Joshua Zemsky

Inside Job Extra Credit

First of all, I think it is extremely comical that man with a net worth of $65 million (Matt Damon) is going to narrate a film that claims that the smartest men in the world are too greedy and are over-compensated. I do not believe I have ever seen such a closed minded, uneducated propagandas film before.

This film was really just a way to bash Wall Street. It was not very viable and many “facts” were skewed. It was made in a very intelligent way though, to make what they were saying seem like they were good facts and statistics. One thing that really stood out when I was watching was when they were talking about the Bush tax cuts and how rich people saved more money from those cuts then poor people. They do not explain percentages though. For example, say person A makes $10 and person B makes $100. If person A saves 10% of that, he is saving $1. If person B saves 5%, less than 10%, he saves $5. So he is saving more total money, but not as much of a percentage of his income. That is a HUGE failure of the movie to identify and state that. Those are not facts that the filmmaker wants to show though, because it will help to disprove his argument.

The movie talks about how poor de-regulation is for Wall Street. Why though? Because there have been a few setbacks? Overall, has Wall Street and the financial industry not been extremely prosperous? And has the United States economy as a whole not been extremely prosperous? De-regulation is actually the reason that the United States overcame then economic issues that it was facing in the late 1970’s, and early 1980’s. For some reason, Matt Damon decided to not talk about that in his narration of Inside Job.

He also forgot to mention one tiny detail about the United States government under President Bill Clinton. His administration went to great lengths to increase the national homeownership rate. They promoted very little down payments and also pushed for lenders to give mortgages to first time buyers, no matter how stable their financial situation was. So government intervened and they pushed for these risky mortgages to be given out. Even the government controlled Fannie Mae and Freddie Mac would guarantee a lot of these risky mortgages. It does not take being the writer of the script for Inside Job, with an agenda to realize that this is the definition of regulation. Government intervention and influence over the private business sector is exactly what regulation is. So the government REGULATIONS were that these lenders should give out mortgage loans to people who might not be able to afford them. But based on that, why is Wall Street blamed for the crisis?

Another question that I have always wondered about this situation is why are the individuals not held accountable? I know that I personally am a very responsible person. So I cannot imagine buying a $1 million dollar home if I am only making $50,000 in a year. But PEOPLE did that. Yet still, this film apparently thinks that there is nothing wrong with that. It is ok for someone to try and buy something, ask for a loan when they know that they will never be able to afford to pay it back.

According to this film, the entire market crash and housing crisis was caused solely by de-regulation. They said that the Fed and SEC and other regulatory agencies were not doing their jobs and just allowing all the big Wall Street banks run freely. It said periodically how the banks were being irresponsible with the securities in which they were selling and trading.

It also commented on how negligent the banks were with all of the bonuses and big salaries they were giving their employees and top executives. They thought that these people should have been forced by the government to give back a lot of their earnings. They even commented on how bad it was that banks, such as Morgan Stanley, have grown as much as they have. About how they used to only employ people in the hundreds, and now they employ over fifty thousand people.

First of all, how are the banks negligent to be giving out high salaries and bonuses to deserving employees and executives? Financial institutions were making records amounts of money at this point. The people who were responsible for making this money that trickled down throughout the entire country and spread more wealth then has ever been consumed in this country, were not entitled to receive high salaries and bonuses? That is absolutely ABSURD! Does anyone say that Bill Gates is not entitled to the money that he makes? No, and he is entitled to be worth what he is. He contributes to society, as do these bankers. They create money, and when they were doing this, they made more of it. People do not even question why a man like Matt Damon, who contributes NOTHING to society, is worth so much money.

These Wall Street employees and executives are some of the smartest people in the world. Wall Street companies, Goldman Sachs, J.P. Morgan, etc, only take the best of the best to employ. They have to be the smartest people. They create wealth and opportunities for other small businesses and individuals in the rest of the world.

Then they say that the government should cap the amount of money that they make? This is the United States of America, not communist Russia. The government cannot control the salaries and bonuses that are given out to employees of companies in the private sector. Now to be fair, I do believe it is permissible for the government to intervene in certain salaries and bonuses while they have major capital invested in these companies, like after the bailout. But other than that, it is not at all up to the government. If they deserve their pay packages based on their performance, then they should be permitted to have it.

How can they complain about the growth of these companies? Are they saying that it is not a good thing that more and more people have good paying jobs? Should these banks cut tens of thousands of jobs and go back to having a couple of hundred employees? It makes no sense to me. These banks being big are better for the economy. They create more jobs for people. not just then thousands of jobs that people have working for the banks, but they also create money for other businesses and companies throughout other sectors of business community.

They also talked about how the banks would pay for their employees and executives to go to “escort” services. Where did they get this information though? From the head of a whore house. A criminal. Someone who had nothing to lose by saying this and someone who quite frankly has zero credibility. And who else did the video interview about the ethics of such an act? Elliot Spitzer! The former governor of New York who resigned because he was cheating on his wife by paying a hooker. Where is the credibility in that? Now, is it hard to imagine that these Wall Street employees went to these escort services? Not at all. But is there any evidence to believe that the banks paid for this as business expenses? No. Is that any reason to talk about how Wall Street is the devil? Even less. Just look at all the political sex scandals that have happened. Governor Spitzer with his escort, Congressman Weiner with his twitter pictures, President Clinton with his intern, and plenty more including Senator Edwards, a man who cheated on his sick wife and used campaign funds to cover it up. There are plenty of athletes’ sex scandals like, such as Tiger Woods. But this video wants to single out Wall Street workers and portray them as the only people to do it.

Another thing they did which was not right is make people like Ben Bernanke and Tim Geithner and other CURRENT Government officials look as though they knew they were wrong about the entire situation. They said “Bernanke refused to be interviewed for this,” and same with Geithner. It would not be appropriate for the current U.S. Secretary of the Treasury and the current President of the Federal Reserve Bank to comment for this video. And also, a lot of the people that they did interview, we do not know the entire story behind those interviews. They of course only put in the parts of the interview that were helped their agenda by helping to get across the video makers message of how bad Wall Street is. So if we did see the entire interviews, all of the stuff that they decided to edit out of the movie, the message being sent might be completely different.

The biggest solution honestly to fixing the economy is more de-regulation. That is the best way to ultimately fix the economy. Let the market work itself out. The bankers are smart enough to bring themselves back up and then once again, money and wealth will trickle down again. More jobs will be creates. The United States economy will once again reach record heights.

Obstacles preventing this are people like the makers of this film and also the current presidential administration. People like that spread so much fear into the population that the banks are the bad guys and will only lead to destruction. They instill absolutely zero confidence. Confidence is needed in order for this to work. People will be too afraid to invest their money in the markets. If the government is taking confidence out of people that the banks will fail, that is almost them regulation the banks. Instilling this fear so the banks do not become too powerful. They have to understand that the banks are the center of all business. When the banks succeed, the rest of the economy succeeds. They create money and opportunity.