Directed by Russell Brand and Michael Winterbottom (2015)
Film Review
In a style reminiscent of Michael Moore, British comedian Russell Brand uses this 2015 documentary to expose the total insanity of our present global economic system.
The film begins with an examination of neoliberalism (aka free market fundamentalism), an economic system glorifying greed and selfishness that engulfed the world under Margaret Thatcher and Ronald Reagan. It would set off a 40-year wealth transfer, in which working people got poorer and poorer while the fortunes of the rich skyrocketed.
Corporate deregulation, one of the major tenets of neoliberalism, would lead to major criminal behavior on the part of bank officials, including rigged interest rates schemes, foreign exchange fraud, money laundering, and tax evasion. Unchecked, this crime spree inflicted crushing misery on billions in the 2008 global financial crash. Yet no banksters ever went to prison for it.
Instead, too-big-to-fail banks got taxpayer-funded bailouts that banks used to buy back shares (to increase their stock prices) and pay obscene CEO salaries. Unfortunately the film fails to make clear the essential role of private banks in money creation, the alleged reason why they can’t be allowed to fail. At present private banks create 97% of our money out of thin air when they issue loans.*
Instead of bailing out them, we should have allowed criminal banks to fail and restored authority for money creation to publicly accountable government bodies.
This is a five-part miniseries describing how European banks have hijacked the euro monetary union to vastly increase their wealth. The upcoming Brexit vote in Britain makes this a particularly relevant topic.
Part 1 A Bank Crisis a Week
The series begins by describing the history of the European monetary union. Built at the height of neoliberalism it adopted all the rhetoric of Ronald Reagan, Margaret Thatcher and Alan Greenspan promising that globalized capitalism and free markets would end economic crises, increase prosperity and end inequality.
What really happened is that creating the euro massively increased inequality between northern and southern Europe and between workers and the super rich.
In seeking to make European banks as strong and competitive as US and British banks, Eurozone leaders ceased regulating them. Wall Street is often blamed for the EU’s 2008 meltdown. In actuality, deregulated European banks were equally guilty of risky speculation in derivatives and subprime mortgages.
Following the 2008 economic crash, European banks required massive government bailouts to keep European economies from collapsing. Promised banking reforms to prevent a recurrence of 2008 never happened. And according to the IMF, the global banking system is even more unstable today as it was right before the meltdown.
Part 2 Austerity Till the Grave
The bailouts required to keep their banks (and economies) going virtually bankrupted all Eurozone governments. All borrowed deeply (from the global banking system they had just bailed out) to keep their governments going. As a condition of this borrowing, the banks required them to reduce their deficits via deep austerity cuts. To qualify for further loans, they all cut pensions and benefits and laid off public service workers.
This segment focuses on Spain, where workers are organizing to block evictions, and Greece, where unemployed parents are forced to drop their kids off at orphanages because they can’t get welfare benefits to support them.
Part 3 Tax Haven Europe
This segment begins by profiling the Greek shipping magnates who run the largest merchant fleet in the world and pay virtually no tax. Corporations and the super rich pay far less tax than working people in all the EU countries. This massive tax avoidance forces all European governments to acquire major debt to keep from collapsing.
The documentary offers the example of Belgium, where the average tax rate is 12.5% and the most profitable corporations pay only 5% of their earnings in tax.
The filmmakers maintain that workers create wealth, though I doubt most neoliberals would see it that way. In 1981 Europe, 74% of the wealth workers created was returned to them as wages and government benefits. By 2012 only 49% of this wealth was returned to them and the super rich claimed the rest.
Part 4 Bratwurst, Lederhosen and Minijobs.
This was the most eye-open segment for me. It exposes the punitive conditions imposed on German workers from 2000 with the goal of making German export industries more competitive. Under former chancellor Gerhart Schroeder, massive wage reductions were imposed on all German workers – something IMF chief Christine LaGarde likes to call “labor market reform.”
Among other labor “reforms,” were a massive increase in “minijobs” – low wage part-time temporary positions that pay an average of 400 ($US 448) euros a month. Given Germany’s high cost of living, both parents need to work 2-3 “minijobs” (if they can find them) to cover a family’s basic needs.
The result was truckloads of cheap German imports flooding into southern EU countries (Greece, Spain, Portugal and Italy), shutting down local industries that couldn’t compete.
In this way, Germany’s vicious attack on their own workers forced wages down in other EU countries. This, in turn, forced countries like Greece and Spain to borrow lots of money from German banks to keep their governments going.
Ironically Germany currently has the highest number of working poor (7 million) of all EU countries.
Part 5 What Kind of Europe Do We Want?
It’s vital for people to understand that the mantra EU governments repeat ad nauseum – that saving the euro is essential to strengthening the EU and restoring prosperity – is pure propaganda. Seven years of austerity is massively increasing deficits and debt by putting so many people out of work.
