Essay Inside Job Movie Synopsis
Part I: How We Got Here:
The Reagan Administration of the United States began a thirty-year-period of deregulation by the legislators in the financial system. Deregulation allowed the financial sector more freedom and less discipline, which provided more opportunity for profit and risk. Reflecting the profit growth resulting from deregulation, investment banks went from small, private firms to public companies. To illustrate the growth of the financial sector beginning in the 1970s and continuing into the early 2000s, consider this - from 1978-2008 the average salary in the United States in every profession other than investment banking rose by 25% and the average salary in investment banking rose by 150%.
Part …show more content…
A significant percentage of the debts being traded could not be repaid, neither by the borrowers in the public sector or the lenders and traders in the financial sector. Everyone was trading immediate profits for promises to pay debts with money they simply did not have, and the crisis occurred when it came time for everyone to pay - and no one could. The result an incredible, sweeping wildfire of foreclosures and bankruptcies. The people lost their illusory homes and their previously tangible jobs. The financial sector lost their businesses. A financial base had been removed and the contagious crisis was spreading around the globe. The US government claimed that if these major financial institutions - that caused the crisis - were allowed to fail, the effect on the global financial system would be catastrophic. The US government said these firms were 'too big to fail' and paid out several hundred billions of taxpayer money to save these firms. The unemployment and inflation from these rescues is still accumulating today.
Part IV: Accountability:
In a nutshell, many of the leaders in the financial sector were brought before the United States Congress to testify - to explain their behavior and account for the global financial crisis that resulted. Most of these individuals either did not