A riveting morality tale of corporate greed, sociopathy and Social Darwinism in “Enron: The Smartest Guys in the Room”

Alex Gibney, “Enron: The Smartest Guys in the Room” (2005)

A bit gimmicky in parts, especially in its transitions, but overall this documentary on the biggest corporate bankruptcy in pre-2008 US financial history is a riveting morality tale on the astonishing rise of energy corporation Enron and its equally astounding fall. Even with its chronological structure, the film exudes drama and an unreal and rather inhuman energy behind the company’s rollercoaster rise to fame and infamy. I can’t help but think that the company’s founders, executives and traders not only couldn’t believe their luck but also kept on pushing it to see how far they could go without being caught, knowing all the while that the more they pushed, the more likely they would be arrested, the more likely the company would fall – and fall hard. I also wonder if, had I been in their situation, whether I also would have pushed my luck and gambled hard, just as they did, if the money was continually flooding in my direction as a result of my misdeeds.

Enron begins drily enough with its founder Kenneth Lay, the Missouri-bred son of a Baptist preacher man, imbibing the ideology of free markets and deregulation, establishing Enron as an energy company in the early heady days of US President Ronald Reagan’s first term during which he set the ball rolling by sacking striking air traffic controllers campaigning for better wages and working conditions. Lay soon finds willing people to work for him and with him – firstly, two crooked traders engaged in risky trading and profit skimming who brought millions to the company, then later Jeff Skilling, Andy Fastow, Lou Pai among others – and with insider trading, the creation of dummy companies to hide debts, the declaration of profits that haven’t yet been earned and various creative accounting schemes, Enron grows very quickly indeed. Such quick growth though comes with expectations both within and without to do better and bigger, and the corruption begins to infiltrate right through the company culture. Skilling himself institutes a cut-throat culture in which employees are forced to compete among themselves in ever more predatory and pitiless behaviours if only to save their own hides from the sack.

Narrator Peter Coyote provides enough background and framework for the interviewees to tell their sides of the tale. Included among the interviewees is Fortune reporter Bethany McLean, co-author of the book “The Smartest Guys in the Room” on which the film is partly based; she and Enron whistle-blower Sherron Watkins emerge as the heroes of the film. A trader appears repentant as he recounts his involvement in the energy market manipulations that took advantage of California’s deregulation of its electricity and led to the rolling electricity blackouts that resulted in billions of dollars’ worth of real damage to that state’s economy and in various wildfires in parts.

One would think that the rollercoaster ride that was Enron’s history would be enough for this documentary but Gibney resorts to some cheap tricks to pad it out – fortunately the tale itself is compulsive enough that such glitches can be forgiven. The main deficiency of the film is to concentrate mostly on the central figures of Lay, Skilling, Fastow and their fellow rogues; while there is mention of other firms that helped Enron in its criminality (auditor Arthur Andersen being one guilty party that ended up being destroyed by Enron’s downfall), the film fails to address the central problem behind all the corporate shenanigans, this being the corporate capitalist system, the assumptions and values it relies on, the thinking, the behaviours and the particular cultures it generates as a result, and – most of all – the overall political culture, represented by the Bush family (members of which were close buddies of Kenneth lay) and itself shot through with layers of corporate corruption, that encouraged it. Instead there is a bizarre detour into a shallow investigation of Stanley Milgram’s famous Yale University experiments on authority and compliance, with the insinuation that ordinary people – the traders, the middle-level management – in the company are as much to blame as the Enron executives. There is nothing about how the Social Darwinist culture deliberately imported into Enron by Skilling might have created fear among most employees and stoked psychopathic behaviour in others.

What’s even more breath-taking than the corporate crimes is the actions of Lay, Skilling and some other senior Enron executives as they see their version of the Titanic sailing into the iceberg of ruin: they quickly decamp as fast as they can, taking millions in profits and golden handshakes, while investors and employees alike see their money disappear faster than you can say abracadabra.

