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Frontline's 'Money, Power and Wall Street' looks at lessons not learned

Occupy Wall Street protesters rally in Manhattan in

Occupy Wall Street protesters rally in Manhattan in November 2011 in this photo from Frontline's "Money Power and Wall Street." Credit: AP

DOCUMENTARY "Frontline": "Money, Power and Wall Street"

WHEN|WHERE Tuesday night and next Tuesday at 9 p.m. on WNET/13

REASON TO WATCH Exhaustive dissection of the financial crisis.

WHAT IT'S ABOUT Over four hours, "Frontline's" Martin Smith and Michael Kirk report out the financial crisis, with the first hour tonight devoted to the exotic Wall Street products that led to the fall, while the second hour is a ticktock beginning with the failure of Bear Stearns, and ending with former Treasury Secretary Henry Paulson's dispersal of TARP (Troubled Asset Relief Program) money.

Next week -- not available for review -- goes inside the Obama White House, and ends up back on Wall Street, where the culture remains unchanged (per "Frontline") and unrepentant.

MY SAY Why do this huge outtake on the financial crisis nearly four years after the fact? Because -- "Frontline" persuasively responds -- who says the financial crisis is over?

Consider some of the fundamentals at play here, which are carefully explored in this program. Banks want to avoid risk because the riskier a loan, the more capital has to be set aside to secure it. Ten years ago, JP Morgan created collateralized debt obligations (CDOs) and credit default swaps to move that risk off their books, thus freeing up credit. Other banks bought or traded these CDOs, or packaged and sold them to clients. That freed up more credit used to fund an economy with a false bottom. How so? The swaps were mortgage-backed, and hence toxic.

When they evaporated, so did credit, and the economy went on life support. We know that painful story well, but the power and impact of this broadcast lies in the moral. The old observation by screenwriter William Goldman about Hollywood -- no one knows anything -- may apply to Washington and the financial industry as well, except "Frontline" argues that no one has learned anything, either. Banks still want to avoid risk, while these smoke-and-mirror products remain a means to that end.

As Phil Angelides, the chairman of the Financial Crisis Inquiry Commission, tells the broadcast, "Here we are, three years-plus after, and very little has changed. In many respects, the financial crisis never ended."

BOTTOM LINE Sober, thoughtful -- this is explanatory journalism at its best.


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