Capitalism—A Propaganda Story
Michael Moore is the Leni Riefenstahl of our time. Or, perhaps he would be better characterized as a Bizzaro World Leni Riefenstahl, because while she propped up with propaganda the political powers of her time, Moore uses the same techniques to bring down the powers of our time, be it GM (Roger and Me), the gun lobby (Bowling for Columbine), the government (Fahrenheit 911), the health care industry (Sicko), or free enterprise (Capitalism: A Love Story).
In this latest installment in his continuing series of what’s wrong with America, Michael Moore takes aim at his biggest target to date, and the result is a disaster. The documentary is not nearly as funny as his previous films, the music selections seem contrived and flat, and the edits and transitions are clumsy, wooden, and not nearly as effective as what we’ve come to expect from the premiere documentarian (Ken Burns notwithstanding) of our time. And, most importantly, the film’s central thesis is so bad that it’s not even wrong.
First, let me confess that even though I have disagreed with most of Michael Moore’s politics and economics throughout his career, I have thoroughly enjoyed his films as skilled and effective works of art and propaganda, never failing to laugh — or be emotionally distraught — at all the places audiences are cued to do so. My willing suspension of disbelief that enables me to take so much pleasure from works of fiction, does not always serve me well when pulled into the narrative arc of a documentary. Thus it is that with his past films I have exited the theater infuriated at the same things Moore is … until I rolled up my sleeves and did some fact checking of my own, at which point Moore’s theses unravel (with the possible exception of Bowling for Columbine, his finest work in my opinion). But with Capitalism: A Love Story, Moore’s propagandistic props are so transparent and contrived that I never was able to suspend disbelief.
What was especially infuriating about Capitalism: A Love Story was the treatment of the people at the bottom end of the economic spectrum. The film is anchored on two eviction stories contrived to pull at the heart strings. One family filmed the eviction process themselves and sent the footage to Moore in hopes he’d use it (many are called, few are chosen), and the other was filmed by Moore’s crew. The message of both is delivered with a sledge hammer: Greedy Evil Soul-Sucking Bankers (think Lionel Barrymore’s villainous Mr. Potter in It’s a Wonderful Life) are tossing out onto the streets of America poor innocent families who are victims of circumstances not of their making. Why? First, because this is what Greedy Evil Soul-Sucking Bankers do for fun on weekends. Two, because the economic crisis caused solely by said bankers has made it impossible for families to make the payments on those subprime loans they were tricked into taking by those same bankers, who themselves were suckered into a Ponzi-like scheme cooked up by Alan Greenspan and his Wall Street/Federal Reserve buddies to take back the homes fully owned by (first) the elderly and (then) the poor. In the fine print that the bankers carefully slipped past the elderly and the poor for these second mortgages and subprime loans, the contracts said that the rates on variable rate loans could go up, and that the house was collateral for the loan such that if the loan payments are not made the home is subject to foreclosure and repossession by the bank (which is what the bankers are hoping happens).
In Michael Moore’s worldview, a goodly portion of the American people are ignorant, uneducated, clueless pinheads too stupid to realize the fundamental principle of a loan: you have to have collateral to secure the loan! No collateral, no loan. You say to the banker “I would like to take out a loan.” The banker says to you “what do you have for collateral?” What happened in the housing boom was that bankers relaxed their standards for what they would require for collateral (and income, assets, etc.) because (1) the government told them to do so and promised to cover their losses if it didn’t work out, and (2) they wanted to make more money; and borrowers wanted in on the cash cow that everyone was milking, from individual house flippers looking for a quick buck, to ordinary families wanting extra cash for remodeling, tuition, or whatever, to mortgage giants wanting corporate expansion. And all were driven by the same motive: greed!
Yes, greed. Those evicted families knew perfectly well what they were doing when they freely chose to climb onto the housing bubble and take it for a ride. I have a much higher view of the American public than does Michael Moore. I don’t think the American people are so stupid or uneducated that they didn’t know what they were doing. This wasn’t rocket science. It was even on television, the ne plus ultra of pop culture! I well remember watching A & E’s television series Flip This House, and reading all those magazine articles and get-rich-quick books on how to make a fortune in the real estate market, and thinking “wow, everyone’s getting rich except me; how can I get in on the action?”
What I felt is, I’m sure, what lots of people felt. I looked into securing a second mortgage on my home in order to build a second home on an undeveloped portion of my hillside property, and then selling it to turn a tidy profit. Everyone was doing it. What could go wrong? Well, for starters I thought, what if it takes longer to build the home than I projected? We all know how slow construction projects can be. Could I make the payments on the second mortgage for an additional six months to a year? And what if I couldn’t sell that second home? Could I make the payments on the new loan indefinitely? What if my income decreased instead of increased, like it was at the time (and, subsequently, did … dramatically!). And what would happen if I couldn’t make the payments? The answer was obvious, and it wasn’t in the fine print: I could lose my primary home.
Forget that! Making a profit on a second home would be nice, but losing my first home would hurt well more than twice as much as making a profit on the second home would feel good. That’s a basic principle of risk aversion: losses hurt twice as much as gains feel good. Now, I’m not really a risk-averse guy (I gave up a secure career as a college professor for an insecure career as a writer and publisher), but even I could see the inherent risks involved when the home you live in could be taken away. My hillside remains sagebrush and wild grass.
What about the people on the other end of the economic spectrum — the bankers and Wall Street moguls? Why aren’t they being evicted. Now, given that I’m a libertarian, you might expect me to come to the defense of Corporate America. Not so. Here I am in complete agreement with Michael Moore that, as I’ve been saying since the day it was first pronounced, “too big to fail” is the great myth of our time. None of these giant corporations — GM, AIG, Bank of America, Goldman Sachs, et al. — should have been bailed out. In fact, they should have been allowed to fail, their stocks go into the toilet, their employees tossed out on to the gilded streets of lower Manhattan, and their CEOs dispersed to work as greeting clerks at Walmart. They gambled and lost on all those securities, bundled securities, derivatives, credit default swaps, and other “financial tools” that I’ll bet not one in a hundred Wall Street experts actually understands. If you really believe in free enterprise, you must accept the freedom to lose everything on such gambles. These CEOs and their corporate lackeys are nothing more than welfare queens who adhere to the motto “in profits we’re capitalists, in losses we’re socialists.” Sorry guys, you can’t have it both ways without corrupting your morals, which you have, along with the politicians you’ve bribed, cajoled and otherwise coerced to your bidding.
The solution? I have some suggestions of my own, but Michael Moore’s solution is beyond bizarre: replace capitalism with democracy. Uh? Replace an economic system with a political system? Even the über liberal Bill Maher was baffled by that one when he hosted Moore on his HBO show. How does a democracy produce automobiles and computers and search engines? It doesn’t. It can’t.
Capitalism: A Love Story, ends with a remarkable film clip that Moore discovered of President Franklin Roosevelt reading from his never proposed second Bill of Rights (he died shortly after and the document died with him). Included in the list are:
- The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
- The right to earn enough to provide adequate food and clothing and recreation;
- The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
- The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
- The right of every family to a decent home;
- The right to adequate medical care and the opportunity to achieve and enjoy good health;
- The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
- The right to a good education.
That’s nice. To this list I would add a computer in every home with wireless Internet access. I’m sure we could all think of many more things “under which a new basis of security and prosperity can be established for all — regardless of station, race, or creed,” in Roosevelt’s words. But there is one question left unstated: Who is going to pay for it? If there is no capitalism, from where will the wealth be generated to pay for all these wonderful things? How much does a “decent” home costs these days, anyway?
Do you see the inherent contradiction? Of course you do. So does Michael Moore, who elsewhere in the film longs for the good old days when the “rich” were taxed 90% of their earnings. So did Willie Sutton, who answered a similar question after being nabbed by the FBI during the Great Depression and asked by a reporter why he robs banks: “Because that’s where the money is.”
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Nicely written. As a grad economist I find myself making those same arguments to the people I know. In Colombia (my home country) me had a really bad crisis back in 1999 and a LOT of people lost their homes. The government solution? Pul back the interests on housing credits… the result? Poor people today can’t access to a credit because for the banks isn’t profitable…
I don’t really know why people doesn’t understand the concept of a loan… any insights from your psychologist background?
Thank you
> Now, given that I’m a libertarian, you might expect me to come to
> the defense of Corporate America.
No, that’s a Republican. A Libertarian would say, “Stand on your own merits.” Everyone should know that.
Yeah I’m a Libertarian too and people expect me to stand up for what we’ve had as IF that were indeed capitalism.
I won’t, it’s fraud and silly double dealing with a bunch of greedy and amoral nitwits running it all.
Don’t be so sure. The two parties are often accussed of being in the hip pocket of “corporate interests” but the ideal of rugged individualism and the ability to create more free markets still has a safe haven in the Republican party, no matter how uneasy their alliance with the Libertarians.
I hate to say it (being a bleeding-heart liberal an’ all), but I agree 100%. Didn’t read the fine print on your credit card application? Too bad. Didn’t read the fine print on your second mortgage? Too bad. Couldn’t understand what the fine print was saying? Find someone who speaks legalese. Being poor is no excuse for not making sure you understand something thoroughly.
I also think the bailouts shouldn’t have happened. Again, if you don’t really understand or accept the risks, don’t play the game.
I am sure that the people in the Great Depression who sat quietly in their houses while watching streams of marching homeless hobo’s were comforted by the fact that they lived within their means. “Too bad!” they thought. Then they lost their jobs too. You’re nothing but an ignorant fool.
The great depression is irrelevant. Malfeasance and incompetence are to blame here. Those that have misbehaved, the lenders, borrowers, and legislators, need to be exposed and punnished. Some by the market, others by the law. Government should not bail out anybody.
At least Moore has again exposed Roosevelt as the doofus that he was.
The problem with this argument is that it is tantimount to suggesting that ours should be a “law of the jungle” sort of society where anything goes as long as you can demonstrate that “technically” someone could have known they would be taken for a ride. Using that standard then pretty much any crime that doesn’t involve putting a gun to someone’s head gets a pass.
This argument also makes for a world where >BY DEFINITION< the strong will rule the weak. The strong will always have more power, more information, and the more influence to rewrite the rules in their favor. Worse, the effect snowballs over time as power and money begats even more.
Yet, the whole idea behind modern liberal (small L) society is that the weak gets the support to stand up to the powerful and get a far deal. Over the last 30 years that's been steadily eroded and the attitude you show would just be the proverbial last nail in the coffin of the "social compact" that once held our civilization together.
Making sure the weak have a fair shake means limiting the power of the strong — and no amount of griping about "punishing the successful" can change that. If you want to live in a democratic and fair society it's a necessary reality. If you want instead for things to be "every man for himself" then let's just turn off our sense of empathy and have a good laugh at all those naive "idiots" who were dumb enough to think their bank (or employer) would treat them fairly.
If we have to treat everyone as a potential enemy out to screw us over then how can we have an effective society? Worse, who would actually want to live in such a world?
First, I just had to throw my two cents at you, mainly for stating “Who would actually want to live in such a world?” I would. Too much trust can go bad ways. I think it is perfectly natural to be suspect of individuals, but responsibly. If everybody is watching everybody that’s alright. If everybody is watching everybody because of the paranoid ideology not uncommon of a conspiracy theorist THEN it is a bad world. I think perhaps you may have meant similarly but I wanted to point that out.
Second. I agree that the wording of policies which govern our money in all it’s various forms and favors. Be them loans or investments. There is a certain wordiness that can be difficult for some people but some of that wordiness results from the company trying to protect its ass when something goes wrong. And I don’t mean ‘wrong’ as in ‘we cheated you, haha’ we mean any moron walking in, taking a long, and specifically exploiting a flaw in the wording in order to benefit at the expense of the innocent. It’s called disclaimer. Please, don’t forget that. I’m not saying shady shit doesn’t happen in wording but not so often.
Third. To address the op and post. I agree that people should be able to stand on their own merit. If they fuck up they fuck up but fucking up happens to the best of us. The current statistic is as follows. 3.5 million people EXPERIENCE homelessness every year, 800,000 of which (roughly) occurs at any given week. These people are not homeless for more then 3 weeks. The chronically homeless are estimated around/tallied at 120,000 as of 2007. Capitalism doesn’t fuck people nearly as bad as we think. Furthermore I would also like to address the FACT that the standard of living has been increasing. When the standard of living increases profiters benefit. For instance, cellphones? Some of the best were only afforded by the rich back in their day when they came out. Now look at us all. There isn’t anyone who doesn’t have one. Even the gang bangers got them and they claim to have nothing. The poor we have now are far richer then the poor we had when the Irish Immigrants came over. I’m not saying that justifies their poverty, it needs work, but seriously, look at the facts. The point is the problem is not nearly as huge as they make it out to be and America is being lied to about a financial crisis. At best we’re headed towards the edge. We are definitely not there as of yet.
Trouble is, the fine print keeps changing.
Taking out a loan you can’t pay back is foolish, and so is lending to someone who know cannot pay it back.
Mistakes were made. Now we need to fix it and make sure it doesn’t happen again. Government needs to be the referee to make sure everyone plays fair.
Maybe the gov’t should be the referee, but it can’t be fair when it is choosing winners and losers.
Why is there fine print? Why is it so difficult to read? Why do mortgage companies sign people who they know cannot afford it? Answer: greed.
Sorry, people, you can’t dream if you can’t understand or if you assume you won’t be cheated.
“Why is there fine print?”
Because it spells out the terms of the contract.
“Why is it so difficult to read?”
Because it’s in legalese, and jargon is hard to read. Same reason a patent is difficult to read, even when the patent holder wants you to understand it.
The font is small in ads because otherwise it would fill up the entire ad with exceptions and details.
The problem is when ads bury the important bad stuff in fine print.
Reading fine print isn’t as easy as you think. Much of it is deceptively worded or unenforceable boilerplate. Hell, I have a JD, and I hired a specialty lawyer when I bought my home. Many people who lose their homes signed agreements they did not understand, all the while carefully analyzing every line of the contract. Capitalism is an excellent tool for deciding consumer choices, but like any tool, it can be dangerous in certain hands. I salute the wise investor who knows his limits, but just because an individual is not participially intelligent should not mean that he or she deserves to lose a home. Capitalism needs a regulator. Before government intervention, we had many unsafe working conditions, no compensation for on-job injuries, child labor, and a host of other symptoms of unrestrained capitalism that we can do without. There are some who argue that these factors were necessary for the success of the industrial revolution. I disagree. Capitalists would have invested their monies where there were profits to be made even if the government had mandate fair and safe working conditions.
“Why do mortgage companies sign people who they know cannot afford it?” ACTUAL answer: because the fucking government tells them they have to. Those well-intended liberal policies broke the economy and screwed countless Americans and I’m sick and tired of liberals acting as if greed is the only motivating factor behind predatory practices in the housing market. It’s either disingenuous or borderline ignorant, and I’m not sure it matters which.
You’ve said it exactly (tho I’m not a bleeding-heart). There should also be acceptance of personal responsibility in general for the things one does or doesn’t do – something quite out of fashion these days…
That’s just it — all the people manipulated into getting bad loans are still going to pay with things like ruined credit or the crushing of their dreams of home ownership.
The real issue is whether or not the mantra of “personal responsibility” is going to be used as little more than an excuse to blame everything on the least powerful individuals in this whole sorry affair.
In other words, all too often “homeowners won’t accept personal responsibility” is code for “big business is blameless.”
So, how about if the blame is just shared fairly? The homeowners in question are being “punished” with things like lost nest-eggs and foreclosed homes. Just how are the banks and the managers who led them getting “punished”? With giant bonuses and an implicit guarantee from the government that they’ll always been rewarded no matter how badly they do?
Yup, that’s fair.
And in the great state of Texas being retarded is no reason to not be executed. All things being equal ignorance of the law is no excuse right? If I see you dying of thirst in the dessert, too bad, you should have brought your own water, calculate your risks, and every man woman and child for themselves.
Life is a wonderful cost benefit analysis, where the numbers always have to provide a greater benefit to what you are giving. Give me a break. Learn to be human and live in a society.
Multi-millionaires don’t need bailouts we might agree in that respect.I do not agree with your frame of mind regarding the poor and their ability to analyze risk. I not on a high horse but I can understand what poverty is. Poverty is a vicious cycle, and with widening gap between rich and poor, not one that find a solution anytime soon. Too be born into poverty means first receiving a lack luster education, maturing in a stressful environment and then being admonished for it from uncaring well intentioned bleeding heart reptiles like yourself. You who understands or feels nothing.
Over simplifications, deliberately misunderstanding opposition, outright fabrications, misleading evaluations, and always, always, self righteous posturing that comes from the demand of the self immolation of others to pay off a debt they owe to others for which they were born into and can never pay off.
How typically leftist.
I hate living in the world you see as justified by fine print. And i can sum it up in one simple statement. Your world requires everyone to look for and dodge corrupted loopholes in every transaction they make. Why should we have to look for the fine print. I feel sorry that you think this is a proper world to live in.
We live in that kind of world, either in respect to government or in respect to the power of private capital, bloated from the stench of political affiliation. There is no way to avoid it. Frankly, I’d rather the less powerful force (private capital / business) be allowed to be corrupt without the freedom to form political affiliations than the alternative we’re currently used to.
Ever try to read the bills that congress passes? “And other reasons” is my favorite catch-all government legalese. They are surely the masters of fine-print.
I am very much in agreement. The blame for the situation falls on the legislators who passed faulty regulations, the derelict agencies that did not properly enforce the regulations, and the business people and customers that violated the regulations.
When someone lies about their income and takes out a loan that they can’t pay back, they have commited a crime, they should lose their house and go to jail.
When someone has the legal duty to ensure that the borrower has stable income sufficient to service the debt and they neglect to do that properly, they have commited a crime and should lose their business and go to jail.
When legislators pass legislation that forces lenders to engage in increasingly risky business practices in order to stay competitve, their responsibility for the situation should be published and they should be removed from office by the electorate.
When businesses engage in increasingly risky, legally dubious, and obviously unsustainable investment practices in order to stay competitive, any employees that have violated regulations should be fired and punished under the law. The damage to the company should be borne by the shareholders, and the business lost by that company will be taken up by companies that behave more responsibly.
Three comments and not yet one proclaiming that Michael Shermer “isn’t a real skeptic” because he doesn’t share the poster’s politics? That must be some kind of record!
