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Skeptimedia

Skeptimedia is a commentary on mass media treatment of issues concerning science, the paranormal, and the supernatural.

»Skeptimedia archives

Skeptimedia replaces  Mass Media Funk and Mass Media Bunk. Those blogs are now archived.

Capitalism?

"It's ... absurd and obscene ... the same guys who crashed the economy ... are now giving themselves even bigger bonuses." --Stephen Lerner

21 Oct 2009. Michael Moore's latest film, "Capitalism: A Love Story," compares the fall of the Roman empire to what's happening to the U.S. empire. There are many hypotheses regarding the causes of the decline of Rome. My favorite story is that Rome collapsed because it stopped taxing its citizens. It paid for its vast bureaucratic network of armies, navies, roads, aqueducts, coliseums, theaters, etc. by plundering the regions it conquered, especially Macedonia. This is not Moore's favorite story about the fall of Rome, however. Had Moore consulted me, we could have produced a fine film depicting what America will be like in a few years when the whining conservatives finally get their way and we are all given the ultimate in tax relief. In that glorious time, none of us will pay any taxes. The money will come from two sources: from the oil and other resources we steal from places like Afghanistan, Iraq, and Iran, and from computers that issue virtual dollars to Goldman Sachs to distribute as it sees fit. Because we have computers and sophisticated propaganda machines, we could avoid our ultimate collapse, even when we run out of places to plunder.

Of course, Moore didn't consult me, so his movie went off in many other directions, some of them very specific, but none of them very clear. I won't spoil the ending for those of you who haven't seen the film, but I'll give you a hint: "democracy."

So the reader will know what kind of reviewer I am I will state up front that the two funniest scenes in the movie for me were 1) Jesus refusing to work a miracle on a sick person because he had a pre-existing condition; and 2) Moore wrapping yellow crime-scene tape around corporate headquarters of Wall Street firms. (A close third was the section where Wall Street smart people could not articulate what "derivatives" are. As best I can figure, they are any kind of doublespeak jargon that a) allows you to screw somebody else out of money in an illegal way, but b) is too confusing for any government official to figure out. Others disagree and say they're completely legal and very simple. Click here to view a slideshow on subprime mortgages.)

The most moving scene for me was the film of Franklin Delano Roosevelt delivering his "second bill of rights" message. This footage was discovered by Moore while doing research for the film. It made me realize what kind of country America could and should be. (An audio recording is posted on YouTube.)

Now, on to the show.

The film, in a nutshell, depicts how Goldman Sachs et al. first screwed the people, then screwed the government, and now is left with nobody to screw except itself and what's left of the competition, unless the people rise up and say: We're mad as hell, and we're not going to take it any more.* In my view, you can quibble with the details, but the general picture is pretty accurate, unless the news has been fabricated lately.

Today's news stories include:

Wells Fargo reports record profits. "Third quarter results again illustrated the company's ability to profitably grow, even through the downward cycle despite elevated credit losses," said Howard Atkins, Wells Fargo's chief financial officer in a statement. (It's a freakin' miracle!)

Bank of America deal had White House support. Top economic advisers to President Obama signed off on a deal to protect Bank of America from losses incurred by its purchase of failed Wall Street firm Merrill Lynch a month before the new administration took office. (What a shock!)

Bailout watchdog expects much to remain unrefunded. Inspector General Neil Barofsky said he believes that "it's unrealistic to think we're going to get all of that money back." (Of course he does. Follow Barofsky's career. If he takes a job with Goldman Sachs when he leaves government, we should give Michael Moore a special prize for pointing a finger at the hole in the dike.) The Treasury Department has spent more than $454 billion through TARP programs. Forty-seven recipients have paid back nearly $73 billion. That means more than $317 billion remains outstanding with the program set to expire Dec. 31.

Zooming In on the Year’s Biggest Hoax by Robert Sheer "...the superrich ... expect to be rewarded for their failures, like the folks at Goldman Sachs who will receive $16.71 billion in bonuses—an average of $530,000 per employee—this year after their company did as much as any to bring the world economy to the brink of disaster.

