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Impoverishment, Shameless Academy Award Trawlers Division

By Shawn Macomber on 1.13.11 @ 11:18AM

Peter Suderman points to a pithy/wonderful Tyler Cowen review of Inside Job, which culminates in this culturally incisive powerhouse punch:

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.

Eric Cartman| 1.13.11 @ 1:42PM

Bear with me here. I watched the trailer so I really have no insight about the whole movie (the prostitue and coke charges, etc.) But what I see as the underlying message - Wall Street knew they were inflicting unsustainable risk on the system - is spot on.

Back to Spring, 2008: My graduate finance professor was a smart guy - very smart. PhD. from a great school. Engineer undergrad, etc. Good guy, too. Great guy to have a beer with. At some point in the class we were discussing risk-free portfolios and how to asses risk within instruments like the mortgage backed investment tranches being sold worldwide. There was a group of four of us who sat in back - the gang of four - and would challenge the prof on certain somethings. This topic - the risk-free portfolio - was one of the most heated. I won't get into the math or assumptions necessary to make this stuff work, but we were arguing that none of it made sense if the products themselves were threatening the system itself. If the asset was an integral part of the system, then it put the system at risk. In other words, he systemic risk could no longer be separated from specific risks.

Anyway, we were discussing the topic in our economics class with our Econ Prof - again, smart guy. Knows Bernanke. Worked at the Chicago Fed. Graduated from good schools. Former cowboy - really. A real cow boy. Good guy to have a beer with. Anyway, he heard us talking and said "You guys talking about Dr. o-and-so?" We made our case and he said "Oh yeah! This is going to pop in a real bad way soon. Should have already happened." He went on to agree with us and gave us some more scary things to think about. We asked why Dr. So-and-so thought we were crazy, "Because all finance guys thinks this stuff works . . . and it does . . .to a point."

The point is we - four dumb grad students with our under grad finance and econ training - had a pretty good hunch this stuff was bunk. But the smartest people in the room assured us we just didn't understand how it worked and how we needed more training. THEN we would understand.

So how could us dummies know this was dangerous but not Goldman Sachs, etc? Then there were the rating agencies who just rubber stamped the garbage. Don't even get me started.

And still, no jail-time for anyone. Amazing. Just amazing.

Trinity 31| 1.14.11 @ 10:19AM

I think what all of this illustrates is -- above all -- one thing: just as we (should have) learned from Genesis 3, mankind (human nature) is unalterably corrupt; whether it's greed, group think, hatred, indolence -- or just stay with the Big 7. In any case, we're seeing more proof, daily proof, constant proof (as if we needed it) that -- on our own -- we'll screw up most everything we touch, make excuses, blame someone or something else, then move on to the next disaster. The least reliable politics is the one that believes that human nature is corrupt and un-perfectable. And redemption comes only one way.

Poppakap| 1.13.11 @ 2:53PM

Cartman, I respect your authoritaa!

It's funny you wrote what you did because a couple of classmates and I had almost the exact discussion in 2005 while toiling away @ B school. Except in our case, the Econ prof was the one buying the logic of the financiers while our corporate finance prof was on our side.

The most enlightening part of the conversation came from the finance prof who said, "I'll bet you guys a plate of baby backs (ribs) that noone will go to jail when that house of cards collapses." I thought he was exaggerating to make a point. Unfortunately, I was wrong.

RE: Sachs and the ratings agencies; Is it any consolation to you that at least Madoff is wearing striped pajamas?

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