I haven’t seen the movie, but I think you’re committing an over-generalization as well:
> And all were driven by the same motive: greed!
I think (and hope) that this is wrong. I would argue that bankers are in it for the money. However, the people who now find themselves in homes they can’t afford, I would guess that there are many lower-income people who were in a bad situation (violent neighborhoods, etc) and heard through the grapevine all the great programs for first time home buyers. They could get a house! Their dream!
They go into the bank. The bank greedily tells them, “No money down! We’ll take care of you.” Once you show them your income, “No worries, we can give you an ARM to lower your payments, and by the time the rate changes, your property value will make it sellable.”
The average Joe doesn’t know about economics. The average Joe, at least in America, doesn’t know the complexities of a mortgage. They are presented with 100 different papers to sign. I would argue most Americans can’t interpret legal documents accurately enough, and need to have a lawyer help them read any complex documents. Even then, you must put your trust in a lawyer’s interpretation of the documents. The whole system is bunk for an average American. And don’t get me started on actual cases of predatory lending…
I just hate to blame the victim. Yes, there were many homebuyer’s motivated by greed. However, there were cases that they were trying to do the best thing for their family, and not knowing enough about how mortgages work, trusted their bankers. They felt they were making the proper decision because of a bad banker.
WIth that said, I agree with nearly everything else you wrote (although I haven’t seen the movie yet).
“> And all were driven by the same motive: greed!
I think (and hope) that this is wrong. I would argue that bankers are in it for the money. However, the people who now find themselves in homes they can’t afford, I would guess that there are many lower-income people who were in a bad situation (violent neighborhoods, etc) and heard through the grapevine all the great programs for first time home buyers. They could get a house!”
Um, that’s greed: excessive or rapacious desire. They could not afford a house, but tried to get one anyway, even if they did not have the resources to pay for it. Their greed led them to a bad decision.
“The average Joe doesn’t know about economics.”
The average Joe doesn’t understand physics. It doesn’t stop gravity from working. The average Joe doesn’t understand human biology. It doesn’t stop lung cancer in those that smoke.
“I would argue most Americans can’t interpret legal documents accurately enough, and need to have a lawyer help them read any complex documents.”
If you are going to buy a house, hire a lawyer or learn it. If you are paying taxes, you either hire an accountant or learn how to do it. Even then, it’s not a bad idea to have an accountant check your work. That’s like fixing a sink without knowing plumbing.
“I just hate to blame the victim.”
It’s not about victims. It never was. The bank doesn’t make money if you foreclose on the home. That is what ended up putting them in trouble – people started foreclosing at high rates, leaving the bank with no source of income.
It would be nice if we could cover everyone from their mistakes, but as we recently learned, it can be more expensive than we can afford. Yes, people who make poor choices will suffer, but the other option is that we all suffer. I’m not better off because if Bill Gates makes less money. I’m still a grad student who gets paid enough to have a diet of raman.
To Jeremy and all Jeremys:
Physics have nothing to do with economy. Economy is human-made (maybe I should say inhuman). As long as profit goes to 20 percent of the population in the “advanced· —that is wealthy— world, and 80% get the rest, you can`t seriously say that the system is fair, can you? Well, I suppose you can. Capitalism is inherently unfair, and have a look at how many peoble are below the standards of poverty in your own contry, my friend. And yes, you probably live in your own home, put having a decently paid job, a home and universal health attencion are not simply something to desire, but a must. But then again, to keep your precious system going you just can`t afford them. So the Question is, do we put our faith in our competitive system based on exploitation, dubious morals and good faith, continuous growth (and inevitable destruction)? Oh boy, everybody in USA must study in the university(es) to understand the sometimes undecipherable “small letters”. You must be very well off.
“Capitalism is inherently unfair”
Ahh…the refrain of someone who has no idea what the word “fair” or “unfair” means in an economic sense. You apparently want everyone to receive from an economic system EQUALLY. Why should people who don’t contribute less to a system receive the same as people who put more into it? The people with the most to lose should be rewarded with the most, yes? Is that FAIR? I would think so.
And to say that capitalism is a system “based on exploitation” and “dubious morals” shows your bias you have against this economic system. Because SOME people exploit others and use “dubious morals” does not mean the entire SYSTEM is based on these and you are making too wide of a generalization. Moral Philosopher and Economist Adam Smith would surely disageee with your sophomoric (and obviously biased) understanding of capitalism. Capitalism REQUIRES sound morals to survive…if not, those unscrupulous activities are revealed and filtered out (sound familiar? That would be what happened to those few “dubious” bankers–the system worked).
How is this relevant to the argument? You’re just throwing insults and strawmen at us — assuming all sorts of negative things about Ibdl and then critcizing him without really touching on the points he brings up. It’s smoke and mirrors.
How about dropping the insults and actually providing some evidence/argument demonstrating how capitalism really is fair, how it manages to reward people for true merit and hard work instead of their power and ability to manipulate others, and how if we nearly had another Great Depression the system actually “worked”.
As the present crisis, not to mention previous ones, clearly demonstrate. True, capitalism is the faires of all poddible sysyems, and those who are in the way or do not get any share are redundant, Adam Smith (who , by the way died quite a while ago) notwithstanding. And, isn’t your reply quite blatantly obviously biased too? Where is the proof, seeing what we’ve seen that capitalism REQUIRES sound morals?Quite an example, your sophomoric answer. Yes SOME people exploit others, but how many others anw how? It seems, after all, you can fool ALL the people ALL the timne.
P. D. To start with, would you please elaborate on what is to you “fair” an “unfair” in the economic sense, because if I don’t know the difference, you must certainly know it. Enlughten us, please. That EQUALLY of yours is only yours, and I suppose you share the idea that people who earn lots of money must be good by definition, while history doesn’t exactly tell us that about most great fortunes. And please, detail what those people who put more into the system shoud be rewarded with. More money? Power? They already have that. More than enough to last the a lifetime, surely. On the other hand, what is it they put into the system? Money? Power? Workers with whom they do as fits them? (have a look at the unemployment figures, at the people who have irretrievably lost therir right to a pension, and so on, friend). The system DOES WORK, though it does through exploitation and brainwashing of commoners, so to speak, and it Is inherently unfair if we look at it through the eyes of Human Rights, declaration I believe the United States signed (correct me if I’m Wrong) and, please, don’t fall into the same trap as Mr Shermer and his propaganda: give data, verifiable cases, and all the rest. If not, yours is a belief, not unlike religion, in capitalism. That is, blind faith.
> Um, that’s greed: excessive or rapacious desire. They could not afford a house, but tried to get one anyway, even if they did not have the resources to pay for it. Their greed led them to a bad decision.
The banks told them they could. A banker is someone who you generally trust with money, especially if you’re not very good with numbers.
> If you are going to buy a house, hire a lawyer or learn it. If you are paying taxes, you either hire an accountant or learn how to do it. Even then, it’s not a bad idea to have an accountant check your work. That’s like fixing a sink without knowing plumbing.
They “hired” the banker to help them out — after all, the banker does make money by doing his job. The bankers lied.
> It’s not about victims. It never was. The bank doesn’t make money…
Are you claiming the *banks* are the victim? Seriously? They’re the ones that talked these people into the loans! They are the one’s that then floated these bad debts around the market and caused our entire system to crumble! They are *hardly* the victims.
> It would be nice if we could cover everyone from their mistakes,
I never claimed I wanted anything of the like, but for the sake of arguing:
> Yes, people who make poor choices will suffer, but the other option is that we all suffer.
That’s definitely a false dichotomy. “We all suffer” is a bit apocalyptic isn’t it? What is the definition of suffer that hasn’t already been seen from the effects of the fallout on the dollar and market? Would asking for $10 per year per citizen really be suffering? How about $20?
To turn it to the modern discussion, we have 44,000 people dying every year from now having health insurance, and many more who have health insurance go bankrupt because of policies not covering crucial treatments. To use your exact same dichotomy, either people suffer and go without health insurance for entirely valid reasons, or we all suffer. But we won’t all suffer, we may see a small tax hike graduated to our income level. Is that really suffering?
Now before I get accused of a bad analogy, I never argued that we should fund people staying in their own houses. I never claim that’s a long-term solution. However, there should be a program to allow banks to get close to breaking even and the home-owner to escape loans made under predatory practices. That’s all I think we should be doing, and the cost of that is much less than forgiving entire loans.
Well I can’t but agree,
you CAN have health care (or Social Security, whatever you want to call it) and never go bankrupt because of it, as long as you don’t have to rely exclusively on private health care. Have a look at Europe.
You cannot have government give those things away. European governments are going bankrupt. There are no private goods (like healthcare) that government is better at distributing fairly than the FREE market. The trouble in America is that the healthcare market is not FREE.
Additionally, many of these people were steered away from more standard loan products toward Zero-interest ARMs. The brokers and real estate agents pressured buyers to take out these types of loans because *they* made more money (the broker because they got bigger commissions and the agent because these loan allowed the buyer to buy more expensive houses and they got bigger commissions).
A sad result was the housing bubble expanded, pushing many of us ‘smart people who live within our means’ out of the home ownership world – so we end up paying off some land lord’s mortgage.
you are the clearest thinker in this whole discussion. thank you.
Moore wouldn’t mind being taxed 90% of his earnings? How about moving from his mansion into public housing?
Curious, what kind of housing do you think Michael Moore would have to live in if he were actually taxed 90% on his earnings over 3 million dollars? I doubt it would be the slums.
So does Michael Moore, who elsewhere in the film longs for the good old days when the “rich” were taxed 90% of their earnings.
This line is deceptive. 90% is the highest tax bracket which is by no means the same thing — as is strongly implied here — as 90% of all the money the rich fellow makes. So, it is only money he makes over a certain high level that would be taxed at 90% (discounting tax shelters, et al), not every last bit of his income.
You want to see hundreds of thousands of employees tossed out onto the streets of lower Manhattan?
You want to see people’s 401k savings follow the stocks into the toilet?
Max,
I do not believe that “hundreds of thousands of employees tossed out onto the streets” for any length of time. If those bankers filed for bankruptcy, they would be back up and running within a few months.
As for the 401k’s, the investors already lost half of their value by 09/2008. Under bankruptcy, the courts would decide who gets their money first. And, as we saw with the GM bankruptcy, their new CEO, Barack Obama, told them ahead of time how to divvy up the assets. Who knew the UAW could end up a major stock holder, eh?
“If those bankers filed for bankruptcy, they would be back up and running within a few months.”
My point was that Bank of America, AIG, and especially GM don’t just employ greedy investment bankers and executives. They employ thousands of people who did nothing wrong.
“As for the 401k’s, the investors already lost half of their value by 09/2008.”
Letting AIG stocks go into the toilet would’ve helped how?
“Under bankruptcy, the courts would decide who gets their money first.”
Washington Mutual was sold to JPMorgan Chase. Chrysler planned to be half-owned by Fiat. So we see more consolidation and foreign ownership.
Your point was included in my response. When these companies reorganize after chapter 11, 13,etc. they do not normally just keep the executives. In fact the executives are the ones who hit the chopping block, while most of the thousands who did nothing wrong are retained to rebuild the company.
When Barry nationalized GM, the CEO was the firs to go.
AIG stocks were already “in the toilet”. The most painless course of action would be to let the market run its course. Some would fail, some would not. Either way, they would have been working on rebuilding in mid 2008 and that would have cut the recession short.
Foreign ownership is not a good thing. Unless the plan is to give the entire country to other countries.
Hey, maybe that is what Barry won the Peace prize for. (Giving $100s of billions to foreign entities via AIG with no accounting). I know it happened Bush’s watch, but they weren’t ever going to give Bush a peace prize, and Barry had a hand in killing our economy, so why not give it to him?
BTW: do you libertarians want to know one reason Barry the socialist nationalized GM?
They make a lot of our military equipment and if our government is going to provide for national security it must secure the means for doing so – this includes keeping spare parts a comin’.
It is all well and good to say “Let them fail” but if you want to live a sovereign nation you have to be willing to compromise certain principles.
I’m glad that I work in the sciences… frankly, I’ve seen dozens of op eds from different decorated Economics people and they all think completely different things from the same preconditions. It seems as if people have decidedly strong views of what is “moral” in economics. The people who took out subprime loans are “immoral”. The people who gave them are, or the government that allowed them to exist at all.
I’m sure at some points, everyone felt like they were doing good things, giving a better home to ones family, allowing millions to own a new, better home, and increasing the overall wealth of America, etc. There was greed too, of course.
What I don’t understand about a libertarian world view, as opposed to my own more liberal one… if you just allow everyone to rise and fall on their own merit, would you just allow the whole of the American banking system to fail? Its not like it would be just the people that gave out subprime loans that would fail, and just those that gave and took them that would suffer. The whole system needs to be fixed, and frankly, I would rather the government intervene, and not everyone get their just deserts, in exchange for avoiding a total collapse of the retirement accounts of everyone in America. Is that immoral? It may not be “justice” but I think its certainly a better solution.
It’s the problem with libertarians. They base all their arguments on their (im)moral views, and not on practicality and logic. Where reality contradicts their theory, they ignore reality.
A few big banks is not the same thing as “the american financial system”. Thousands of smaller banks did the right thing and didn’t get themselves involved in the bubble.
Shouldn’t those prudent well-capitalized banks get rewarded for their financial management and foresight, by (let’s say) being able to purchase small parts of the larger banks during bankruptcy proceedings?
Instead, the big banks got biggers, and everyone else got shafted. Great.
Kinda like team rock climbing, the guy at the top only falls first.
@Max: Not really. It’s all fine and dandy to tell people never to sign a document they don’t understand, until you realise that for the vast majority of people there is no way to get anything done without signing incomprehensible documents. And the people who could explain them to you properly want money, more money than you can afford.
Yes, people have been living above their means on a national scale. But it wasn’t their fault and they shouldn’t be punished. Making the banks go belly up and reducing them to poverty, destroying the economy and affecting everyone else too doesn’t seem to be a solution any sane person could live with.
But it stings that the people who caused the problem are now being paid for their kindness by the government in shiny tax dollars. I don’t get it. I’ve met people in the banking sector, and they weren’t that smart and just as replaceable as everyone else. How hard can it be to simply give the people who were responsible for the banks’ policies life in prison, replace them, and then do your best to keep the banks afloat?
Of course, the banks’ directors and our politicians are all part of the same politico-economic clique and that’s probably where it goes wrong.
Too bad! Don’t conduct economic transactions! It’s you’re fault for not going to law school and not having enough money to pay someone to read each and every document you ever own!
Anthony can buy a $300,000 house, pay the thousands in real estate fees and taxes, but can’t afford a lawyer to explain to him where his money is going.
Geez. Skeptic much?
Besides, if you knew anything about US contract law (you clearly don’t), you’d realize that there are provisions for those kinds of situations, both before and after bankruptcy. In general, contracts are not valid if one of the parties didn’t or doesn’t understand the terms.
And Robert, I’m sure that excuse has held up well in bankruptcy court. “Really, your honor. I *thought* I understood it, but I didn’t realize it meant that my payments could triple.” Haven’t heard that defense much.
Under certain circumstances, this defense can indeed work. You can start your reading of how common law contracts are treated in courts here:
http://en.wikipedia.org/wiki/Contract#Setting_aside_the_contract
I’m sure a lawyer will explain to you those terms in detail.
Life in prison? That’s barbaric.
To the extent that you take regulations off of ‘free’ enterprise, it will tend to self-organize into large power blocks (just look at economic history). If those power blocks become too large, dismantling them causes harm to people who had no idea of the risks, and no easy way of knowing.
And yes, I would suggest a bit more skepticism of something so belief oriented as libertarianism. Just like communism (and many other isms), it has some rather preposterous underpinnings in the form of assumptions about how people behave.
Expecting rational behavior from economic actors fits Einstein’s (attribution may not be the original) definition of insanity. Doing the same thing over and over and expecting different results.
My problem with this whole “crisis” is that people want to find that one group to blame. I just don’t think that’s possible, everyone in this transaction shares the blame. It was just one of those perfect storms where it just came together into a hurricane.
My problem with economics is that it’s hard to say it’s a hard science, when there is little empirical data to evaluate. Everyone knows about the “laws” of supply and demand, but how does that shake out mathematically? How do you rate demand? I would love to see some kind of equation or paper or something. Not only that, but the world view of most economists was that the investor is a discriminating and shrewd individual. Seriously? So insider trading is just someone being smart? They couldn’t possibly be motivated by something like greed? or cocaine? (-pssst- Mr. Shermer feel free to plug your book here! -cough- “Mind of the Market”)
Also, as an aside since Michael Moore is such an anti-capitalist, why does he own so much Haliburton stock? Or get paid so much to do these films?
The “Law of Supply and Demand” has many other, significant factors that people often over look like ‘efficiency of the marketplace”, “elasticity”, and others.
The supply and demand balance for, say, soda pop is much different than it is for, say, insulin.
Another point that people often miss about “supply and demand” there are limits to its applicability. For example, there are many documented cases of natural disasters cutting off small communities for periods of time – giving those with stocks of food and supplies a huge advantage in the “supply & demand” game – but instead of gouging those in need, those with plenty have been known to *give away* the goods.
That law is flawed – it is comparable to the law of “Whatever goes up must come back down.”
I am way past the traditional age of home ownership. The reason I didn’t buy, was because I obviously couldn’t afford it. It’s not just poor families desperate for housing that pushed the bubble, there were a lot of speculators buying a 2nd home and renting it out to cover their mortgage. It drove up the price of new homes and rentals in my area dramatically. A year and a half ago, my family began renting a recently flipped home from a couple that had bought it as a retirement home. We were paying a huge amount of rent, but that’s how much a decent house cost. A year later, when our lease came up, the housing market was deep in the throes of collapse. Rents and home prices were dropping, but our landlords couldn’t afford their mortgage without very high rent. We moved, they’re selling short. I can’t help but agree that they were highly motivated by greed, they took a risk they couldn’t afford. There is a bright side. If I can keep my job until the market bottoms out (which is likely) I may be able to buy a home one day.
Normally I disagree with you, but I think you are spot on. I don’t know if the government pushed banks to make more loans, but just relaxed the laws so that banks could make more money. It could have worked, but they relaxed it far too much. You have a lot of “faith” (for lack of a better word) in the public. There really needed to be more protections for the people, which I think is what the government removed.
But, thats really against libertarianism. If the laws weren’t relaxed (in a very libertarian sense, less government intervention), then this wouldn’t have been a problem. Yay for more intervention!
