‘Maxed Out’ predicted the financial crisis, but it might have been only the beginning

March 16, 2012

Six years ago, at the South by Southwest Film Festival in Austin, a documentary made its world premiere to good reviews but little additional fanfare. “Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders” won a special jury prize but didn’t generate a bidding war worthy of breathless coverage in the trades. Still, it proved to be easily the most prescient film on the circuit that year, foreshadowing the subprime mortgage scandal, consumer debt crisis and financial meltdown that would capture headlines two years later.

Oh, and it introduced the world to a Harvard Law School professor named Elizabeth Warren.

Looking back, “Maxed Out” director James Scurlock says that the ills he limned in the film are far from solved. “What we went through in 2007 and 2008 was the Beta version of the real crisis,” he said in a recent telephone conversation from his home in Los Angeles. Referring to the financial policies and regulations put in place by the Obama administration, he added: “What we basically did was press the reset button and in some cases made those problems much worse. Deposits are far more concentrated today because of the mergers the bailout enabled, so the money is in fewer hands today than it was then. Unemployment is nearly double what it was when the film came out. I just read that 1.4 million homes are now in foreclosure or in the foreclosure pipeline. And personal bankruptcies have come roaring back.”

Although most filmmakers are thrilled when their work stays timely, for Scurlock it’s a decidedly mixed blessing that “Maxed Out” — which can currently be seen on Showtime — remains so relevant. Noting that he could take former Federal Reserve chairman Alan Greenspan out of the film and put in footage of Treasury Secretary Tim Geithner, current Fed chairman Ben Bernanke and the speeches of President Obama, he said: “I feel like we just re-booted the same time bomb.”

Scurlock, who attended the Wharton School of Business and just completed writing “King Larry,” a biography of the late DHL Worldwide Express founder Larry Hillblom, said he’s among those observers who are disappointed in Obama’s response to the 2008 crisis. “We needed someone who could be bold,” Scurlock said. “And I think it’s hard to argue that that’s what happened when Larry Summers and Ben Bernanke are still advising and calling the shots. How these people still have any credibility, much less jobs, is beyond me. How can the president turn to these people to rescue us from a crisis that they should have been preventing?”

In 2008, Charles Ferguson’s documentary “Inside Job,” a dissection of the financial crisis, took home the Oscar — a full two years after Scurlock made his movie, which had a modest theatrical release. “What I’m proud of with ‘Maxed Out’ is that it was taking a look at the industry from the bottom up,” Scurlock said.

Although the film serves as an engaging, lucid primer for how Washington and the financial industry fashion economic policy, it’s the personal stories of people affected by those decisions that prove the most powerful.

In one sequence, Scurlock chronicles the efforts of a real estate agent in Nevada who cheerfully markets expensive homes to subprime borrowers; in another, a family has a garage sale as a last-ditch attempt to survive crushing debt. The film’s most wrenching subjects are mothers of college students who, responding to the aggressive marketing campaign of a credit card company on their college campuses, took their own lives after racking up debt they couldn’t pay off.

One of those mothers, Janne O’Donnell, has visited Washington to testify about abusive credit card marketing practices; President Obama gave her a hug when he signed the 2009 Credit Card Reform Act. Scurlock said he lost touch with the real estate agent. “I’ve reached out several times,” he said, “and I assume things did not end well for her.”

As for the biggest star of “Maxed Out,” Senate candidate Elizabeth Warren, Scurlock declines credit for discovering her. “I think she was just really waiting to be heard,” he said, adding that hers was the last interview he did for the film, and that she only gave him an hour. “And she didn’t even really need an hour, because what she basically said was [that] you can’t have banks making more and more money as their customers are going broke faster and faster. That’s not sustainable.”

He was shocked when Warren became a polarizing figure after Obama named her to create the newly formed Consumer Financial Protection Bureau. “Elizabeth has been labeled as anti-business and anti-finance,” Scurlock said, “but the reality is that the financial industry, which is the backbone of the economy, cannot survive bankrupting all its customers. We both felt that’s a very pro-business, pro-economy position.”

If Scurlock doesn’t see “Maxed Out” as Warren’s plucked-from-obscurity moment, he does say that he’s been impressed with her rise since the film came out. “You look at the way people have responded to her, I’m just in awe,” he said. “I live in L.A., which is a celebrity culture, and people get much more excited when you say you know Elizabeth Warren than if I knew Angelina Jolie or George Clooney. She’s like a rock star.

“I don’t know why her message is so offensive to a segment of the country. The music has stopped. We’ve seen it already. I don’t know why we’re still arguing whether there’s enough chairs to go around.”

Maxed Out:Hard Times, Easy Credit andthe Era of Predatory Lenders

airing on Showtime through March 31. 90 minutes.

Ann Hornaday is The Post's movie critic.
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