The Flaw is a look at the recession and financial collapse of 2008. This documentary investigates the causes of ruin and includes interviews with noted economists, financial reporters, Wall Street bankers and homeowners on the brink of foreclosure. The film has some pretty good insights, with lucid analytical perspectives of top academics in economics. The economists and hedge fund manager are top rate. The film also interviews an appropriate selection of affected individuals to capture the human dimensions of the crisis. There are some interesting interviews with borrowers who have problems paying their mortgages after the crash, and most don’t portray themselves as victims, but guilty of poor judgment or excessive optimism. The film doesn’t go very deep into the problem but does give an excellent overview for people trying to understand what happened. I do think the movie is well made. It made the point pretty well that it wasn’t trying to blame people for being greedy, not even the top 1%. Instead it tried to explain how the correlation between a drop in income, rise in debt and the need people feel to not get left behind coalesced into unhealthy and unrealistic view of the sustainability of investing in houses as assets when a bubble was forming. One of the changes during the housing bubble was the ability to purchase a house for no money down and no income verification, as well as dispensing with the other things that had been needed in the past to purchase a major asset. The complete disconnect between the people writing the mortgages and the people packaging, slicing, dicing, and repackaging them as collateralized securities is brought out, as is the effect of continued near-zero interest rates and Greenspan’s naive belief that the financial markets can be mostly self-regulating. This movie had a lot of great insights, like the part about strong wage growth for the lower classes during what many people think of as America’s most prosperous era (the 1950s). It runs down changes and trends in economics and class over the past century, covering history most people are unaware of but that as a country we’d do well to remember. I also like that it spotlights the new wisdom that real estate is not always a good investment (since many people I know personally cling to the opposite idea even as their own houses stay ‘under water’). I don’t think this is film is necessarily against capitalism but does seem to advocate stronger boundaries for the financial elite, better consumer protections, and a better braking system for our market’s swings. Although I’ve traditionally leaned right my whole life, after everything I’ve seen, heard, read, and experienced regarding our nation’s economy over the past 10-15 years, I’m inclined to agree. One aspect of this documentary that I enjoyed was the mention of the principle problem of wage inequality and stagnation. It is very rarely mentioned that if wages increased then the problem of the ‘debt society’ would be largely alleviated. Consumerism will always exist (whether we are conditioned into it or not is another, broader issue) but if you actually give people a more equal share of the purchasing power the credit / debt cancer that is eating this nation alive would go into remission. The reason why it’s not happening is very simple; the same people who are lobbying for stagnant wages for the average American worker are often the same people who are making money off that same worker’s increasing debt, while already gaining significant profits from the base inequality. While it’s totally unfair to demonize the entire top 1/10%, there does exist an element within the wealthy elite who actively pursue maximizing their own wealth at the expense of the majority of the American public. Sadly these people are in a position to shape our governmental policies and paint the realities most of us live in. Debt at one point becomes indentured servitude, and unless things change, welcome to a new era of slavery. The fix in 2008 was temporary and perpetuated the problems. If we would have let the big banks fail we would have been on the road to real recovery by now. Instead, the next collapse could be worse. I hope that when the dig among our ruins they will find this great documentary. The best I have seen on the crash and I have a seen a ton of them. I have seen every documentary I can get my hands on whose subject matter is the recent financial collapse. None have put all puzzle pieces together yet, but getting close! What I can say is that I’ve been able to pick up different key pieces of the puzzle and new perspectives with each one of these films, even though they are all covering the same story. “The Flaw” was very helpful. I know a great deal about this issue, but learned more from this film. However, if you know nothing, the narration is simple but intelligent, and you’ll learn heaps. You’ve heard it said before: “Knowledge is power.” And that really is the truth. The more you know and understand, the better you can put things into perspective and learn how to navigate forward. So call them documentaries. To me, they are a series of “college level” education courses. We as Americans should all be learning what we can, especially about our financial system. The biggest weakness of this film is the failure to interview and follow up aggressively with more of the ‘perps’, including those in government — for this, Inside Job is a much better film. If you want to understand the housing crisis, watch the House of Cards, a balanced view of the crisis. Documentary 2010 NR 1hr 21m.
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