Before the tying of loose ends and the rolling end credits, the film concludes with a warning from Watkins that what happened at Enron will happen again. It is a timely warning but unfortunately a warning that those who most need to hear it have ignored (as the Bernie Madoff pyramid scheme debacle and the 2008 collapse of Lehmann Brothers demonstrated) and will ignore again.

Getting a handle on Modern Monetary Theory (or trying to) on “Warren Mosler: What Modern Monetary Theory tells Us about Economic Policy”

“Warren Mosler: What Modern Monetary Theory tells Us about Economic Policy” (Institute for New Economic Thinking, July 2013)

This interview focussing on Warren Mosler’s explanation of Modern Monetary Theory was the first in a series of video interviews made by the Institute for New Economic Thinking in 2013. Mosler is the president of a financial services firm, Valance Company, and is one of the founders of Modern Monetary Theory which challenges conventional beliefs about how money operates in modern economies and offers explanations and solutions to addressing and solving current problems and crises in Western economies. The theory has attracted quite a bit of attention in recent years to the extent that it and Mosler were the subject of a New York Times article in 2013 which portrayed him as an enthusiast for government deficit spending.

Anyone wanting to know what Modern Monetary Theory is all about and whether it is a credible alternative to neoliberal economics or just a rehashed version of Keynesian economics or social credit theory won’t find very much in this video that explains what it is in a nutshell. The interview takes the form of a conversation that ranges over a number of topics such as the Global Financial Crisis of 2008 and how various countries were affected and their response to it. Particular financial and accounting issues are discussed but the basic thrust of MMT – what it believes a healthy functioning economy should look like, what philosophical assumptions underpin its ideas, and what the roles of governments, corporations, individuals, households and other stake-holders are or should be in an economy governed by MMT – is not explained. People outside the US not familiar with the particular problems of the US economy will be confused. Mosler speaks quite softly and quickly so much of what he says can go over listeners’ heads.

Mosler notes that most current crises in modern economies have arisen due to mistaken ideas about how money circulates and economies operate, and to existing economic paradigms that circumscribe economic thinking and shut off options and solutions to those making economic policy. (Of course there is also the fact that governments are beholden to those who fund their election campaigns and who demand that governments follow particular economic belief systems and ideologies that benefit them, and not the Great Unwashed who participate as voters.) Mosler states that governments that issue currency are actually always financially solvent: a revelation that will surprise most people. Government spending stimulates money creation and circulation, leading to job creation; the goal being to generate full employment. The function of taxation – incidentally Mosler advocates abolishing income tax and replacing it with a real estate tax (a land tax maybe?) – is to ensure people use the currency, to regulate demand and control inflation, and to help stimulate even more government spending if needed, rather than to force ordinary working people to forgo spending so that they can have the public services they need. According to Mosler, governments should spend as much as they want and budgetary controls are not needed. (The fact that in the US, the Department of Defense’s spending runs into the billions and billions with no apparent controls and very few knowing where much of that money goes suggests that budgeting and controlling expenditure are very abstract notions indeed.)

I’m sure if the interview had been a bit more structured and less conversational, it would flow more awkwardly and unnaturally but at least most viewers would get a handle on the basic ideas of MMT and how it is similar to Keynesian economics and other alternative theories on the function of money in societies and how to run economies. Those interested in how MMT works are directed to the Wikipedia article on the subject.

There have been criticisms hurled at the theory from economists but these criticisms seem to stem mostly from the critics’ own biases against MMT and concentrate on details of MMT rather than on its fundamental beliefs and ideas.

5 Biggest No Campaign Economics Scare Stories Debunked: cherry-picking easy targets to attack so as to look good

Gordon MacIntyre-Kemp / Business For Scotland, “5 Biggest No Campaign Economics Scare Stories Debunked” (September 2014)

At this time of writing, there remain just a few days to go until Scotland has its independence referendum and already the pro-independence and the anti-independence camps have escalated their war of words across the UK media to a shrill intensity. To counter some of the fear tactics and scare stories concerning how an independent Scotland will cope and thrive economically, Business For Scotland’s Chief Executive Gordon MacIntyre-Kemp has come out with guns blazing in a series of short videos, all of which can be viewed on Youtube, to explain how Scotland can pay its own way and fulfill its independence dreams. He concentrates on five scare stories that the No Campaign has been drumming up and which various Business For Scotland speakers and campaigners have had to confront the most in meetings and interviews, and demolishes the objections the No Campaign has raised. All the videos in which MacIntyre-Kemp takes apart the scare stories are very brief, running for less than three minutes each. They can be viewed at this Business For Scotland link.

