When poker machine legislation was being proposed in Australia, despite the harm that poker machines can do, the legislation would not have outlawed poker machine use. Indeed, very few people who used poker machines would be affected by it at all. The proposed legislation was targeted specifically at problem gamblers, and predominantly the rules would have helped to limit the damage that problem gamblers could do. The response was a targeted campaign against the government, that it would damage clubs and communities, and that the government was being a nanny state trying to restrict our freedoms. If a few lives needed to be wrecked so that clubs could take in as much money as possible, so be it.
Inside Job is a look at the financial services industry and the practices that were said to lead up to the global financial crisis. The lack of regulatory oversight was the central theme; starting with the story of Iceland's banking sector then moving onto the major players in the American story. It's the story of greed, excess, risk-taking, and the complete lack of any regulation on the industry. Even when companies were violating what little regulation there was, the regulators didn't do anything about it.
A movie like this isn't going to be able to tell a complete or detailed account of the events. It's good in how it presents the information, though as to its economic accuracy I cannot verify. It did very little in the way of offering practical advice, so it differed in the hopeful manner of An Inconvenient Truth. The question is left as to why the government is doing nothing about this, which leaves a somewhat bitter taste. The message: we're fucked and the people who fucked us are still there fucking us, and worst of all the people in charge are oblivious (or at the very least indifferent) as to how they are fucking us.
For me, though, the worst part was the lengths at which those in the financial industry went to denying that a problem even existed, let alone whether or not their practices needed to change. It reminded me of the personality types described in The Authoritarians, people who were apologists for the power structures and practices irrespective of their merits. The film tried to paint them as slaves to ideologies, unable to see the world any other way than the failed way in which they adhere to. Whether or not that's accurate, that the people who had a strong influence couldn't even answer in the affirmative about a simple conflict of interest question doesn't leave me with much hope for the future of the financial industry. That these corporations could lawyer up, had people in high places, and had people who would defend their interests no matter what is chilling. It got me thinking, on no account should anyone who wants to be in the financial sector be allowed to be in such a position.
One question I did have was how the influx in revenue in the financial sector was going to be accounted for. When we talk about poker revenue, it's understood that the revenue is the money that is lost by those playing. Anyone's winnings is going to be at the expense of those others who tried, and the money on top of that is what the operators make. If the financial system is in such a way that profits are going higher, that there's huge salaries and bonuses, that there's large fines being dished out that can be absorbed, and there's even a lobby group that has billions of dollars a year at its disposal - then where is this extra revenue coming from?
The documentary gives a number of causes of this: artificial inflation of the house market, excessive corporate borrowing, people taking on more debt, predatory lending, etc. With a system that promoted certain behaviours financially, the argument was that such practices were inevitable - each part of the system acting in its own self-interest, with the whole thing eventually falling apart. Possibly the most egregious moment of the film were the ratings firms defending their dodgy (and well rewarded) ratings as being mere "opinion", which seems about as much opinion as yelling fire in a crowded theatre after being paid by the usher to make a scene.
If nothing else, any industry, especially an otherwise well-established offering no new service, making more and more money should warrant investigation into how that money is being generated. How is it the financial services could become so lucrative for those involved without that money coming from somewhere else?
Getting back to the analogy of the poker machine reforms, the obvious disanalogy is that the poker machine reforms are there to try to help specific individuals who have a problem. Their negative effects are largely sociological and confined to the immediate family and friends of problem gamblers. When the financial system collapses under its own bad practices, nearly everyone is affected. If that's not reason enough to try to put some regulation in place to prevent there being such huge potential collapses in the system, then what would be?