More on Moore...
Again, at the request of readers of this blog, I will say more on a topic. This topic - Michael Moore and his film "Capitalism: A Love Story." It seems there might be some confusion as to exactly what Moore is wrong about in this movie... so I will elaborate:
Fundamental assumption
Moore's fundamental assumption was that the bail out of Wall Street was capitalism. I agree with Moore that we should not have done the bail-out. However, the bail out ushered in a standard of socialism - government financed and controlled corporations. This was in no way capitalism... or even an effort to keep capitalism afloat. The bailout was a government mistake that was geared around the central core of what is socialism.
Definition - Socialism (from Wikipedia):
"Socialism is not a concrete philosophy of fixed doctrine and programme; its branches advocate a degree of social interventionism and economic rationalisation usually in the form of economic planning."
Economic planning (from Wikipedia):
"Planned economy (or directed economy) is an economic system in which the state or workers' councils manage the economy."
That second definition describes the bail out and the conditions of its impact exactly. That, my friends, is how Moore's fundamental assumption is flawed.
Three major factual errors (from Wikipedia):
1. "Three months after a scene in which Moore approaches Goldman Sachs headquarters to reclaim taxpayers' funds, the bank was one of the ten that repaid part of the $68 billion received from the Troubled Asset Relief Program."
2. "Moore criticizes Wal-Mart for "dead peasant" policies, where the company canceled all 350,000 of such policies in 2000. However, Moore notes that the termination of the policies was covered in the presentation of facts and quotes in the closing credits."
- Wait - he made a claim during the movie, then corrects the erroneous claim in the credits. That's a weasel-move if ever I've seen one. Also... the problems were corrected by Wal-Mart in 2000; and the movie was released in 2009 - that's called digging up the past.
3. "The documentary criticizes Senator Christopher Dodd and other government officials for benefiting from exclusive financial programs; Moore lambasts Dodd in particular for predatory lending as chairman of the Senate Banking Committee. The AP reported that the interest rates and fees involved were norms for the industry, and that the Senate's Select Committee on Ethics cleared Dodd ... of getting special treatments..."
Housing Bubble
Moore attributes the housing bubble to Greenspan and criticizes special interest rates for government officials. While I agree that the government officials should not receive special rates, Moore is dead wrong on what caused the housing bubble. In reality, the main contributing factors to the housing bubble:
- Fair Lending Act and Fair Housing act. While parts of these laws were absolutely needed, the damaging part was the mandate by the federal government to lenders - forcing them to lend to unqualified individuals - and "insuring" these unqualified loans with the federal government... an entity that is not known for its financial solvency.
- Market decline. A major part of the stock market was housing futures - and this part suffered with the rest of the stock market in 2008 & 2009. When so many of these companies were depending on stock yield for their profits... and stock yields lost money... the natural conclusion is that this part of the puzzle falls apart.
- Subprime mortgage industry collapse. For too long, subprime companies had been making risky loans to risky people. There's an old saying in the South - "if you play with snakes, you're gonna get bit." Well, these high risk companies met the high risk and got bit.
There are many other inaccuracies, but I suggest my readers read about them and look for them on their own. I'll point you in the right direction:
More on Moore's inaccuracies.
Fundamental assumption
Moore's fundamental assumption was that the bail out of Wall Street was capitalism. I agree with Moore that we should not have done the bail-out. However, the bail out ushered in a standard of socialism - government financed and controlled corporations. This was in no way capitalism... or even an effort to keep capitalism afloat. The bailout was a government mistake that was geared around the central core of what is socialism.
Definition - Socialism (from Wikipedia):
"Socialism is not a concrete philosophy of fixed doctrine and programme; its branches advocate a degree of social interventionism and economic rationalisation usually in the form of economic planning."
Economic planning (from Wikipedia):
"Planned economy (or directed economy) is an economic system in which the state or workers' councils manage the economy."
That second definition describes the bail out and the conditions of its impact exactly. That, my friends, is how Moore's fundamental assumption is flawed.
Three major factual errors (from Wikipedia):
1. "Three months after a scene in which Moore approaches Goldman Sachs headquarters to reclaim taxpayers' funds, the bank was one of the ten that repaid part of the $68 billion received from the Troubled Asset Relief Program."
2. "Moore criticizes Wal-Mart for "dead peasant" policies, where the company canceled all 350,000 of such policies in 2000. However, Moore notes that the termination of the policies was covered in the presentation of facts and quotes in the closing credits."
- Wait - he made a claim during the movie, then corrects the erroneous claim in the credits. That's a weasel-move if ever I've seen one. Also... the problems were corrected by Wal-Mart in 2000; and the movie was released in 2009 - that's called digging up the past.
3. "The documentary criticizes Senator Christopher Dodd and other government officials for benefiting from exclusive financial programs; Moore lambasts Dodd in particular for predatory lending as chairman of the Senate Banking Committee. The AP reported that the interest rates and fees involved were norms for the industry, and that the Senate's Select Committee on Ethics cleared Dodd ... of getting special treatments..."
Housing Bubble
Moore attributes the housing bubble to Greenspan and criticizes special interest rates for government officials. While I agree that the government officials should not receive special rates, Moore is dead wrong on what caused the housing bubble. In reality, the main contributing factors to the housing bubble:
- Fair Lending Act and Fair Housing act. While parts of these laws were absolutely needed, the damaging part was the mandate by the federal government to lenders - forcing them to lend to unqualified individuals - and "insuring" these unqualified loans with the federal government... an entity that is not known for its financial solvency.
- Market decline. A major part of the stock market was housing futures - and this part suffered with the rest of the stock market in 2008 & 2009. When so many of these companies were depending on stock yield for their profits... and stock yields lost money... the natural conclusion is that this part of the puzzle falls apart.
- Subprime mortgage industry collapse. For too long, subprime companies had been making risky loans to risky people. There's an old saying in the South - "if you play with snakes, you're gonna get bit." Well, these high risk companies met the high risk and got bit.
There are many other inaccuracies, but I suggest my readers read about them and look for them on their own. I'll point you in the right direction:
More on Moore's inaccuracies.
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