In 2008 the United States financial crisis sparked a domino-like global recession throwing millions out of work. Triggered by a lax and liberalized regulatory system in the United States, the crisis sounded the death knell for the G7’s leadership and catapulted the G20 into prominence as the world’s new governance framework for global economic management. It also fed a US climate of electoral revolt.
Have lessons been learned and acted upon in the wake of the crisis? Two new documentaries say no: the conditions that created the opportunity for the crisis have not been addressed yet.
Well-known Canadian documentary maker Terrance McKenna recently completed a riveting and comprehensive four-part CBC series on the 2008 crisis called MELTDOWN, which is available on the CBC website for viewing. The website also boasts a robust resource centre supporting the content of the film, including a resource listing , a timeline and a summary of The Hard Facts like:
- Half of America owns only 2.5% of country’s wealth. The top 1% owns a third of it.
- The gap between the top 0.01% and everyone else hasn’t been this vast since the Roaring Twenties.
- In 1950, the ratio of the average executive’s pay cheque to the average worker’s pay cheque was about 30 to 1. Since the year 2000, that ratio has exploded to between 300-500 to 1.
- In 2008, the total national household debt in Canada reached an all-time high of $1.3 trillion. A survey found that 42% of respondents said their personal debt rose in the previous three years, and 21% said they couldn’t manage their debt.
- Approximately 21% of all children in the United States are living below the poverty line in 2010 – the highest rate in 20 years.
Inside Job is a more polemical film than MELTDOWN but also compelling. Just released in Canadian theatres, it is directed by a former information technology consultant (who sold his company to Microsoft) turned filmmaker. 51 year old Charles Ferguson’s style genuflects to Michael Moore.
Ferguson failed to get key central players to be interviewed however the insiders who did participate found themselves on the defensive. Ferguson says the film is not a partisan one. “This is a completely bi-partisan problem in US political terms,” he adds. “It was done to us equally by Democrats and Republicans…The final section of the film makes the point that unfortunately President Obama appointed a group of people to run economic policy in his administration who contributed to the crisis.”
One of the documentary’s strengths is how it uncovers the way in which academic endorsements for the era of liberalization went hand in hand with lucrative financial sector consulting contracts.
MELTDOWN and Inside Job both focus on the crisis, its causes and the human and policy aftermath. Neither attempts to look at alternative ways that prudent financial innovation can be part of a solution addressing economic, social and ecological wellbeing by building new financial products and services centred on Impact Investing.
Editor’s Note: SiG is looking at alternative financial models in its championing of the Task Force on Social Finance. With a report due out by December 2010, the Task Force will lay out a roadmap for the development of an impact investment marketplace in Canada.