<em>Inside Job</em>'s Charles Ferguson Wins Oscar, Airs Frustration with Obama

Ferguson spoke with me about his new film, Obama's disappointingly silent reaction to it and why he feels this president has an even stricter "with us or against us" policy than his predecessor.
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Charles Ferguson's mind goes where others dare not travel. In 2007, when movies like Lions for Lambs and Home of the Brave were proving Iraq toxic at the box office, Ferguson released No End in Sight, an engrossing examination of the Bush administration's post-invasion blunders. That film earned Ferguson an Oscar nomination for Best Documentary.

Last night the director captured the Oscar for his second film, Inside Job, an infuriating look at the cronyism that triggered the 2008 financial meltdown, which destroyed millions of jobs and torched trillions of dollars in worldwide capital.

With Inside Job, Ferguson cements his position as an essential voice in the documentary world, a filmmaker who tackles the same subjects as Michael Moore without the goofy theatrics or partisanship. His film attacks the Bush administration and offers an equally scathing evaluation of President Obama, whom Ferguson says has betrayed his famous pledge for change by tapping the same corrupt Wall Street executives who crashed the economy in 2008 to devise his economic policies.

A few days before his Oscar victory, Ferguson spoke with me about his new film, Obama's disappointingly silent reaction to it and why he feels this president has an even stricter "with us or against us" policy than his predecessor.

Kors: I'm an extremely stupid person, and I walked into your film thinking, "Ferguson's never going to be able to explain to me what asset backed securities are or how synthetic CDOs operate." But your film is extremely clear. And I noticed on your website, you even put up a jargon page to explain the financial terms.

Ferguson: We did.

Kors: Before you can even begin to explain these Wall Street crimes, you first have to bridge that language gap, don't you?

Ferguson: You do. And to some extent, the Wall Street firms work to keep it that way. They like the idea that they're engaging in procedures mere mortals can't understand. It keeps the public out of their hair.

Kors: In the film you interview some high-powered people in the financial world. Did you ever feel like you were in over your head?

Ferguson: No, not at all. But I had an unfair advantage. A long time ago I got a Ph.D. in political science. My doctorate was on economic policy. So I had a substantial background in this. And I knew a number of people in high finance.

Kors: None of the people you interviewed tried telling you, "Oh, Charles, you just don't understand."

Ferguson: Actually a couple of them did. But most of the people I interviewed for the film were quite welcoming. Of course, there was a self-selection effect: so many people refused to go on camera. I tried almost everyone from the Obama administration, from the president on down, plus all the presidents and top executives of the banks. They all refused.

Kors: Obama's role in this scandal really struck me. In the film, you show how, during the campaign, he spoke eloquently in favor of aggressive regulations on Wall Street and how now, as president, he's continuing the deregulation that got us in trouble. He's not only appointing the same kinds of people to key financial positions—in many cases, he has actually hired the same people.

Ferguson: That's right.

Kors: I think many liberals who see the movie will be surprised that you didn't spare Obama.

Ferguson: No, I didn't. Nor should have. ... Obama was one of the real question marks in my mind when he got into office. What would he do? How should we handle him in this movie? In the first six months, a lot of people were hopeful that he'd change the direction we've been going in. But his personnel appointments and his policies have been pretty consistent with the previous administration.

Kors: Were you one of the hopeful ones?

Ferguson: Oh, sure. The first disturbing signals were those appointments in the economic realm. I thought, to some extent he might be a prisoner of the system there in Washington, trapped by the personnel, the mindset in the capitol. He doesn't have a background specifically in economics. I thought, let's see what he learns. Maybe he'll fire these people. But then six, nine months down the road: nothing. The same path as before.

Kors: That's so painful because during the campaign, Obama made clear that he did understand how the economic system malfunctioned.

Ferguson: Yes, and he had a unique opportunity to do something about it. That is what's really tragic. He had an overwhelming majority in Congress, tremendous personal popularity and a true economic crisis. The financial system had come to its knees. Now that he blew that opportunity, it's really back to the drawing board. Fixing this is going to be a gradual process, and it wouldn't surprise me if Washington waits to the next crisis to do anything.

