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Inside Job

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by

Katie Ruthven

on 6 November 2012

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Transcript of Inside Job

Real Estate Bubble We support the “Occupy Wall Street” movement because
it is finally the voice of the citizens such as us. We are not fighting for
individual benefits, we are fighting for overall improvement and fairness in our economy. Occupy Wall Street Extent of the crisis? The crisis is completely attributable to deregulation.
Regulation would hold order and allow the industry to flow smoothly without faults. CEO’s such as Henry Paulson succeeded to work around the regulation and create new rules. For example Henry Paulson, the CEO of Goldman Sachs, helped lobby the Securities and Exchange Commission to relax limits on leverage, allowing banks to sharply increase their borrowing. Was compensation
a factor? Ethical Behavior: is characterized by honesty,fairness and equity.
Legal Behavior: refers to variations in the methods and degree of governmental social control of behavior.

In an ideal society, legal and ethical standards / laws should be the same. Factors that caused the real estate bubble:
-sub prime mortgages - mortgages were being
given to people who were not financially stable
& able to repay them
-CDO's were being falsely rated as triple A and
sold to investors who trusted the rating
agencies' judgements The real estate bubble worsened the economic crisis.
It caused enormous profit and annual cash bonuses to spike on Wall Street. Traders and CEO’s became extremely wealthy during this bubble. This wasn’t real income or real profits, it was money created by the system which flooded the financial system.
Yes compensation was a factor
in the crisis. Everything is about money.
Rules were bent in favour of those who are
money hungry. Those such as Henry Paulson and Richard Fuld who were already bringing in millions but found ways to make even more. Business schools should not encourage externally funded research. This research is bound to be biased as it is written by someone who is paid thousands to make what they are writing about appear flawless. We do not agree with this view because although it was not illegal for Goldman Sachs to do what they did, it was not ethical at all. They were aware that their clients were not educated in the area and they were taking advantage of their lack of knowledge to create an income. What made us angry was: –rating agencies giving AAA ratings to CDO’s that were not supposed to be rated that highly
- CEO’s leaving the financial sector and joining the political sector in order to create rules in favor of themselves and not for the good of the country
-bonuses were given in huge amounts
-the ones who are supposed to be trustworthy and loyal leaders are the ones being selfish and looking out only for themselves and others in their position We do not think anyone should go to jail because nothing was done illegally only extremely unethically. Although the people at the top did create a huge crisis in our financial industry, they did it legally. There is not enough reason to put someone behind bars that did not break laws. We do however believe the Justice Department should pursue an investigation to fine the biggest players and firms on Wall Street. These people should be stripped of their position and fined a large amount of money. We believe the government should and should not have bailed out banks.
On the positive, it should have happened because less damage was done bailing out the banks than damage that would have been done had the banks completely fell. The U.S. government stepped in to help out and with their help it allowed many people to keep their jobs.
On the negative, by them bailing out the banks they have basically allowed the banks to easily do the same thing they were doing again. The largest portion of economic problems consists of something to do with jobs and wealth, whether it is low salary, not enough jobs or the descending amount of middle class people. Therefore, by fixing the financial system, many economic problems would be solved. Although there are other factors contributing to the problems, the majority can be fixed by fixing the financial system. Canada has avoided so many of these problems because we are a strong democratic society. Decisions made by the government are made in favor of the citizens of the country, not by individuals. The economic problems are just as attributable to the political system as they are to the financial because once again it really is a “wall-street government”. The same people in control of the government are in control of the activities occurring on Wall Street. They work hand in hand. We are pessimistic about our economy in the future because once the damage is done it is very hard to return to the original state of how things were. Although it is possible to get back on track, just like we did from the last downfall, it is impossible to return to how the economy was before the downfall OPTIMISTIC OR PESSIMISTIC? The most important steps to take to address our economic problems is through documentaries like “Inside Job” to make citizens aware of what is actually going on in their economy. The more people are aware, the more they can work together to fix things.
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