REACTION

PAPER
IN
ECONOMIC
DEVELOPMENT
(INSIDE JOB)

SUBMITTED BY: JOHN CARLO B. AQUINO

SUBMITTED TO: MS. JENNIFER DELA ROSA

INTRODUCTION
The movie entitled “Inside Job” was an American documentary film that portrays
about the late-2000’s global financial meltdown, which was often called the crisis. It is
the analysis of the said crisis that cost over $20 trillion and many people lost their jobs
and homes. The documentary was directed by Charles Ferguson who began lots of
research before launching it. The movie was related to many of our topics in Economic
Development that helps students to fully understand the main thought of the book.

BODY
In the first minutes of the movie, it opens with a case study of Iceland and it
clearly says that Iceland was had the complete infrastructure of modern society. It is a
good place for a family to live. But in 2000 the government began a broad policy, it
shows how the country was being deregulated and it allows three main banks of the
country to be privatized that results financial deregulation. When Lehman Brothers went
bankrupt and AIG collapsed, Iceland and the rest of the world went into a global
recession.
Inside job was split into five chapters. Chapter 1: How we got here. It was during
the 40 years of economic growth in the US, investment banks were small. Morgan
Stanley in 1972 was the prominent investment bank at that time. In the 1980’s financial
sector quantum leaped, because it was said that investment banks were going public
which allows them to have many stockholders. By 1990’s many internet companies
dropped investments in internet stocks. Financial engineering became a new field of
study and derivatives were developed. The economic system changed, where mortgages
fused with other loans. Together they are called CDO’s (Collateralized Debt Obligations)
which they sold to investors.
Chapter 2: The Bubble. Since anyone could get a mortgage, home sales and
housing prices exploded. Investment banks believe that if they sell more of CDOs they
will have big profit. They also influence their investors that it has a rate of triple A. But
suddenly CDOs cannot payback and was a fraud creating the largest financial bubble in
history.
Chapter 3: The crisis. And it was happened that the bad side of selling CDOs was
a fraud that cause the economy in recession. The bad thing is, no one did a thing to fix it.
Many banks were collapsed and fall into bankruptcy.
Chapter 4: Accountability. The narrator says, “The men who destroyed their own
companies and plunged the world into crisis, walked away their fortunes intact” Many
CEO and major decision makers who were responsible for this crisis just walked away.
They are also supposed to be held accountable for this financial crisis.
 Chapter 5: Where we are now. For decades, the American financial system was
stable and safe, but then something changed. The US is declining, as shown through
wealth gaps and outsourcing. Europe tried to regulate the system, because they didn’t
want to come in another recession. But America didn’t want to do this. The main reason
why they don’t do it is because the same people who caused this mess are still in charge.
In my opinion, this movie was an amazing work and must watch specially for an
investor who feels it’s safe to believe in ratings of investments for taking risks. It is a
shame that leaders safeguarding the financial mafia rather than taking steps to eradicate
and protect the people in providing security. Inside Job showed how the government,
investment banks, CEO’s, insurance companies, etc. played a major role on the economy.
The movie presented the financial crisis in a clear and easily understandable
format. You won’t regret watching it. It gave me a deeper look on the financial crisis. It
gives us an awareness to the situation around us specifically in our economy. It is very
informative and enlightening which allows me to think deeper about the economic issues.
CONCLUSION
 For me this movie is one of the best documentary movies I have seen in my life. I
can highly recommend everyone to watch this movie. The moral lesson here is, financial
crisis is not an accident and unpredictable. It happens in many countries. It is fatal and
contagious. But it is controllable when leaders are effective and sublime.