The truth is that the Eurozone has been hijacked by banks and multinational corporations who are determined to use trade agreements to lock member countries into austerity and statutory destruction of Europe’s proud tradition of democratic socialism.
The only solution is a public takeover of too-big-to fail banks. Continuing to bail them out, while allowing them to privatize all the profits, is simply legalized theft of public monies. And a yes vote on Brexit.
Unstoppable: The Emerging Left-Right Alliance to Dismantle the Corporate State.
Ralph Nader (2014)
Book Review
A long time consumer advocate, Nader has spent most of his career battling the corporate takeover of government and US society. Although most analysts place him to the left of the Democratic Party, he frequently allies himself with libertarians and populist conservatives in specific campaigns. He now maintains the only way to restore accountable Constitutional government is by forming what he calls right-left convergences.
Traditional Labels Meaningless
Nader begins by defining “right” and “left,” as both have ceased to have any real meaning. He devotes an entire chapter to dispelling the common myths people from opposite ends of the political spectrum have about each other. He begins by discussing the philosophical architects responsible for the basic principles that underpin conservatism and libertarianism, with special emphasis on Adam Smith, Ludvig Van Mises, Frank Meyer, Russell Kirk and Peter Viereck. He goes on to trace links between contemporary conservatism and the 19th century populist movement in which farmers fought big banks and big railroads. This movement, commonly referred to as the “populist” or “decentralist” movement, would eventually evolve into Goldwater and Reagan conservatism. Nader maintains that many contemporary Republicans who call themselves “conservative” are really corporatists or corporate statists – working primarily for the benefit of the corporations who put them into office.
The US Left represents too many different tendencies – liberals, progressives, socialist, anarchists – to agree on a single overarching political philosophy.
Although Nader doesn’t mention it, many prominent figures identified with the so-called Non-Communist Left have been discredited by accepting major funding from CIA pass-through foundations.1
Issues Ripe for Collaboration and Potential Obstacles
Nader identifies 25 potential issues that are ripe for collaboration between existing left and right-leaning movements (see below).2
He feels the biggest potential obstacle to potential is the knee-jerk ideological reaction of major party activists. It’s often hard to move Democratic Party loyalists past the tired knee-jerk reaction that conservatives are too narrow-minded, dogmatic and self-interested to be worthwhile coalition partners. Meanwhile many conservatives have the mistaken belief that all leftists are covert socialists who are only interested in big government, more welfare spending, more business regulation, more debt and and higher taxes.
Nader bemoans the tendency of ideologues from both ends of the political spectrum to get so focused in dogma and abstractions that they can’t lose sight of the constitutional crisis in front of them.
This is partly why left-right convergences tend to me more effective at the local level, where people are already shoulder-to-shoulder confronting the practicalities they face everyday. This is certainly consistent with what Susan Clark and Woden Teachout describe in Slow Democracy, their book on local direct democracy. It also reflects the the experience of the Community Environmental Legal Defense Fund (CELDF), which unites activists across the political spectrum in outlawing fracking, toxic sludge, factory farms and water bottling plants.
Examples of Successful Left-Right Collaboration
Unstoppable goes on to provide numerous examples of high profile right-left alignments in Congress (see below). 3
The main value of the book, in my view, is to remind us of the political power of strange bedfellow alliances and to discourage knee-jerk reactions to collaborating with people of different ideological persuasions. Since Unstoppable went to print, a left-right congressional convergence prevented Obama from going to war against Syria, and left-right convergences in Washington and Oregon passed ballot initiatives legalizing marijuana.
1Frances Stonor Saunders discusses this at length in her 1999 book Who Paid the Piper? The CIA and the Cultural Cold War.
2Personally, I think Nader’s list is too long. I myself would prioritize 6, 12, 14 and 22, as I already see evidence of left-right collaboration on these specific issues:
Requiring annual auditing of the defense budget and that ALL government budgets (including the CIA and NSA) be disclosed.
Ending corporate welfare and bailouts.
Promoting efficiency in government contracting and government spending.
Adjusting the minimum wage to inflation.
Introducing specific tax reform as well as pushing to regain uncollected taxes.
Breaking up the “Too Big to Fail” banks.
Expanding contributions to charity, using these funds to increase jobs and draw on available “dead money” (i.e. recycle wealth from millionaires and billionaires).
Legislating to allow taxpayers the standing to sue all government and “immune” corporations.
Expanding direct democracy by introducing ballot initiatives in the states that don’t have them and simplifying recall processes.
Pushing community self-reliance.
Clearing away obstacles to a competitive electoral process.
Restoring civil liberties.
Enhance civic skills and experience for students.