Maybe Micheal Shermer’s argument would have a shred of validity if the Community Reinvestment act had been passed in the 2000’s instead of the 1970’s. I guess Libertarians just get an unlimited amount of time for their predictions to be proven true; they’re special like that.
You make it sound liek the CRA was a required component of the housing bubble. It was neither required nor necessary. The housing bubble would have occured with or without the CRA.
I don’t remember Shermer singling out the CRA as the cause of the housing bubble.
There are over 300 Federal Government programs and tax incentives to “encourage” home ownership. The CRA is a drop in the bucket. That doesn’t mean it had to effect, only that its efect is small. But a small effect times 300 other programs, and now you’re talking big numbers.
To Brian, if the government made houses illegal, there would be no housing bubble either. That doesn’t mean that a) there wouldn’t be a bubble in some other asset class (are you ready for oil at $1,000/barrel?), or b) that it would improve overall wealth.
… make houses illegal… ? What… ?
I think what you were trying to say is that making these loans illegal wouldn’t stop a different bubble (dot com, anyone?). I would agree, and thats why regulations are so important to be across the board. If you restrain a bubble, you don’t get a large bang when it pops, but a dull thud. And those smaller bubbles are far easier to manage when they do go belly up, which are much easier to handle with government safeguards.
No, I really meant for houses to be illegal. If you own a house, the government would come in and destroy it. If you build a house, you go to jail.
Now, you can chose to draw the line somewhere else, and say that house ownership is acceptable, but borrowing using a house as collateral isn’t. So if you wanted to buy a house, you needed to come up with 100% of the price in cash.
Would that have avoided the housing problem? Yes. Sucks if you’re poor or middle class though.
However, that’s not the problem. The housing bubble is itself a symptom of something else. It didn’t occur out of nowhere, and would never have been sustainable on its own.
Regulating housing to death would only be playing a game of whack-a-mole, where you’d end up with serial bubbles in every asset class imaginable. And you’d continue this game until every aspect of economic life is centrally controlled, planned and regulated.
We all know where that ends.
Moreover, there is no existing metric that can be used to differentiate a bubble from regular economic activity. It’s no accident that the various Federal Reserve chairmen and most economists were denying the existence of a bubble basically up until it burst.
Hey, why don’t we stop the government from meddling in how we drive our cars? Who are they to say how safely fast I can safely operate my car?
Don’t they think I am smart enough, when I come to an intersection, to look both ways and not proceed until it is safe? Self-preservation ought to be to motivation enough for people to operate their cars safely – none of us want to die so why would we drive in an unsafe manner?
These regulations impose a bewildering array of rules which add to the confusion on the road (quick. in your home state, what is it when a speed limit is not specified in a commercial district?) Additionally, these rules change from state to state and from city to city!! How can any driver be expected to comply with such a hodge-podge of rules?
Note that in Europe (that den of socialists) there are as many “Stop”, “Yield” and speed limit signs as there are here. They expect drivers to know how to drive and it works: Studies have shown that our proliferation of signs has trained American drivers to rely on signage rather than their own eyes to the point where pedestrians will step out into traffic just because they have the right of way.
Additionally, traffic signs are typically off to the side so they draw our attention from where it should be: on the road! Our traffic laws are not only an unnecessary hampering of our freedoms but a confusing, inconsistent and counter-productive mess imposed up drivers.
We must de-regulate the roads and the get rid of government interference. Obviously, this must also include state run ambulances, tow-trucks and paramedics who rescue those drivers who bring it on themselves. Only by letting the failures fail will we make driving safer and more efficient! [Note: I am not totally heartless, I know that occasionally people make mistakes and need help - that is why I approve of private insurance companies providing rescue service for the drivers who have the sense to subscribe to those services].
Imagine the glories of roads unfettered with government meddling!
Oops. In Europe there AREN’T as many signs as there are here. (It’s true, you know)
There are also a lot fewer street signs. I find it very confusing trying to get around a European city, even on foot. Presumably the locals know the streets, and if you’re not local, too bad. Liked the post, though. Very few countries world-wide regulate traffic nearly as much as the U.S.
John said:
“Don’t they think I am smart enough, when I come to an intersection, to look both ways and not proceed until it is safe? Self-preservation ought to be to motivation enough for people to operate their cars safely – none of us want to die so why would we drive in an unsafe manner?”
I must ask: Are those questions rhetorical, or are they legitimate? If they are legitimate, then the answer to all of them is a resounding negative. Hourly in North America people die at the wheel because they do not bother to look both ways; they believe that accidents only happent to the other guy; they belive they are so skilled at driving that they will make no mistakes; they believe that it’s always the other guy who screws up; they have not been properly trained in the how to drive safely; they have no innate driving skills, etc., etc., etc.
Your cultural comparisons, while appearing legitimate on the surface, are in fact apples and oranges and not valid, and your last two paragrpahs are astoundingly naive and ignorant or dismissive of the ranges of human behaviour, skills, knowledge, training, and ability.
“Only by letting the failures fail will we make driving safer and more efficient”
That is simply offensive and profoundly ignorant.
SicPreFix, I think John was speaking (writing?) ironically, taking a particular argument and applying it to a different situation to demonstrate the absurdity, or at least the inconsistency. Irony is always dangerous: people often mistake it for a serious position.
Chris R., If John he was indeed being ironic — and you have an excellent point on the difficulty of perceiving irony online — then I humbly apologize.
Man, when I saw a thread titled “Capitalism: a propaganda story” in a blog that’s supposed to be centered around a skeptical/scientific/nontheist theme, I sure was surprised to see that it was written by Michael Shermer. Couldn’t have ever predicted that.
Being a capitalist (though not a libertarian) I am absolutely appalled by the bailouts – that’s fascism at its best. It is certainly not capitalism; in a capitalist scheme bad businesses fail and others grow. As is, the government is artificially propping things up and setting up for a bigger problem, and all the while people like myself who make what would be considered sensible decisions in a capitalist system suffer because I can’t get in on the action of picking the corpses of the poor decision makers. Short story: instead of a “market correction” where prices of many goods adjust to more sensible levels, we have government-sponsored inflation and fiscal irresponsibility.
From Merriam Webster: Fascism :1. often capitalized : a political philosophy, movement, or regime (as that of the Fascisti) that exalts nation and often race above the individual and that stands for a centralized autocratic government headed by a dictatorial leader, severe economic and social regimentation, and forcible suppression of opposition.
Seems you are indulging in a bit of hyperbole. Also as for inflation, this year, it has been largely negative ( -1.48 for Aug).
To tmac25:
On the other hand, citing a very broad-stroke definition of a dictionary as a fount of authority is rather hypobolic (sorry about that, let’s leave it at silly). The point is how and what kind of social relationships and power management are implemented under such a state and, sorry to say, the direction in both cases is quite similar. As to negative inflation, do your homework, that’s what fortune tellers call deflation if other circumstances concur, which they do.
Citing a definition from Merriam Webster is hyperbolic? Are no sources admissible unless they agree with your rhetoric?
The text says: hipobolic (bad pun, I agree), not hiperbolic, and where is the rethoric, pray?
Sea snake- Your objection to using the definition of a word to refute an assertion made using that word, seems silly to me. And my point to MadScientist was that “we have government-sponsored inflation” is not what we are experiencing this year. The fact that you pointed out that it is deflation only supports what I said.
Tmac57, know something? You may be right, I may have let myself be misled by your short entry, which I took to be a rebuttal of the use of “fascist” and yes, the use of “deflation· does coincide with the negative inflation point. However, I suppose that yo will agree that deflation is not a desirable situation, do you? And I repeat, I used the invented “hipobolic” term, not Hiperbolic. Would you pleasease elaborate as to the rest? Believe me, I just want to know what you think there’s no bad faith or feeling at all in my question
Well, obviously I am not buying into the fascist argument. I don’t think the Obama administration is doing the things that people are objecting to because of some power grab to become dictatorial, and autocratic. I think that they have taken action on problems that have been dumped into their laps, and are doing the best that they can under the circumstances. All of their actions may not be correct, and only time will tell, but I don’t see this as some power grab by cynical masterminds, only imperfect people with the best intentions trying to manage a crappy situation that they neither created nor wanted to have to deal with.
Concerning deflation, I do see that as a very bad thing, if it is a long term trend, and continues to grow. But short term small deflation, as we have seen so far, might just be a correction for the larger inflationary period of 2008, but we will see.
“Here I am in complete agreement with Michael Moore that, as I’ve been saying since the day it was first pronounced, “too big to fail” is the great myth of our time. None of these giant corporations — GM, AIG, Bank of America, Goldman Sachs, et al. — should have been bailed out. In fact, they should have been allowed to fail, their stocks go into the toilet, their employees tossed out on to the gilded streets of lower Manhattan, and their CEOs dispersed to work as greeting clerks at Walmart.”
Nice sentiment, but lousy economic theory. We were on the very edge of a second Great Depression. Without the bailout the economy would have tanked and the costs of a Depression would have be far, far in excess of any bailout.
In short, your argument is a moral one (in the sense that it offends your libertarian ideology) rather than an economic one. You’d be right if only the banks in question were involved, but without a bailout they would have dragged everyone else down with them. Besides, without laws that can punish CEOs and upper management >personally< then merely letting banks fail would hurt others besides them (since they are already rich and can, regardless, bail out of the burning plane with their golden parachutes).
What was really done wrong was that there wasn't enough oversight to begin with. Sorry, but your ideology that thinks there has never been a good business regulation just doesn't work when — unavoidably — the rest of us are connected at the hip with big business. Business must be regulated — not stiffled, but managed properly — because the rest of society lives or dies along with it.
It is wrong and I would argue immortal to argue — as you do implicitly — that we should let the innocent or less powerful suffer just so that true believers like you can feel (self-)righteously vindicated in punishing those who made the mistake of violating libertarian ideology.
Who is going to pay for it? If there is no capitalism, from where will the wealth be generated to pay for all these wonderful things? How much does a “decent” home costs these days, anyway?
Do you see the inherent contradiction?
Do you see your inherent contradiction? If we live in a society where hard work can’t reliably give people those “rights” that Roosevelt lists then WHAT’S THE POINT????
I am really sick of these sorts of arguments that contemptuously dismiss the need for economic justice by taking for granted that — magically — if we just give everything business wants then we’ll all be fat and happy. Of course, the problem is that we’ve been giving business benefit after special privilege, yet standards of living continue to stagnate if not decline.
I am also sick of the slick bit of circular-reasoning that libertarians use to justify this attitude. It goes something like this:
1) Libertarians insist that reduced regulation and taxes will help business and make us all rich
2) Having bought into #1 we do so
3) Yet, standards of living stagnate or decline while inequality skyrockets
4) People complain
5) Libertarians respond by insisting that since there are still some regulations and some taxes (as there will always be) that is why things are worse
6) Go to #1
This argument often goes hand-in-hand with the religious puritism-like argument that by definition if you fail it must be your own fault and that complaining that the system may be injust just shows you are a whiner or lazy bum. No matter what the ideology is always right — you just reinterpret reality (as in “What, the New Deal made things better? Ah…well…that must be because it really made things worse than the would have been. Honest.”) to fit what your ideology predicts.
People have called libertarianism the socialism of the Right and I can see why — much of the same excuses are used to rationalize its failures. Soviet Russia failed? Well, that’s because “real” socialism wasn’t tried. What, relaxed regulation in finance led to the “Great Recession”? Well, that’s because “real” libertarianism wasn’t tried.
Sheesh.
I don’t think it’s the libertarian position that less regulation will “make us all rich.” It’s that less regulation leads to the best conditions for the largest number of people for the longest amount of time. Libertarians would also say that FDR’s new bill of rights and similar things are not at all sustainable. Sure the government could provide those things for a while, but then everything would stagnate and collapse.
It’s also, admittedly, a value thing. I (a libertarian) consider taking things from people who created or earned them to be morally wrong. You as a liberal (?) may disagree, and that’s fine.
I don’t think it’s the libertarian position that less regulation will “make us all rich.” It’s that less regulation leads to the best conditions for the largest number of people for the longest amount of time.
In my experience this is one of the most common libertarian tactics for promoting their views and in the process having it both ways.
When they want to present libertarianism as an egalitarian concept — that is, something that is suitable for society wide application — the argument IS basically that if you embrace modern business we are a society will get rich, although it is often just heavily implied.
Funny thing is that when libertarian policies don’t bring wide-spread prosperity and instead lead to growing inequality suddenly libertarians become hard-nosed “realists” condemning others for thinking that somehow life guarantees you anything.
In short, it’s a classic bait-and-switch where libertarians — who tend to be overwhelming middle to upper class “winners” — promote a system that serves their social class while dismissing any problems with their ideology as being the fault of the “losers” because they are, well, losers.
Libertarians would also say that FDR’s new bill of rights and similar things are not at all sustainable. Sure the government could provide those things for a while, but then everything would stagnate and collapse.
Yet, we can lavish trillions of dollars of tax breaks, special deals, loans, if not out-and-out money hand outs to business — which, on the whole, libertarians support enthusiastically (although there are some libertarian intellectuals who argue against some of these on moral grounds). In fact, these business supports are taken so much for granted that for someone to even just suggest they should be limited is to receive a hail of angry denouncements and back-handed blackmails that if business doesn’t get everything it wants then watch out, we’re all (economically) doomed.
If this was really a case of a “rising tide lifting all boats” then there wouldn’t be anything to complain about. But, of course, the truth is anything up — stagnant and declining wages for the vast majority of us, weakening health benefits, ruined retirements, larger and larger levels of inequality where an increasingly tiny elite at the top makes more and more and more.
It’s also, admittedly, a value thing. I (a libertarian) consider taking things from people who created or earned them to be morally wrong.
That’s the problem — libertarians take for granted that if someone is rich then by definition they earned it. That is, they look at the result and then assume the cause. They never question who that money was amassed, questioning if it was done fairly, was built on hard work and not just who you know, wasn’t just built on abusing loopholes in the law, and so forth.
Likewise, they tend to take all the things civilization gives them — police, army, roads, a peaceful culture, defense of their property rights, and so on for granted as well. In fact, they seem to treat such things as if they arise straight from nature and that therefore it is a travesty that they might have to pay for any of it at all.
In other words, in my experience the strong tendency for libertarians is to interpret reality in whatever way validates their preconceptions. In general, they have a deep psychological need to feel that they earned their success without owing anything to anyone — and a deep psychological fear against anyone telling them to do anything they don’t personally agree with.
Others have described them metaphorcally as eternal teenagers who resent the hell of having to obey their parents over anything, yet take for granted all that their parents give them. It’s not a perfect metaphor, but I think it works disturbingly well.
@Ryan says “Libertarians would also say that FDR’s new bill of rights and similar things are not at all sustainable. Sure the government could provide those things for a while, but then everything would stagnate and collapse.”
But just because the government recognizes something as a *right* doesn’t mean that it has to *provide* it, merely protect it so neither it, nor others take it away. I have the right to “Life” but the government doesn’t give me life or grant me immortality. It just tries to make a environment where my life is reasonably safe – and punishes those who try to take my life wrongfully.
So if the government said having a “good job” is a right (for example) it doesn’t necessarily have to give everyone a good job, nor even guarantee that all will always have jobs. It just must create a safe environment to protect the good jobs we have and punishing those who wrongfully seek to take them away.
Michael, there is a ton of evidence to support the contention that hundreds of thousands of low income families – far from being stupid or uneducated – were simply lied into subprime loans by banks & mortgage lenders. In many ways, the term ‘subprime’ is too vague, or only the whole story – we ought to be referring to these as predatory loans. Put simply, people were told their monthly payments would be lower than they actually turned out to be – I mean, literally a bait & switch game, & when they couldn’t pay these, were foreclosed on …
Meanwhile, the banks securitized these loans & sold the debt, thanks to the Clinton Administration repealing Glass-Steagall & other regulations, &, well the rest is important, but not quite relevant to the contention that people, like me, who point their fingers at the banks, allied industries & government deregulation, think low income people are dumb or uneducated. Most of us are not experts at financial matters, & don’t have the wherewithal to understand the minutia of these deals – that, say, the sum we are given by mortgage lenders regarding who much we owe monthly may not include the escrow payment that will also be due. It is not ideal, but we often take bankers & other people’s words for it when it comes to these matters, & greed – in this case – did cause outright fraud.
I know Moore’s film is the big news now, but a few months ago a film called “American Casino” came out which looked at this issue with more depth, intellectual honesty & emotional integrity … Shermer, I think you’re a pretty great guy, but beating up on Michael Moore is pretty easy. I would have loved to see you tackle an intelligent & serious look at the financial crisis – check out “American Casino” by Leslie & Andrew Cockburn.
I’m putting all my money into tulips.
You shouldn’t take M. Moore too seriously in this latest foray of his. He’s a provocateur and we should see him in that vein, in my view.
I think that our reaction to his latest film will prove to be either (1) unheeded & misunderstood or (2) an unbalanced, over-reaction to our latest battering.
I DO fear that the more conspicuously laissez-faire–hearkening back to 19th century Social Darwinism–mismanagement of our economy will go unexamined in the face of Moore’s provocation.
I respectively disagree with your perspective, Mr. Shermer. As I have written here before, the obsession you (and most libertarians – whom I see as simplistically idealist) have with the free-market, neoliberal model of the world restricts you from feeling significant empathy or reasoning in the repercussions of American capitalism. Not everything should be thrown in the “for profit” economic machine you use to balance an issue. Not everything is about this Social Darwinistic idea that is engrained in most Libertarians’ minds (Social Darwinism being a bastardization and cruel use of Darwin’s elegant gift to the world). If you consider human rights as a value a bit more, you can see how American capitalism plagues the realms of business too much to stand alone. The profit motive and competition are too idealistic to fit into modern economics. This isn’t just my opinion, it is the evidenced argument as posed by economists and scholars throughout the world (J. Stigitz, P. Farmer, etc.).. I believe that because too many people are toyed along by moronic pundits on cable tv and are misled by the illusion of one day becoming very wealthy, they do not take a stand on this.
Your points are well taken, Michael. I can admirably say that they are not in any way rooted from mere partisanship or assumption.