In Video 1, MacIntyre-Kemp addresses the issue of bank bail-outs and points out that the two major banks in Scotland, the Royal Bank of Scotland and HBOS, were bailed out in the cities where they are headquartered or registered; that is, in the City of London and New York City. He ends his talk by suggesting that banks headquartered in Scotland should be nationalised and regulated so that they are not allowed to rack up huge debts and require massive multi-billion pound bail-outs.

Video 2 deals with the issue of who subsidises Scotland: MacIntyre-Kemp turns that assumption on its head by pointing out that Scotland contributes more in tax revenues to Westminister than it receives back. In Video 3, he tackles the issue of how Scotland will be able to prop up public services like pensions and asserts that Scotland will lock in increases  to pensions which will be based on increases in average weekly earnings. He argues that a revitalised economy will be able to arrest a brain drain of young qualified professionals away from Scotland and at the same time attract skilled immigrants and together these groups will provide a substantial tax base that will support pension payments to the elderly and the needy.

Currency is the focus of Video 4 as for the time being Scotland expects to continue using pound sterling after independence. MacIntyre-Kemp suggests the confusion over the issue of currency has been stirred up deliberately by Westminster to persuade people to vote No. Should Scotland opt for independence, the most likely scenario will be that the Bank of England will support currency union between Scotland and the rest of the UK to help stabilise the economies of the two states. In the final video, MacIntyre-Kemp explains how Scotland will be able to pay its way as an independent country, pointing out that among other things it will not need a large defence force and will commit itself to creating a society with sustainability as a core value. He rounds off his series of videos by declaring that the issue of Scottish independence isn’t about the economics but about seizing a once-in-a-lifetime opportunity to strike out and create a fairer and more just society that could serve as an example for others including the rest of Britain to follow.

The videos are easy on the eye – they just feature MacIntyre-Kemp against a white background over which figures and facts float temporarily to illustrate what he says.

I admit to surprise that in all of these videos MacIntyre-Kemp doesn’t mention the issue of North Sea oil and how much oil really is within Scotland’s maritime territories to its north. This is significant if Scotland plans not only to adopt Scandinavian-influenced social welfare policies which in themselves would cost a fair few cool hundred billion pounds a year but also to invest in renewable energies and eventually wean itself off fossil fuels. Even if there were enough oil to last Scotland several decades (let alone some of the more optimistic claims that the oil could last a century!), there is the problem of how Scotland will finance exploration and drilling for the oil and how it will be able to control revenues and direct the bulk of them into a sovereign wealth fund and away from unproductive financial transactions such as property speculation (which drives up real estate prices in cities and towns), various debt bubbles and ingenious but ultimately harmful financial engineering schemes that make money disappear into tax haven black holes or unscrupulous scamsters’ bank accounts. Even before all this, there’s the problem as to whether Scotland will be able to claim the oil resources in its waters on behalf of its people before the US or UK pressures the country’s government through under-handed tactics: in this context, for Scotland to assume that currency union will ensure stable economies on both sides of Hadrian’s Wall might be naive in the least.

Another big problem is that an independent Scotland cannot rely completely on oil resources whose market prices can vary from one year to the next depending on what other oil exporters are able to sell and the levels of global demand for oil. The country could rely on providing financial services and inviting foreign companies to establish factories (Scottish manufacturing having declined over the last half-century or so under Westminister rule) but at a cost of offering subsidies, tax relief and other incentives (like low wages, importing Third World labour and waiving or ignoring OHS regulations) to compete against the rest of Britain and Ireland. This could well pull funding away from building up a social welfare net for citizens, a sovereign wealth fund and renewable energy projects and into the coffers of foreign firms.

