Wednesday, 26 May 2010

Capitalism: A Love Story

I saw this film on Saturday night, its a strange one. As always, Michael Moore makes some very good points, but this film is not really focused.

It starts with footage of real robbers with masks and guns. Then we are asked if our age will be remembered for cats flushing toilets, or this... Then we go to some people watching 7 sheriffs cars come to the house and break down the door. What is going on? Are they some cult? No, they have not paid the mortgage and the sheriff is kicking them out of their homes.

He builds the case very gradually that the financial sector are the crooks that are taking your money. Its done with with but its confusing, why do these people who have jobs and have lived in their houses for decades suddenly fail to pay their mortgages?

He contrasts the past where the well paid were taxed at 90%, the money was used for the common good. Now the top rate is 35%, the rich have got much richer.

It has some great moments, community action fighting back against the banks, Moore declaring the bank HQs crime scene, trying to arrest the CEOs. And the disturbing dead peasant insurance where corporations insure against their workers dying with them gaining if they die.

But I have seen better films from M Moore, Bowling For Columbine and Sicko for example. And I have seen better films about Capitalism; the Yes Men & The Corporation. Interestingly Michael is featured in both these films.

'Capitalism: A Love Story' is more about the current economic collapse and the politics. The bank bail out is seen here as the rich getting subsidised by the nation, and no one knows where the money has gone. Its hard to know from the outside if this is real.

It seems that the film started out as a direct follow up to 'Fahrenheit 9/11' (2004) after President Bush was elected to a second term, but gradually changed focus more on corporate America, until the 2008 financial crisis and resulting Wall Street bailout prompted Moore to rework the film again to center on that story.

He points to links between Goldman Sachs and the Whitehouse administration. It doesn't surprise me though, we have heard many times about corporate lobbyists and Bush. He doesn't mention the role of Gordon Brown, who thought it was his idea. It leaves me with the question, what about the billions we in the UK gave to our banks? Will we get this back?

Considering the amount our politicians talk about our vast debt, they barely mention how much of it is our money leant to the banks is coming back. We heard in 2008 that Northern Rock paid back more than half of the £26bn it owed by 2008. By Jan 2009 more than £15 billion of that has been repaid.
On 3 March 2009 Northern Rock noted that only £8.9 billion of the loan remained unpaid.

On 6 February 2009, the Office for National Statistics announced that it was treating Northern Rock as a public corporation, causing the loans (approximately £25 billion) and guarantees (approximately £30 billion) extended by the Bank of England and the value of the company's mortgage book (approximately £55 billion), provisionally estimated to total around £100 billion, to be added to the National Debt. Although not technically a nationalisation, the decision effectively acknowledged that "In all but name, Northern Rock is now nationalised".

The addition of this borrowing to the Government's totals increases the National Debt from £537 billion, or 37.7% of GDP to around 45%. In the 2008 Budget, the Chancellor of the Exchequer announced that the government will issue £14 billion of gilts in order to cover the Northern Rock debt.

The national debt is £900 billion, £850bn is the cost of the bank bailout! Why does no one put these two numbers together?

Instead of getting the baks to pay it back, or even raising tax for the wealthy, we only hear of cuts of services, or making pensioners keep on working for longer.

In many ways we have the opposite of capitalism, the nation has taken all the risk from the banks, they know they cant fail now. The state went on to subsidise car companies. Rather than encourage them to behave better, this could mean they will take ever greater risks. I wish Michael had explored this in the movie.

I wrote about this movie when it came out.

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