The Flaw

Will you go to see a film about the American financial crisis of 2008? I hope you will, because this is one of the best films I've seen in a long time.

David Sington (In The Shadow Of The Moon) has made a film which is hugely entertaining and hugely insightful. This is a film without commentary, and there are no Michael Moore-type stunts. Instead Sington has found a range of economists and experts who explain in clear language the roots of the crisis - “It's a debt crisis, but also a crisis of economic theory”. These interviews are linked by a tourist guide, a former banker, leading his group around Wall Street and intercut with clips of animation from more optimistic times.

Editor David Fairhead has done a superb job with this material from training videos of the 1950s and early Sixties – the golden age of capitalism. Highly amusing now, at the same time it helps to build a picture of the historic background to the crisis. Apparently Sington was asked if they had specially created this animation, “because it matches so beautifully”.

Masterfully, Sington takes us through the years leading up to the crisis, explaining terms like “efficient market hypothesis”, the prevalent economic ideology of the 1970s – the wisdom of crowds – through the next two decades, when the rise of globalisation and industrialisation began to hit the American workforce. This was the time of the break up of the Soviet Union and the rise of China. With wages depressed, people began to jump on the speculation bandwagon. An ad from the time asks us “Wouldn't you like to find out how to make a fortune in real estate without having any money?” The debt bubble began to grow.

Then we see the people in the front line, those who fell victim to a predatory loans system which has cost them their homes and ruined their lives. Throughout the Reagan, Clinton and Bush years there was an enormous upward redistribution of wealth and the rich put much of their money into real estate such as the mansions in the Hamptons which for many are second or third homes. The fatal flaw was the assumption that the price of real estate would always go up.

This is not a film about greedy bankers. It doesn't point the finger at evil villains. We are reminded that greed is the basis of all capitalism, and the causes of this situation are complex. Sington takes us through this without ever losing his grip, overturning some common preconceptions along the way, for instance, this was not primarily a crisis of the poor, but of articulate middle class people. He goes back to the 1920s, another period of great income inequality, when the public were encouraged to invest in home owning with government insured mortgages. As a spin off, we see how this contributed to the creation of urban ghettoes. An area free from Jews, Asians and African Americans meant a better property deal. This is illustrated with an imaginative blend of contemporary and archive film.

If you're still unsure about how the bubble burst, and why we are in the economic situation we find ourselves in today, I urge you to go and see this film. Very well received at Sheffield's Doc/Fest, it should soon be on wider release.