The following is a guest post by Grzegorz W. Kolodko, author of Truth, Errors, and Lies: Politics and Economics in a Volatile World. He blogs at www.volatileworld.net You can also read a recent interview with Kolodko in the Warsaw Business Journal.
During my recent cross-country lecture tour in the USA, I heard opinions that the themes of the films Wall Street: Money Never Sleeps, directed by Oliver Stone and Inside Job perfectly coincided with Truth, Errors, and Lies: Politics and Economics in a Volatile World. Several people said the films are a quasi-postscript to the book, in particular my comments on the cynical stage of contemporary laissez faire economic policy. I have also been told that some people—everyone knows who—are afraid of the book and the films. Well, nothing hurts like truth and it is not always enough to present the truth in an academic, theoretical way. Artistic fiction has value too and fighting for the truth is never too much.
Several months ago I was asked on my blog (post 994) about my opinion of Stone’s film. In the movie, Stone shares his vision of how today’s global economic crisis began and what caused the U.S. government buyout of Wall Street investment banks. After watching the film, I don’t think it’s Stone’s best work. I find his other films, such as Platoon or JFK better. Nevertheless, because of the polarizing nature of his themes, with each new movie he has made more adversaries as well as more supporters. His work proves that he is not only a great artist but a brave one as well.
An original comment left on my blog wonders if “Stone’s point of view has any basis in reality?” I believe it does. Some of the characters depicted in the film are based on real people and the movie’s plot resonates with actual events. The film’s depiction of ruthless rivalries, hostile takeovers, efforts at destroying the competition, speculation on expected earnings, manipulating markets, playing the media, and even charity balls with beautiful people is based on intelligent observation of reality.
When Gordon Gekko, the main character wonderfully depicted by Michael Douglas, advertises his book with the title Greed is Good he gives the overall impression of neoliberal capitalism as a cynical enriching of the few at the expense of the many. He uses insider slang terms for derivatives, adding that there are maybe seventy five people in the entire world who understand the concept completely. Also, his daughter’s computer screen displays a sentence that describes the system as a method to “privatize the gains and socialize the losses”.
There is a wonderful scene in the movie showing a meeting of top New York bankers with the politicians responsible for financial policy. Such a meeting was held on Saturday, September 13, 2008, at the headquarters of the New York Federal Reserve. It was attended by the Secretary of the Treasury, Henry Paulson ,the then Head of the Federal Reserve Bank of New York, and current Secretary of the Treasury, Timothy Geithner, and Ben Bernanke, chairman of the Fed. The negotiations lasted ten days and were very dramatic but in the film the same event takes only a minute or so. The participants in the meeting are confronted with a choice between a government rescue or a great crash of the financial sector with all its consequences: thousands of bankruptcies and more than million unemployed workers. The real life decision was made and losses were socialized…
But in Money Never Sleeps gains must be privatized. Some cynical bankers were able to make millions of dollars that particular weekend on somebody else’s bankruptcy. Why would anybody need another several dozen million dollars? As Gordon Gekko explains, it is not the money, it is the game.
Though a work of fiction Wall Street: Money Never Sleeps offers its own explanation of the current financial crisis However, there is a better and far more interesting film on how neoliberalism led to the financial crash only this time it is a great documentary, Inside Job by Charles Ferguson. This one is a must see! If one wishes to understand the true story of how money never sleeps one should see this movie or read my new book, Truth, Errors and Lies: Politics and Economics in a Volatile World!
Grzegorz W. Kolodko is professor of international political economy at Kozminski University, Warsaw