Capitalism: A Love Story

Michael Moore’s Next Punch

I’m in two minds about Michael Moore’s work as a filmmaker. The guy is pretty polemical and sensationalist and isn’t shy of spinning a few facts his way to get the gangplank of his agenda across to the shores of his audiences’ minds. He’s effective and funny, wistful and ironic, and has the rare facility to couch his visuals deftly. His ‘Fahrenheit 9/11’ was bombastic, while ‘Bowling For Columbine’ seemed to be a gun-loving dude’s apologia turned into a plea for less fear.

The fear, perpetrated by the rich, white exclusive oligarchs of American society of course is exactly what he’s talking about in this film as well and this time it manifests itself as the great market crash of 15 Sept 2008.The Global Financial Crisis kicking into the markets hard.

What’s Good About It

At the core of Michael Moore’s instincts is a really good newshound who chases down story leads. He takes us through a tour of what exactly the sub-prime mortgage looked like from the hapless consumers and then goes through how the working class has been shafted by the ruling elite since Ronald Reagan came to power. In most part, it’s true, and when you get to see the social devastation in places such as Detroit, Flint, Cleveland and Florida, you get the picture that people have forgotten what the middle classes used to be even 15-20 years ago.

The picture it paints of the rich pillaging their wealth from the middle and the working class is pretty convincing. As an illustrated case for the existence of a class war going on, it’s as good as you’ll ever get on the big screen. Nobody else is going to tell you like Michael Moore. More interestingly, Michael Moore being a well-brought-up American, trying to shrug off the straitjacket of American ideology in order to come at Socialism and rhetorically asks, what is so wrong with Socialism?

Of course there’s a great confusion about Socialism in American politics as it struggles to envisage a society that is fair and equitable to all as the great image of America proclaims in all of its ideological propaganda. The McCain-Palin campaign tried to use the word as a derogatory term to not much success. Still, nobody in America can show how socialism is actually not going to work, given the amount of devastation to government services that they have experienced in the last 28years since Ronald Reagan came to power.

The land of the the free and the home of the brave has in fact been reduced to the land of the opportunist and the home of people who are being sold lottery tickets – and Michael Moore’s career ouvre of films documents how this has cumulatively devastated whole cities across America, all in the name of capitalism.

It’s enough to make one cry, and cry we must for the things that have been lost.

What’s Bad About It

I hate doing this bit because it’s a really nice film but there are some fundamental problems with how Michael Moore is couching his subject. I have a number of concrete objections so the reader will have to take these as my account of the ‘bad bits’ but they’re not. They’re more like difference of perspectives.

My primary issue with Moore’s  take is that what he is attacking isn’t Capitalism per se. The guys he cites in his films as good socialists – the robot manufacturing plant, the co-op bakery, Dr. Salk, are and were all products of Capitalism too. They got the capital together to do a venture. It’s just that they split the proceeds differently and saw different dividends for their investment of money and labor. What Moore is really attacking is this unrestrained greed without any regulation, as played out on Wall Street – and there is no official name for that to distinguish it from Capitalism from whence it came – but let’s call it ‘economic rationalism’.

The computer I’m writing this on,the computer you’re reading this on, all come from the workings of Capitalism. That includes Moore’s video cameras and the movie screen on which it was screened. So Capitalism in of itself can’t be that bad. What’s really crappy about the phenomenon he is covering is the way the top execs conspire to pay themselves obscene amounts of money while they work diligently to cut the pay of people working for the company. That very ‘economic rationalism’ is actually what is killing America society and the industrial capacity of America.

The Secondary problems I have with the film have to do with Moore’s relatively scant familiarity with Marx’s writing. After all, Moore goes to interview Catholic clergy men to bolster the point that the Capitalism they are witnessing in America is ‘evil’ and against the spirit of the bible and Jesus. For one, I’m not persuaded by any moral argument based on religion and for another, Marx did say religion was the opiate of the masses. Why bring in religion to bolster your already strong argument?

A strong argument for social justice doesn’t need the sanctioning by the Church. In the end, Moore only hints at Marx when most Americans who are suffering under the draconian yoke could do well to read Marx. Or even Saul Alinsky.

What’s Interesting About It

That being said, it’s quite fascinating to see anybody batting for the cause of socialism in the American context. Which sort of leads me to consider a few more things about the nature of the US Dollar.

Under the Bretton-Woods agreement, the US Dollar became the unofficial reserve currency of the world, and it was linked to gold. When Richard Nixon de-coupled it from Gold, it came about partially because there wasn’t going to be enough gold to back the entire world’s economy as long as it used the US Dollar as the reserve currency.

So all of a sudden the world’s reserve currency became fiat money where it’s worth what we agree we say it is worth – and it changes every day.The biggest enemy of the currency then becomes inflation. So if you look up any thing any central bank does, it is to ward off inflation at all costs. The thing is, because it’s fit money, it’s actually physically worth the paper it’s printed on, but we attached the abstract value. Inflation erodes the value of the money back to the worth of the paper it’s printed on. The faster it goes, the faster we reach that point. It’s something we’ve seen time and time again, with the Weimar Republic as well as Zimbabwe today.

A lot of people have been freaked out by this fact alone and it’s not surprising to find the world’s conspiracy theorists love to talk about fiat money and how the world economy s a sham. And it still might be. Michael Moore’s film takes us to that doorstep and then essentially shuts up about the ramifications.

But there’s lots more to think about, like…

The ‘Bail Out’ As Goldman Sachs’ Conspiracy

Michael Moore makes an interesting case about it, and even Time magazine ran that story way back when asking how the Treasury can be so filled with Goldman Sachs people. At this point in time I think it’s fair to say that Timothy Geithner doesn’t get the Treasury Secretary job without Goldman Sachs being the greatest donor to the Obama campaign, that much is true.

