Moore’s documentary includes some of his usual high jinks and practical jokes, but his assessment of capitalism, or rather capitalism in its most extreme neo-liberal form, is overall more sober than his previous releases.The film comes up with a few shockers, including a segment on the corporate practice of taking life insurance policies on unwitting employees. Normally, when you sign up for life insurance, the insurer can be reasonably certain that you hope not make use of it for some time. Not so when the one contracting the policy employs you: You may be more valuable to your company dead than alive. Citibank, Wal-Mart, Nestle, Bank of America and other giants were among companies cited in the film as frequently resorting to what is known in the trade as “dead peasants” policies.
Moore also uncovers two memos written in 2005 and 2006 by the top team of equity analysts at Citigroup, which describe a world divided between plutonomies and the rest. After watching the film, I could not resist and searched the Internet to read these gems in their entirety. They made entertaining, if scary, reading.
In the authors’ view, the US, “where the top 1 percent of households account for 40.5 percent of financial net worth, more than the bottom 95 percent of households put together,” Canada and the UK can be described as plutonomies. More egalitarian countries in Scandinavia and continental Europe, where the share controlled by the wealthy has remained constant and income discrepancies are narrower, do not make the grade.
The glib analysts brush aside concerns about global imbalances and lack of saving, arguing that analysis based on ordinary consumers and the non-rich “multitudinous many” is flawed from the start since the high-spending few hold enough of the cards and money to control the system and keep it afloat. Among possible risks, they list the “one person, one vote” system -- otherwise known as democracy -- still applied in most plutonomies, which they acknowledge could eventually lead to a labor backlash.
While the authors clearly underestimated the threats to the global financial system, their assessment that the rich will continue to get richer may not be that wide off the mark. Increasingly, there is a feeling in the US that the crisis has provided an opportunity for what the memo describes as “the new managerial aristocracy” to get a bigger share of the corporate pie, using taxpayer money to further their growth.
Ordinary people in the US, and indeed in other economies that have been affected by the recession, experience a growing sense of disconnect between gross domestic product (GDP) figures that suggest a return to economic expansion, and the continuing impact of last year’s meltdown on their daily lives.
The 10.2 percent unemployment figure announced last week in the US, still well below that of Turkey, does not take into account the many people who have already dropped out of the market altogether. Although President Barack Obama recently extended benefits, joblessness often plunges highly indebted Americans into a dark financial hole. A friend of mine the other day received a letter from her bank blithely announcing that the 14.9 percent interest rate on her credit card would be increased to 29.9 percent. And yes, it is legal for the bank to do so, at least for the time being.
In the past couple of weeks, I’ve had the chance to hear experts debate the economic situation. Around the dinner table, Nobel laureate Joseph Stiglitz, who will soon release a new book entitled “Freefall: America, Free Markets and the Sinking of the World Economy,” and his economist friends do not share optimistic talk of recovery. Rather they worry that unemployment is likely to last for years and unless drastic action is taken to tackle “too-big-to-fail” banks and the casino mentality that still prevails on Wall Street, the risk of further turmoil cannot be discounted.
