Nick writes to me:
I'm an undergrad math/Econ double major and aspiring economist. I also read your blog (amongst others) daily. You said today that "Inside Job" was "half very good and half terrible." Critical reviews are widespread, but prominent economists haven't said much. I was wondering if you could expound on your terse critique in an email or blog post.
It's been a while since I've seen the movie, but here goes. The best parts are on excess leverage, the political economy of the crisis, and the attitudes of the economics profession. Overall it is remarkable how much economics is in the movie, even though some of it is quite bad. The visuals and pacing are excellent and many scenes deserve kudos.
The worst parts are the misunderstandings of deregulation. Glass-Steagall repeal was not a major factor, much of the sector remained highly regulated, and there is no mention of the failure to oversee the shadow banking system. The entire discussion has more misses than hits. The smirky association of major bankers with expensive NYC prostitutes (on one hand based on very little evidence, on the other hand probably true) was inexcusable. There is talk of "predatory lending," but it is not mentioned that many borrowers committed felonies, or were complicit in felonies ("on the form, put down any income you would like"). Most generally, there is virtually no understanding of the complexity of the dilemmas involving in either public service or in running a major corporation.
Overall, the movie's smug moralizing makes me wonder: is this a condescending posture, spooned out with contempt to an audience regarded, one way or another, as inferior and undeserving of better? Or are the moviemakers actually so juvenile and/or so ignorant of the Western tradition — from Thucydides to Montaigne to Pascal to Shakespeare to Ibsen to FILL IN THE BLANK — that they themselves accept the very same simplistic moral portrait? If so, most of all I feel sorry for how much of life's complexities they are missing and how impoverished their reading and moviegoing and theatregoing must be.
Do you remember the scene in Hamlet, where Hamlet tries to judge the King by enacting a pantomime play in front of him, to see how the King would respond to a work of art? I think of that often.