As president Obama tries to push through financial reforms, the worldwide financial crisis is a hot topic at the Cannes Film Festival, from popular fiction Wall Street: Money Never Sleeps to Charles Ferguson's widely-hailed doc Inside Job.
One source that both films have in common: former New York prosecutor and ousted governor Eliot Spitzer. He proved a valuable resource to both Stone and Ferguson. When Spitzer was New York's pugnacious Attorney General, he was singularly willing to confront Wall Street Masters of the Universe accustomed to being given free rein---to disastrous effect. It looks like Spitzer is trying for a new career as a media pundit.
Both Wall Street 2 and Inside Job start with devastating intros to the financial collapse using news footage and cut to stunning aerial views of the skyscrapers of lower Manhattan. One of the best-reviewed movies at the festival, Inside Job deserved to be shown in competition (it presumably wasn't because Ferguson isn't a branded auteur). This movie could raise consciousness and call voters to action much the way Al Gore's An Inconvenient Truth did. I certainly have more grave doubts about Obama's Wall Street government after seeing Ferguson's critical portraits of President's National Economic Council head Larry Summers--who fought fiercely and consistently against Wall Street regulation--and former head of the Fed, Secretary of the Treasury Tim Geithner. (Summers may exit the White House sooner rather than later after the White House sees this movie.)
The 2008 financial crisis cost tens of millions of people their jobs, Ferguson points out at the start, showing in a microcosm what happened to Iceland, once a prosperous little country with 320,000 inhabitants with a GNP of $13 billion. When deregulators allowed its three banks to go haywire, the banks' losses totaled over $100 billion. In other words, what deregulation did to Iceland it did to the rest of the global economy, to devastating effect.
On September 17, 2008, Lehman Brothers owed $600 billion to creditors, who were paid nine cents on the dollar. As Greece's plummeting fortunes threaten the rest of Europe, the crisis is far from over. And Obama's re-regulation battle has just begun: Wall Street has hired 3000 lobbyists, five for each member of Congress. Between 1998 and 2008, Wall Street has spent $5 billion on lobbying and campaign contributions.
Ferguson, who studied political science at MIT and consulted at the White House, is a Capitol Beltway insider who can talk the talk with the brainiest of policy wonks. He was considering an Obama movie because he knew Summers and Ram Emanuel. Back in August 2008, before Lehman Brothers went down, Sony Pictures Classics' Michael Barker opened talks with the filmmaker about explaining the financial world to moviegoers the way he laid bare the Iraq war in Oscar-nominated No End in Sight, which was clear as a bell. When the crisis exploded, SPC agreed to back the film, which is unusual for the distrib. Barker was betting that auds would flock to a movie that explained the financial meltdown to them. While Ferguson and Sony had some fights, Ferguson said at Cannes, Barker and co-president Tom Bernard "never once tried to tell me to tone it down. They gave me complete and total freedom." (Barker and Bernard say they tussled over issues like clearing rights, always thorny and expensive.)
This well-explicated expose makes Michael Moore's Capitalism: A Love Story look like a maundering misfire. Unlike Moore, Ferguson isn't front and center in the film. He opted to use Matt Damon as his narrator. But you still hear him in the interviews, asking probing questions and boring in on unsuspecting targets like Columbia Business School Dean Glenn Hubbard, who squirms with discomfort as the degree of his conflicts of interest become clear. I was shocked that academics routinely are paid huge consulting fees and serve on the council of economic advisers for presidents with no questions asked about the impact substantial extra income must have on their influential points of view. (Their rules are less stringent than those of journalists.) Economists like Harvard's Martin Feldstein, also grilled by Ferguson, are the architects of the deregulation policy. And he served on the board of AIG, earning millions.
"I'm by my nature ornery," admits Ferguson in a beachside interview. "And I am angry. What happened here angered and surprised me. When I first started making this film it was clear there had been some very bad behavior. I had no idea that on a very large scale the major investment banks were deregulating securities with the intention of betting on failure and selling it to people. My jaw dropped." All of them? "All of them." And Goldman Sachs "did so well in large part because they did that." France's Minister of Finance, Christine Lagarde, reminds that "the financial industry should serve others before it serves itself."
Is there hope for meaningful change? "It's not going to come from the people currently in the government," says Ferguson, who hopes the film will demystify the subject for the general viewer and stimulate political debate. "If something changes it's going to change because the American people get angry. It's happened before, with Watergate and Nixon, though I'm not comparing them."
Now comes news that Ferguson's collaborator on his Iraq documentary No End in Sight, Alex Gibney, has sold U.S. rights to his new Eliot Spitzer doc to Magnolia Pictures. The unfinished film, backed by A & E Indiefilms and Wider Film Projects, was the hit of Tribeca. The distrib has a long relationship with the prolific NY filmmaker, releasing five of his films including Enron: The Smartest Men in the Room and the recent Casino Jack: The United States of Money. Magnolia didn't have to bid against Apparition after Bill Pohlad opted not to buy the movie, which Bob Berney liked. This may have contributed to Berney's early exit from the company just before Cannes.
Gibney's untitled film follows Spitzer’s career from attorney general fighting Wall Street powerbrokers to his plummet from grace. Spitzer opens up about his world, and so do many of its mightiest denizens. A & E will premiere the film after its theatrical and homevideo release. Magnolia is also releasing the upcoming Freakonomics omnibus, which includes a Gibney segment.