Inside Job Review

The movie Inside Job was recently released and more or less lays out the pattern of corruption that led to the 2008 Financial Crisis and subsequent government inaction as far as new financial regulation goes.

 In short, the bankers were in bed with the government, government was in bed with the bankers, neoliberalism will kill us all, and bankers made out fine while the rest of us are unemployed. The first 4/5 of the film were not surprising for anyone that has kept up with blogs, books, and articles about the crisis. The last 1/5 though really drove home the idea of corruption in academia. (The movie is broken up into parts, I'm guessing 5, but I can't quite remember how many there were.)

A number of academic economists, most prominently Larry Summers and Martin Feldstein, were examined for their conflicts of interest. Nancy Folbre summarized a lot of this, plus other new research on ulterior motives in economics, in this recent blog post "Ethics for Economists". Academic economists, unlike other professions, do not have a standard code of ethics that requires them to disclose conflicts of interests or other pertinent information when publishing their work. According to Inside Job and recent research from UMass economists, the ivory towers seem all to have moved to Wall Street. 

Inside Job only talks about these conflicts in the context of the financial crisis though, and I suspect these kinds of ties go much deeper. For example, the New Yorker recently had a great piece tracking the influence of the infamous Koch brothers on not only the Tea Party, but academic institutions as well. Conservative colleges like George Mason University and right-leaning think-tanks like the Cato Institute receive a portion of their funding from the Koch brothers, who's interest surely are not confined to pure academics. I imagine there's a lot more dirt to be dug up if we were to examine the university donations, grant funding, and business ties within many economics departments, and probably other disciplines as well.

The movie really showcased the corruption of industry, politics, and academia. Understandably not in depth, the film asked the right questions and did a particularly good job of exposing some of the nuanced conflicts of interests. I wish the filmmakers had address the hegemonic nature of neoliberalism and the complacency of common folk. I also wish they had interviewed at least one heterodox economist to talk about the ethics problem, but maybe they will save that for part two.