For someone who feels such anger at frauds that he needs to be part of this immoral “skeptic” movement, you sure don’t seem to mind bankers duping the public. Then again, what else do you expect from someone who lied about Pim Van Lommel’s research back in 2003. (I think) So did you ever apologize about that, Shermer? I’m just wondering…
http://www.towardthelight.org/neardeathstudies/pimvanlommelarticles.html
Readers! ! ! The device to prevent the 2nd great depression was removed. It was this: http://en.wikipedia.org/wiki/Glass-Steagall_Act
All this happened before. And congress did their job.
A major flaw of the argument in this post, as usual, is the failure to look outside the US borders. There are countries across the ocean where people do have a right to a decent education, protection from unemployment, sickness and accident and even where businesses are protected from monopolistic behavior. Those countries are not bankrupt and people seem to be happy there. That doesn’t make Moore 100% right, of course, but it makes your argument fragile at best.
Please list a few of these so we can see what they are really like, and what its down-side is.
The problem is not with capitalism as such, it is with the current form of corporate capitalism which treats the corporation as a person for the purpose of regulation but allows corporations to get away with crimes that a flesh and blood person would go to gaol for committing.
I would like to see Michael’s review of the book/documentary “The Corporation” by Joel Bakan, sub-titled “The Pathological Pursuit of Profit and Power”.
To tmac57:
Very Good, you cite Merriam Webster and thus your authority denies the fascist argument. It’s simply absurd to cite a general description and omit the actual management of society under fascism, which goes very much in the direction pointed out by the funnily capitalisic MadScientist (I presume he refers to the Magazine). Capitalism is, by itself a “each one look out for himself” whatever the coditions may be. Thus, it’s essentially unfair, you should try to delve more deeply in your own system.
Oh, and by the way, if I understood correctly what so-called “libertarians” claim, they are seriously misusing the word “liberty”, they shoud call themselves “the extreme right” or maybe TER, or radical capitalists (RC) or maybe Social Darwinists, although this would be misusing Darwin’s name so, why not Antisocial Activists? (AA) —they are shorter— and leave lberty alone.
A.J.Edwards said:
“I would like to see Michael’s review of the book/documentary “The Corporation” by Joel Bakan, sub-titled “The Pathological Pursuit of Profit and Power”.”
Almost took the words out of my mouth. So far as I know, Libertarians are intentionally unaware of Bakan’s intensively resourced and referenced work.
Which should come as no surprise.
May I formally ask you, Mr. Shermer, why you believe these weird things?
(Such as that ‘the Economy’ is immune to finite growth)
…or why what you sneer at as ‘socialized medicine’ is a BAD THING?
(In flagrant denial of the available experiments in countries other than the USA)
This includes your denial that the US system produces abysmal results when compared to other industrialized western democracies, and even western dictatorships, such as: well you know damn well who…
From what I’ve read, and what this discussion focuses on, even the issues raised in Moore’s film are too peripheral, and, for my taste, rather yawn-inducing (though not nearly so much as the apologetics that blames this and that government failing for the crisis). The capitalist system’s apologists always seem intent on blaming anything other than the system itself, to focus on issues like greed and the psychic deficiencies of individuals, rather than on systemic issues which we would not hesitate to look into if we were dealing with the Soviet Union or China; instead, we erect an ideological smokescreen to dilute our attention from anything but the most boring and self-serving “explanations” for capitalist crisis. The reason that the system itself can’t be criticised (and why everyone is petrified of the term “socialist”) is because, by definition, free markets deliver the most benefits to the most people, and that’s all there is to say about that. Well, who can argue against that? Never mind that the United States and other major industrialised nations all grew rich and prosperous not primarily because of so-called free markets but because of 1) massive exploitation of the “Third World” (which we now tutor in the art of “fiscal responsibility’ and other fictions), and 2) massive state intervention in the economy. The nations that have provided their citizens with a reasonable standard of living are those that have violated IMF free-market fundamentalist dictates. Those that have gone along with them have been train-wrecks for their people (the libertarian can always, however, find some reason why the victims are to blame, all in the service of defending the Platonic abstraction of the free market, which sits in a realm of perfect mathematical symmetry).
I wish that more sceptics would exercise some of that scepticism in the service of examining secular idols and mythologies like the free market rather than limiting the permissible spectrum of debate to conspiracy theories. With impending ecological collapse, as well as the moral emergency presented to us by the recent news of 1 billion people facing hunger worldwide, it’s unfortunate (but entirely understandable, within the context of the current doctrinal system) that people sill want to protect capitalism. I should also add that the issue of greed would not vindicate capitalism. Capitalism is about the accumulation and reproduction of capital; what sorts of people will that generate if it defines the economic mode of production? But now I suspect that someone will tutor me about that other secular idol: “human nature”, and blame that for the debacle.
Wow, right on target. I dare Shermer to publish this type of skepticism in journal.
I am disappointed that Shermer uses a right wing political cliché when he says:
“In Michael Moore’s worldview, a goodly portion of the American people are ignorant, uneducated, clueless pinheads too stupid to realize the fundamental principle of a loan: you have to have collateral to secure the loan!”
It begs evidence that the general level of education is America inoculates consumers against shady loan practices and that they simply engaged in gambling their personal security. Until Shermer backs this up his thesis is pretty weak.
It’s funny, at least for me, to see Mr. Shermer adopt such an extremely right-wing position. Ell, I guess it’s to be expected from one who takes the root word “liberty” to describe a position where grassroots people are greedy and, consequently, stupid, never needy or hungry or poor, being provided for by the “free market” and all that rot, whereas executives, big money, banks, are all honest-to-god guys who deprive themselves to hel the needy. It´s not necessary even to refute that idiocy, because as Luis cayetano says:
…Never mind that the United States and other major industrialised nations all grew rich and prosperous not primarily because of so-called free markets but because of 1) massive exploitation of the “Third World” (which we now tutor in the art of “fiscal responsibility’ and other fictions), and 2) massive state intervention in the economy. The nations that have provided their citizens with a reasonable standard of living are those that have violated IMF free-market fundamentalist dictates. Those that have gone along with them have been train-wrecks for their people (the libertarian can always, however, find some reason why the victims are to blame, all in the service of defending the Platonic abstraction of the free market, which sits in a realm of perfect mathematical symmetry.
That’s it in a nutshell, now try to refute it.
As to who would pay for those benefits you find so funny, certainly it wo’nt be the “capitalists”, they will be paid (hopefully, sometime) by tha taxpayer, who has already paid for the reinstatement of capitalism with a new turn of the Screw: Oligoplistic —yes, even more— capitalism, and a worldwide destruction of small business, which have been absorbed, at ridiculous prices where profitable, or simply left to rot, leaving more space —that is, market— for a monopolistic future. Sadly, this was predicted as far back as the 19th century, as you should know, and still you try to sell the idea that everyone for himself ys a good idea. Selection of the best. Wow! Just step away from social eugenesia, no longer necessary because propaganda is less spectacular and the big media are in the hands of Big Money which, as a matter of fact, have “a little influence” on the mores of government. My, you have it all, even armies.
Dear Mr. Shermer,
I’m amazed that, being a Skeptic you can have such faith on what can’t be proved or repeater faithfully under controlled conditions. Is Economics a Science anymor the Psichoanalysis is? Their respective subject matters seem to be rather unatteinable save thorugh subject evaluation, and you must certainly agree that the recent events have produced as many “predictions” as the papers’ horocope, all of them almost as trustworthy. To be a “libertarian”, that is a right-winger, is about as “scientific” as being a fortune teller, sorry to say, as experience tells us —as is every other belief, to be frank, though some are more “attractive” than others—. Do you mean to tell us you like the world as it is? Well, that reminds me of a saying tha goes something like “an optimist is he who belives we’re living in the best of all possible worlds, whereas a pessimist is he who fears the optimist could be right”. I’m sure we could do better, but not with your world view, as expressed in your own words:
The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
The right to earn enough to provide adequate food and clothing and recreation;
The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
The right of every family to a decent home;
The right to adequate medical care and the opportunity to achieve and enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
The right to a good education.
That’s nice. To this list I would add a computer in every home with wireless Internet access. I’m sure we could all think of many more things “under which a new basis of security and prosperity can be established for all — regardless of station, race, or creed,” in Roosevelt’s words. But there is one question left unstated: Who is going to pay for it? If there is no capitalism, from where will the wealth be generated to pay for all these wonderful things? How much does a “decent” home costs these days, anyway?
Apart from thinking that your flippancy about the subject is disgusting, and that many of those “impossible to pay things actually exist in Europe, for example, not to mention Cuba, Venezuela and Bolivia, which have been declared free of illiteracy by the UN pertinent agency, and have (in the case of the continent are implementing) free health care, just answer this: Who paid por the rescue of Big Money? (Big Brother, maybe?). The little ones, mainly, who provide whatever the State dictates for the benefit of its favored… let’s say “too big to fall” friends and counsellors. Oh, I suppose you’ll say that the State should have allowed them to fall and cope, but do you really believe that? Would Capitalism have survived a crash of such gigantic proportions? On the other hand, save for the misery —yes, even more— the Fall would have caused, it would have probably led your “enlightened” middle and lower classes to rethink the system starting from different premises, and then, who knows what might have happened? It’s a case of using the people to fight against themselves and —god forbid— failing to tinl. It’s called imprinting, and goes on from the cradle to the grave by means of different kinds of we may fairly call propaganda, considering its relationship ehith what’s really going on. You, too, have incurred in such propaganda without giving a single fasifiable datum to verify your word. Yors is just an opinion, and not particularly skeptical, I must add.
Dear Mr. Shermer,
I’m amazed that, purportedly being a Skeptic you can have such faith on what can’t be proved or repeater faithfully under controlled conditions. Is Economics a Science anymor the Psichoanalysis is? Their respective subject matters seem to be rather unatteinable save thorugh subject evaluation, and you must certainly agree that the recent events have produced as many “predictions” as the papers’ horocope, all of them almost as trustworthy. To be a “libertarian”, that is a right-winger, is about as “scientific” as being a fortune teller, sorry to say, as experience tells us —as is every other belief, to be frank, though some are more “attractive” than others—. Do you mean to tell us you like the world as it is? Well, that reminds me of a saying tha goes something like “an optimist is he who belives we’re living in the best of all possible worlds, whereas a pessimist is he who fears the optimist could be right”. I’m sure we could do better, but not with your world view, as expressed in your own words:
The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
The right to earn enough to provide adequate food and clothing and recreation;
The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
The right of every family to a decent home;
The right to adequate medical care and the opportunity to achieve and enjoy good health;
The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
The right to a good education.
That’s nice. To this list I would add a computer in every home with wireless Internet access. I’m sure we could all think of many more things “under which a new basis of security and prosperity can be established for all — regardless of station, race, or creed,” in Roosevelt’s words. But there is one question left unstated: Who is going to pay for it? If there is no capitalism, from where will the wealth be generated to pay for all these wonderful things? How much does a “decent” home costs these days, anyway?
Apart from thinking that your flippancy about the subject is disgusting, and that many of those “impossible to pay things actually exist in Europe, for example, not to mention Cuba, Venezuela and Bolivia, which have been declared free of illiteracy by the UN pertinent agency, and have (in the case of the continent are implementing) free health care, just answer this: Who paid por the rescue of Big Money? (Big Brother, maybe?). Not the poor Big Money, but mostly those little people, who meekly provide whatever the State dictates for the benefit of its favored… let’s say “too big to fall” friends and counsellors. Oh, I suppose you’ll say that the State should have allowed them to fall and cope, but do you really believe that? Would Capitalism have survived a crash of such gigantic proportions? On the other hand, save for the misery —yes, even more—, the Big Fall would have caused, it would have probably led your “enlightened” middle and lower classes to rethink the system starting from different premises, conceivably from scratch, and then, who knows what might have happened? It’s a case of using people to fight against themselves and preventing any kind of critical thinking —god forbid— among them. These false answers doled out in more than generous doses are part of a process called imprinting, or conditioning in the case of aduls, I suppose, and takes place from the cradle to the grave by means of different kinds of what we may fairly call propaganda, considering its relationship with what’s really going on. You, too, have incurred in such propaganda without giving a single fasifiable datum to verify your words. Yours is just an opinion, and not particularly skeptical, I must add.
Ask yourself the following question: When presenting the legal documents for a mortgage did the bankers actively attempt to make it clear and easily understood to their clients (even the uneducated ones) what the risks and consequences were, or did they actively attempt to make it opaque and difficult to understand to their clients (expecially their uneducated ones) what the risks and consequences were? If the former, then the blame lies with the people who still took out such risky mortgages (like Shermer claims). If the latter, then the blame lies with the bankers who essentially stole the money through fraud. By experience I am confident that the latter scenario is more accurate. Since the government does not actively require banks to make sure that the terms, conditions and risks are clearly explained and provide punishment when this is not done, the government is also complicit.
There is a serious hole in the line of reasoning above.
Michael writes:
“In Michael Moore’s worldview, a goodly portion of the American people are ignorant, uneducated, clueless pinheads too stupid to realize the fundamental principle of a loan: you have to have collateral to secure the loan!”
and:
“I have a much higher view of the American public than does Michael Moore.”
But why?
Mr. Moore got where he is by praying on those “pinheads” didn’t he?
And isn’t it pinheads who believe in all those things that Randi has been working his whole life (mostly in vain)to disprove?
And Mr. Shermer spends most of his time trying to get pinheads to stop believing in the nonsense they believe in, and live in reality.
Maybe Mr. Shermer can’t or won’t say it, but I will.
Most people are stupid, primitive, and filled with unfounded beliefs.
If they weren’t, Mr. Moore would never have become famous, and we wouldn’t need Mr. Shermer to fight the good fight for us.
Thanks,
Slingword
I’m afraid Mr. Shermer’s estimation of the American public is overly optimistic, and I daresay, not based in reality.
Capitalism has one, and only one, imperative – PROFIT. Therefore, in its pure form, it is an inherently destructive, and dictatorial economic system (corporate boards are not popularly elected). This has become more so as Corporations now have the same rights and status as a “person”, yet they have the advantages to operate and move capital across borders at will, avoid taxes, environmental regulations, workplace safety, fair labor practices, and due to thier fiscal size, can negatively influence the political situation in the countries in which they operate.
Governments (however imperfect and compromised by some of this same money and power) are the only Mitigating entities available to counter these excesses. Governments can demand accountability, impose workplace safety and environmental regulations, and otherwise protect the population from excessive exploitation by large corporate entities. Unlike corporate board members, government officials can be thrown out of office or otherwise censured by the people or their elected representatives in many countries.
The fact that their is a constant villification of “government”, and incessant praise for “free markets” at any cost, is an incredible and disturbing propaganda victory for exploitive capitalism.
Sorry Michael this is just the old “blame the victim” in 2000 words.
You claim to be against megacorporations, and the failures will be allowed to fail. Yet under your preferred system when implemented has the little side-effect of ““in profits we’re capitalists, in losses we’re socialists.”” again and again and again… And it is not unforeseen-able, by rewarding the successful you allow them to control the governing bodies regardless of the rules. “Legislation is not Law” should be very familiar to you, how ironic. This is the reality of your system, tweak away or change rules until the end of time it will not work:Legislation is not Law!!
The problem is that pure libertarism or pure capitalism DOESN’T WORK. It doesn’t work due to inherent human greed. Yes the bankers are into it for the money but they are also willing to stretch the rules in an effort to make money (greed). The same with corporations that move manufacturing off shore which cuts costs and drives up profits. For everything that Henry Ford was he did recognize that it didn’t make sense to price your workers out of the market. Instead the modern manager is all about only serving the “rich” which is causing the middle class to shrink.
“I have a much higher view of the American public than does Michael Moore. I don’t think the American people are so stupid or uneducated that they didn’t know what they were doing.”
Sorry my friend. Generally a good review and with a couple of exceptions, objective and insightful. However, after many years of watching the real estate and financial world (from the inside) I fear your giving far too much credit to the American people for their education and intellect. In the real world, Moore’s assumptions on this score are closer to truth than are those of a college professor generally surrounded by educated and thoughtful skeptics.
I have only anecdotal data (and what do you have, Michael?), but virtually all the people I’ve met through my work with community groups who have lost their homes during the recent financial crisis were not in the business of “flipping” them. A good portion had lost jobs or faced medical crises that prevented them from keeping up with even their modest mortgage payments. Others had clearly been conned by unscrupulous lenders into loans the buyers simply didn’t understand and shouldn’t have been granted. (Most mortgage contracts are written far above a high school comprehension level.)These buyers were not greedy; the greed was on the part of the lenders, nor could the buyers have been expected to predict the coming of the worst financial downturn since the Great Depression (lord knows my broker, with his MA in finance, didn’t).
While I’m at it, Bill Maher is far from being an ultra liberal or even a liberal. Though I rarely watch his television show, I have read his writings, which boil down to “don’t do stupid things and keep government out of my…whatever.” This sounds much closer to a libertarian philosophy. I find myself split between agreeing with Maher and wanting to figuratively thrash him–that’s not the sign of either a consistent liberal or conservative world view.
One last thing: As Chaz Mena correctly noted above, Michael Moore is part of the lively and useful of tradition of social provocateurs. His films, like most documentaries, are not neutral or unbiased nor do they endeavor to be “balanced” (which has its own many faults and risks). If his films get you arguing with your friends and colleagues, then they are successful. Your column and the many interesting responses above suggest that Mr. Moore has done just that.
‘Free market fundamentalism’ as [capitalism] is often called, held that money had no borders and like Empire it could overwhelm small nations, alter their cultures, reorder their agrarian economies into industrial, manufacturing ones, paying their subject peoples pittances, or what were then called ‘slave wages’, for goods (like Nike shoes) that then sold for immense profit in the western world.
Being borderless, it interpenetrated economies ill-armed to resist its bad effects – urbanisation, pollution, foul slums, child prostitution, cigarettes, the opium trade – and its worse effects when the multinational company pulled out, and went to another country whose even more desperate wage slaves charged even less money for their services in factories and plantations.
Being borderless, and unconstrained by governments hungry for ‘investment’, it could write its own rules. It could smash, grab and move on. It had the ethic of the highway robber, and a good deal of the same sales pitch: Your money or your life.
Bob Ellis – “The Capitalism Delusion”
OK, every poster that has commented here so far……what is your debt to earnings ratio? How many live within their means?
My wife and I owe approximately 150K dollars total, and we have approximately 325K in 401K/IRA investments plus 3 pieces of real estate other than our home.
So, we are smart and thus can afford to become Libertarians and tell everybody else to get theirs like we got ours, and screw everybody who does not have the education and foresight to do so!