Goldman Sachs reaped riches from risky mortgages, but passed on the danger "Goldman sold off nearly $28 billion of risky mortgage securities it had issued in the United States in 2006, including $10 billion on Oct. 6, 2006. The firm unloaded an additional $11 billion in February 2007, after the firm had intensified its contrary bets.

Then, of course, there was the recent news that Obama selected Adam Storch to be the first chief operating officer of the Securities and Exchange Commission's enforcement division. Storch has been in Goldman Sachs's employ for the past five years. What are the odds that he will investigate former Goldman Sachs employees who are running the U.S. Department of the Treasury? Did they mess with the SEC? Was there anything untoward in the government bailout of Goldman Sachs? Was there anything untoward in Goldman Sachs's competitors being forced into bankruptcy?* Was there anything untoward in the recent enormous profit making by Goldman Sachs? ("Goldman Goes Gangbusters on Profit, Pay") Just good business?

Are the Wall Street folks playing with us? Two recent stories indicate the joke is still on us, the taxpayers. Wall Street Bonuses Vs. Normal Wages: A Disturbing Trend and 23 states report higher unemployment in September.

Moore lays the blame for our woes on capitalism, but don't look for a detailed analysis of what capitalism is and why it is responsible for the worldwide economic collapse. I don't know that a lot of the evils Moore gives examples of can be blamed on capitalism. Now that communist societies (countries with government-planned economies) are nearly all dead, the rest of us are not really either capitalist or socialist. We're all socialist countries, but we differ in our degree of government using tax money to pay for social services. Everybody agrees a nation is an absurdity if it can't protect its people from enemies within and without. Security isn't going to come from volunteers in this day and age. How many rights beyond security is a society willing to give to its people? It differs from country to country, but what better measure of a country could there be than the rights of it citizens it supports?

There will be corruption in socialist countries, so to find a crooked judge who locks up juveniles for a kickback or Senators who abuse their power isn't really an indictment of capitalism. Finding crooked bankers, government officials, or fellows like Bernie Madoff isn't an indictment of capitalism, either. Finding millions of people who live beyond their means isn't an indictment of capitalism, nor is removing 2,400 FBI agents from investigating white collar crime to working on anti-terrorism. There will be consumerism, greed, corruption, and irrational exuberance in socialist countries.

If I had done this film, I wouldn't have opened with scenes of people robbing banks or clips of movies about the fall of the Roman empire. I'd have started with a view of a beautiful lake or reservoir. I'd depict people boating and enjoying themselves. I'd show clear water flowing out of the tap into a clear glass. Then, I'd depict the water level dropping as a drought covers the land. Slowly, more and more garbage and junk would be revealed that had been hidden beneath the surface of the water. A world of ugliness would open up as the water level keeps dropping. I think that's a better metaphor for what's happened. Many practices that have been revealed as evil have been going on for decades but nobody cared because the water level was high. Nobody cares about bank robberies if nobody gets hurt and the depositors can count on getting their money out whenever they want no matter how much is stolen. Nobody cares about Ponzi schemes when the money keeps rolling in to cover up the scam. Credit card debt means nothing when there are enough people spending and paying to allow for billions of losses without much pain to the lenders or business folks.

One subject that requires separate treatment from capitalism or socialism is the topic of unions. Unions, like corporations, are run by human beings and so are subject to corruption. Both unions and corporations, overall, are forces for good, not evil. They make life more enjoyable than it otherwise would be by providing the goods that make a decent life possible and by providing the means of acquiring those goods. Moore claims that unions made the middle class possible. To a large extent, I think this is true. Busting unions has become fashionable. Ronald Reagan is portrayed as the Buster-in-Chief by Moore. Reagan was certainly not a friend of unions, but even an avowed liberal senator from California opposes workers' rights to form unions. (Nurses wanting to unionize face unlikely foe: Feinstein.) Bill Clinton may have seemed liberal to right-wing media, but his best buddies in and out of government were from Big Business. Jerry Brown characterized Clinton as a "lackey for business." He was a lot of others things, too, but Clinton brought in Goldman Sachs boys to run the treasury. So did "W." Obama has continued the program, despite his being constantly attacked by right-wing commentators. If Obama is a socialist, he's a Wall Street Socialist like his predecessor, who said he had to destroy the free market so he could save it (or something like that). Obama is surrounded by Goldman Sachs people (left over from "W's" reign) and guys like Timothy Geithner. Talk about hiring bank robbers to guard the safe! Or are they lake drainers, hired to expose all the garbage we've been putting up with for decades?

