Global recession peeled bare by Wall St doco

Filmmaker Charles Ferguson. Photo / Sony Pictures Classics

Should Charles Ferguson make it to the podium of the Oscars next month - and that's likely given that his doco Inside Job is to the global financial crisis what An Inconvenient Truth was to global warming - don't expect any big speeches.

He's not Michael Moore or Al Gore, for that matter. And he's smarter.

Ferguson, big brain that he is, barely appears in Inside Job.

That's him asking the searching questions of representatives of the American financial elite, men seemingly interconnected between Wall St, the White House and ivy league business schools.

Only once or twice can he be heard remonstrating with his subjects, like when Frederic Mishkin, who resigned from his job as governor of the US Federal Reserve at the height of the crisis to take up a professorship at Columbia Business school is attempting to shrug off that no one saw the crisis coming.

"Excuse me. You can't be serious," says an even-tempered Ferguson. "If you would have looked you would have found things."

Ferguson certainly found things in his exhaustive study. He got access to some folks who might have regretted letting Ferguson, his camera and his sharp mind into their office.

Former Bush Administration chief economic adviser, now Dean of the Columbia Business school Glenn Hubbard, looks like a man expecting to be asked for his expert opinion, only to find himself being held to account and clearly disliking the experience.

"A number of people did get quite upset," Ferguson tells the Weekend Herald from San Francisco "and actually there were more instances than are in the film. But I didn't think it would be particularly useful to show that five times in a film just because we had it on film.

"And yes, obviously, some of the interviews did get quite intense and quite contentious. But in general I've tried to keep my cool and I'm reasonably good at that. Certainly in some of the business things I have done I have been in situations far more tense than an interview with Glen Hubbard ..."

Before turning documentary maker - his previous documentary was a treatise on post-invasion Iraq No End in Sight - Ferguson acquired quite a CV, the highlights of which include a PhD in political science from M.I.T. where he was a researcher and frequent policy consultant to US government departments on technology matters, before founding software company Vermeer Technologies, which he eventually sold to Microsoft.

Having made his fortune he headed back to academia, and a few books later it was into documentaries with the acclaimed No End in Sight, a non-politically aligned look at what drove the US occupation of Iraq.

On the phone to the Weekend Herald, before learning of his second Oscar nod, Ferguson says his own involvement in Silicon Valley in the days of the dot.com boom and burst helped spur him to take on the vast complications of the GFC.

"It certainly sensitised me to the issue. The company that I did was a very - it might sound odd but it's actually quite true - a very classical software company. It wasn't a website. It was a software product.

"But at the same time I could see around me all this stuff going on and it was clear that a lot of it was just crazy and quite fraudulent. I could see a lot of it was quite fake."

In Inside Job, Ferguson contends that the global financial crisis was avoidable and a product of the progressive deregulation of the US financial sector since the Reagan era which led to an era of credit default swaps and collateralised debt obligations and subprime mortgages.

"Each crisis has been worse than the last and yet, due to the industry's increasing wealth and power, each crisis has seen few people go to prison.

"In the case of this crisis, nobody has gone to prison, despite fraud that caused trillions of dollars in losses."

From the dozens of interviews he did for the documentary - more than 30 of which are used on screen - Ferguson says the main things that most disturbed him were questions of principle and of politics.

"One was just how incredibly unethical Wall St had become.

"When I started making the film it was clear there had been some bad behaviour but certainly I had no idea that the banking industry, on a quite large scale, had been creating its own securities with the intention of profiting by betting against them.

"When that revelation came out and we were among the first to learn about it, I was dumbfounded. I didn't think it was legal. It turned out in principle it is legal.

"I suspect there was a great deal of criminal fraud because I suspect to be able to do that on a large scale while also telling the truth is pretty hard.

"I would have thought there was just a law against it flat out that you couldn't do that.

"No, not so. So that was certainly one shock.

"And the other was the incompetence of the Government's reaction during the crisis. That got me."

And he also means the Obama Administration which inherited the crisis.

"Their motivations are perhaps less clear. A fraction of it is political calculation as opposed to incompetence. But it's not clear what the motivations of the Bush Administration were during the crisis, either.

"But it's clear that at least in some instances they simply didn't know what they were doing and they didn't know what the consequences would be of their decisions and they behaved in ways that just seemed astonishing."

Ferguson is amused that last year's Hollywood attempt to make fiction out of the crisis, Wall Street 2, had a similar Manhattan skyline opening sequence to his film.

But it's the modest Inside Job that is still being talked about and acclaimed months after its October release in the US, unlike Oliver Stone's throwback.

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He felt some deadline anxiety in getting the film finished in time for the crisis not to have become yesterday's news.

"There was some pressure of that sort. But I was also depressingly confident that these problems would still be with us."

Inside Job is screening now at Rialto cinemas.