Inside Job - Charles Ferguson interview

CHARLES Ferguson talks about his documentary, Inside Job, which examines the cause of the global financial crisis of 2008. He talks about being denied access to anyone from the Obama administration, his disappointment with current US policy and its failure to regulate the banks and how the crisis affected him and the people closest to him.

Q. What made you decide to tackle the banks in Inside Job?
Charles Ferguson: We made the film to make people aware of these issues and to make people aware that they haven’t been dealt with yet and that there’s still a lot of work to be done.

Q. When did you become aware that you wanted to make a film about the financial crisis of 2007 to 2010?
Charles Ferguson: I started thinking about it fairly early. Several of the people who are actually in the film are people that I’ve known for a long time, including people who were among the first to warn about this. Nouriel Roubini and Charles Morris I’ve known for a very long time and they started talking to me about this in 2007. But it was after Lehman weekend that I really decided I should make a movie.

Q. How did the crisis personally affect you?
Charles Ferguson: Much less than most other people. I have investments and, of course, they declined in value because all investments declined in value. But I was not affected nearly to the extent that many people were. I wasn’t laid off from a job, I don’t have a mortgage, I own my house. So, I’m quite fortunate relative to many people. But I have many friends who were affected by this quite severely.

Q. Did you consult with them as to what questions should be asked from their point of view?
Charles Ferguson: Sure, I tried to talk to a lot of people to get a sense of how people felt about the situation and what experiences they’d had.

Q. What were some of the worst cases you heard about?
Charles Ferguson: I’d prefer not to go into people’s individual situations, for privacy reasons, but I have one friend whose father lost 80% of his net worth because he had invested heavily in stocks and bonds that were very seriously affected by what happened. So, I do know some people who have been very seriously affected.

Q. So, how do you feel knowing them and knowing that people at the top of this chain are effectively getting away with it… without prosecution and often with huge profits?
Charles Ferguson: Well, it makes what occurred even more unethical and even more unfair and outrageous. I personally try to control my emotions because I have a job to do and it’s important not to let your emotions get in the way of doing your job properly. I wanted and still want to be able to think clearly and objectively about what happened.

Q. Did anything surprise you about just how bad the situation was once you started on this path?
Charles Ferguson: I thought, because I’d been speaking with Nouriel and Charlie, that I would be well informed. But in fact when I really dug into it, which was very late 2008 and all of 2009, I was quite shocked at what I discovered – the really very low ethical level to which American investment banking and commercial banking had sunk. The practices of the mortgage lenders and the practices of the investment banks in creating securities that were designed to fail so that you could profit by betting against them. I was stunned that this occurred and I was stunned that it was legal. It’s actually not ipso facto illegal to do that… although as a practical matter there was probably a great deal of fraud committed.

Q. How easy was it to get access to some of the people you interviewed? A lot of them declined to speak to you…
Charles Ferguson: Yes, none of the CEOs of any of the banks would speak with me on camera. A few of them, not very many, but a few spoke off the record. But nobody in the Obama administration would speak with me, even off the record, and these were people in many cases I’d known for 20 years. I have to say I found that very disappointing and a very bad sign.

Q. So, how satisfying was it to be able to put people like former Bush adviser Glenn Hubbard [now dean of Columbia Business School] on the spot and get a rise out of him like ‘give it your best shot’?
Charles Ferguson: I didn’t enjoy myself when I was doing that. I viewed it as my responsibility to ask them questions that apparently nobody else has asked them and confront them with their conflicts of interest and the nature of their activities. It wasn’t particularly fun to do that. It sometimes look funny to an audience watching the film. And I can see how audiences would have that reaction. But as you can imagine it was a pretty tense situation.

Q. Do you think Obama is doing as much to bring about reform as he promised prior to election?
Charles Ferguson: No, he’s a huge disappointment… a huge disappointment. And the people he’s chosen to run economic policy are a huge disappointment. Many of them were deeply involved in causing the crisis. It’s a very, very, very sad thing…a tragedy I think for America.

Q. Why is the government so resistant to that, in your opinion?
Charles Ferguson: I think it’s quite simply the political power of the financial services industry. It’s economic and political power.