Capitalism is wonderful for those who understand it. Problem is, there are a lot of folks who do not.
There is a reason why creditors hired mathematicians, physicists, and complexity theorists to figure out financial schemes for them.
Duh Michael.
I find myself in disagreement with Michael on this one. I have personal experience which leads me to the conclusion that many people were simply misled and very subtly coaxed into making a decision to buy a home – to buy into the grand “American Dream” of home ownership. Many of them poorly educated immigrants, and hardworking taxpaying single parents trying to provide a home for their children, were led to believe they could afford a mortgage and that the risks were small since they would experience dramatic growth in the market value of their purchased home – often a condominium apartment. When the bottom fell out of the housing market, and the interest only loan they were holding came due, with no equity in their home, they faced foreclosure and unending liability for the balance of the mortgage left unpaid after foreclosure. I consider these people, many of whom are my clients and whom I know personally, victims of a system that preyed upon their naivete and innocence in a new country where the sales pitch raced them through to settlement without good advice from independent counsel. Put an innocent, poorly educated immigrant with dreams of sharing in the American economic success story, which was part of the sales pitch to stir their emotional reaction and spur them towards a poor decision to buy, with lowered standards of ability to payback, put these people up against the sophistication of the mortgage loan saleman, the condo salesman, and there’s no comparison. These folks, the ones I know at least, were simply “duped” into buying above their means in a fluid market that most people were predicting would continue to flourish and climb. They were like lambs being led to slaughter, without a prayer, without good legal advice, without a chance to have their dreams come true – the dream they were aggressively “sold” by the mortgage lenders. Michael is wrong. He’s been living amongst too many educated elitists who think that everyone is as capable of making educated judgments as they are. And this is the fallacy in his argument. Not everyone is motivated by greed. Many are motivated by a simple desire, albeit naive, to become part of the American dream of homeownership and are easy prey for aggressive marketers every time.
Michael is wrong. He’s been living amongst too many educated elitists who think that everyone is as capable of making educated judgments as they are.
I wonder if it’s not worse than this — that Michael has been living amongst the solid middle/upper middle class elite that he’s come to take his own status for granted. As a result he’s become blind to not just social injustice, but to the possibility that his own success came about by more than just hard work.
Historically, higher social classes always develop protective social mythologies meant to protect their position of privilege. I call it the “Mythological Industrial Complex”.
For the old aristocracy of Europe it was made up of grand palaces, the system of deference, the notion that aristocrats were “superior”, and even that God loved them more. If you were poor it was because you were morally weak, lazy, and scorned by god.
In the industrial era we’ve seen a similar effect, but now the emphasis is on the notion that the rich “earned” their riches “fair and square” and that the poor are poor because they are weak and/or lazy. The idea that there might be systematic biases in the system (for instance — strange how libertarians are overwhelmingly middle/upper class, white, and male) that serve one group at the expense of others isn’t just ignored, but to even bring up the idea is to be shouted down as a “class warrior” or “playing the race card” or “trying to shame us into losing”.
In other words, just like the elites of yesteryear the best defense is a good offense — use the “Mythological Industrial Complex” to insist that if anyone is the victim it’s the elite (and those who identify with the elite) with their having to pay extra taxes or their businesses facing regulation, or the insult of having to support government programs that only serve to encourage the “lazy and dumb”.
The irony, of course, is that such attitudes have historically led to some of the most horrific events in history — the French revolution, the Russian revolition, indirectly both World Wars, etc. Let’s hope as a culture we can get past this latest run with elitism without the cure being so terrible.
I admit to being ignorant of all the possible effects of allowing the failure of enormous banks and businesses.
I dislike handing money to failed banks and businesses as much as everyone else here does, BUT…
If we let those huge organizations fail, what exactly would have become of the rest of America’s economy and the world’s? Can anyone say for sure?
Don’t Japanese and European governments routinely pump money into their industries and banks?
I agree there’s a problem with greed but doesn’t every system have its flaws? And people are ingenious and find ways around each new system and set of laws.
THE MOST WE CAN HOPE FOR… is to promote whistleblowers and investigative journalists who alert us to the most gigantic loopholes through which the rich are currently leaping, and as each new loophole grows in useage and prominence, we seek ways to close it. Sure the rich will find another loophole, but that’s evolution.
I personally think we needed the bailout to save the economy as a whole. What was done wrong is that those personally responsible for it weren’t ruined and, at least in some cases, thrown in jail. As long as individuals can loot companies/economies and walk away super-rich for their efforts debacles like the “Great Recession” will continue.
Ahhh, I was wondering when Michael the Libertarian is going to crawl out again. I especially liked the sneering, contemptuous “taxation is theft” little riff at the end. Well I have a better one Property is Theft too! Hah!
Excellent! Well thought out, well executed, etc.
Mr. Shermer conscripts an army of straw men to fight his battle. But let’s just take one of his key arguments, not by coincidence one of the most familiar arguments promulgated by the right. Namely, that all these irrational, irresponsible, greedy homeowners had it coming when they lost their homes. And the ensuing financial crisis is their fault.
To save time, let’s speed over the part where the bankers made this all possible by providing the liquidity, rigging the system and re-bundling loans (in so-called tranches) to have riskier loans reclassified as triple A, then sold them off to unsuspecting buyers. Let’s even skip through the fact that mortgage brokers exercised bad faith (at the very least) in their dealings with homebuyers, pushing them into loans with the knowledge and foresight of the potential downside risks.
The argument completely fails to consider the real circumstances under which the majority of these foreclosures have occurred. It chooses instead to focus on a much smaller group of people – those who refinanced, taking equity out of their property, then, in the dark collective imagination of the right I suppose, squandered their newfound booty on “irresponsible” things like cars and second homes.
But the reality was a perfect storm of circumstances which could not have been foreseen, except perhaps, by the bankers themselves, who chose to continue down the path of assured destruction by leveraging those questionable, bogus triple A holdings, sometimes as much as 30 to 1. New homeowners, able to enter the market because of low interests rates, were attracted to newly constructed neighborhoods in the suburbs where prices were lower. Housing was booming at the time, but even in years when it’s not, housing prices have, over the last 50 years by and large, tended to keep up with inflation. It looked like a pretty good bet. A bet even responsible folks like Mr. Shermer himself might have made in the same situation.
Continued from previous:
The stage (or trap, if you’re Michael Moore, but it’s semanatics) has now been set. All that’s needed to trigger a crash is for housing prices to turn down, and a few mortgages to reset. Now, the key word here is “few”, because thanks to the banks leveraging all those assets, the effects of a few loans going bad was going to be magnified 30 times over, and it was going to reverberate throughout the world. The total mortgage debt in America was a molehill compared to the mountain of high-finance debt the banks had built on top of it.
Banks began to crumble, fears of the entire economy unravelling sent stock values cratering. Businesses across the country stalled, making the layoffs to come inevitable. The immediate problem for the new homeowner, was the fact that loan liquidity dried up overnight. Loans were going to be much harder to come by, and with housing prices in freefall, the situation was critical. Even if you were able to hold on to your job in a shrinking market, it became nearly impossible to refinance when the mortgage reset, because, thanks to the three foreclosed homes on your block, you home loan value was now 25 % higher than the value of your house, and no banker (especially with their sudden renewed sense of “responsibility”) was going to cover the spread. No, you were going to have to cough up the missing 25% in cash, thank you, or face foreclosure.
The homeowners had no possible way of knowing just how fragile the house of cards was, nor the colossal repercussions that would follow in the wake of the fiasco. And even if, as Shermer contends, some were just greedy, that in no way compares to transgressions of the bankers. In any case, the gospel of capitalism contains the scripture that greed is good. So who’s wanting to have their cake and eat it too here?
As to the Moore film, it’s a shame that it failed to amuse Mr. Shermer adequately. For me, I found the film moving and eloquent. Moore can be faulted for failing to understand that he’s ultimately made a film about morality, not politics, and this accounts for seeming disconnect at the end of the picture, when he calls for more democracy as an antidote to the rampant selfishness in America.
The film asks a much deeper question than any of his previous works: Are we a good people? I for one, am afraid of the answer.
I am sorry, but did you even read the blog? I mean, it’s posted right in front of you, yet you got so many of your statements all turned around and confused. Just a small suggestion for future consideration: read before posting.
I think your analysis should be an op-ed piece in Skeptic Magazine, which under Shermer’s editorial direction will probably be moving more and more to the right. And you’re so right. The film is not just about politics, it’s about how we care for one another. Perhaps Shermer is too “evolved” to see that.
Excellent analysis Beckner. That was the best explanation that I have seen in all of these discussions on this topic. Especially important was the 30 to 1 leveraging of the debt via credit default swaps (insurance?). That made the commercial paper market dry up, thus throwing the ability of businesses to utilize short term credit for day to day operations. That freezing of the credit market was what scared the hell out of governments around the world, when they saw the specter of business as we know it coming to a near complete halt. That was why they felt compelled to act, and act quickly (hastily?). It is easy for armchair, Monday morning economists to second guess this complex and dangerous situation, but the horrible responsibility dumped into the laps of our elected officials demanded decisive if imperfect action. Just be thankful that none of you had to make those choices between bad and worse options.
Your business isn’t dong too well when you need credit for day-to-day operations. When credit “dried up” (whatever that means), the previously masked insolvencies were merely revealed.
Like it or not lines of credit and commercial paper are the way many businesses (especially large ones) operate to meet short term money needs such as payroll. This is usually not a problem, and the businesses can be financially healthy otherwise, but depend on this liquidity to manage day to day operations. Therefore, when banks suddenly refused to make these loans due to uncertainty, it threatened to halt the ability of those businesses to function, which could have caused our entire economic system to collapse in a domino effect.
I am not defending the system, just explaining what some of the hazzards were.
everyone. go back and read what geeky atheist wrote. You should all aspire to that level of simplicity and clarity.
Frankly, I applaud Michael Moore’s chutzpah. The biggest reason the Republicans have been able to attack liberals so successfully in the last 30 years is their willingness to go to unbelievable heights of hyperbole, hypocrisy, and ad hominem cruelty. Meanwhile, the Democrats fight back with reason and civility. It doesn’t work and Moore knows it. He knows perfectly well that his documentaries cherry pick and appeal to emotions rather than facts: they DO work. I think a case could be made that, without Moore’s in-your-face documentaries, we might still be murdering innocent Iraqis, accepting a third world health care system, and forking even more of our hard-earned money to the filthy rich.
“we might still be murdering innocent Iraqis, accepting a third world health care system, and forking even more of our hard-earned money to the filthy rich”
Practicing your “unbelievable heights of hyperbole”?
Corporate Bailouts? Who is bailing me out? No one, then, why should I bail some corporation that have been exploiting society? From a capitalistic point of view, it does not make sense. The failure of Corporate America will mean better alternative fuel sources, better cars, better banking. Capitalism is like the Serengeti only the best eats and only the best mates. Socialism like religion has screwed up humankind. Human competition brings out the best and Pure Capitalism brings out the best too. Both are Darwinian philosophy at its best. Welfare is feeding and sustaining the non-competent and perpetuating immaturity. Welfare is the death of progress!
“Capitalism is like the Serengeti only the best eats and only the best mates. Socialism like religion has screwed up humankind. Human competition brings out the best and Pure Capitalism brings out the best too. Both are Darwinian philosophy at its best. Welfare is feeding and sustaining the non-competent and perpetuating immaturity. Welfare is the death of progress!”
If you conflate genocide with progress, then sure. I suppose that the recent news that the number of people who are now facing hunger has passed 1 billion must count as “progress” to you, given that all these superfluous people will be left to wallow and die because of their own “incompetence”, so that civilised, proper men like you (who represent the best of humankind, and who understand their Darwinian imperatives even if the lazy and undeserving multitude don’t) can live at peace with your hard-earned belongings. I suppose, too, that “pure capitalism”, as you call it, should entail things like the privatisation of water in Bolivia. In that instance, it was the peasants and poor workers who were in the wrong when they rose up and threw out the hated multinational corporations; these folk didn’t adequately appreciate the importance of economic theorems over human dignity, and hence must, in your formulation, represent the perpetuation of immaturity.
Please, do go on telling us about progress.
Lets face it. We bipeds have created the perfect rat race maze. There is no real solution to anything as any solution creates more problems to solve. It really has to do with the brain and our need for conscious experience and the only way to keep interested (conscious) and to be aware of the process which gets us to feel alive and interested rather than be zombie like is to keep inventing more and more problems to solve. Call it what you like, capitalism, socialism, libertarianism, any ism will do. Just to keep us awake in the myth of the now. The rat race.
I believe you have a more optimistic view of the American public than I – and more power to you. They are, for the most part, sheep who believe just about anything they hear – including the nonsense spewed by mortgage loan originators who told them they were fully qualified for that $250,000 loan, even though they work for minimum wage at Walmart. I work in the insurance industry (don’t go there…I know, we suck too) and spent some time selling insurance to people who when asked for their zip code would unfailingly spout off their telephone area code.
Nope – pretty sure these idiots didn’t have much of a clue just what they were signing and what “adjustable rate” meant.
I believe you have a more optimistic view of the American public than I. They, for the most part, believe just about anything they hear–including the nonsense spewed by Michael Shermer.
Soooo, Dr Shermer … how much for that as-of-yet-undeveloped house on your hillside property?
Michael Moore is a fantastic skeptic. He doesn’t fall for the cultural mythologies of our age.
The fervor that some people hold for their favorite economic systems is much akin to that held for religions. People get bent all out of shape when someone is sacrilegious enough to point out the problems and disconnects within their worshipped system. Some people think that there is some kind of magical something or other to their economic system that makes it function automatically. When you go looking for the “man behind the curtain”, you find out how frail the system really is.
The microeconomics that drive the lives of ordinary people and businessmen do not necessarily coordinate with the macroeconomic needs of a nation.
Fact is, cycles are a standard part of a capitalist system.
Fact is, things can be done to mitigate and remedy those cycles.
Being America, there will always be fussing as to how much is enough, but unless Mr. Shermer can come up with something better than he has thus far presented, I would sooner elect Moore for President.
Michael Moore should be invited to contribute articles to the Skeptic magazine to help bring people to reality. He has probably made skeptics of more people than Shermer. Sometimes having a PhD keeps one too distant from the masses.
“Michael Moore is a fantastic skeptic. He doesn’t fall for the cultural mythologies of our age.”
Is Communism a cultural mythology of our age or of a previous age?
“The microeconomics that drive the lives of ordinary people and businessmen do not necessarily coordinate with the macroeconomic needs of a nation.”
This is exactly point he makes in the film.Capitalism is not an sustainable economy because it depends largely on wealth accumulation and exploitation of labor. When 1% of the population owns 95 or more percent of all the wealth, something is seriously wrong with that equation. That means that people are being exploited, for the benefits of the wealthy.
Absolutely right,
is Marxism forbidden in US? Infinite growth, necessary to capitalism, added to what Bakari so concisely points out, is essentially destructive. And it is based on exploitation, yes. How else would accumulation take place? Paying dalaries below the value of what’s being sold and, of course, through a good deal of corruption, which wep’re getting, unfortunately, used to.
Suggestion #1 Shermer should stay out of politics and economics.
#2 He and all of you should read this:
How the Servant Became a Predator, Finance’s Five Fatal Flaws
By William K. Black
Assoc. Professor, Univ. of Missouri, Kansas City
http://www.informationclearinghouse.info/article23723.htm
A great companion film to Moore’s movie is “Maxed Out”. It’s all about the credit card industry and the lengths they go to in order to keep us in debt. If Moore’s movie made you mad, you’ll go ballistic watching this one.
Looks like Shermer got this site mixed up with Reason again.
Oh great. Another libertarian rant, backed up with no science at all. Hell you even managed to compare Moore to a Nazi propaganda film maker in the first paragraph. His movie must have really struck a chord with you.
Friend Beelzebub,
you’ve hit the nail right on the head. Just reading the comparison made me skeptical of the rest of the article. I don’t think Dear Mr. Shemer is referring To Leni’s genius as a filmaker, which she had, fact aknowledged by all sort or film critics. It’s just a sly vay of assimilating him to nazi’s propaganda, as he surely knows, he’s supposed to be a learned person, isn’t he? The whole piece is disgusting, I’m sorry to say, and doesn’t addres the issue at all, it’s just propaganda, the same crime he unfairly accuses Moore of, given that he just gives HIS opinion, not any data to nack his assertions. Right wing? Beyond Attila, it seems.
I have three broad comments on this whole issue. The first is economic and deals with market theory and the idea that we live in a “free market system”. The second is social and has to do with the idea that in a free market people earning rewards for merit. The third is political and deals with the essential balance of power necessary for democracy. (I apologize up front for the length of this post, but I have not the time to shorten it–not original to me, but I am unsure of the correct attribution.)
First, market theory. Why does everyone seem to conflate the terms “free market” “laissez-faire” “capitalism” and “business”? There is a lot of evidence that a free market is the most efficient method of allocating scarce resources, but a free market only exists when all participants are “price-takers”, that is to say no participant (individual or corporation) can decide the price of a good or service, but must accept what the market determines. This is the case in some commodity markets (gold, for instance), but any company which has a pricing policy by definition is not participating in a free market. In fact, most markets are not free, and most businesses don’t want them to be (for all the lip service), because a free market drives profits down to zero. That’s why they are efficient. Obviously, this is contrary to most business’ objectives. Market theory is also dependent on a number of other assumptions: rational expectations, that all factors are included in the price, and perfect information (or at least symmetric information). This last is the commonest flaw in the model: the seller usually knows much more about a good or service than the buyer. This is basic Econ 101 stuff, by the way. Since businesses will do everything in their power to exert control over the market, in order to increase profits (basic tenet of capitalism), a laissez-faire policy fails: government must be prepared to intervene to maintain a free market (notice: this means not all government intervention is bad from the point of view of a free market). Government, or other, intervention can also be justified from the point of view of addressing the problem of information assymetry, which can destroy markets entirely (Google “The Market for Lemons” for the classic paper on the subject). [Intervention can also be applied to ensure all relevant factors are included, such as damage to the environment, but this is not germane to my discussion.]