In my opinion, workers' cooperatives are the only fair alternative to unions these days. Moore presents a couple of apparently very successful cooperatives. But few companies are going to be successful on that model in a nation that values prizes and instant gratification more than hard work, long hours, and uncertainty of outcome.

Corporations and businesses don't like unions, for obvious reasons. Are unions necessary? Yes, I think so, for businesses with large groups of employees in manufacturing, farming, education, hospitals, and many other areas. Some areas probably shouldn't have unions, e.g., small businesses with only a few employees, the army, the U.S. Senate, and some others. After watching what's happened in my state of California with our prison guards' union, I have my doubts about the wisdom of such unions. There is too much incentive to keep building prisons and filling them up. Since 1990, the prison population in California has grown three times faster than the adult population.* Barely a majority of prisoners are in for violent crimes, thanks to a 2000 law that provides drug treatment instead of prison for many found guilty of drug offenses. Otherwise, most of our prisoners would be in for non-violent offenses and many of them for drug use. (On a side note, maybe students at the University of California should unionize. UC was the number one contributor to Obama's presidential campaign. What did it get the students? A 32% increase in fees.* On the other hand, guess who was number 2 in contributions: that socialist organization Goldman Sachs. On a side note to the side note, the contributions paid off: The University of California system was awarded $717.5 million in American Recovery and Reinvestment Act funds.*)

Most of the union-busting activity in this country has come from corporations and their lackeys in legislatures, or hired thugs in uniform. To show there's no hard feelings, though, we've named an airport after Ronald Reagan.

I agree with Michael Moore that our country could be better. I don't think the problem is capitalism or free enterprise, however. And I sure don't think the solution Moore proposes—democracy—is anything but laughable. We already have a democracy and that's why we're run by Goldman Sachs et al. rather than a cooperative of people who have the interests of the commonwealth foremost in their sights. What we need is a generation of FDRs. What are the chances that in the current political, economic, and media climate that's going to happen? I'd say about one in a gazillion. FDR has been demonized by the Right, the libertarians, the anti-taxers, and is to the Right as symbolic of everything that's wrong with America as Ronald Reagan is for moderates and progressives.

I think Moore may be right about one thing, though. We the people usually support people and policies that oppose our interests because we think we, too, can someday be rich.

But, since most of us like to be told that things are just fine and that everything's going to get better soon, I'll conclude by reminding you: the best is yet to come. If you don't believe me, go see Michael Moore's latest film. It's a love story and you'll leave the theater whistling a happy tune.

further reading

New Zooming In on the Year’s Biggest Hoax by Robert Sheer "...the superrich ... expect to be rewarded for their failures, like the folks at Goldman Sachs who will receive $16.71 billion in bonuses—an average of $530,000 per employee—this year after their company did as much as any to bring the world economy to the brink of disaster.

“The Guys from Government Sachs” is what The New York Times once called them in recognition of their chokehold on the federal government. Their power is marked by the two treasury secretaries who led the fight to legally enable and then reward Wall Street for its obscene excesses....if we could get one of the banking lobbyists to float a duct-taped flying saucer balloon, Wolf Blitzer might cover the real hoax."

New Goldman Sachs reaped riches from risky mortgages, but passed on the danger Part One: "Goldman sold off nearly $28 billion of risky mortgage securities it had issued in the United States in 2006, including $10 billion on Oct. 6, 2006. The firm unloaded an additional $11 billion in February 2007, after the firm had intensified its contrary bets.

Despite updating its numerous disclosures to investors in 2007, Goldman never revealed its secret wagers....

The Securities Act of 1933 puts a special disclosure burden on principal underwriters of securities, which was Goldman's role when it sold about $39 billion of its own risky mortgage-backed securities from March 2006 to February 2007.

The firm maintains that the requirement doesn't apply in this case."