Politics: 13 March 2011

Inside Job

I just saw Inside Job, Charles Ferguson’s documentary about the 2008 financial melt-down. It is good—very good. However, it isn’t until I got to the deleted scenes with Dominique Strauss-Kahn, that I found the reason this crisis ended in a paralysis of the financial industry: lack of trust. Not only did one bank not know what other banks’ balance sheets looked like, but each bank individually didn’t know what its own balance sheet looked like. That is what made this crisis so much worse than other crises like the dot-com and savings & loan disasters. The film is well worth watching—especially if you haven’t spent the last two years reading Paul Krugman.