OK, now the social issue. The free market does not reward people based on hard work or merit. The market rewards people based on the scarcity of their resources (capital, connections, skills) relative to the demand for those resources. A professional athlete or investment banker does not earn vastlier more than a nurse or a teacher because they have a greater intrinsic merit or because they worked harder. They earn more because they have skills that are rare compared to the demand for them (note: nursing and teaching skills are actually in greater demand, but also far greater supply). And they have had the good fortune to have been born with the right talents, or had the opportunities to develop those skills. It is not the market per se that is the problem here, but the myth that under a free market system everyone gets what they deserve. Belief in this myth implies we have no social obligation to others, when clearly we do. There is no such thing as a “self-made man.” For those who say: “No one every gave me anything,” reflect on this: how did you survive infancy if your parents did not feed you and attend to your needs. We are all born helpless, and even after adulthood, almost no one survives strictly on their own (and the one who do are regarded as very strange). It is the very nature of the market that we specialize for efficiency, but this makes us mutually dependent on others for vital goods and services. Only when we recognize that good fortune has played a part in the process of our success can we recognize that we all have an obligation to those who are doing less well.
Finally, the political point. Politics is about power. And any organization able to control a large amount of resources–be it a government, an army, a church, a corporation, a union, a political party or a lobby group–is a potential source of power. And every one of those sources of power must be kept in check, or they can become a threat to democracy and freedom. When we forget that, and talk about “the corrupt government” or “the greedy corporations” to the exclusion of other dangers, when we assume all evil comes from a single source, we are treading the path to dictatorship. It’s the extremes we must fear: of all flavours.
OK, so where does that leave us with the current situation. After certain critical regulations were removed, lenders were allowed to make poor loans, then escape the consequences by passing them along to others, who were not fully aware of the dangers (information assymetry). This let them escape the market consequences of their actions. In countries where those regulations were maintained, no financial bail-outs were necessary. Does this mean that regulation is good? No. It means some regulation is necessary. Lifting of restrictions and selling of bandwidth frequencies opened up the market for cell phones. Does this mean regulation is bad? No. It means some regulation is not necessary (or, at least, no longer necessary). Each case needs to be considered separately, and blanket statements driven by dogma (political, economic, or other) don’t help. (In western countries, insider trading is restricted–information assymetry again. In China and India it is not. Care to risk your money on the Shanghai exchange?)
So, the direct culprits were able to escape the consequences, while others were left holding the bag. So should the banks have been allowed to fail, not merely putting their employees out of work, but potentially having a knock-on affect on their customers (say businesses with a line-of-credit at that bank, who suddenly find themselves in a liquidity crisis), as well as a severe hit to investor confidence in all markets? Our entire economy is built on confidence. Should they have been carefully examined on a case-by-case basis, with the guilty parties suffering? There wasn’t the time for an in-depth investigation. Should those banks have paid huge bonuses to the very executives who got them into the mess in the first place? Probably not. Should Congress have given the Treasury Secretary a trillion-dollar blank check with no controls and a blanket immunity? Almost certainly not. Please note that there were much tighter restrictions put on the auto companies, who really didn’t cause the problem, than on the banks. (Not that the auto companies weren’t the architects of their own misfortune, but governments have been continually abetting their mismanagement as well. In that case not by failing to regulate, but by interfering in the market, especially in the oil market.)
There was a lot of mishandling all around, and it has been going on for a while, but simplistic arguments of any stripe don’t help.
Chris R.
(By the way, what’s with this notion that “all bankers are greedy” or “all sub-prime borrowers are stupid”? We’re talking about millions of people, each with their own thoughts, needs and motivations. I’m sure some people gambled and lost, and others were trapped through no fault of their own. Some bankers were dishonest, others were trying to help their clients the best they knew how. To say “All X are Y”, or even most, simply betrays a prejudice.)
Wow, I hadn’t read your post until now. I think you covered pretty much everything that I did, but better.
Thanks. And might I return the compliment? Your post nicely addresses what was just a P.S. in mine.
On a completely different note, can someone explain why libertarians keep supporting the Republicans? Libertarians are supposed to be for small government, but every Republican president since the Second World War has increased government spending. And the biggest growth by far was the period where Republicans controlled the White House and both houses of Congress. Not getting it.
Chris R.
Libertarians are closer to Republicans when it comes to finances. They don’t support the maintenance of large corporations, however. This may be partially because they have never won a presidential election and have not become dependent upon corporate money for large successes. Libertarians are closer to hippies when it comes to social issues. However, there is more power in buing supported by even medium sized businesses than there is in being supported by marajuana legalization protesters. Any libertarians out there, please tell me if I’m wrong.
I saw MM on the Colbert Report. At the end MM says “As long as people keep coming to my movies, I get to keep making them”. Sounds like a capitalist to me?
MM is not anti-capitalist, but anti-exploitation and anti-business aristocracy. He wants fairness in the system, but he’s not against capitalism as a rule.
Thanks. Very nicely written. I’ve always thought that being a skeptic and libertarian forms a integrated, seamless continuum of reason.
I feel I need to make another point. All of you skeptics on board who are accusing Shermer of dishonorable tactics – like straw men – need to ask yourselves if he (and many other skeptics) might be doing the same thing in areas of esoterica.
I’m sure that skeptics have used straw man tactics. I once thought that Stephen Jay Gould had used these tactics, because I hadn’t been aware of the evidence. However, some of the most evidence-free, discredited and even disproven areas of esoterica are still widely believed in many parts of the world. It is rare to see actual scientific method and double-blind studies being done by the promotors of esoterica. One is not making a straw man by pointing out what is lacking.
I’m sure that there were people who were profiting off of the housing bubble. I’m sure that there were people who thought that they had calculated a particular risk. However, a world full of well-educated people trying to make an extra dollar off of a loan is no less of a fiction than a world full of uneducated people who were unfairly disadvantaged by an unexpected financial downturn. We cannot base our policies on an idealized world. One must take into consideration both scenarios and what would happen to people in both scenarios. I’m not going to say that it’s the only way to look at things, but the Rawlesian Justice method of assuming that you could be anyone should apply here. Would you have taken out a second loan if the only home that you could afford near your place of work needed new wiring and a roof? Were most Americans aware that housing could actually decrease in value? I think that it is a given that there are limits to socialist and communistic economic systems, but there are limits to capitalism as well. We should not be making policies under the assumption that they will work forever and in all economic situations. When Michael Moore said that capitalism should be replaced by democracy, it didn’t make the most sense, I agree. However, it is well known that the economic system of socialism change how effective a political system works. Captialism, when allowed to go to extremes can also interfere with our political system.
As intelligent as Micheal Shermer is, and I deeply respect the work he’s done about religion and skepticism, I’m seriously baffled by his political and economic conservative agenda. Just human beings evolve, so must the political economy. The point of Moore’s film was to show how incompatible capitalism is with our needs as human beings. Capitalism is fed by greed and exploitation of human and non-human resources. The enslavement of African people in this country,for example, was the backbone of capitalist development. That exploitation of the working class, including Whites, has continued to this day. But guess what, if people don’t have jobs, a good standard of living, and access to education (do I dare say to health care) corporations are going to have less and less people to sell over abundance of goods and services to. People can’t buy cars, houses, gadgets, and all sorts of junk we don’t need unless we’re working and getting paid. So what happens? Corporations have to cater more and more to those who expendable income, and those people are becoming fewer and fewer.
It’s sad that Shermer didn’t find Moore’s movie funny, because guess what, it wasn’t supposed to be. And quite frankly there’s not too many journalist like Moore even attempting call into question the forces of capitalism, which is accepted by most as the system the fictional Sky God would have us believe in and support.
No, it’s time to evolve out of capitalist exploitation, and our worldwide dependence on the dollar itself. It’s not religion that destroys everything, it’s money and what we all do to get it. Moore can’t use the word “socialism” in his films because the propaganda war against the idea of it has been pretty much entrenched the minds of people that it’s bad. So he uses democracy, which means people have a real say in what is done with their labor and their taxes, not elite politicians and the corporate class whom are in the minority.
Capitalism, especially industrial capitalism, didn’t really take off in the US until after the Civil War (i.e., after slavery was abolished), and it was primarily in the “free” states of the North. And in Europe, slavery was abolished long before (and there were never a lot of African slaves there). Where slavery lingered, the “progress” of capitalism was slowest. I don’t think you’ve made your case that capitalism was built on the exploitation of slaves (not that slaves weren’t exploited, but that’s another matter).
You are quite right in that most companies would probably benefit from health care reform. But for most companies, that is not their main concern. For the health insurance companies, whose profits would be threatened by health care reform, it is the critical issue, so they have spent a lot of money spreading fear and buying votes… err… “lobbying” Congress to stop it. In economics, this is called “rent seeking” and is generally considered a bad thing, as it consumes resources that could otherwise be put to productive use (from a societal viewpoint).
Then exactly in your view was the benefits of enslaving millions of African people? Was it just a sport? I suggest you read Eric William’s “Capitalism and Slavery” to understand just how beneficial enslaved labor can be to building an economy.
I also suggest that when corporations go searching for cheap labor across the globe, it’s not because they’re trying to be global employers who share the booty of their wealth. They’re looking to make huge profits, and you do that by getting and maintaining cheap labor. Enslaved would be great, but you know, it’s not the moral thing to do in a modern era. Slavery, though, does still exist.
So unless slavery benefited an industrial economy, there was no benefit to a pre-industrial economy? Slavery was part of the mercantilist and physiocratic pre-capitalist system. Slavery does not make economic sense in a capitalist system: you are capitalizing your workforce, making it a fixed cost instead of a variable cost. With “free” labour, you can lay off workers when demand drops, lowering your costs, and hire workers when demand picks up. With slaves, you still have to house, clothe and feed them, unless you want to throw away your investment (effectively, slaves are like plant and equipment).
I believe Williams was arguing that the profits from the slave trade formed the capital used to drive industrialism, not that slavery itself was directly beneficial to a capitalist economy. While this might explain Britain and the US, it hardly explains the industrialization of Germany, which preceded German colonialism, nor does it explain why Spain and Portugal, far larger users of African slave labour in their colonies than Britain, failed to industrialize.
Of course companies are looking for cheaper labour: I didn’t suggest anything else. Slavery appears cheaper because you are not paying variable wage costs, but this is misleading. It’s not because slavery is immoral (although it is), but because it is not economical, that it does not survive in modern economies.
Was slavery immoral? Yes. Was it profitable for those who engagedin it? Undoubtedly, though not as profitable as capitalist industrialization. Does society owe compensation to the descendants of those slaves? Now we get to the real crux of the issue. Are these modern descendants really upset about the mistreatment of thier ancestors, or the continued mistreatment of themselves and their children? I would suggest that what is owed is fair treatment of all members of society and equal opportunity for all to reach their full potential. By the way, I don’t believe that capitalism necessarily provides this. See my comments above on why the free market and merit have nothing to do with each other.
For those interested in more info and debate about capitalism and slavery, this is a pretty good article and analysis: http://www.diigo.com/07o8c
Major gap in the argument here: the effect of disease. The West Indies, now seen as a idyllic vacation spot, were for centuries known in Europe as “the fever islands.” Being sent to the Caribbean was tantamount to a death sentence. (Ironically, since the plantation owners originally tried to import indentured European labour after the native inhabitants died out from European diseases.) Africans proved to be more resistant to tropical diseases (unfortunately for them). Which is why slavery was common in the southern US, but not in the northern US or Canada, common in the Caribbean and Brazil, but less so in Argentina.
Again, just to be clear: I am not justifying slavery. I am just pointing out that it only flourished where it made economic sense, and that under capitalism, it does not make economic sense. I am not convinced that slavery is an essential precondition for capitalism (there are lots of historical examples of the accumulation of private capital and the development of trade without slavery); I am, however, convinced that capitalism cannot co-exist with slavery in the long term.
When you are a skeptic Mr. Shermer, you have some very good insights. May I suggest that an honest critical reflection on your personality type (James H. Fowler’s work as an example) may help you be a little skeptical of your abilities to be objective when it comes to your thinking about ideology. There is some sort of correlation between those of us who have been “born again” at some time in our lives (you in 1971) and this longing and need to believe in something, even if it is an economic theory. When you delve into economics you start to take on the role of evangelist and I remain very skeptical that a theory promoted by Ayn Rand has any honest architecture for our current economic crises.
The most powerful part of your skepticism is not that it brings power to individuality, but that it destroys mindless robotic thought and stimulates dialogue. Biology today helps destroy these ideals of individualism being the solution. I just finished David Sloan Wilson’s Evolution for Everyone and think that he has many good insights into the scientific critique of the ideals of Idividualism and a look at the reality of dependence.
Although I sympathize with your view of Ayn Rand, your critique of libertarianism based on her support of it is an ad hominem attack. Libertarianism can and should be attacked on its own merits, as should Mr. Shermer’s arguments for his particular brand of libertarianism.
I wholly agree with your characterization of the value of skepticism as a counter to “mindless robotic thought”. Especially in areas of public policy, things need to be carefully thought out and all the consequences considered. There is far too much labelling and knee-jerk reaction today.
“Moore can’t use the word “socialism” in his films because the propaganda war against the idea of it has been pretty much entrenched the minds of people that it’s bad.”
There’s another reason he can’t; 1989. Moore may be willing to ignore the effects of centralized economic planning, but most of us aren’t.
You know, you’re right, we definitely should not ignore centralized economic planning. No matter the economic system we have, workers have to push for real control over their labor, even when the so-called Central Committee is saying it’s working on behalf of the people. Believe me, I’m in no way advocating some totalitarian socialist regime, nor is Moore. But I am advocating that capitalism is not a sustainable economy for our modern needs. We need a collectivist economy that does allow for profit making when it comes to education, health, food, military resources and other necessities.
Socialism has been and can be misused, but the real revolution is when the workers gain complete control over the benefits of their labor. We really ought to be pissed off by the effects capitalism where the wealthy class lives and benefits off the working class.
Bakari, you’re right,
the present system works beautifully, amassing capital in ever fewer hands, reducing the indepence of the less favoured both by unemployment and brainwashing (ever increasing control of the media) and leading all of us to an inevitable unhappy ending. Capitalism is based on continuous growth, it depends on it, and Ford understood this when he astonished his board telling them they should sell by installments to their own workers. This marries quite well to the famous subprimes: indebted people are malleable, it’s the “I do this because of the mortgage” sort of dependence. As for socialism, the so called “real” has neves existed, and certainly, being a strange form of state capitalism, it faile. But Capitalism has been tested in all its possible shapes so, how does that equate with the “Social Capitalism” oximoron. Capitalism, as a way of achieving a kind of social structure capable of respecting Human Rights (and that’s a minimum), has failed repeatedly, but crisis are the way it evolves and concentrates its power. Have a look at the Whole world, not only our developed one, and decide if there’s any sort of fairness or respect for others. Not a lot, ¿uh?
Surely you jest Mr. S when you wrote ” I have a much higher view of the American public than does Michael Moore.” Your livelihood depends on pointing out the foolishness of most people.
Most people are ignorant as hell and cannot survive in a complex world. They are not educated enough to comprehend the large OR the small print on financial contracts. One fifth are functionally illiterate, more are enumerate, even more believe in aliens, astrology, ghosts, and on and on and on as you well know. Even if people were more educated individual behavior is determined by the structure of society. Libertarian pull up your socks and get going individualist dogma is as silly as believing that lottery odds don’t apply to everyone.
I’m waiting to hear about a successful libertarian society – any were any time (or any species!)
BTW The Finns are all entitled to broad band.
AZ
Excellent points, AZ. It’s interesting that Shermer maintains that Moore sees the public as stupid, but then he blames them for the mortgage crisis, as if they’re not intelligent enough to read the fine print or to know that they can’t afford a loan they’re taking out.
But that’s just in the details. You point out the larger issue. Most of us are not scientifically literate as we need to be for a post-modern, technological society. Critical thinking is not taught in the schools, and we have way too much dependence on elite of classes of people to come up with solutions to societal issues that really require a more informed and well educated society.
Furthermore, like you said, there’s very little in the structure of our society that even allows for real democratic decision making. Political votes are cast based on sound bites and scanty information. There’s little or no structure in our society that allows the people themselves to engage in healthy debates about issues that effect their/our lives. Just think what it would mean if just five hours per week was given over to organized workplace discussions and debates about issues that we are asked to vote on? So, no, this is not a very informed or educated society.
Taxes are the price a society pays for civility. Libertarians are just going to have to one day get over it.
My belief about banks and casinos – 1)if the lights are on and the door is unlocked the house is winning. 2) If the lights are on and the door is locked – it’s either housekeeping or the Feds closing it down. 3)If the lights are off and the door is locked – leave your money on the ground out front and you wont have to wonder what will happen to it. My belief is that most don’t really get #1.
“No matter the economic system we have, workers have to push for real control over their labor, even when the so-called Central Committee is saying it’s working on behalf of the people.”
That’s nice, and it’s possible where workers can withhold their labor without getting shot or imprisoned.
You (and most other lefties) conveniently forget that business operates absent coercion, while government only operates *with* it.
Try appealing to the “central committee” in, oh, say Cuba.
“Socialism has been and can be misused, but the real revolution is when the workers gain complete control over the benefits of their labor.”
Socialism is a failure everywhere and always when it’s been tried. And the Labor Theory of value was debunked soon after Marx proposed it; you should read some skeptical literature:
http://mises.org/about/3229
From the site: “Böhm-Bawerk was to revisit the issues raised by the socialists. Karl Marx and the Close of His System established that the question of how income is distributed among the factors of production is fundamentally an economic-rather than a political-question. And the Austrian answer effectively rebutted the labor theory of value as well as the so-called “iron law of wages.”
Debunked within
I fail to see how businesses only operate without coercion. Businesses only operate without coercion if they have been coerced to do so. There are many examples in history of businesses taking as much control of their employees’ lives as possible. It is only due to government regulation that we do not have more businesses treating employess as property as some coal mines once did.
” Neil says:
October 16, 2009 at 5:39 pm
Taxes are the price a society pays for civility.”
Sloganeering: what passes for economics on the left. Lefties are just going to have to get over it.
Economic libertarianism is ripe for a comprehensive skeptical treatment within the pages of one of the movement journals like Skeptical Inquirer, The Humanist, Free Inquiry or Skeptic. If we ask which economic system produces the greatest human well-being, the overwhelming evidence is already in: we know economic libertarianism doesn’t work. The only serious question, the only question for critical thinkers, is what balance between state and market (assuming we can even make a meaningful distinction between them in some cases) is ideal?
But even posing this question violates a core libertarian assumption: the economic system should be largely off limits to democratic control.
