November 01, 2010
Or at least Ferguson tells half of a coherent story. Inside Job is excellent at explaining why bogus assets”in general”would appeal to Wall Street. IMF economist Raghuram G. Rajan points out that paying annual bonuses calculated on short-term profits encouraged bankers to take on long-term risks that the public might wind up bailing out.
But why, out of countless financial instruments, did mortgages in the “Sand States” of California, Arizona, Nevada, and Florida”with minorities defaulting disproportionately”happen to be what blew up the world?
This insidious question wouldn”t even occur to an average documentarian such as Davis Guggenheim of the inane Waiting for “Superman.” Ferguson, however, knows more than he lets on in Inside Job. He leaves out the other half of Rajan’s even-handed blame-laying: The government undermined credit standards to boost home ownership among minorities and the poor. Ferguson complains about government’s failure to regulate lenders but never mentions that the blowout happened precisely where politicians demanded more lending.
Tellingly, Ferguson even includes a clip dated “Oct. 15, 2002″ from George W. Bush’s catastrophic speech denouncing down payments and adequate documentation as mortgage requirements, a historic turning point otherwise shoved down the Memory Hole by ashamed Republicans and guilty Democrats. Of course, Inside Job doesn”t mention the politically correct occasion of Bush’s irresponsible oration: his White House Conference on Increasing Minority Homeownership.
In such a moral morass, whom can Ferguson trust to recount history? Comically, the director trots out as his reliable witnesses Congressman Barney Frank (!) and Robert Gnaizda of the Greenlining Institute. Like ACORN and hundreds of other “community redevelopment” shakedown artists, Greenlining demanded more mortgages for minorities to fight racist redlining.
Gnaizda, a green-eyed white man, has done very well for himself in the Diversity Industry. As a 2005 Los Angeles Times exposé implied, Greenlining is something of a Capitalist Front, suavely offering civil-rights certification to dubious lenders. Say you”re CEO of an aggressive mortgage firm and an anarchic ACORN whines to the feds that you racially discriminate. Well, Greenlining’s professionals can furnish you regulatory cover. Promise to lend more to “underserved” minorities, and they”ll issue a press release announcing you”re moral. Greenlining’s funders thus turned out to include subprime boiler-room operators such as the notorious Ameriquest.
In short, the rich (“Heads we win; tails we”re too big to fail”) needed the poor (“Heads we win; tails we”ve got little to lose”) to swindle the middle class.