There is a very real possibility also that the EU will not accept Scotland as a member unless and until its government imposes an austerity package on its citizens and conforms to other EU, World Bank and IMF requirements. Even if Scotland were to agree to undergo austerity, forgo developing a social welfare net and to restructure its institutions according to EU, World Bank and IMF guidelines, full EU membership cannot be guaranteed.

The assumption that small European countries are wealthier than larger European countries is lazy: Greece, Ireland and Portugal are being squeezed by their crippling debt and austerity programs, and several EU member states in eastern Europe (Hungary, Latvia, Lithuania, Slovakia, Slovenia) are not exactly thriving either. About 1 in 5 people in Lithuania are living at near-poverty levels or below and similar proportions of the populations in Estonia and Latvia are also living close to near-poverty levels. Latvia is said to be losing 30,000 people a year as young adults are voting with their feet in search of employment. As for the wealthy small European countries, Luxembourg derives a considerable part of its wealth from being a tax haven as does Switzerland: hardly worthy examples for Scotland to follow.

Even so, in spite of what I have just said, I do realise the September 2014 referendum is a unique opportunity for Scotland’s citizens to decide on the future direction of their country. It will be a momentous event, one that may have flow-on consequences for what remains of the United Kingdom: it may well start conversations within England, Wales and Northern Ireland themselves as to their futures and devolving more power to the public away from their elites. As Gordon MacIntyre-Kemp says at the end of Video 5, independence isn’t just about economics, it’s about starting anew with a new set of values that stress fairness, justice, equality and sustainability.

Detroit Water Crisis – A Prelude to the Privatization of Water: activism with passion, creativity and a positive attitude

Dutch Merrick, “Detroit Water Crisis: A Prelude to the Privatization of Water” (Acronym TV, 21 August 2014)

For a major part of the 20th century, the city of Detroit was one of the richest if not the richest city in the United States thanks to its being the epicentre of US automobile manufacturing . The city was a major focus for labour union activity as a result of the dominance of car manufacturing; the famous labour union leader Jimmy Hoffa was a native of Detroit. The city was a magnet for immigrants attracted by the work in car-making factories which paid well and offered great working conditions, and in time a distinctive culture of art and music arose: Motown Records was based in Detroit, the city produced many famous musicians, singers and song-writers, and techno, originally a fusion of electronic-based music, disco and African-American forms of pop music, originated in Detroit.

Since 1970, and maybe even well before then, Detroit has seen a long decline in its fortunes as the US auto industry has had to yield to competing manufacturers in Europe and Asia, and the economy of the US and in particular of the US Midwest has declined. At the same time, successive US governments have succumbed to the lure of monetarist / neoliberal economic policies which over time have gutted social and economic infrastructures across America and driven the slow death of the US middle class. As a primarily car-making town, Detroit has borne the brunt of deindustrialisation and the result is that in recent years the city has shrunk alarmingly with the consequence that its taxpayer base has also dwindled, families have been forced out of their homes by bank foreclosures in the wake of the subprime mortgage bubble bust, and neighbourhoods have become ghost towns. The city government has now commenced cutting off necessarily utilities in many suburbs and one of these is water.

The Acronym TV program focuses in the main on Dennis Trainor Jr’s interview with Atpeace Makita, an activist volunteer working with the Detroit Water Brigade alerting people to the city’s decision to cut off water supplies to areas where poor people live. Makita herself has had her water supply stopped as a result of being unable to pay her water bills (she is a single parent of five children) and faces a very real possibility of losing her children to foster care.

In the interview, after a brief video by Detroit Water Brigade is shown, Makita details what can happen to families whose water is cut off as a result of falling delinquent on their water bills. Articulate and passionate about the cause she is fighting for, Makita talks about the problems households face when they have no water and the mental stress that lack of access brings. Families also suffer discrimination and censure from other people for apparently bringing water shut-offs on themselves because they could not pay the water bills. She goes on to emphasise how access to water is a basic human right due to the nature of our biology (our bodies are 70% water) and how she counters opinions that if people don’t pay their water bills, they deserve to have their water cut off.