Kors: I find Obama's support for loose financial regulations odd too because, well, with President Bush, many people said, "Ah, he doesn't know any better." Or: "Of course. He's a Republican. That's what Republicans are for: to represent business and the wealthy."

Ferguson: No, that contrast between Democrats and Republicans, that's been eroding for quite some time. It began in the Clinton administration. The way Republicans and Democrats handle business—especially regulatory issues—has been narrowing since then. The Clinton administration went a long way down that road, and the Democratic party has moved continuously in that direction. Today one could argue that there's virtually no difference between the two parties on this issue. There's still a contrast on abortion, gay rights, global warming. But business regulation: not much.

Kors: I see what you mean.

Ferguson: Of course, that doesn't answer the question about Obama as an individual. Could he have broken with his party and his funding base and sought stricter regulations? Yes, he could have. Even with the Democrats increasingly beholden to the business sector, if he had appointed officials who believed in aggressive regulation and prosecuted Wall Street executives who broke the law, Obama could have made a substantial impact.

Kors: I want to ask you about Matt Damon, who narrates Inside Job. As someone not versed in finance, I came in thinking, "Even if I understand this film's assertions, I won't have the knowledge base to question them." When I heard Damon's voice, that concern faded. I figured: he's smart; he's knowledgeable; he wouldn't take part in a documentary unless its research was solid and its assertions were true, so I can trust the statements in this narration.

Ferguson: (Silence)

Kors: ... Your silence is making me feel crazy. I'm guessing, then, that that thought of Damon never occurred to you. So let me ask, why did you choose him?

Ferguson: Well, Matt is known to be an intelligent man who has had some thoughtful involvement in politics. (Ferguson laughs.) It's not crazy that his voice gave you confidence in the film. Something like that occurred to us when we chose him. I'm just thinking: I spent a decade at MIT and Harvard among some of the sharpest analysts in the world, and I don't think when they watch the film that they're going to be swayed to one viewpoint or another because of the voice of Matt Damon.

Kors: Fair enough.

Ferguson: Matt did turn out to be incredibly good though. He had perceptive observations about the script. When we sent him the draft, he identified a weakness in the script, the same one that we were wrestling with. He helped us strengthen that area.

Kors: Are you referring specifically to the end of the film, where essentially, after a movie's worth of explanation, the narration suddenly addresses the viewer, breaks the fourth wall and urges us to take action?

Ferguson: Yes, that was it.

Kors: That was a bold move. I thought about that section a lot.

Ferguson: We did too. I had made that decision to address the audience before Matt came into the project, but the way I had written it was clunky, and when he came in, he said, "It's rather simple: aren't you trying to say this?"

Kors: Weren't you worried that by urging the audience to take action, you were ruining your journalistic objectivity, becoming advocates?

Ferguson: No, I didn't worry about that at all. My view was: we've just shown you two hours' worth of facts about what happened. We've earned the right to say what we think about it.

Kors: I got my master's at Columbia, and I can't tell you how much it burned me to see two different Columbia men on camera making fools of themselves and the institution: Glenn Hubbard, who advocated deregulation, was instrumental in designing the Bush tax cuts for the rich, and is now dean of the Columbia Business School, and Frederic Mishkin, professor at the business school, who accepted over $100,000 from Iceland's government to write a report praising Iceland's faulty economy.

Ferguson: Yes. You're not the only one from Columbia who was upset. In fact, I'm going to be speaking soon at the Columbia University Senate, which handles policy and ethics issues. They've asked me to come and share information I've uncovered about Hubbard, Mishkin and others.

Kors: Mishkin even doctored his resume after the crash to make it sound like his paper identified Iceland's instability. It's crazy. I mean, if you were a physician who authored a study championing a medication and you didn't reveal that you were working for the pharmaceutical company that made that medication, you could lose your medical license. If you were a lawyer and did something comparable, you could be disbarred. But your movie says that in academics, this happens all the time.

