The Financial Crisis Film 'Boom Bust Boom' Falls Prey To The Big Problem It Addresses

Our biases nearly always get the best of us.
Terry Jones with a puppet of 20th century economist Hyman Minsky.
Terry Jones with a puppet of 20th century economist Hyman Minsky.

Can a group of portly, middle-aged puppets explain the financial crisis?

They certainly can try.

In the new Terry Jones documentary, "Boom Bust Boom," which premiered Friday in New York City, the Monty Python comedian uses puppets, cartoons and interviews with real people to turn a difficult and often boring subject into a lively lesson on history and the human biases that drive huge swings in the economy. Think of it as a whimsical version of "The Big Short." 

Set for a national release on March 18, the film shows how markets can boom and bust with regularity. Over the course of centuries, we see this cycle play out over and over, and yet, before each bust, we learn how people convince themselves this time is different. It's frustrating. Why can't humans just get it right? 

Unfortunately, the film falls prey to its own thesis, almost shutting out the voices of anyone who isn't a middle-aged white man, leading to a narrow view of this complex topic. It's not very helpful for thinking critically about how we might change things, and perhaps that's why the film offers few solutions.

"Boom Bust Boom" is at its best when illustrating some of history's worst economic meltdowns. It has informative and fun depictions of the 1637 tulip mania in the Netherlands, the crash of the South Sea Company in early 18th-century Britain, and the 19th-century speculation in (and fantastic crash of) British railroad stock. It also describes how the heights of speculation in the 1920s led to the lows of the Great Depression, and, finally, the hard lessons of the 2008 mortgage crisis. Every time is the same: Euphoria over rising prices leads to speculation, which ends with a crash.

Humans are not rational, the movie tells us. We are hardwired, from the time of our primate ancestors, to have certain biases and blind spots. When it comes to capitalism, those blind spots lead to financial crises. And when someone sees the issue clearly, they are often disregarded until long after it's too late.

The problem is, the film doesn't take the next step and ask why policymakers and economists continue to think the same way and follow the same patterns from one crisis to another.

Here's one reason: The world's top economists (and government officials) more or less all have the same background. They went to a handful of schools, studied under a few dozen of the same professors, have read the same books and mingle in the same circles. Oh, and, to a large extent, they're all white and male. That doesn't encourage diversity of thought. 

Neither does this film. I counted about a dozen puppets woven into the story, and nearly all of them depicted middle-aged (or older) white men. Activist-actor and Huffington Post blogger John Cusack makes several somewhat puzzling appearances in this movie, too. (No disrespect to Mr. Cusack.)  

Women and minorities are almost entirely left out of this film -- not unlike the way they've been left out of financial and economics professions. Yet, we know that women are slightly better at managing financial risk than men are. Study after study over the last five years has found that female financial managers consistently outperform their male peers. They think differently.

The two expert women the movie manages to talk to are Lucy Prebble, a playwright who once wrote a play about the collapse of Enron, and Laurie Santos, a Yale psychology professor who studies how monkeys make decisions. Neither have a background in economics, or in the 2008 crisis. 

But there is a long list of people -- who aren't white men -- who would have made great interview subjects for the filmmakers.

Where was Christina Romer, who wrote a paper in 2015 examining the impact of financial crises on advanced economies? Where was Brooksley Born, who warned against the danger of unregulated derivatives -- which ended up creating the 2008 financial crisis -- when she was head of the Commodity Futures Trading Commission in the 1990s? Where was Harvard economist Carmen Reinhart, who literally wrote a book called This Time is Different: Eight Centuries of Financial Folly? Where was Raghuram Rajan, India's top central banker, who warned of a potential financial crash way back in 2005, when he was working at the International Monetary Fund? 

If the world is to develop a framework for thinking differently about economics, it might help to start with more diverse sources.