Makita talks about her work as a volunteer Creative Director with Detroit Water Brigade and what the organisation is doing to create public awareness of water access issues. The culture of the organisation is important in generating and maintaining a positive, vibrant attitude in a struggle that faces enormous obstacles and opposition from government and corporations. To that end, Makita discusses the way in which DWB encourages an inclusive, warm approach in recruiting activists and conducting its activities which include arts campaigns and other creative events. The message within DWB’s drive is to change people’s attitudes about how their society currently functions and how it could function, and to instill a positive, energetic outlook that inspires people to respect one another, look out and care for one another, and to create a new society based on compassion and an awareness that everyone and everything is connected.

The interview is very wide-ranging and Makita comes across as a very dynamic and fast-talking (maybe a little too fast-talking!) advocate for social justice. Interviewer Trainor is sympathetic towards Makita which in a way isn’t good in that he does not ask her very challenging questions about how DWB confronts the powers that took away people’s access to water in the first place. How does DWB deal with government and corporations, how does it help people who stand to lose their homes or even be charged with and convicted of child neglect because they have had their water cut off, what would happen if DWB activists were persecuted or jailed for their campaigning: these are some issues that Trainor might have raised. Educating people to see that access to water and other basics of life should not be dependent on their ability to pay (and attacking the neoliberal ideology that underpins such an attitude) but instead should be free or provided by communities or collective institutions is another hurdle.

After the interview ends, I come away with the belief that if Makita is representative of mainstream America, Detroit may again lead the rest of the country in a very different direction, one not based on particular technology and the culture that grew up around it but a direction based on authentic human values of care for one’s fellow humans and other creatures, and a new culture resulting from that.

The interview can be viewed at this Youtube link.

Economic Case for an Independent Scotland: a not entirely convincing case made for going alone

Ivan McKee / Business for Scotland,Economic Case for an Independent Scotland (Part 2)” (The Glad Cafe, Shawlands, Glasgow, 26th Nov 2013)

In the run-up to the September 2014 independence referendum, Scottish Independence Live Events has organised a number of talks, presentations and other live events to present the case for an independent Scotland. Some of these events have been co-ordinated with Business for Scotland and Ivan McKee of that latter organisation has been giving a series of talks on why and how Scotland can benefit from splitting from the United Kingdom. The presentations take the form of PowerPoint show-and-tell presentations with McKee talking about the information flashed up on a large screen.

The talk is very dry and consists of McKee running through various comparative statistics that put Scotland in quite a good light compared to the UK as a whole. No wonder the audience seems very quiet: half the people there must have been bamboozled by the figures presented and the other half might have been in the various stages of sleep! The talk seems well organised enough though for a talk that takes slightly over 35 minutes there is no attempt to categorise parts of the talk into sections about Scotland’s economy, its balance of payments and accounts, its exports and imports, and its financial position. Indeed, McKee concentrates mostly on Scotland’s financial position vis-a-vis that of the United Kingdom and the figures invariably look better for Scotland where its contributions to the UK economy are concerned, and worse where its share of the national wealth on various criteria is the focus. McKee paints a picture of statistics showing that Scotland, if its economy were teased apart from that of the UK, is more productive on a per capita basis and contributes more per person to the overall British economy, yet does not receive what it should from London based on its contributions to the national economy. To take one example, the country contributes over £3 billion in defence yet only £1.9 billion is actually spent in Scotland for defence.

I did get the impression that many if not most statistics quoted were cherry-picked to portray a post-independence Scotland in a better position than it would otherwise be in were people to vote “No” in the September referendum. Curiously McKee did not mention what Scotland contributes to the British economy apart from North Sea oil; since the oil makes up 15% of Scottish exports, the Scots would rightly expect McKee to highlight other major and minor exports and say something about the prospects of their future earnings were Scotland to bolt from the union. As oil is a finite resource and North Sea oil production especially surpassed its peak production limit some time ago, one would think McKee would say something about how an independent Scotland would restructure its economy away from dependence on the British economy overall and from finite energy commodities.

