'Inside Job' Brings Gordon Gekkos to Life

Charles Ferguson's documentary makes clear the villains of the financial meltdown.
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BOSTON (TheStreet) -- Movie-goers at this week's New York Film Festival, taking a break from the exploits of Gordon Gekko, will have the chance to boo the real-life characters behind the economic meltdown of 2008 with Charles Ferguson's documentary about the financial crisis, "Inside Job."

In an interview with

TheStreet

, Ferguson said his experience prepared him well for tackling the complex topic. He holds a doctorate in political science from the Massachusetts Institute of Technology, has been a self-described "policy wonk" -- consulting for the White House and Department of Defense -- and an entrepreneur savvy in the ways of finance. His former company, Vermeer Technologies, founded in 1994, created the Web site development software FrontPage before being bought by

Microsoft

(MSFT) - Get Report

.

Charles Ferguson, director of "Inside Job," says there has been little attempt at justice in the wake of the financial crisis.

Beyond Wall Street executives, politicians and industry overseers, Ferguson's film -- which opens nationwide Oct. 8 -- launches an assault on the academic world, and the economists and business schools that helped validate dangerous policies. Those interviews and narratives prove to be among "Inside Job's" most contentious. Notable is a tense confrontation with Glenn Hubbard, dean of the Columbia University Business School and an economic adviser during the Bush administration.

"The economic discipline has been subverted and corrupted by the financial-services industry," Ferguson says. "Many of the academic economists who were defenders of the financial-services industry and deregulation also had very strong financial ties that they personally benefited from. It was a direct conflict of interest."

Also troubling to Ferguson, and presented as such in "Inside Job," is the role academic economists have had within government, not just influencing it from the outside.

Larry Summers, a prominent economist and former president of Harvard University, gets a healthy dose of the film's ire. Summers, who recently announced he will step down as an economic adviser to the Obama administration, also held a key role in the Clinton Administration.

Although significant blame is placed at the feet of George W. Bush, Ferguson sees little improving under President Barack Obama. That lack of confidence is made clear in recent footage devoted to financial reform and the Dodd-Frank Act, a post-film development Ferguson was able to edit into the final theatrical release.

"There wasn't much change required, unfortunately," Ferguson says. "My views are unchanged, and I think the Obama Administration has been a profound disappointment."

He delves into that lack of confidence by challenging the lack of civil or criminal charges after the meltdown.

"There has been no attempt to sanction, investigate or prosecute the people responsible for this," Ferguson says. "There is no way this could have happened without massive criminal fraud, and yet there have been zero criminal prosecutions. There haven't even been very many civil actions either against companies or executives, all of whom, thus far, have been permitted to keep all of the money they made during the bubble. There has been no attempt at real justice."

"The financial reform bill is, in my view, a joke," he adds. "It doesn't even address several of the most significant areas that most people who have looked at this agree need to be addressed.

Ferguson says "the people running economic policy in the Obama administration are, by and large, the people who caused this problem."

Summers, as pointed out in "Inside Job" (he declined to appear on camera), was instrumental in the deregulation of derivatives and the repeal of the Glass-Steagall Act, designed during the Great Depression to reduce speculation.

Among others he singles out are Mary Schapiro, who now heads the Securities and Exchange Commission and was in charge of FINRA, the investment-banking industry self-regulation body, "which did absolutely nothing to curb investment-banking practices during the bubble."

"Inside Job" digs into what is presented as often being "runaway compensation" on Wall Street, not just for bonus-collecting executives, but rank-and-file employees as well. The film, including a segment with a notorious madam, details how this cash-rich culture distorted the financial industry's perceptions of right and wrong, prudent and dangerous.

"These people become disconnected from reality and from the lives of normal people and the consequences of their actions," Ferguson says. "The structure of their compensation has made them dangerously disconnected from any kind of personal accountability. There is the culture on Wall Street that says anything can be bought."

Ferguson says he was continually surprised during the making of "Inside Job" by how much more outrageous matters were than what he thought he knew about the crisis and its lead-up. He points to

Goldman Sachs'

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creation of securities sold to investors that the investment bank sold short, betting on a decline. That practice led to a congressional hearing and disciplinary measures against the banker who oversaw those securities.

He was also shocked by the "incompetence and disorganization of the government," including the U.S. Treasury and its former head, Henry Paulson, another target of the film. Paulson has been CEO of Goldman Sachs.

"Inside Job," which is narrated by Matt Damon, has also been shown in Toronto and Colorado.

"The reaction has been extraordinary," Ferguson says, clearly relieved that general audiences are able to follow the patchwork of complex events he lays out. "It makes people very, very angry and quite engaged. Popular sentiment about this issue is the one hopeful sign I see. It is my sense that the America people, although they didn't understand the details -- and I hope my film will help in that regard -- they do understand that they got screwed, that something very unfair happened and nothing has been done about it."

-- Reported by Joe Mont in Boston.

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