Blog 3: Inside Job

The documentary Inside Job is split up into multiple parts and has to do with the financial crisis that struck the economy in the late 2000’s. The first part of the documentary has to do with how the whole economic crisis originated. One of the main points in the first part of the film is that the majority of small and privately owned businesses slowly changed into publicly owned companies. Another important factor mentioned is that most salaries for professors and bankers at that time rose tenfold. The second segment of the documentary described the housing bubble of 2001 up until 2008. The most important idea of this part describes loans. In that time period of the new millenium, loans were given out almost like candy. These loans range from credit card loans and car loans to mortgages for homes. This in turn would cause the prices for homes to shoot up drastically, greatly reducing the chance of any loans getting repaid. Also, this caused foreclosures of homes and businesses to declare bankruptcy. Eventually, the people that were supposedly in charge of all the problems were brought up in court and were facing charges. Not only did they testify that they weren’t responsible, but they also got bonuses and raises! MOUNTAINS OF RIDICULOUSITY! Today, most of these idiots are still in power, unfortunately. I’m not surprised..

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One response to “Blog 3: Inside Job

  1. “Mountains of Ridiculousity!” That’s a good way to describe it. Your post shows why.

    I want to add a couple points of information/clarification. You write that leading up to the crisis, “small and privately owned businesses slowly changed into publicly owned companies.” Here, you’re referring to the transformation of the banking sector, when privately-owned commercial and investment banks went “public”, right? The restructuring of the financial sector, in particular, is definitely an important part of the story.

    And I must point out the misstatement regarding professors’ salaries. You state that “bankers and professors” have seen a tenfold rise in salaries. It’s strange for me to even see bankers and professors in the same sentence. Universities no doubt played a key role in enabling the housing boom and bust, but average professors did not reap any financial rewards — and have not received anything close to a tenfold rise in their salaries. You may be thinking of university administrators. Here’s a link to an article that just appeared in Business Week: http://www.businessweek.com/articles/2012-11-21/the-troubling-dean-to-professor-ratio

    The article notes that “At universities nationwide, employment of administrators jumped 60 percent from 1993 to 2009, 10 times the growth rate for tenured faculty.” Administrator salaries are typically significantly higher than professor salaries and they’ve been growing at a much faster rate. At any rate, the majority of teaching done in universities is by adjuncts and they are paid a small fraction of what administrators or tenured faculty receive.

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