I often liken economic libertarianism to Marxism in the sense that both are systems of thought that grossly ignore or discount a great deal of human experience, economic knowledge, findings from social science, and their own internal contradictions. Both are idealistic, purist and pseudo-rational systems of belief that were the basis of the greatest ideological divide of the 20th century. I think it’s time we grew up from both and set about the hard task of finding out how to really make an economic system work for us, and not the other way around.
You make a great point — human created systems are within human control. All too often the arguments from libertarians (among others) act from the assumption that somehow economies are natural laws that can be no more manipulated than gravity. Of course, that is a convenient belief when you arguing that it is — surprise, surprise — your preferred system that is the “natural law.”
In general, libertarians seem to have a blindspot when it comes to noticing the self-serving aspects of their beliefs. They often spout words like “liberty” and “freedom” without even considering that they might be truly wanting “liberty” from responsibility toward others and “freedom” from paying back the society that has often served their interests quite well.
To be fair, libertarians are hardly the only group that makes this mistake. For instance, religious conservatives tend to be the same way — e.g. pushing a social system where conveniently everything they desire to be true is assumed to be. What is ironic, however, is the supposed emphasis that libertarians place on rationality and skepticism. But, that just serves to prove that being a “skeptic” (as opposed to using skeptical methods to examine all aspects of your life) is no guaranteed defense against confusing self-serving beliefs with universal “truth”.
Three books that everyone should read: The Sane Society by Erich Fromm, The Age of Consent by George Monbiot, and Year 501 by Noam Chomsky.
I would add to that list, “The Wrecking Crew”, by Thomas Frank. He outlines and argues what it means for societies to allow unregulated corporate entities to have their way, and how corrupt governments and politicians end up serving the interests of the corporate elite.
Wow Bakari- five hours a week for politics is just enough for the Daily Show and the Colbert Report!
I think the complexity of the economy, the health crisis, and climate change are greater than our messy democracy can handle well. I’ll wager that most legislators are as confused about effective solutions as the rest of us. Instead of earnest debate they offer timid incremental fixes that won’t tip the boat for them and their party in the next election.
Promoting the libertarian ideal now is the same as encouraging people not to take vaccines. Now is the time for more cooperation.
AZ
Well said AZ! The confusion is palpable in congress.
Hey, can’t argue with you there. I find it interesting how when legislators are interviewed on television many of them sound so very inept. It’s either they’re pretending be done because they don’t want to say the wrong thing, or that they really are ignorant of what they’re talking about.
But sadly, it seems that the only way we make real left progress is that people are politically educated and involved; otherwise, capitalist, conservative ideology will always dominate because this ideology speaks to our basic instincts, including self-interests, greed, and simplistic thinking. Progressive left politics requires much, much more from us.
Dear friend,
if you’ll forgive me, I agree with you. They sound so inept because they are, they are only the frontispice of money, and they manage the world according to what they are told.Sorry to say, in its unstoppable, or unstopped evoluition, capitalism has hoarded power in every way. Lately, the media, which were supposed to be part of the “checks and balances”. Have a look at the owners of your major media owners —if you haven’t done so already— and you’ll know what I mean. Social brainwashing, suppresion of doubt, skepticism, and making us believe we’re living in the best of possible (underline possible) worlds is what is all about. Remember the weapons of mass destruction and how their existen (false) was sold. The big media had someting to do with the hoax, an in spite of that, there they are, immutable, still believeable, though what they omit is frequently as important as what they publish. The f. system works, and beautifully (or maybe I should say horridly, if there is sucha a word).
Force KILLS cooperation.
Try it at work sometime — or with your spouse!
The entire Libertarian philosophy springs in large part from that one simple observation. The opposite of force is choice, yet many misunderstand the Libertarian preference for choice over force to somehow indicate a distaste for cooperation.
Free markets are free because people spontaneously create and participate in them by choice, which is why Libertarians speak in favor of them. Given the ever rising numbers of humans, it is increasingly difficult to imagine another way for millions who can never hope to meet or know one another to trade and cooperate in relative peace. And as our numbers continue to rise, command and control approaches meant to coax the benefits of peaceful trade and cooperation from humanity are likely to become increasingly disappointing.
So, to promote the Libertarian ideal now is to promote trade, cooperation, and peace.
i won’t even try to disown your opinion, which is just that, or rather a belief without reference to reality (look around you, if you possibly can (and I don’t mean your own country). Promote trade, cooperation and peace? You must be joking.
Mere ridicule is not enough, sir. Debate requires specifics, but you’ve provided none. YOU must be the joker.
Well you point ot a series of premises and then offer a magical solution without any data to support why and how it relates (in any positive way) your conclusion: Libertarianism, that is, in the final analysis, no control at all. The rising numbres of humans, takes place mainly in poor countries, had’nt you noticed? It seems there is a positive correlation between the living conditions and the urge to reduce one’s progeny. Thus, are how your promotion, trade etc. supposed to solve the problem? We help by dictating how our “meagre” —and often only publicized put not materializaed (see Tsunami, help to victims, for example)— aid is to be used, and as of now, it does not seem to be working. So, a free (even freer) market is what we need to solve everything? How do you think this whole crisis started? Because of overpopulation?
I liked the film because I learned a few things. I’d never heard of “dead peasant” life insurance policies and didn”t realize that Goldman Sachs runs the country. I was surprised that Moore tried to make it look like things are changing under Obama. Last week, Obama appointed Adam Storch, vice president in Goldman Sachs’ Business Intelligence Group, to be the COO of the enforcement division of the Securities and Exchange Commission (SEC), a new position at the SEC.
American Banking News notes: “Other high level financial positions held in the Obama administration by former Goldman Sachs executives are Neel Kashkari, heading the TARP bailout; Mark Patterson, Chief of Staff for Treasury Secretary Timothy Geithner; Gary Gensler, top executive at the Commodity Futures Trading Commission; and finally Goldman has its top lobbyist, Michael Paese, Rep. Barney Frank’s top aide, who is the chair of the House Financial Services Committee.”
There’s really no need to fear regulation when you put together a team like this to watch over companies like Goldman Sachs. We’re replacing capitalism with a new kind of socialism: Wall Street Socialism.
This is what irritates me about ‘free market’ acolytes. They want the risks to be socialized, and the profits to remain privatized.
Well…..we are all overseeing the truth behind all this. The housing problem was just something that luckily (for our rulers and leaders) emerged (or was it pushed?) to take the blame…..Let’s take, just for a little moment, a global perspective (Note to americans: This can require some effort on your part):
First: What is really happening is that during sometime in the past americans were around 20 times more productive (thanks to automation and more freedom) that the rest of the workers of the world…
Based on competition and participation in the market, now chinese, japanese, korean, etc. are much more productive than they were before (and almost equally underpaid as before)…So what is happening is that the american worker is now worth half or less…(just check how many products at home are produced in china, how many oriental cars, etc.). BUT NOBODY WANTS TO RECOGNIZE THIS FACT! And it is all thanks to capitalistic and market competition! (now you hate it, don’t you? Please, do not let the workers know). If americans are not paid less, well, the market reacts leaving them without a job (that goes, or has gone long ago, somewhere else).
Second: Another truth is that the rich is richer because many times happens that they are the owners of those oriental industries or the lenders and bankers of the oriental people. They never lose…(and if they lose, there is always a kind and helping hand).
Third: the government is not planning on time and based on the people’s needs…(let free market rule)…and they are driven by pressure of the powers of society (to be true, by power groups). So, for the rest of us, they react running with a bucket from fire to fire (or let them burn, the weak must not survive if uncapable)….And the legislators? You call them inefficient? they are subject to the pressures of their own political free market…It has always surprised me how people overlooks the inherent inefficiencies of the free market, but expects the government to act as a swiss clock (or should I say oriental clock?). It has always been strange to me how people in capitalism wants no government intervention but complains about them doing nothing and reacting only in favor of those waving the money…(again, free market rules).
The keywords to all this are PLANNING AND ADMINISTRATION. But, yes, these words interfere with the market…let the market forces rule by themselves. They will somehow take care without us worrying.
Remember: PLANNING AND ADMINISTRATION. (obviously this needs social consent, coordination and cooperation. Also, social responsibility. And it works better if it is among equally well educated people. Sounds like socialism? Oops! We better leave things as they are…).
Everybody loathes a busybody, and so-called progressive ones are not exempt.
Progressives see themselves as so wonderfully competent and visionary that, while running their own lives full-time, they have a generous capacity to simultaneously run the lives of many others — and they even feel a duty to do so! And they imagine that it is due to their own uniquely caring hearts and exceptional intelligence that they are so capable.
Yes, Progressive left politics requires much, much more from them because they see themselves as such good, good people. Unfortunately, their failure to examine the morality of their approach to human affairs that makes them very dangerous. They’re on a mission to mind everyone else’s business WHETHER THEY LIKE IT OR NOT, and imagine that history will celebrate the brilliance of their vision and simple humanity.
Not likely.
For subordinating their neighbors to their own definition of caring and vision, the legitimacy of all others be damned, progressives paradoxically will likely be described by history as actually REgressive, having succombed to the most retrograde and inhumane instincts of humanity. They will be regarded as just another of the endless gang of bullies and thugs who imagined that they had the natural right to force others to bend to their will, and that others would stand still for it.
To all progressives (and conservatives, and liberals) out there:
Want Peace? Mind Your Own Business!
Paradoxically, that is what progressives prescribe internationally. When will they also prescribe it domestically?
Want Peace? Mind Your Own Business Abroad AND at Home!
Biased much? Any idea sounds sinister when you offer it in such extreme, conspiratory terms. Problem is that reality is usually far more subtle and grey.
Moral here is that you’ll have a lot more success when debating what an opposing view really is as opposed to some absurd strawman.
EVERYONE here is biased. My bias happens to be in favor of those who wish to live peacefully in a live-and-let-live manner. What, exactly, is your problem with that?
The problem is your definition of “live and let-live manner”. Libertarians (and others, to be fair) do this all the time — spout words like “liberty” or “freedom” as if to merely claim they support such things proves their arguments. They miss that terms can have widely divergent real-world meanings. That is what matters.
IMHO, it is intellectually disingenuous to use such hot-button, but ultimately too-vague-to-be-meaningful terms only to turn around and cry insult if someone calls you on your definitions.
In other words, real facts and information trump mere rhetorical declarations.
I asked an honest question, which isn’t the same thing as “crying insult”.
I don’t think you answered it.
You said “the problem is your definition of…”. I’ve no idea what definition you think I’m using and you didn’t ask, but I’ll try to make myself clearer.
I’m a Libertarian. Capital L. The Prime Directive, so to speak, in the Libertarian philosophy is that person(s) and their agents should neither initiate physical force against (an)other person(s) nor threaten to. We consider this to be the most fundamental and minimal principle to be practiced by persons who wish to live together peacefully. We judge it to be perhaps the deepest bedrock upon which a secular morality can be built, and think that it is more solid and predictable ground for such moral construction than god-commandments. This is, after all, an EARTHLY “kingdom”, not a heavenly one. All are free to hold *themselves* to even more specific law. Violation of that “prime directive”, to a Libertarian, is the most fundamental of crimes. Some might argue it should be the ONLY crime, but I digress.
“Mind Your Own Business” and “live peacefully in a live-and-let-live manner” are examples of the kind of shorthand phrases many Libertarians use to express the meaning of our bedrock principle in a less “academic” manner than I just tried to do.
I hope my question is clearer now.
In the Libertarian view taking from some to give to others, which seems to be at the root of so many progressive prescriptions, is NOT the selfless, generous, or caring act progressives may imagine it to be, but a crime of the most fundamental and basic kind. The crime is that of physically forcing some person(s) to provide something to (an)other person(s). Or threatening to.
This crime has been called slavery. Regardless of it’s name I guarantee that no victim of this crime will like it. Most victims will attempt to avoid it as best they can. Many victims will resist it. Some victims may eventually take up arms against it. Those, victims and bystanders, who learn the cause in whose name this crime is committed may come to despise that cause, despise it’s beneficiaries, and despise those who peddle such prescriptions. I can think of no more disservice to a worthy cause than this. No more effective way to convert possible allies of a cause into enemies of it.
How unnecessary!
Instead, imagine simply ASKING folks to help a specific cause. No Person(s) will be physically forced to provide something to (an)other person(s). Or threatened to. It will not be called slavery, but kindly help and charity. There will be no victims to dislike it, avoid it, resist it, or take up arms against it, but instead some will enthusiastically support it, many will want to support it, most will admire it, and none will dislike it. Those bystanders who learn of the cause may eventually come to understand it and support it, empathize with it’s beneficiaries, and admire those who identify and commit to pursuing such a cause. I can think of no better service to a worthy cause than this. No more effective way to convert those ignorant of the cause into allies of it.
Simply ASKING folks to help a specific cause means that it won’t require an Act of Congress to make it happen, nor can an Act of Congress STOP it from happening or de-fund it, neither will waiting for the next election to vote on the matter be required. People will be free to act, and free to begin doing so whenever they like! Will the cause ever gain the support true believers think it deserves? Extremely unlikely, but extra efforts may produce extra results. But will the cause ever gain the numbers of dedicated enemies literally CREATED by the Robbing Hood approach? Extremely unlikely. All people will be free to make their own choice on the matter. This is what Freedom is. Choice, not Force.
Do Libertarians hold people (and thus their government) to an unprecedented standard in this regard? A standard far stricter on this issue than ever before? Perhaps. Why only perhaps? Because most people already implicitly believe in and practice the Libertarian view on this issue with their immediate neighbors without even recognizing it. But a great many people simply get confused when it comes to large numbers of people taking from some to give to other large numbers of people. The legitimacy of such actions at that scale would seem to be sanctioned by large numbers, in a group, who vote for it, with ample government precedent, and with career politicians and lobbyists urging it.
Yes, people do get confused. They begin to believe that while it makes sense not to force one’s immediate neighbors as I’ve described, it somehow makes sense TO force one’s neighbors who are perhaps farther out of view. That what they believe to be moral at one scale is somehow not moral on a different scale. Libertarians disagree.
Um, why do all the people here keep using the word capitalism when they mean corporatism?
I mean I know for some reason (the media) they have somehow become synonymous they are not.
As for Libertarians. Just because you meet some “stupid” libertarians (let anarchy rule) doesn’t mean they all are. Much like some “stupid” democrats(government can solve everything) or “stupid” republicans(we certainly can legislate morality).
This whole argument is so so so so so much bigger than any of you are really willing to even wrap your minds around. I realize that, that’s why I turn off the news. I can’t fathom it the government can’t fathom it, Michael Moore Can’t fathom it Nobel Prize winning economists can’t either. It would take a Library to explain how we got to where we are.
Actually if you went to a library and read every book from about 1900 to today chronologically and could actually COMPREHEND that dense amount of information (and i do mean EVERY book) then maybe you’d have a chance.
Suffice to say we pick one thing and take a side. Bailouts good or bailouts bad. Libertarianism good or libertarianism bad. Free market good or free market bad. We frequently misunderstand the terms we use.
We quote regulation as if we actually know what the regulation is.(there are most likely volumes upon volumes of incredibly stupid short sighted regulation you have never heard of). We don’t even look at the justice system which had in the first place allowed corporations to get away with enough shady stuff that the government had to step in. Then repeat infinitely. Most of these regulations put into place over the last 50 years probably weren’t even necessary. Had the courts done their job and actually protected people from corrupt banks. As it was they failed. The correct course of action would probably have been to tighten up the legal system. Which would have allowed the actual rights of an individual to have been protected in the first place. We could have tried to slow inflation instead of encouraging it. We could have not protected credit issuers in the first place (with regulation) which might have slowed the available credit, which in turn might have encouraged saving, which in turn might have kept interest rates high on savings accounts etc etc. What we did is secured credit companies loans.
It’s like hate-crime laws. These things are already crimes. A lot of corporate regulation is like this. It feels good, it reads good, hell it makes a great slogan. What it really does is muck up the justice system.
Most here don’t seem to understand how capitalism is actually at odds with corporate person-hood. How many of you even knows what that means? It means if a corporation is corrupt the corporation gets punished. Not the CEO or owner(s) or share holders. You wanna know why CEO’s are still getting bonuses? They’re not responsible. All you do is incorporate. Drain the money slowly. And make bad decisions. Lose your job, and retire. The corp goes down the tube. Problem is you can’t send a corp to jail. It has no fear. This is the socializing of losses. That so that the share holders take the brunt.
Share holders are not innocent either. Used to be you’d buy stock in a company you believed in. You know maybe a local one. Maybe one you worked for. Nowadays? Buy some stock short term. Sell it quick. Make a profit. The media is partially to blame for this as they report the profits and rarely expose the risk.
What else? Hmm, could it be that a lot of you people believe things you hear? Water cooler talk, a book or two and a few tv reports. Human beings are a marvel of complexity. The human brain is an incredible machine that is ridiculously good at organization. Incredible at grouping things, and very very good at making things manageable. What it’s not so good at?: Big things. Try imagining the distance from here to the sun? System error. Try picturing a billion dollars. Error 404. We don’t comprehend very large numbers or very large events well. There’s a trick to it and that’s to break it down. Imagine the economy: haha yeah. I don’t think we were equipped with the RAM for that. So people, a lot of people, break it into small parts. Capitalism is really really big. So we single out a few key concepts. Same for any principle. Usually it’s the key concepts that reinforce our own ideas (and do not lie to me you all go into something already assuming, it makes it easier to pick out the “pertinent information” that your require for reinforcement I do it too). We spout out words as if we actually understand the concepts that have taken 1000’s of people generations to refine. As if it were easy.
I wish people really understood this. Being a skeptic means that you question things does it not? Most of us however would have a mental breakdown without some “truths”. Some in politics, religion etc etc…
“The economy failed because of greed” is stupid.
“greed or profit is the fundamental principle of capitalism” is stupid.
“the bailouts were necessary” stupid
“libertarians believe in social darwinism is stupid” Stupid.
You want to know why some big companies/bankers/politicians are greedy? Because we let them be. Because it’s expected. It’s self fulfilling public prophecy. You allow it. We don’t hold them up to a standard we hold them down to one. People generally live down to the lowest standard you set for them. Same for schools, marriages whatever is is. It’s not the governments job to hold them accountable it’s ours. When was the last boycott? Hmm? The last time someone said publicly “no we’re not dealing with you until you shape up.”