Most people in the audience were representative of the general public and one surmises that jobs and employment post-independence would be uppermost in their minds. McKee has nothing to say about how independence will affect companies’ willingness to invest in Scotland and create work that will employ Scottish people. There is nothing mentioned either about how enmeshed Scotland is with the rest of the British economy and whether non-Scottish British firms would be willing to continue investing in Scotland after the country pulls out of the union.

Another significant issue must surely be the currency, whether Scotland would be allowed to continue using the British pound as its currency unit and what consequences the Scots would suffer from London if they did so. Even if the Cameron government promised the Scots that it would not use the pound to wreck the Scottish economy, the financial sector in the UK, based as it is in the City of London whose founding pre-dates the arrival of the Angles, Saxons, Jutes and Frisians in the British Isles 1,500 years ago, tends to act like a law unto itself and could use its power to weaken and ruin the Scottish economy by starving it of funding for necessary infrastructure projects with the connivance of Whitehall.

Nevertheless McKee’s talk certainly provides plenty of food for thought and further discussion.

 

 

 

 

Breaking Inequality: a well-intentioned documentary based on a simplistic view of corruption in American politics and economy

“Breaking Inequality” (2013)

An urgent and impassioned documentary made to appeal to all Americans, “Breaking Inequality” focuses on the corrupt links that tie the United States government and the country’s financial industry, and traces the history of that corruption back to 1971 when then President Richard Nixon took the country off the gold standard. The film was made on a modest budget: much of it consists of snippets from TV news media with some animation and basic title cards, all laid over by a narration from an unseen narrator.

The film does a good job of tracking the various events and economic trends that led to the 2008 global financial crisis. Where it fails though is in attributing all the problems in the American economy and society back to Nixon’s decision to break with the Bretton Woods agreement, established in 1944 to regulate the international monetary system, and end the convertibility of the US dollar into gold. This act made the US dollar a fiat currency (a currency whose existence depends entirely on laws made by government) and the world’s reserve currency. From then on, the money supply in the US began to increase, gradually at first, then practically exponentially in 2008 and beyond. Now Nixon does deserve to be vilified for the Watergate scandal and for the documents at the centre of that scandal which among other things record that in 1968 Nixon attempted to stall the US-Vietnamese peace negotiations so that he could win the Presidential election that year; but he does not bear sole responsibility, direct and indirect, for those events that occurred as a result of the US dollar being released from the gold standard. The Bretton Woods agreement itself that re-established the gold standard and fixed all global currencies to it was flawed: it was structured in a way that privileged the United States and made it the most economically powerful country in the world. At the same time, the agreement allowed the US to accumulate balance of payments deficits as global demand for the dollar in international trade meant that large amounts of it had to circulate globally. A currency that serves as both national currency and reserve currency will create tension between long-term national fiscal and monetary policy on the one hand and short-term global monetary policy on the other: policies that benefit one do not benefit the other. When the narrator says “… we live in one of the greatest countries in the world …”, his statement takes on a most unwelcome taste.

There were changes also outside the US that made the Bretton Woods agreement untenable: the rise of Germany and Japan as rival economic powers meant that the US economic position was bound to weaken with German and Japanese manufactured products often exceeding US products in quality and affordability. In addition the expansion of US military bases in many parts of the world and the Vietnam War, initiated by President John F Kennedy in the early 1960s, led to large amounts of US dollars circulating globally.

Indeed, if we go back further than 1960, before the rise of Nixon as politician, we see that the United States has had strong imperialistic ambitions since the Monroe Doctrine was proclaimed in 1823. Perhaps such ambitions had their origins even well before then, in the belief that having democracy (or whatever passed for democracy) and being a child of the Enlightenment project of the 1700s made the US a special society that must spread the ideals inherent in democracy to the rest of the world whether it liked it or not. Also the existence of indigenous peoples and slaves – both viewed as inferior in some way to white Americans racially and culturally – and the need to deal with them must surely have influenced American attitudes towards other people.

