Inside Job (2010 Film)

The 2008 American financial crisis had a negative impact on all global economies. The movie “Inside Job” provides a thorough study of the catastrophe that cost the US economy more than $20 trillion and resulted in millions of individuals losing their homes and livelihoods. The Great Downturn was followed by the 2008 crisis, which was the second-largest economic depression. In five different sections of the movie, the director expresses his ideas. The filmmaker explains how the financial crisis started. This part of the film explains that the root cause of the financial crisis in 2008 was the deregulation of financial institutions including Credit Rating Agencies, Insurance Companies and Banks during 1980s. Due to deregulation, the US financial institutions began playing on their own ways of achieving maximum personal benefits. Charles Ferguson explains that deregulation of three leading banks; Glitnir, Kaupping and Iselandsbanki caused the economic bubble that ruptured at the end of 2008. President Regan administration encouraged financial institutions to make risky investments in 1982 that led the country to incur losses of taxpayers’ money worth over $124 billion.

Part Two: The Bubble

There was a constant creation of financial bubble between 2001 and 2007 when people could easily access house mortgage loans even if they were unable to pay the loan back. The film views it that during this time, the Security and Exchange Commission and the US government failed to undertake close monitoring of banks. The ration of borrowing to deposit was 33:1.

Part Three: The Crisis

Journalists and economists gave various warnings against the fast depreciating US economy. Mortgage loan holders did not pay back their loans to banks thereby leading to the implosion of Securitization Food Chain. The default of the financial institution was obvious since they provided mortgage loans to individuals who were unable to pay back.

Major banks started collapsing and becoming bankrupt from the mid-2008. The filmmaker quotes Lehman Brothers’ bankruptcy as the most eminent as it led to major disruptions in the international financial markets. Even after President Bush offering $1400B as a bailout package, there was no significant change in the financial market. The crisis affected the United States economy and other world economies.

Part Four: Accountability

Major decision makers and various CEOs who propagated the crisis walked away. Various economist professors and academics who supported deregulation were appointed in various financial sectors as economic affairs’ advisors while others were appointed as managers of financial institutions. The film views these acts of appointments to be unfair since they were the people who the government was supposed to hold accountable for the economic crisis.

Part Five: Where Are We Now

This part portrays the current US economy to be weaker as compared to how it was before the financial crisis hit the country. Inflation and unemployment have continued to increase. The US construction sector is falling; however, its IT sector has remained strongest globally. Acquiring jobs in the US IT industry needs high qualifications and accessing such qualifications in the US is very high. The gap between the poor and the rich in the US is still higher than any other nation globally.

In conclusion, deregulation was the key cause of the financial crisis in the US and beyond since it allowed the banks to act in their own interests. The financial institutions made millions of dollars from public investments and taxpayers’ money. The effect of the crisis is still felt today, and it’s advisable to take actions against those who propagated the crisis. The US government should also establish various reforms in the banking sector to protect the economy.

Works Cited

Ferguson, Charles. “Inside Job.” 2010, http://www.youtube.com/watch?v=_TBrI7VOUFg.