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" My cardinal trait is generosity "
— Katrin Cartlidge, Career Girls

MRQE Top Critic

Do The Right Thing

Spike Lee's complex, intricate look at race relations in Bed-Stuy NY. —Marty Mapes (review...)

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The Flaw takes its title from a quote by Alan Greenspan, an understatement made after the financial crisis of 2008.

This documentary is not an in-depth analysis of that specific flaw. Instead it’s a relatively deep look at the credit and housing bubbles of 2008.

Demand for Credit

Talking heads (intercut ironically with educational films and cartoons from the 40s and 50s) explain how stagnant wages coupled with income inequality created demand for credit.

The supply of credit rose with that demand, as wealthy investors (the movie might say that’s redundant) sought cheap and easy investments. The lastest type of investment packaged mortgages into tradeable securities.

Meanwhile, down in the middle class, home equity was a great source of credit... while it lasted.

But enough people in the fall of 2008 had trouble paying their mortgages, that not only the mortgages failed, but so did the market investments based on them. Suddenly house prices stopped rising. The downward trends rippled throughout the economy, and the rest is history.

Income Inequality

It was nice to see the movie mention income inequality. It pointed out that the more money you have, the more stuff you buy. When you reach a certain level you don’t buy stuff anymore, but houses. When you pass that point, you just buy investments and hold on to it. Money at the top doesn’t go toward consumption or job creation, but rather to more abstract finance. Those investments don’t do the rest of us any good.

I’ve read enough psychology to know that income inequality is fiercely emotional and culturally destabilizing. It’s reassuring to hear that it is bad for us fiscally, too.

Charts and Graphs

I found the wonky issues in The Flaw pretty well explained, although I was quite interested in hearing the message. I found the cutaways to cartoons to be more tangential than illustrative.

I think that if I hadn’t been drawn to the movie, I would have found the movie more confusing than enlightening. There is too much gratuitous visual flash — charts that we zoom into and fly over as though we were gliders buzzing some mountainous computer screen. None of that helps tell the story. You could even say that it’s insulting to an audience’s — although I wouldn’t go quite that far.

Mostly, The Flaw is a level and clear explanation of what happened in 2008. And it doesn’t once mention tulips.