You look at Bush or Obama or the government as if they are somehow enlightened. You buy the bullshit you eat it you shit it out and eat it again. These people are as stupid as you or I. I voted for Obama. But the man has done jack so far. How often do we ever hold our own guys accountable? We don’t. We surround ourselves with people who agree with us because it’s nice. That’s not being a skeptic. That’s being retarded. You hold your enemies accountable. Does this make sense? Political figures are not your sports team. You can keep rooting for a home team because, hey, maybe they’ll be better next year.
I could go on. Wanna talk about the stupidly huge strain on our economy and peace the drug war is? How about all of our foreign entanglements and how they could have economic impact. How about subsidization or some of the ass backwards import export laws?
PHEMA, HUD. any other retarded wastes of bureaucracy? Wanna talk about the lack of standards in media reporting? Non profit organizations. How about inflation mostly benefiting the rich? Education waste?
The people who really read up on and want small government don’t want it because it lets rich people do whatever they want. They want it because small government is streamlined mobile government that can deal with problems efficiently and quickly. That is educated and accountable. That can actually fix problems that occur based on existing law and the existing Bill of Rights.
You don’t need a second (or workers) Bill of Rights. It’s built into the system. It is Liberty.
rant over.
Nice rant, but it is really just a variation on the “libertarianism is true — trust me” sort of argument we’ve seen before. That is, you are offering libertarian solutions based on faith and/or offering them with subtle rationalizations.
For example, I have no doubt that “people” who support small government indeed “don’t want it because it lets rich people do whatever they want”. The question is whether or not “small government” would actually cause that regardless. Statements of faith or declarations that believers don’t “mean” this or that to happen are beside the point.
Libertarians are big about sermonizing over “unintended consequences” when it comes to other ideological ideas, but seem strangely naive about such possible effects with their own. The rest of us would feel a lot better about their ideology if they could demonstrate that — all signs to the contrary — what they claim would actually happen.
Sorry,
would you elaborate on:
“The economy failed because of greed” is stupid.
“greed or profit is the fundamental principle of capitalism” is stupid.
“the bailouts were necessary” stupid
“libertarians believe in social darwinism is stupid” Stupid
How stupid? Why? Are you living in the real world or are you one of the favoured ones? (your god bless you, no animosity here)
As far as I understand from libertarians’ opinions, they are far to the right of Gengis Khan, and would leave the world to save itself (dare you say that banks, big business, capital et al. saved themselves? No, of course, they had to socialize their losses. And as for Your liberty, where is it? Are the unemployed willingly inemployed? Are the needy needy because they like it that way? Please..
I love this site. Insults withstanding, some of the best debates go on here and give me something to think about. I don’t feel like wading into this one (I work in govt. shhhhh) but I just want to express an appreciation for all of your opinions.
Since economic libertarianism is, in my view anyway, long overdue for some rigorous criticism, I wish to add the following bit of argument to its critique.
Briefly: A primary construct woven into libertarian discourse is choice, which in turn is predicated on freedom, or at least the libertarian conception of freedom. A great amount of resources are poured into advertising psychology–a sub-specialty of psychology whose purpose is to devise ever more sophisticated ways to manipulate minds (attitudes, beliefs, values and behaviors) in order to convince them to respond in a way they otherwise might not. (This in turn opens up a discussion about the ways in which unregulated capitalism degrades morality, but it is not my point here to pursue this.)
So, the ironic tension is that the economic system libertarians are trying to sell the public is itself predicated on spending a great deal of money (worldwide advertising expenditures are in the high 100s of billions if I recall) on undermining free choice (yes, sometimes advertising is simply providing raw information), the very construct at the heart of what they’re trying to convince others is so great about the economic libertarian point of view.
Another point: current research seeking to explain secularization focuses on social insecurity as being a or the primary contributor to religiosity in Western countries. We know that economic libertarianism is one of the best methods known to increase mass social insecurity. Thus, the atheism/agnosticism/skepticism-promoting libertarian is working at cross-purposes with himself. Thus, in terms of the priorities of his social engagements, the libertarian is first a libertarian, and secondly a skeptic, secondly an atheist or agnostic.
Eric, people simply MUST continuously learn in order to continue to make good choices in the face of others’ attempts to tempt them out of their own best interest. And it’s OUR OWN job to help OUR OWN children, parents, and grandparents with this. That Greed and Charlatanism exists and will exist as long as human nature is what it is you can absolutely 100% count on. Lament it all you want, but human nature changes very slowly, and no human power seems poised to change that. But we can take some solace in the fact that, just as clouds have sliver linings, swords have two edges. There is an evil and a good side to everything, and the Human Mind makes it so.
As for your point that “we know that economic libertarianism is one of the best methods known to increase mass social insecurity”: We know nothing of the sort. People free to make their own choices without coercive “guidance” or “incentives” generally do not choose insecurity, and if they do they wise up soon enough unless folks succeed in engineering a thinking-free and learning-free society a-la your first point – which really IS impossible, so WTF? I must point out that our present Federal Monstrosity in the USA is certainly proving itself much more capable of increasing mass social insecurity than you’d need to fear from your truly free friends, neighbors, and enemies. And with further “progressive” assistance, that FM is becoming ever more capable in that department. That single largest source of systemic risk in the history of the planet will (WILL) prove to be the Grand Imperial Wizard of all social insecurity manufacturing operations, eventually blowing the “Bubble To Burst Everyone’s Bubble”. Geez, I wish it weren’t true, but truly Colossal, Planetary Sized Bubble-Blowing is now underway in Washington – and accelerating – squared, and only time will tell when it’s “Planetary Colossalness” will burst. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ………
Thirdly, there is no “economic” Libertarianism. It could perhaps be more successfully argued that there is only “political” Libertarianism. Free Markets are simply what people appear to naturally create and participate in when left to their own devices to trade and choose what they want. Who knows? Other, better systems may evolve among free people in the future. True Libertarians would certainly applaud it. Political freedom seems a prerequisite for economic freedom, though perhaps each persuades the other somewhat. There is plenty of difficulty in that for another day…
Fourthly, I am first a Skeptic, THEN a Libertarian. Skeptical Thinking is in large part what LED me to become a Libertarian. In fact, Skeptical Inquirer magazine back in the mid-late 1970’s was a milestone along my path toward eventually finding it. I am also first a Skeptic, THEN an Agnostic. The questioning definitely came first. I’m comfortable accepting that there are some very large questions that humans may never answer or even ask. As in all other things, I believe honesty is the best policy. If you don’t know The Answer, just say so. No need to start another myth! You may not know that there are religious Libertarians. You may not know that there are PRO-LIFE Libertarians. Both seem to have little trouble with the concept of simply layering stricter “heavenly” rules they choose for *themselves* and their group over top of the simple “earthly” moral foundation that Libertarianism offers.
In fact, ALL Libertarians layer their own personal rules over that foundation to some extent or another, reflecting the higher standards they wish to personally hold *themselves* to, but not others. In fact, Marxists, Robbing-Hood Egalitarians, “Progressives”, and even Conservatives are free to do so as well. Simply form a group, then start controlling each other right away! I jest – *personally* ascribing to and attempting to live up to what one (or a group one admires and chooses) sees as a higher moral code is profoundly admirable. Libertarians merely lay down what we see as a very minimum requirement for a stable foundation for a free and peaceful society: Non-Initiation of Physical Force – and No Threatening it either. If others choose to subscribe to a higher law for *themselves*, then *they* are free to choose it. No true Libertarian will stop them, and many will in fact join them. What *NONE* should be free to do, though, is ram their own view of things down the throats or over the dead bodies of others. Something like that CAN happen (WITHOUT the dead bodies) within any religious/ideological group(s) voluntarily *chosen*. It’s interesting that religious Libertarians seem to “get it” that the “religious sins” of others say nothing of their own sin or virtue. Perhaps they believe a reasonable god would not hold one person accountable for the actions of others. I applaud them in making such a grand leap toward truly minding their own business.
Want Peace? Mind Your Own Business. Don’t You Wish Everybody Would?
First let me state that Michael Shermer is no fool, I have read almost all of his works and find myself in complete admiration of his intellect; however, with this blog I have to intellectually disagree.
I recall an interview with Nobel Prize winning economist Paul Krugman, who made similar points about the granting loans to low income families and increasing the amount owned each month, it seems that even if a well respected economist is making similar points, one can really see that the past 28 years has been a period of easy credit. Where is Shermer’s counterpoint, to Moore’s footage of the pilots testifying before congress about pay being less than what a cashier at Wal Mart makes a year?
As for disagreeing with FDR’s second bill of rights, I would refer anyone who wants a further education on it to check out Cass Sunstein’s FDR’s Unfinished Revolution. It’s not too much to want people to live in a society where we have protections and regulations to protect us when times get tough. I don’t want a socialistic society, what I want is regulated capitalism.
Once again, I deeply respect Michael Shermer, I am currently re-reading The Science of Good and Evil, and just love his thought process. I urge all who read his blog(s) not to misjudge him and discount all he has to say.
I do have a criticism of Moore’s film, it would have been better if he had someone like Frans de Waal to talk about empathy and evolution, instead of leaving it to religon, I am an athesit and felt the film could use that.
Libertarianism is a cancer, a massive vile cancer among skeptics. Malthusian filth drunk by Obectivist, selfish scum. Atlas Shrugged. . . . . I puked
Well if you want to have that judgment that is your prerogative, but do you have an argument to go with that conclusion? I don’t have cancer (or do what cancer does to other people, I eat away at nobody), I don’t drink, I am selfish but also kind (I give blood on a regular basis and have spent years volunteering with underprivileged children) but not altruistic, and I very much enjoyed Atlas Shrugged. I don’t see why freedom is a bad thing. So, if you could give an argument to go with that conclusion I would appreciate it so that I may see the error of my ways. However I’m not a foolish man and I think I’ve come to my current conclusions for good reasons, so I am going to continue thinking that I am correct until I can be persuaded otherwise. I mean, I know I’m not an evil or vicious person so if you are using that as an argument then I know that is wrong, but if my conclusions are wrong, tell me. I don’t want to be wrong. I want to be right. So if I am wrong tell me so that I can be right, but expect me to be skeptical when your opening argument is so hostile and demagogic.
Well done Jim! Well done.
Thank you GotGay.
Sincerely,
Jim. :-)
GotGay? WTF? That’s DOC Day!
…and my name is TIM. I’m just having fun with you, thank you for the compliment.
I only have one question for you, Dr. Shermer. What does political opinion have to do with skepticism? Politics, and how we choose our opinions, is a subjective choice based on values. While there are pragmatic elements to governing, a person’s views are not fodder for the skeptic. I could easily apply the same scalpel to your own Libertarianism and concoct a reasonable explanation of why your view of economics is flawed. I’ve noticed a lot of people in the ‘Skeptic Community’ wander off the reservation of rational thought and misuse their position and ability to reinforce their own subjective choices, especially when it comes to political thought. Micheal Moore has his political position and you have yours, and they will compete in the market place of ideas.
This characteristic of skeptics is one that I very much enjoy because it is the inverse of the rest of society and equally incorrect. The rest of society says that economics can be argued about, but not religion. Skeptics say that religion can be argued about, but not economics. Putting aside the fact that this blog seems to be about the Moore film more so than the Moore view points, why shouldn’t views about how resources come into existence and find their way into various hands have a skeptical eye applied to them?
You say you can apply a skeptical view of liberty in response to Mr. Shermer’s skeptical (skeptical now apparently meaning opposing) view of socialism (or as Moore puts it in the film, “democracy”). Okay, do it. Provide that view point. Would we not be enlightened by additional views and isn’t enlightenment the purpose of this website?
Do a search for Smallest Political Quiz in the world. Short but informative.
Micheal Shermers book the Mind of the Market is about how evolution is a bottom up system so is the free market. Think of government as the “intelligent designer/s” of the economy or rather not so intelligent. As for monopoly corporations they could not exist in a true free market without government help. For example the housing bust was primarily caused by the Federal Reserve monopoly on money. The economist Milton Friedman once said “the greatest enemies of capitalism are government and businessmen.” Government has a monopoloy on law and order, post office, public schools, money and interest rates, etc etc. Capitilist like socialism when they don’t profit also they pass legislation to hinder their competitors(think patent laws for example)
I second Tim’s motion.
While I’m skeptical that you can “concoct a reasonable explanation of why [free-market economics] is flawed”, I’m skeptical of most everything. If you can reveal the flaws AND SHOW EVERYONE A BETTER WAY, I want to know about it right now so I can change my thinking and begin advocating that better way.
Please, Christian, get your scalpel out and do it.
Why have a system in which people are left unmolested in whatever activities they choose to do, free to live their lives and keep what they gather during the course of it, and have a court system that punishes people who violate other people and serve as a neutral arbiter of disputes when instead you can have the courts and bureaucracy violate other people (presumably on your behalf or on behalf of those who you believe count) in order to change the temporary arrangement of material things? Sure, having a system in which people may only deal with each other on a voluntary basis may be the definition of a peaceful society, but there are more important things than peace, freedom, and happiness like making sure that certain people have certain amounts of stuff (in a moral code which says that having stuff doesn’t make you happy).
I don’t know DocDay, maybe he has a point. I like stuff, and surely if government is given the power to initiate force against people for the purpose of redistributing those resources at its discretion, surely the state will act on my behalf and not to my detriment. I mean who would propose that resources are produced and come into existence through processes other than confiscation? I mean it is not like investigation, science, and reason are necessary to understand the world we live in and therefore necessary to produce things within that world therefore making a system based on exclusively voluntary interaction the most conducive to education, peace, and prosperity? No no, we just need to seize control of static wealth and put aside the dynamic which brings that wealth into existence in the first place. I mean if we just have the state take what we want from people who have it and give it to us, how could that system ever break down and not provide us with those things any longer? It’s not like rich people will stop trying to be rich once we take away their ability to be rich or anything like that. There are no practical or moral implications to establishing a society premised upon arbitrary confiscation of property from the state and a moral code of self immolation. I think you are being hard on Christian, he seems to have a very good point.
Here are some excellent books on libertarianism-there are two types minarchy and anarcho-capitalist-
Our Right to Drugs-Thomas Szasz
Libertarianism-A Primer-David Boaz
End the Fed by Ron Paul (ran for President 2008)
For A New Liberty-Murray Rothbard
The Road to Serfdom-Fredrick Hayeck (Nobel Prize Winner)
Human Action-Ludwig von Mises (Nobel Prize Winner)
Free to Choose PBS series and book by Milton Friedman and Rose Friedman (Nobel Prize Winner also in Economics)
And someone mentioned there are actually religous libertarians which is odd since most libertarians I think are of the atheist/agnostic types. I’m waiting for a Skeptic issue on economic fallacies(lots of Federal Reserve myths for example) and maybe an interview with libertarian psychiatrist Thomas Szasz. Suprising how many Skeptic readers defend statism.
Don’t forget Atlas Shrugged, Capitalism and Freedom, and the most important of all…Mind of the Market. :-)
A must watch for everyone of my home.
http://www.youtube.com/watch?v=1hhJ_49leBw&feature=player_embedded
And also,
http://www.youtube.com/watch?v=oNM6HHJTUMM
Merry Winter Solstice to all by the way.
This was obvious a brilliant post, and that’s always good to see. You need time to create that informative and in addition lots of effort to create a brilliant article.
” If you want to live in a democratic and fair society it’s a necessary reality. ”
Your logic here is beyond outlandish and naive, Alan.
If we want to live in a “fair” and “democratic” society, we need to forcibly take from the succesful?
It’s one thing to read the fine print, which is tricky enough. Elizabeth Warren who is trained as a lawyer in the area of law covering credit card regulations said that even she can’t understand the disclosure statements. But then credit card companies have been well known to change terms with no notice. So you think that medical payment being made on 5% intereset will cost x? Yes, until the compnay notices that you haven’t paid enough in late fees or interest to suite them so they bump the rate on that already paid item to 12% and/or lower your limit to push you into over limit fees.
Capitalism—A Propaganda Story
by Michael Shermer, Oct 13 2009
Amazing of a years worth of reading! To point out every ones view is different. Nobody is in total agreement, some have watched the “Movie” others have not. We will always be in an economic time (good or Bad) and it all depends on your situation in life as to how you interpret what system/s work best. Your situation leads to your input on “the situation”. Many situations have been discussed in this past blog over a year old! Outsiders and insiders have layed their thougts and beliefs here for others.
Im not a Darwin fan, I believe the strong will survive, I believe each of us has the majority of control over ones self (dependent on where you live). I beleive the majority can rule/govern honestly (weapons not allowed). I believe in protecting what is right, weapons allowed. With that, violence may not solve all issues, but bare in mind. Anyone who can show through out time the rise of a country not nation, that has done so much through out the world, please show your credits! For we should be indet to you! Other wise I stand with the founders of the Constitution of The United States.(cooks or not). Our time that this country has became and will always stay GREAT through out the history of the world was and will be made of people from this world! No nation under god/allah/almighty or any other faction will change what we do. It is our’s to get it right.
William said, way back in Aught Nine: “If I see you dying of thirst in the dessert”
Well then, you should have poured yourself a glass of milk to go with all those dry, dry cookies
Everyone quotes Darwin as saying “only the strongest will survive” to fight for their own ideal economic/political model, except what Darwin actually said was “it is not the strongest of the species that survives, nor the most intelligent. It is the one that is the most adaptable to change.”
In any system we have there will be certain kinds of people that will flourish and others who will fail (and possibly starve if that’s what the system allows). There will also be people who work out how to use the system to their advantage like some (and I stress SOME) people who sit back and collect unemployment because it’s easier than getting a job, yet under other systems they would starve.
People will adapt to their situations, which is why under other systems the ultra-rich of today (Warren Buffet, Bill Gates, etc) may not have been ultra-rich in money, but they would have probably found a way to be “rich” in whatever way different systems elevate certain members of society.
To refer back to William’s quote of “If I see you dying of thirst in the dessert”. This really is an oversimplification of the problem as I’m sure that 99.9% of people who came across this situation would give water.
I think the situation is more like what if you came across a person who ran out of petrol in the middle of nowhere? Would you give the person petrol out of your own tank knowing that you might run out of petrol before you reach the next petrol station? If you had a spare canister of petrol and were confident you could get there you’d probably give it over, but without one and without knowing how far away the next petrol station is, aren’t you potentially going to help the man get closer to civilisation only for you both to run out of petrol.
Would you be so prepared to take that risk if your whole family were in the car with you?