Ferguson: Yes, it's a major problem. It started around the time I did my doctorate. Now it's pervasive. Academics are routinely being paid to advocate for corporate positions in papers, in court, in Congressional testimony.

Kors: Wow. I testified twice before Congress, and no one ever paid me a dime. ... Have you testified?

Ferguson: Yes. Many times.

Kors: About this film? About the economic crisis?

Ferguson: No, no, this was years ago. I testified about different policies regarding technology.

Kors: I'm wondering if you saw Capitalism: A Love Story and what you think of Michael Moore generally.

Ferguson: That's a difficult question. I have conflicted feelings about the film and about him personally. I think he's a very nice guy. I've spoken to him and really like him. And I think he's done a tremendous amount for the genre. Before Moore, people never thought that documentaries could attract such a large audience or be worthy of such public and corporate attention. But with Capitalism, I think he missed a good opportunity. Maybe he didn't know exactly what he wanted to say. But if he had revised a few times, he could have collected his thoughts and expressed them clearly.

Kors: I'll tell you the difference I see between your movies and his. Yours are essays. They give the big picture, but they aren't big on memorable, three-dimensional people. His films have memorable people, but sometimes they don't capture the larger political situation.

Ferguson: Hmm. I think there's some accuracy in that, though I will tell you, the wounded soldiers in No End in Sight ... I will never forget them. When I was conducting those interviews, I was fighting very hard not to cry. And the editors, when they saw that footage, they brook into tears. But, in general, it is true that both my films take a more academic, systemic approach.

Kors: Is it fair to call your movies essays?

Ferguson: Sure, I think that's fair. In fact I take that as praise. Hopefully they're cool, watchable essays.

Kors: They are. I'll tell you why, too. I've always wanted to say this to you. Your films have these fascinating, quirky details that stay with you. Like in No End in Sight, you talk about how President Bush appointed the son of one of his largest contributors to run Baghdad's traffic, even though the son had never worked in urban planning. Then you show a clip of Baghdad's haphazard stop lights and nightmarish traffic.

Ferguson: Yes. I wanted to highlight details like that in this film as well. Like the fact that Dick Fuld, the CEO of Lehman Brothers, had his own private elevator, so he didn't have to interact with other people at the firm. An additional segment that didn't make it into the final film was about Stan O'Neal, the CEO of Merrill Lynch. He also had a private elevator, and he wrote a note to his employees, saying essentially "Whatever elevator I get into, you get out of."

Kors: The therapist in this film threw me. He's talking about how his patients, high-ranking Wall Street executives, use cocaine and prostitutes. He didn't mention his patients' names. Still, I was sitting there thinking, by speaking with you, isn't he violating therapeutic standards?

Ferguson: I know. I found his agreeing to speak a little odd myself. I even asked him off camera, "Are you sure this is okay?" When he said yes, I asked if I could speak with his clients, to verify what he was telling me. He gave them my contact info, and some of them called me and confirmed what he told me.

Kors: I have friends in finance, and they say your film is off the mark. You spotlight how the investment firms urged clients to buy certain securities while secretly banking on those same securities to fail. My friend said that in very large firms, that's bound to happen. One division of the company supports an investment, another opposes it, and the only thing those two divisions have in common is the company name. But that's not really what was happening here, was it?

Ferguson: No, not at all. That scenario does occur, where the right hand doesn't know what the left hand is doing. But Goldman Sachs is an extremely carefully managed firm, and they took a look at the firm's portfolios and came to a strategic decision in 2006 that it was a dangerous market and decided they would hedge themselves against it. Then finally they began betting against certain high-risk securities while continuing to sell them. Finally they were designing securities for the purpose of betting against them.

Kors: And it wasn't just Goldman.

Ferguson: No. Morgan Stanley started doing the same thing, but they missed one trader, one guy who made contrary bets that erased $9 billion.

Kors: You mean one trader was trading with the stated company opinion, not the secret, reverse company opinion.

