Michael Moore's Smash and Grab

When I first met Michael Moore more than 20 years ago, he was showing a half-finished documentary
to a few dozen people in a classroom in Ann Arbor, Michigan. It was
funny and poignant and had a powerful message. He had taken a second
mortgage on his house - equipment for filmmaking was a lot more
expensive back then - and raised some money from like-minded locals for
a long-shot venture. We all loved what he showed us but thought he
would be lucky if a few thousand people got to see it.

But the film, Roger and Me,
about the irrationality and human cost of the destruction of America's
auto industry, was a smash hit and Moore was on his way to become
America's most influential documentary film-maker. Twenty years later,
he has produced his most radical work, which was greeted with rave
enthusiasm when I saw it at the world's oldest film festival in Venice.

As
the old saying goes, you either blame the victim or blame the system.
Moore is making an appeal to blame it on the system, big time.

You
know this film is going to be subversive when it opens with clips
depicting actual bank robbers - caught on security cameras in the midst
of their heists - grabbing their loot with Iggy Pop's cover of Louie Louie
(a special version for the film) blasting away in the background. Moral
equivalence for the titans of the financial industry, and their
political protectors, is just around the corner.

Capitalism: a Love Story
doesn't just go after the seamy side of the American economy, although
that is captured neatly in the scenes of "condo vultures" feeding on
Florida's housing bust, alongside the corporations (including Wal-Mart
and Amegy Bank) which take out insurance policies on their employees
and cash in big when they die young. These ghoulish derivatives go by
the charming name of "dead peasants" insurance - which says it all,
really.

But Moore has bigger targets in his sights: he is
questioning whether the whole incentive structure, moral values and
political economy of American capitalism is fit for human beings.
Although this will not seem so radical in Europe, where most countries
have had governments in the post-second world war era that at least
called themselves socialist, or in most of the developing world, where
socialist ideas have popular appeal, it's pretty much unprecedented for
something that can reach a mass audience in the US.

But you
don't have to be a revolutionary to appreciate this film. Indeed, it
can be seen as a social democratic treatise, with Franklin Roosevelt's
proposed "second bill of rights" - an "economic bill of rights" that
included a job with a living wage, housing, medical care, and education
- as its reform program. Roosevelt is shown proposing this now
forgotten program back in 1944.

As in his previous films, Moore
combines the grief and tragedy of the victims - people losing their
homes and jobs - with hilarious comedy, cartoonish film clips from the
1950's, and sober testimony as needed. And there are victories, too -
as when workers occupy their factory in Chicago to win the pay that
they are owed.

As an economist who operates in the think-tank
world, I have to appreciate this work. He gets the economic story
right. How is it that Michael Moore's
father could buy a house and raise a family on the income of one auto
worker, and still have a pension for his retirement? And yet this is
not possible in the vastly more productive economy of today? The answer
is not complicated: in the first half of the post-War era, employees
shared in the gains from productivity growth; since 1973, most of them
have hardly done so at all. (Productivity growth has also slowed.)
Moore also explains the structural changes, such as Ronald Reagan's
rollback of union and labour relations to the 19th century, that helped
bring about the most massive upward redistribution of income in US
history. (Moore even includes graphs and charts to back up the main
points with data.)

From an economic point of view, the only thing
missing was a look at the stock market and housing bubbles of the last
decade. The current recession, like the last one, was primarily caused
by the collapse of a huge asset bubble - an $8 trillion housing bubble
in 2006, and a similar size stock market bubble in 2000-2002. This is
something that most of the media has not really understood. Asset
bubbles are as old as capitalism, and since this is a movie about
capitalism and the current Great Recession, it would have been nice to
see some of this in the movie. But I can't fault Moore too much for not
taking on something that most economists and the press missed - and
still don't talk about. It's a film, not a textbook.

Moore also
wins my vote by getting his facts and numbers right. This is worth
emphasizing because Moore's last documentary, Sicko - which was quite
careful with the facts - drew attacks from CNN and a smear campaign
from the insurance industry. Both attempted - unsuccessfully - to
impugn its accuracy. One former vice president of corporate
communications for a health insurance company, and the author of
several memos attempting to discredit Sicko, recently admitted to Bill
Moyers on camera that Moore "hit the nail on the head with his movie."

The new love story also targets the big boys who made our current Great Recession possible: Alan Greenspan,
Robert Rubin, and Larry Summers (the three smugly depicted in that 1999
Time cover of the "committee to Save the world"), and Tim Geithner.
Rubin, who came from Goldman Sachs, helped deregulate the financial
industry and got rich at Citibank from the results. Larry Summers, who
came from academia, also made millions from the deregulated,
government-guaranteed casino that he helped fashion when he (like
Rubin) was President Clinton's Treasury secretary. It's a bipartisan
hall of shame, tracking the havoc wreaked by a burgeoning, parasitic,
and increasingly politically powerful financial industry, through the
Reagan, Bush I, Clinton, and Bush II presidencies.

In a
heart-warming contrast to the age of greed, we see Jonas Salk, the man
who discovered the vaccine for polio in 1955, saving millions from the
crippling and often fatal disease and refusing to get rich off his work
by claiming patent rights. He only wanted that it be as available as
possible. "Could you patent the sun?" he asks. And the Catholic Bishop
of Detroit, when asked what Jesus would think of capitalism, replies
that Jesus would not want to participate in such a system. It's all
part of Moore's plot to make democratic socialist values as American as
apple pie.

Which is a tough sell, but if anyone can try it, it's a Midwestern
boy from the heartland, the kind that Garrison Keillor writes about
when
he says that its "the dummies who sit on the dais, and the smart people
who sit in the dark near the exits", the son of a Flint autoworker who
is true to his roots who doesn't forget which side he is on. Twenty
years later, he doesn't seem to have been changed very much by fame and
success.

Moore's last film was a devastating
indictment of the US health care system, an excellent introduction to
the battle for healthcare reform. This one could be a prelude to the
anger and disillusionment that is only beginning to swell.

The
Congressional Budget Office projects that the official unemployment
rate will remain near 10% through next year. If we add in the
underemployed (involuntarily part-time), dropouts from the workforce
and other uncounted unemployment we are looking at a number nearly
twice as high. Even if the economy were to begin its recovery soon, it
won't feel like one for quite some time. This film will have an
audience that is ready for it, in the US and elsewhere.