Thoughts on Heist: Who Stole the American Dream?

I decided to head to The Little (240 East Ave.) to see Heist: Who Stole the American Dream? Filmmaker Frances Causey, and author David Cay Johnston were there to discuss the film with moderator Julie Philipp.

Of course, because I can't remember facts, I'm heading to Heist's Official Website with this outline of the central point:

Beginning with background on the New Deal, HEIST explores how Franklin Delano Roosevelt's progressive policies were derailed by Ronald Reagan and subsequent presidential administrations, benefiting only the wealthiest investors and CEOs. HEIST exposes the full story: how corporate leaders worked with elected officials of both major political parties to create the largest transfer of wealth in history, looting the economy to create a gap between rich and poor previously seen only in impoverished colonial nations. The film is structured as a political thriller, showing the shift from FDR's New Deal reforms to an ideology where the free market reigns. It reveals the impact of the infamous Powell memo of 1971 entitled "Attack on American Free Enterprise System," which was a call to the U.S. Chamber of Commerce for American business to defend its interests against criticisms of unregulated capitalism. The Powell Memo and the 1000 page Mandate for Leadership document published in 1980 by the conservative Heritage Foundation, which were written to promote business interests and deregulation, serve as the starting points of the story to show the roots of the class warfare unleashed by big business, and how wealth in the U.S. was transferred from workers to corporate interests over decades of policy shifts.

I walked in there brimming with confirmation bias. The facts presented in the film and the theories behind them fit exactly with my own experience and observation of corporate expansion of scale and power, the behavior of the media, the exploitation of journalistic standards, government, and taxation — pretty much everything.

The other day I was in a restaurant with a TV on some news network, and the on-screen personality was presenting — as news — changes to the contract plans of one of the cell phone companies. To me, this was just the flat-out reading of a press-release generated by that company. I argue this isn't news (but I think I'm more likely to get people to agree that it's the reading of a press release so I'll stop while I'm ahead). This doesn't violate journalistic standards per se — where the goal is to accurately represent statements from an individual or organization. But there's something there that misses the spirit of journalism … perhaps the spirit that journalists are the watchdogs of democracy rather than the lapdogs of the aristocracy [a phrasing that is not exactly right, but far too clever for me to omit].

Heist, however, confirms my suspicions. One of the goals of the 1971 Powell memo was to control the media in exactly this way. Modern journalists don't just go out and pick their own stories: morning e-mails outline the stories they are to cover. Those e-mails are sent by the managers which are driven by their managers, and so on, until you get to realize that there are only a half-dozen media companies making these decisions. A few years ago, I recall watching the nightly news and flipping between channels — horrified that every single story was being reported on the other stations in exactly the same order. The simplest explanation was that the schedule for all three stations came from the same source.

I thought Heist presented a solid case, but it's also affirming what I believe already, so how can I be confident that the theory it presents is an accurate one? I was thinking that people bring their own biases, and they're more likely to be swayed by something that agrees with their established ideas than by something that does not. So why would someone be influenced by this film? I muddled my way through asking a question of the panel and got most of it across.

Frances Causey made a point to say that she had been a journalist at CNN, but left to work on more in-depth projects like this one. She said she spent an extraordinary amount of effort confirming that every fact — especially the most sensational ones — were verifiable and accurate.

What's omitted in all the discussion, though, is the underlying theory. I'm going to take as given that the facts are true, and the sequence of events is as depicted (i.e. corporations are using the 1971 Powell memo as a playbook). But Heist answers the question, "is this good?" with a resounding "no." In fact, it basically presumes that this is not good.

Individually, I think this kind of world sucks. I hate having to constantly be an outsider simply because I observe the world directly and draw my own conclusions.

Working outward, I also think that centralized power and wealth creates an inhospitable society for people to live. I think the core argument opposing that opinion is that the system we have at present provides slightly less than what people want, and that encourages them to work more and work harder, propelling progress. It doesn't actually let people starve (for the most part) but it does ensure people are in a constant state of indebtedness.

What I mean that it's inhospitable is that it could be much better. If all the wealth and power tied up in making more wealth and power were instead used to foster individual household energy independence, health care for all, true theoretical scientific research, elevating everyone's education, and so forth, I think we'd be far better off.

There is a fear — and rightfully so — that this may lead to a bunch of idle hands that become the devil's playthings, but it's entirely possible to get back to some of the good parts of the 1950's: particularly the possibility of income from a 25th percentile individual providing all that's needed to raise a family. Is it not absurd that two college graduates must both be employed to earn a decent living?

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David Cay Johnston Cheerfully Explains the Credit Crisis

I happened to hit a good break point at work and had just enough time to get to the Tuesday Topics discussion in The Kate Gleason Auditorium at The Rochester Public Library (115 South Ave.) David Cay Johnston was on hand to explain The Credit Crisis: Your Wallet and Wall Street in that cheerfully confident way that only David Cay Johnston can.

He started off talking about Reaganomics and where it is some 28 years after the start. The original plan had three goals: reduce taxes, balance the budget, and deregulate industry, so he outlined a measure of past performance. Taxes have dropped for the tiny sliver of extremely rich people but not for the rest of us. The budget is profoundly not balanced. But at the core of the overall failure is that the concept of deregulation is fundamentally a myth.

His analogy to the situation is that of driving: most people on the road are generally pretty good drivers. So, to aid them in driving better, we should eliminate those expensive road signs and traffic signals. After all, most drivers are responsible, so why should we impede their progress with unnecessary regulation? Clearly the exercise leads to worse conditions. But if you take a closer look, even the act of licensing drivers is an act of regulation.

In other words, the concept of deregulation was actually one of reducing regulation, and reducing the amount of regulation opened the door for conditions for which the regulations were designed to circumvent. By operating within the confines of a system of rules, responsible action was one of following those rules.

Johnston's point was that in "deregulating", we have separated risk from responsibility. And by allowing people to make irresponsible decisions, we ended up in the mess we're in now.

Anyway, in this bail-out, the estimated value of all the sub-prime mortgages were worth about US$500B and their actual value was more like US$300B if you consider the real value of the real estate, but the government is spending 8.5 trillion dollars on the bailout — nearly 30 times more than their value … in other words, a terribly bad investment. The excess money is being used to pay for companies who owe money to Goldman Sachs — curiously enough, one of the central figures of the entire bailout.

I suspect I'm doing a very poor job explaining it. The thing I noted was that he seemed rather calm about the whole thing, whether he was talking about the bailout amount being about the same as 8 years of every American's income tax collection, or the possibility of a decade of 10% inflation. It was that kind of deep understanding that makes you know that you really don't know, and no matter what happens, you get by.

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