A revelatory howl against the still-gestating, $8 trillion-and-counting financial-services industry bailout, Leslie Cockburn’s American Casino follows the money that changed hands, or account columns, at every step of the subprime home-loan scam. Beginning with an incisive nuts-and-bolts dissection by financial reporter Mark Pittman (as well as some astonished industry witnesses) of our amok age of deregulation, this outraged survey starts on Wall Street with careful but thriller-like exposition of the house of cards built upon the backs of targeted new homeowners, in many instances minorities being hoodwinked with hidden escrow costs and mortgage documents impenetrable to most professionals.
For the predatory lenders, “the value is extracted upfront…they have no skin in the game,” explains one analyst, leaving those who inherit the derivative “financial products” to deal with skyrocketing monthly payments and the buyers with possible homelessness and bankruptcy. The value of one category of X-generation derivatives “can’t be tied back to anything real,” says another Street-watcher. Well, who would buy those products? “Idiots.” Titles cards (the film is narration-free) excerpt internal memos reeking with cynicism or gallows humor, as with a Standard & Poor’s email that confesses of freely dispensed AAA loan ratings: “If it was structured by cows, we’d rate it.” Newly devised standard procedures such as credit swaps fobbed off on insurance companies by banks that knew, with a Cheshire-cat grin, that home prices were about to crash, exact no penalty in the casino system, but their perpetrators are rewarded with bailout funds.
Changing keys after an often intimidating, but usually comprehensible, cascade of lending jargon, Cockburn turns to African-American neighborhoods of inner-city Baltimore to individualize the humiliating pain and real danger behind the collapse of the derivative-fueled housing boon. A clinical psychologist, treating clients paying the human cost of the foreclosures’ fallout, is herself in danger of losing her home, wiping away tears when her mortgage agent flatly refuses to accept a check. A high school teacher wanders his packed-up house that’s just been auctioned away from him on courthouse steps; a minister who’s been evicted from her childhood home speaks of loss of identity and sleeping in a friend’s car every night. Scored by Baltimore-area hip-hoppers, these segments are a tragic rebuttal to vilification of these buyers by right-wing pundits and President Bush’s 2002 Trojan-horse rollout of an agenda to increase minority home purchases. The faces behind the default statistics are scared, shamed, and struggling to rebalance their lives.
The film’s final segment follows a mosquito-control team on a circuit of vacated California properties as they attempt to exterminate larvae—up to 800,000 per swimming pool—before they can raise the risk of West Nile virus (and after the crew has checked there are no squatters, some of whom use the abandoned homes for meth labs or pot farms). American Casino ends with no faith that the treatment of the subprime fallout will come at any cost other than trillions more for the floor managers of this enormous scheme, and with an estimated eight million more home losses in the next three years.