Michael Moore's "Capitalism" Film

(Warning: spoilers contained herein)

I just rented Michael Moore’s “Capitalism: A Love Story”. As usual, Mr. Moore raises some excellent points, throws in some humor and theatrics, and completely misses the mark when it comes to identifying causes and promoting good solutions.

First of all, I don’t think his definition of “capitalism” is anywhere close to the mark. He described it with the absurd phrase “a system of taking and giving” as opposed to a system of building, producing, earning, etc. Another point on semantics later.

Moore makes some effort to correctly attribute blame for the economic and fiscal woes of our country to officials from both political parties, but he still has a soft spot for anyone with a “D” next to their name, and a clear animosity for those evil “R”s. He accuses Ronald Reagan of “presiding over the “wholesale dismantling of [the U.S.] industrial infrastructure”. Hardly a fair accusation when U.S. manufacturing was in decline before, during and after Reagan. Also a bit biased when the film omits the fact that Bill Clinton(with the help of Republicans) signed both the NAFTA and GATT treaties which were not exactly healthy for U.S. manufacturing, but forget partisan bickering.

Michael Moore makes a point of the fact that “capitalism” isn’t described in The U.S. Constitution, although his citation of phrases such as “We The People”, “a more perfect union” and “general welfare” indicate that he didn’t read much beyond the preamble. He then makes a point of talking to several priests who state that capitalism is pure evil, and that Jesus would never stand for it. I know that the bible condemns “usury” but, like the Constitution, I don’t think it specifically mentions “capitalism”.

The film contains scathing criticisms of the banking and financial systems, the cozy relationship between Washington and Wall Street, the TARP bill, and AIG bailout. One photo shows Federal regulators, namely the head of the OTS and deputy director of the FDIC in a pose with bank lobbyists figuratively cutting through “red tape” of regulation. The sweetheart loans that government officials such as Christopher Dodd, Donna Shalala, Pete Conrad and any number of banking and securities regulators received from Countrywide Financial are described. Numerous examples are provided which reveal the relationship of elected officials, economic advisers and high ranking appointed officials with banking and investment firms that they were supposed to be regulating. The issue of the 2004 FBI report describing an “Epidemic” of Mortgage Fraud is also raised. Then, there’s the major issue of the big bailouts in which the U.S. Government funneled hundreds of billions of taxpayer dollars into AIG and the large Wall Street banks.

These are all valid things to criticize, yet Mr. Moore would have us conclude that this is somehow an indictment of capitalism? All I see is a tale of corruption and failure on the part of big government. We have mountains of regulations, and armies of regulators employed to prevent fraud, corruption and abuse in the marketplace. These highly paid government officials have utterly and completely failed in their appointed tasks. The FBI warns of an epidemic of fraud, yet we see no high profile prosecutions? The SEC fails to note the proliferation and danger of exotic financial instruments? The FDIC, OTS and Federal Reserve don’t sound the alarm about badly under-capitalized and over-leveraged financial institutions? WORST OF ALL, right at the moment when we were about to witness a vindication of free market principles ... just when the people and the companies who committed the frauds, who created the financial derivatives and who made millions with reckless speculation were about to be wiped out by their excesses . . . in comes BIG GOVERNMENT and The Federal Reserve to bail out the failed businesses with trillions of taxpayer dollars. I challenge Michael Moore or anyone else to find me a source which would define one of the elements of capitalism as “Big government confiscates wealth from successful and responsible businesses and individuals to reward failed businesses and individuals.” More than a few other ‘isms’ come to mind when I think of a a system in which economic outcomes are ordained by a central power.

In other parts of the film, there is a story of a bread company that is organized as a co-op, and uses a business model which minimizes the pay differential between the managerial workers and the assembly line workers. There is also a profile of a successful company called “Isthmus Engineering” which has cast off the top-down management system in favor of a decision making process where all employees vote and participate. There is also the story of the employees of Republic Windows and Doors in Chicago who staged a sit-in to demand the severance benefits which they had been promised, and the outpouring of community support for their effort. In holding up these shining examples, Mr. Moore fails to note that Isthmus engineering doesn’t operate on government grants. The bread company in question doesn’t produce under the direction of a government commissar, and it wasn’t Barack Obama, Richard Daley or Nancy Pelosi who organized the protest at Republic Windows and Doors. These folks are free American citizens, and it is by virtue of our Constitutional system of limited government that these people are at liberty to pursue their creative business models, and exercise their right to organize and assemble, free of the constraints and tyranny that have been the hallmark of economies designed around a system of central planning.

I would advise Mr. Moore to choose his terms more carefully, and be thankful for the fact that he lives in a society where he is able to produce films and distribute them to a wide audience free of interference from any Ministry of Truth.

One final side note on “Capitalism”. . . That guy Randy Hacker, who was being foreclosed upon had quite a collection of firearms. In the film, he even says that, after what he and his family have gone through with the banks, he could understand why someone might snap and go on a shooting spree. Sounds like a dangerous right wing extremist to me. Perhaps he and the rest of us peasants should be deprived of our firearms. What say you Mr. Moore?