And just who is Timothy Geithner. Moore thinks he’s the poster child for the Peter Principle who shouldn’t be there. Interestingly we have a second opinion from none other than Paul Keating who says Geithner is a worry.

In a speech to a closed gathering at the Lowy Institute in Sydney on Thursday, Paul Keating gave a starkly different account of Geithner’s record in handling the Asian crisis: “Tim Geithner was the Treasury line officer who wrote the IMF [International Monetary Fund] program for Indonesia in 1997-98, which was to apply current account solutions to a capital account crisis.”

In other words, Geithner fundamentally misdiagnosed the problem. And his misdiagnosis led to a dreadfully wrong prescription.

Geithner thought Asia’s problem was the same as the ones that had shattered Latin America in the 1980s and Mexico in 1994, a classic current account crisis. In this kind of crisis, the central cause is that the government has run impossibly big debts.

The solution? The IMF, the Washington-based emergency lender of last resort, will make loans to keep the country solvent, but on condition the government hacks back its spending. The cure addresses the ailment.

But the Asian crisis was completely different. The Asian governments that went to the IMF for emergency loans – Thailand, South Korea and Indonesia – all had sound public finances.

The problem was not government debt. It was great tsunamis of hot money in the private capital markets. When the wave rushed out, it left a credit drought behind.

But Geithner, through his influence on the IMF, imposed the same cure the IMF had imposed on Latin America and Mexico. It was the wrong cure. Indeed, it only aggravated the problem.

Keating continued: “Soeharto’s government delivered 21 years of 7 per cent compound growth. It takes a gigantic fool to mess that up. But the IMF messed it up. The end result was the biggest fall in GDP in the 20th century. That dubious distinction went to Indonesia. And, of course, Soeharto lost power.”

Exactly who was the “gigantic fool”? It was, obviously, the man who wrote the program, Geithner, although Keating is prepared to put the then managing director of the IMF, the Frenchman Michel Camdessus, in the same category.

Worse, Keating argued, Geithner’s misjudgment had done terminal damage to the credibility of the IMF, with seismic geoeconomic consequences: “The IMF is the gun that can’t shoot straight. They’ve been making a mess of things for the last 20-odd years, and the greatest mess they made was in east Asia in 1997-98, so much so that no east Asian state will put its head in the IMF noose.”

China, in particular, drew hard conclusions from the IMF’s mishandling of the Asian crisis. It decided that it would never allow itself to be dependent on the IMF, or the US, or the West generally, for its international solvency. Instead, it would build the biggest war chest the world had ever seen.

Keating continued: “This has all been noted inside the State Council of China and by the Politburo. And it’s one of the reasons, perhaps the principal reason, why convertibility of the renminbi remains off the agenda for China, and it’s why through a series of exchange-rate interventions each day that they’ve built these massive reserves.

“These reserves are so large at $US2 trillion as to equal $US2000 for every Chinese person, and when your consider that the average income of Chinese people is $US4000 to $US5000, it’s 50 per cent of their annual income. It’s a huge thing for a developing country to not spend its wealth on its own development.”

Is this some flight of Keatingesque fancy? The former deputy governor of the Reserve Bank of Australia, Stephen Grenville, doesn’t think so: “After the Asian crisis, the countries of east Asia decided that they would never go to the IMF again. The IMF is taboo in east Asia. Look at the evidence. The revealed preference of the region is that no one has gone to the IMF since, even when they needed the money.”

The problem was not government debt. It was great tsunamis of hot money in the private capital markets. When the wave rushed out, it left a credit drought behind.

But Geithner, through his influence on the IMF, imposed the same cure the IMF had imposed on Latin America and Mexico. It was the wrong cure. Indeed, it only aggravated the problem….

That about tells you enough about Obama’s Treasury Secretary – and why they can’t seem to get some proper regulations and oversight back on to Wall Street. It’s not like Moore is alone here, calling the dog a dog.

So let’s say that there is no conspiracy – it’s just plain bad luck and the markets tanked. Why are those assholes getting enormous bonuses for presiding over this mess? Do we really buy this? Doesn’t this go against our most hardened scepticism? What explanations have we got? How the hell does that work as a ‘coincidence?’

So maybe, just maybe, they did want this GFC to be this way, as contended in the film? Maybe it’s just an endemic culture of Goldman-Sachs-greed that is self-fulfilling? But what would be the practical difference and a Goldman Sachs conspiracy? Moore says these bastards think they’re effectuating class warfare.

There’s  a certain level to all of this where American leadership’s sense of its own invincibility has brought it into this mess. America didn’t exist in some informational vacuum. The things it said and did has had tremendous influence for many years. Should anybody be surprised to see the Global Financial Crisis bring about more instability to the system than say Goldman Sachs bargained for? They might end up owning America, but China may yet end up owning them.

Them Or Us

Michael Moore’s ideology rests very close to Frank Zappa’s small business ideology. Zappa spent the latter part of his career railing against the unholy union of far right interests with fundamentalist Church and the US Republican Party. In a sense what Frank Zappa predicted in the closing chapters of ‘The Rea Frank Zappa Book’ have come to pass an Michael Moore is documenting them, if belatedly.

Moore’s lifetime which we see snippets of are fascinating insights into times gone by. The world people were taught about an the world they grew into are very, very different; and the big difference is that the ultra rich have siphoned off so much wealth from our government coffers.

Is this some sort of conspiracy theory? No. It’s actually an apt statement of facts. It’s fair use of Occam’s razor to say that the Ultra rich have benefited greatly in the last 30 years at the expense of the middle class – there’s no other damn explanation. So he tells us to join together and fight the power, citing examples of people fighting back.

It really is Them or Us.

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One response to “Capitalism: A Love Story

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