Q. So, why couldn’t someone like Obama come in and break that power, or at least shake it up?
Charles Ferguson: He could have. And his election was the one time recently and perhaps for a long time to come when somebody really could have done something about this. It is a huge tragedy that he chose not to and it’s something that we as a country and the whole world – certainly America – are going to be paying for a very long time.

Q. Did you ever get any feeling that pressure was being brought to bear not to ask particular questions or pursue certain people or topics?
Charles Ferguson: No.

Q. Did that surprise you?
Charles Ferguson: Actually, I was a little bit. I think that part of it had to do with support from Sony Pictures Classics. They came in very early, so the fact that it was known that they were partially financing and would be distributing the film helped. They were incredibly supportive and they gave me complete editorial control. It was a great thing. If we hadn’t had them, I think it’s quite possible that things would have been a little rougher. But nobody gave us any threats and there were no attempts to intimidate us. Certainly, the response of the Obama administration was very, very disappointing. Nobody would speak with us even off the camera or off the record. The one conversation that we had with the White House Communications Office was a very unpleasant, unsatisfactory conversation, which as very unfortunate.

Q. On a global scale, were you aware of just how powerful America still is as a financial hub? Your film shows what an immediate effect the collapse of Lehman had on things over here, for instance…
Charles Ferguson: In a general way, yes. There were certainly things I still discovered, though. The effect on Asia was, in some cases, very, very dramatic. Asia is recovering rapidly now but for a couple of years a very large number of people in Asia were affected and a lot of people in Eastern Europe were very heavily affected. So, it’s still true that the world depends on what happens to American finance.

Q. There does appear to be a growing inclination among Hollywood filmmakers to want to tackle this issue. Oliver Stone returned to Wall Street to do it. We have Margin Call coming our way and HBO have made Too Big To Fail. Are you monitoring those films with interest?
Charles Ferguson: Sure, some of them haven’t been made yet but I have watched the new Wall Street film, which really doesn’t have much in it that’s about the crisis. Apparently, they had actually written a script before the crisis started and then they kind of retro-fitted the crisis into the film. It’s an entertaining film but it doesn’t tell you what happened. The other films could have a much higher educational component – presumably Too Big To Fail will, although the book – which of course I’ve read – focuses mainly on the period of the acute crisis and doesn’t say much about the causes of it.

Q. Oliver Stone is a fierce critic of the US financial model and he believes that it would be good if the US followed the South American model and gave control back to public control. Do you think that would help?
Charles Ferguson: No, I don’t think so. But a controlled, regulated banking system would help a lot.

Q. What will you do next? Will you stay with this issue?
Charles Ferguson: Yes, I will stay involved with this issue but at the same time I’m going to start doing new things. I haven’t decided yet what to do.

Q. When did you first know you wanted to make documentaries and which filmmakers inspired you?
Charles Ferguson: Well, I’d like to make lots of different kinds of films. Not just documentaries. Shortly after I decided that I wanted to start making films the world handed me first one and then a second gigantic issue that were relevant to my earlier background and training in political science… first Iraq and then this. But there are lots of different kinds of films that I’d like to make – not just documentaries and not just political documentaries.

Q. Would that extend to feature films?
Charles Ferguson: Yes, oh yes. I’d love to make thrillers.

Q. Was it an easy switch to make to get into films?
Charles Ferguson: It was surprisingly easier than I feared it might be. I found that many of the things I’d done before were, to some extent, transferable or were helpful in learning how to make films. The most important of those was something that I learned when I started and ran a software company, which was also something that I’d never done before, which is that if you’re able to attract very good people they will teach you your job. That’s what happened in the software company and that’s what happened the first time we made a film together.

Q. So, what’s been the most positive or surprising reaction you’ve had to the film so far?
Charles Ferguson: I think there have been several. One of them certainly is that many people in finance have told me privately that they agree with it. And some have even said so publicly. At the New York Film Festival, eight of the people who are in the film were on stage with us. Several of them are people deeply involved in the financial world, such as Bill Ackman, an extremely successful hedge fund manager, and that was very gratifying that people like that would stand up and very publicly support the film.