This weekend we went to the latest Michael Moore movie: Capitalism: A love story. I find Moore’s work to be generally entertaining and of value where it provokes critical thought and discussion about the status quo. Any medium that helps to shake awake epidemic complacency is worth something. I recall writing to Moore back in 2004 after seeing Fahrenheit 911 and urging him to examine the financial industry as his next area of expose. I am sure I am not the only one who raised the idea.
My criticism of Moore’s work is always basically the same: he excludes rather completely any acknowledgement of the responsibility we individuals bear for our own decisions.
In Sicko, he was all about the big Drug Cos and the right wing neglecting the needs of the poor. I agree; but I also see blame in those who eat, drink and smoke their health into oblivion.
In Capitalism Moore starts out with a study of families being foreclosed from their homes. It’s painful to watch, and sad. But never once does he also tip his hand to the fact that many of the now destitute, willingly levered and spent their own way to hell.
Yes the predatory lenders and financial sales force were commission-driven harpies that should be charged, punished and restrained where possible. But in most cases no one held consumers down and forced credit into their family. Some accumulated debilitating debt from unfunded medical expenses that they could not avoid; and that is a separate category of misfortune, born of the US not having a publicly funded health care system. But those special cases aside, consumers mostly blew their own brains out, aided and abided by marketing firms from all walks and sectors.
The truth is that the human cocktail of emotion, aspiration, and money is notorious. Moore points out that unfettered capitalism has taken human nature down an increasingly destructive and anti-democratic path. I can agree with this thesis. But when he has Catholic priests talking about the evil in capitalism, I wanted them to also acknowledge that their own institution is also a top heavy hierarchal structure that feeds those at the top more than those near the bottom. Is the Vatican any better than the head quarters of other multi-nationals? Should we throw out all corporations and churches because they tend to be as flawed as their constituents?
It is always easier to criticize than it is to build a better model. And I do think that it is the duty of democratically appointed leaders to draft and enforce equitable principles and restraints on animal spirits. We learned this after other major crisis points in history like each world war and the great depression. Wise policies were implemented after each of these that served to reinvigorate democracy and a return to prosperity. The trouble with the past 65 years is that up until the financial crisis of 2007, the world had been stumbling along without any real systemic adversity. The calm time inspired complacency and deregulation as people forgot about downside risk and mindlessly bought all that was sold them. As a result of this slumber, many are now literally having to start over; dig themselves out from the rubble and start anew.
One of the key tenets of democracy and equity in our western legal system is that justice must not only be done, but it must also be seen to be done. This is key to avoiding revolt and anarchy. Politicians and corporations must revisit this key to our future. It is not good enough to have those that accepted inappropriate compensation from financial services now implementing regulation and policy decisions. It is not acceptable to have the likes of Paulson, Geithner, Summers, Rubin and other broker/sales firm executives now populating and advising the Obama administration and the Federal Reserve.
The release of Moore’s film could be fortuitous timing for Obama; coming at a critical time. His administration is starting to smell increasingly bad to the public. His promise of change and fair leadership has been compromised so far by his inability to get the financial serpents at arms’ length.
If I were Obama I would use the public ire now focused by the Moore film as a much needed excuse to make drastic personnel changes. Say to Geithner, “Look Tim, I know you Larry and the guys mean well and all, but the public just won’t go for you being in charge at this point, it is dangerous to us politically; there is an appearance of conflict here that we just can’t afford.”
Obama needs to audit the Fed, he needs to clean financial house and start fresh in a new era of accountability, transparency and enforcement of regulation for the greater good of the economy, his legacy and democracy. And especially I think, if he hopes to see a second term.
Cory’s Chart Corner
“An explosive critique about the investment industry: provocative and well worth reading.”
“Juggling Dynamite, #1 pick for best new books about money and markets.”
“Park manages to not only explain finances well for the average person, she also manages to entertain and educate, while cutting through the clutter of information she knows every investor faces.”