Ferguson: Correct. And by betting with the firm's public viewpoint, he wiped out $9 billion in profit from the other parts of the company which were betting on the economy's collapse.

Kors: Have you heard any response to the film from the White House or Wall Street?

Ferguson: Wall Street, yes. The White House, no. Which is really quite striking because I know many people in the Obama administration, people at high levels. They have approached the movie, before and after it was released, with this real attitude.

Kors: "You're either with us or against us."

Ferguson: Yes, just like the Bush administration. But I'd say even more closed and even more controlling. We're talking about people I've known for 20, 25 years, people who have been dinner guests in my home.

Kors: Couldn't you say, "Hey, did you catch my new flick?"

Ferguson: Unfortunately they won't speak to me anymore.

Kors: Wow. So you've really paid a personal price for speaking out with this movie.

Ferguson: Well, a price by whose standards? It's not like the price many people in Tunisia or Egypt have paid for speaking out. I still have a very comfortable life. And for every friend I've lost, I've gained a few more.

Kors: In Hollywood?

Ferguson: In Hollywood. And not just in Hollywood. ... Even still, it was sad the way all this played out with the Obama administration.

Kors: Do you think Obama has seen the film?

Ferguson: I don't know. I wish I did know.

Kors: You said there was a reaction from Wall Street.

Ferguson: Well, nobody who was willing to speak on the record. But privately, some executives—very senior executives—told me that they agree with the film. Most of those people thanked me for making it.

Kors: Did you worry about your safety after making the film? No doubt you pissed off a lot of powerful people.

Ferguson: That's true. But no, I didn't really worry. I thought it was possible that they'd send a private investigator after me or make some effort to stop the distribution of the film. But there's no sign that any of that has occurred.

Kors: What do you think is going to happen from here?

Ferguson: It's very difficult to say. You never can tell when the public has had enough. One month ago, if someone said, "In a month revolution will sweep through Tunisia and Egypt and—"

Kors: And Madison.

Ferguson: (Ferguson laughs.) Yes. And Madison. So who knows what's going to happen.

Kors: George Carlin said that the revolution will never occur in this country because Americans are too fat and too lazy, and we all have a cell phone that will rub our balls and make us pancakes.

Ferguson: I'd say that's no longer true.

Kors: Which part?

Ferguson: About people's material comfort. A lot of people in this country do not look at themselves as fat and happy and secure.

Kors: So you think, perhaps with a Jon Stewart-esque optimism, that maybe people will rise up.

Ferguson: It's hard to predict. But I wouldn't count it out.

Kors: What was the biggest surprise in making the film?

Ferguson: There were two big surprises. I didn't realize until I really dug into my research how low the ethical standards had sunk in the financial world. I knew there had been some rather unethical occurrences. But if someone had told me that we were going to uncover that the major banks were creating securities designed to fail, I would have said, no, people in this country just wouldn't do that. And what was even crazier was discovering that doing that isn't illegal per se. ... I was also shocked by the ineptitude of the government during the 2008 crisis.

Kors: Some Congressmen come across in the movie as very articulate, like Senator Carl Levin, whom your show grilling executives from Goldman Sachs during the Congressional hearings. Levin comes across as smart.

Ferguson: He is. Unfortunately he doesn't run the government. I wish he did. He's an extremely knowledgeable and competent guy.

Kors: In a previous life you were a software designer, helped create FrontPage and sold your company to Microsoft for over $130 million. You could have moved to the Bahamas, kicked back and ate shrimp for the rest of your life. Why make movies? And why movies on these important topics?

Ferguson: Well, one factual note: my company did sell for over $130 million, but at that point I owned less than 10 percent of the company. Still, I could have retired to Bahamas. That's true. But I love film. I always had a secret dream of becoming a filmmaker. I was planning on making a feature film. Then along came the Iraq War, and I thought, this is too important a topic to just pass on. I had double that reaction when the financial crisis hit. I thought, this is perfectly suited to what I know.

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