Andrew and Leslie Cockburn have produced the best movie of the year. American Casino tells the story of the financial crisis, which started with the meltdown in subprime lending and ended up triggering the deepest slump since the Great Depression. The Cockburns skillfully uncover the truth behind the headlines, shining a light on the negligent regulators, the colluding Fed, the unscrupulous ratings agencies, the mercenary banks, the venal mortgage lenders, and the long daisy-chain of opportunists and fraudsters who gorged themselves on the spoils from the biggest swindle in history. This is this generation’s big story and it is deftly conveyed by master narrators, Mr. and Mrs. Cockburn.
The movie begins in downtown Manhattan, the camera shifting impulsively from one looming skyscraper to the next. This is Wall Street, the epicenter of the financial universe. With the edgy wail of bebop in the background, Cockburn fixes his lens on Senator Phil Gramm and Fed chairman Alan Greenspan, the two policymakers most responsible for the market blowup. In testimony before a congressional committee, “Maestro” Greenspan reluctantly admits that he discovered a “flaw” in his theory of how markets work. Director Cockburn contrasts Greenspan’s feeble defense with sweeping visuals of the endless rows of boarded up homes in downtown Baltimore where the foreclosure epidemic has turned large parts of the city into a ghost-town. This is the Greenspan-Gramm legacy, the triumph of deregulation.
American Casino explains the most complex aspects of the financial collapse in terms that everyone can understand. The movie is an informal tutorial on Wall Street’s “innovations”, including a brief rundown on collateralized debt obligations (CDOs), mortgage-backed securities (MBSs) and credit default swaps (CDSs). These are the notorious debt-instruments which clogged the credit markets and sent stocks into a nosedive. The Cockburn’s also interview a number of people who played a part in the market crash. We get a glimpse of the ratings agency executive who caved in to the investment banks and gave them the triple A ratings they wanted, but didn’t deserve. There’s a brief segment with a mortgage lender who routinely filed false income statements which allowed unqualified loan applicants to be approved. There’s also a clip of a financial technician who packed B-rated junk into CDOs that were offloaded to gullible Korean investors. What’s most disturbing about American Casino, is that it shows how normal people eagerly participated in a profit-skimming operation that was based on repackaging and peddling dodgy loans to credulous investors. These people knew what they were doing was wrong, but did it anyway.
American Casino transitions seamlessly from Wall Street to intercity Baltimore, and then onto the abandoned housing developments in California’s Central Valley. Here, we see the true cost of deregulation measured in terms of the lives it has ruined. The Cockburns allow a few articulate African Americans, who were trapped in predatory lending scams, to relay the story of an entire Baltimore community. Not surprisingly, these mortgage ripoffs were engineered by some of the most highly-respected banks in the country. Wells Fargo is one name that pops up repeatedly. African Americans were four times more likely to be given subprime loans even though the vast majority of applicants met the standards for conventional prime mortgages. To their credit, the Cockburns stand alone in showing the role that racial discrimination played in the housing crisis. This is clearly the civil rights issue of our time.
American Casino is not your typical dispassionate documentary. The Cockburn’s sympathies are never in doubt as they stitch together a number of gut-wrenching stories which help to illustrate how the trading of financial exotica in an “anything goes” market, ended up destroying the lives of millions of ordinary working people. This is what separates the movie from the desensitized version of events we read in the mainstream press. It’s not enough to know who was responsible or what crimes they may have committed. We need to see the faces of the victims and hear their stories first-hand. These are the people whose lives will be forever marred by the reckless, high-stakes gambling of Wall Street speculators.