Monday, February 28, 2011

Most Notable Oscar Acceptance of the Night

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“Forgive me, I must start by pointing out that three years after a horrific financial crisis caused by fraud, not a single financial executive has gone to jail — and that’s wrong,”

-Charles Ferguson
Oscar winner for Best Documentary

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After Exposé, Filmmaker Sees Little Change on Wall Street


Will Wall Street win over Hollywood?

Inside Job,” the Oscar-nominated documentary directed by Charles Ferguson, takes a piercing look at the financial crisis. Told through the lens of economists like Nouriel Roubini and investors like George Soros, the film lays much of the blame on Wall Street and a revolving door of regulators, many of whom came straight from the big banks.

With the Academy Awards to be presented on Sunday, Andrew Ross Sorkin of DealBook caught up with Mr. Ferguson to discuss what Wall Street thought of his work, regulatory reform and the filmmaking process. What follows is an edited version of the discussion.

Q. What type of reaction have you gotten from Wall Street?

A. Most of the people with whom I’ve spoken on Wall Street have reacted positively to the film.

Q. Despite the dim view that it often takes of Wall Street?

A. Yes, I would say actually because of the dim view that it takes of Wall Street. Of course, I am sure there are people who are very displeased by the film. But they haven’t spoken with me, I guess.

Q. Have you had any encounters with people who were in the film?

A. I had a rather interesting encounter with William Dudley, who is now the president of the Federal Reserve Bank of New York. The research department of the Federal Reserve Bank of New York actually requested a screening of the film, and a meeting with me. He attended.

Q. What did he say?

A. Well, he said that he was broadly happy with and in agreement with the film, which surprised me a little bit. But he was in front of a bunch of his employees. That may have had an effect on the way he conducted himself. I don’t know.

Q. One of the criticisms you hear about the film is that it focuses somewhat conspiratorially on Wall Street but doesn’t lay any blame on individuals like homeowners. How do you respond to that?

A. It’s there in the film, briefly. Perhaps it deserved another five minutes in the film, I don’t know. That’s a kind of subjective thing. I guess my own view was that it wasn’t the core of what occurred, and therefore wasn’t the focus of the film.

Q. Many of those who are on the police force today arguably were at the scene of the crime at the time — whether it be the Treasury secretary, Timothy F. Geithner; the Federal Reserve chairman, Ben S. Bernanke; or others. When you look at the environment today, after the passage of regulatory reform, do you feel any better?

A. Not much. I think it is a very disturbing situation, and that says something very disturbing about the condition of American politics. There has been very little change. Many people when they voted for Barack Obama and Congress thought that this problem would be dealt with.

But it hasn’t been, and in fact, the people running economic and regulatory policy in the Obama administration are in many cases people who contributed to causing the crisis. In some cases, there’s fairly clear evidence that they conducted themselves in very, very unethical ways.

Q. What is the single issue that you worry about most today?

A. Well, I think that I would name two. One of them is that in another 10 years this could happen again. The other — which is related but in some ways even more disturbing — is that there has been no justice.

Q. What do you think now of Wall Street’s compensation practices, an issue that seemed to pervade much of the film?

A. I don’t have a problem with people getting wealthy if they work hard, contribute to society and do valuable things. There are people in Silicon Valley who are enormously wealthy. But for the most part they are enormously wealthy because they did something useful and valuable.

The problem here is that in finance people can get enormously wealthy by causing enormous damage to many other people. And that hasn’t been stopped. That’s part of why I am concerned that this could happen again in another decade.

Q. One of the most striking moments in the film involved Glenn Hubbard, formerly the chief economic adviser to President George W. Bush and now the dean of Columbia Business School. In the scene, you ask Mr. Hubbard rather pointedly about his consulting relationships with financial firms.

Since the movie has come out there has been a lot of discussion about such relationships and about creating a new code of ethics for academics and economists. Has progress been made?

A. There has been a lot of conversation about it, and there is some progress in that regard. And that does make me happy that there has been that progress. The progress so far is very limited and very incomplete, but at least things are going in the correct direction.

Q. With contentious interviews like the one involving Mr. Hubbard, do subjects ever get the feeling there’s been a bait and switch?

A. There was no bait and switch. Essentially, everyone interviewed for the film was given the same information. We told them who we were. A few people asked for my C.V., or information about me, which we supplied. We said that we were making a documentary. We described the subject of the documentary.

Some people had further detailed questions. Most didn’t. Glenn Hubbard did not. We asked him to be interviewed. He agreed to be interviewed.

Q. Any reaction afterward?

A. Obviously, some of those people were extremely unhappy. But, you know, too bad.