Ending unconstitutional wars and enforcing Article 1, Section 8 of the Constitution, which gives Congress the exclusive authority to declare war.
Revising trade agreements to protect US sovereignty and ending fast track approval for treaties.
Protecting children from commericialism and the physical and mental harm it causes.
Ending corporate personhood.
Controlling more of the commons than we already own.
Getting tough on corporate crime.
Ramping up investor power by strengthening investor-protection laws.
Opposing the patenting of life forms.
Ending the ineffective war on drugs.
Pushing for environmentalism.
Reforming health care.
Creating convergent institutions.
3 Among many others:
• The left-right coalition that stopped the Clinch River Breeder Reactor in 1983
• The left-right coalition that passed the False Claims Amendment Act in 1986 to protect whistleblowers who uncovered fraud in government contracts. The passage of the McCain (R)–Feingold (D) Act to reform campaign financing in 2003.
• The left-right coalition Ron Paul formed with sympathetic Democrats to introduce a bill to legalize industrial hemp in 2005.
• The bill Ron Wyden (D) and Rand Paul (R) introduced to legalize industrial hemp in 2013.
• The bill Ron Wyden (D) and Lisa Murkowski introducing requiring the reporting of donations over $1,000 to any group engaged in federal political activity.
(This is the fifth in a series of posts about stripping private banks of their power to issue money)
Modernising Money: Why Our Monetary System is Broken and How It Can Be Fixed
by Andrew Jackson and Ben Dyson (Positive Money 2012)
Book Review
Modernizing Money lays out a model for restoring government control of the money supply that’s very similar to the Chicago Plan. However it differs from the Chicago Plan in several important ways. Unlike the Chicago Plan, this second model isn’t obsessed with sovereign debt repayment. This, in my view is the most significant difference. Given the IMF’s singular focus on servicing debt, their heavy emphasis on debt repayment isn’t terribly surprising.
In allowing publicly accountable government bodies to assume responsibility for issuing money, both models ensure decisions around money creation are based on the needs of a productive economy, rather than the profit profile of private banks.
Thus both go a long way towards ending bubbles and boom and bust cycles, as well as reducing debt and minimizing inflation and deflation. The 2008 economic downturn was triggered by sudden deflation, i.e. the permanent loss of 60-200 trillion dollars from the global economy.*
Because income inequality increases in direct proportion to debt levels, nationalizing the money supply will also reduce income inequality.
A Radical Change in the Function of Banks
The function of banks changes radically under both proposals. In both cases, private would function purely as money brokers, like credit unions and savings and loan associations. They would only be permitted to loan money from existing assets, from customers’ investment accounts or from reserves borrowed from the central bank. Under both plans, there would be no bank bailouts or bank depositor insurance. When private banks cease to serve the essential function of creating and maintaining the money supply, they will cease to be “too big to fail.” Those that continue to make risky speculative investments will be allowed to go bankrupt.
How the Two Proposals Differ
The proposal Positive Money puts forward in Modernising Money is based on the British economic system, whereas the Chicago Plan is based on the US system. Thus the transition would be somewhat easier in the UK, where the central bank (the Bank of England) has been government-owned since 1946. In contrast the US the central bank (the Federal Reserve) is a consortium of privately owned banks.
Unlike the Chicago Plan, the Positive Money model would use newly created sovereign money for other purposes that paying down existing debt. Under the Chicago Plan, using the new debt-free money to repay sovereign debt (aka national debt or public debt) would be one of the first steps in the transition. The Chicago Plan would also use the new money to issue a citizens dividend that businesses and households would use to pay off private debt.
The Positive Money proposal would simply transfer all existing public and private debt (i.e. mortgage and consumer debt) to the Bank of England balance sheet. Businesses and households would continue to make loan repayments to the Bank of England according to the terms agreed with their bank. This new revenue accruing to the BOE would be spent into the economy in one of five ways. At the discretion of the British government, it could be used to increase public spending, cut taxes or repay government debt. It could also be used to issue a citizens’ dividend (which households and businesses would be required to use for repayment of existing debts) or new loans to businesses.
Ensuring Adequate Credit for the Business Sector
Positive Money is also more explicit about how they would ensure there is adequate credit in the economy to make sure new businesses have adequate access to loans for productive business investment. They would use a variety of qualitative and quantitative methods, including the existing Credit Conditions Survey. They would then auction off a specified amount of new credit to private banks. This new credit could only be used for business loans and not mortgages or consumer credit.
*Both proposals also make the claim that nationalizing the creation of money would also end real estate speculation and bubbles by restricting the funds available for mortgage loans. However given that both proposals spend new money into the economy, there’s still a good chance this could be used for real estate speculation. In my view, the only way to prevent this would be to implement a Land Value Tax simultaneously with the transition to government-issued money.
The Most Revolutionary Act 