Early on in the Academy Award-winning documentary “Inside Job,” a film chronicling the reckless investment behavior that led to the recession, we learn about a neurological phenomenon.

It’s revelatory.

When people are placed in studies in which they play games for money, real cash, the part of the brain stimulated, the area that lights up with colors on monitors, is the same one affected by cocaine use.

As we see in Charles Ferguson’s 2010 film, much of the investment-banking crowd on Wall Street was in fact fueled by cocaine — and hookers, of the $1,000-an-hour variety — during the last decade of excesses. The financial “pros” would write off their paid sexual escapades as market or financial research or supply expenses. They’d even write out their own invoices, one madam said.

“They have no problem using a prostitute and going home to their wife,” a psychiatrist who treats Wall Street bankers tells the filmmakers.

Wall Streeters took a similarly arrogant and dismissive attitude toward their clients and the American economy. Ferguson shows, in infuriating fashion, that the financial meltdown in 2008, the one from which we are still suffering, was not only predictable, but could have been prevented.

“I finally managed to see the movie,” New York Times columnist Paul Krugman wrote recently. “Do see it if you can; it will make your blood boil, and in a good way.”

“Inside Job” is not a partisan vehicle. Ferguson’s film casts a net of culpability that ensnares Reagan and the Bushes as well as Bill Clinton and Obama, revealing their administrations as foils if not handmaidens for the financial industry.

The film’s greatest contribution, however, is not the exposing of the unholy alliance between Pennsylvania Avenue and Wall Street (I’m not going to list all the culprits and their billion-dollar heists) but the dragon-slaying of commonly held opinions in America: The investment community is full of the smartest guys in the room, and our economy depends on them. It’s Wall Street as Mount Olympus. We mere mortals can’t possibly understand what makes our economy work, or their investments. “Go back to your mutual funds, little people,” we are told.

Bull. There’s no other way to say it.

Credit default swaps aren’t as easy to understand as compound interest, to be sure.

We’d be a better country if all of the people lathered up over gay marriage and collective bargaining by state janitors turned their attention to a basic understanding of our economy. The bankers’ arrogance is warranted, in a sense, as the American people, distracted by “Idol” and social issues and “gotcha” stories of a politician offending one demographic or another in YouTube clips, consume the national oxygen, leaving the moneychangers to operate with impunity. We are chasing the wrong villains so much of the time.

Credit default swaps allow speculators to basically bet that people can’t pay back loans, to give them a rooting interest in home foreclosures and the like. Billions were invested in these tools — with no regulation and reporting — setting up catastrophe when the housing bubble burst.

These guys aren’t Bradley Cooper on that “Limitless” pill. They were playing a rigged game.

The financial sector has 3,000 lobbyists in Washington, D.C. Rating agencies paid by big money houses provided AAA and AA cover to investments that were ridiculously risky. Academics on the payrolls of banking firms rolled out “position papers” arguing for deregulation of lending and investing beginning in the 1980s.

Some investment firms were leveraged at 33 to 1.

And sub-prime loans climbed from $30 billion to $600 billion.

“The low-income buyer can have just a nice a home as anyone else,” said President George W. Bush.


President Obama, who sold the nation on a culture of “change,” in 2008 went to many of the people who caused the problems in the first place to people his economic team.

In so many ways it is business as usual.

The money men aren’t smarter than us. It’s a mirage. Too much of America just accepts at face value that the investment community has keys to an exclusive kingdom of knowledge.

That fantasy has created a frightening reality. See “Inside Job.” And take notes.