directed by Charles Ferguson proves that there were systemic faults in our economic and financial system that brought about the collapse of 2007-2008. His research and moviemaking efforts were appreciated at Cannes and the film also won the 2010 Oscar for Best Documentary. This paper will compare the events described in the movie to the textbook by Patricia and Peter Adler and try to trace some common grounds.
Truth is often stranger than fiction, and to be honest, the financial crisis of 2008 was a long time in the making. Ferguson traces the beginnings of the malaise to the loosening of control on the US banking sector that occurred in the late 1980s. Loosening of control is always to be viewed with suspicion (Adler & Adler, 2011, 45). The system behaved from the 1940s to the 1980s and enabled us to climb out of the Great Depression, survive the Second World War and engage in mass production of cars, computers and communication technologies. The failure of savings and loans associations led to consolidation within the banking sector. Speculation in IT firms was on the rise but eventually the bubble burst with losses to millions in the stock market. At one time in the 1990s, the entire investment banking industry was in the hands of five banks. Efforts to regulate the market were thwarted and loans were made to the sub-prime sector, netting in high fees and commissions. The housing market and speculative investments were at an all time high. Then the market collapsed and crisis came upon us. Freddie Mac and Fannie Mae had to be rescued by the Government (Ferguson, 2010). Lehman Brothers collapsed and other institutions were either bailed out or rescued by the Government’s bailout package. Similar was the case for the auto-industry where GM and Chrysler were rescued by the Government. Foreclosures were at an all time high and people lost their homes and jobs. AIG has been found guilty of conniving with other firms to get insurance policies in lieu of payoffs and