So, honest and well-intentioned that the film is, when it calls for people to support a petition calling for the restoration of the gold standard, to be presented along with the signatures to US Congress on 4 September 2013, I just wonder whether the response to the petition from US Congress and various economic and political commentators will be silence, ridicule or laughter. In pinning all its hopes on the petition, “Breaking Inequality” and its supporters risk being labelled as naïve. I hate to have to say this but the film-makers really need to bone up on 20th century economic history and the history of the evolution of debt-based monetary systems to understand better the roots of the current global monetary crisis: it is a crisis of global capitalism.

 

 

 

The Yes Men Fix the World: taking down predatory global corporate fascism with hilarious pranks and comedy

Kurt Engfehr, Andy Bichlbaum and Mike Bonanno, “The Yes Men Fix the World” (2009)

Well no, actually they don’t but that was a pretty good little attention-grabber. The Yes Men (Bichlbaum and Bonanno playing themselves) are two political activists whose modus operandi is to pose as faceless executives of real companies and bluff their way into conferences and public forums to pull off pranks that call attention to problems ignored by governments, global finance, corporations and mainstream news media. In the process of carrying out these stunts, the comedy duo exposes the hypocrisy, arrogance, greed and sheer emptiness behind the public face of the corporate world and the dangerous and often inhuman ideology and rhetoric it espouses.

In the form of a fly-on-the-wall / self-confessional home movie with crazy camera angles, giving the impression that any minute the entire enterprise will collapse spectacularly, the film breathlessly chronicles the Yes Men’s adventures (with faithful camera operator in tow) across the world. The structure is loose but basically linear; near its end the film goes into a circular loop around issues relating to post-Katrina New Orleans. First stop is the stunt in which Bichlbaum poses as a spokesperson for Dow Chemicals on BBC TV and says that his company will pay US$12 billion in reconstruction efforts to help the victims of the Union Carbide plant explosion in Bhopal in 1984 which killed 5,000 and which continues to poison and maim communities surrounding the plant. (Dow Chemicals took over Union Carbide in 2001.) Other memorable and hilarious if sometimes tasteless stunts include the duo’s infiltration of an oil industry conference to hand out candles purportedly made of human fat to attendees and a sales pitch to various company representatives of Survivor Ball costumes: these and other stunts are ingenious and well-planned, and are carried out with seat-of-the-pants bravado and a raw energy that counter-act the usual studied and artificial faux smoothness and slickness of much corporate advertising.

One insidious feature of the film that’s not explored or exploited much is the corporate news media’ unquestioning worship of the dominant corporate ideology and culture, expressed in the media’s often deliberate misrepresentation of the Bhopal victims’ reaction to the BBC TV prank and the New Orleans Lafitte public housing residents’ reaction to the Yes Men’s humiliation of the city mayor and the US Department of Housing and Urban Development. The Yes Men feel compelled to visit the Bhopal victims and the Lafitte public housing residents to gauge their reactions and discover that these people, far from being upset at the duo’s hoaxes, thought the pranks were a hoot.

The Yes Men attempt to understand and explore the mind-set and ideology of global corporatism, only to discover that what passes for ideology is an infantile mantra of disconnected buzzwords and phrases that point to self-absorption, laziness and general lack of interest in historical memory, culture and anything beyond self-cocooning and satisfaction. The emphasis is on material self-gratification and anything that might interfere with that is denied; hence we have global capitalism’s fierce denial and attack on phenomena such as climate change or Peak Oil, Peak Uranium, Peak Minerals or Peak Whatever.

Experiencing despair and frustration at seeing their stunts garnering the wrong reactions – the enthusiasm of industry people for the Survivor Ball costumes suggests some folks are so lacking in insight and understanding about their own employers they fail to see they’re being sent up (perhaps the most frightening aspect of the documentary) – our heroes try one last stunt: printing and distributing for free a “special” edition of The New York Times dated six months in advance , covering “news” with a positive bent. The aim is to change people’s perceptions and attitudes so they can see the world could be a better place. When we are not being raped psychologically every day by media tales of brutality, mindless violence and governments and corporations rolling back workers’ rights with sheer machine force, we are less likely to lapse into helplessness, apathy and mental illness, and more likely to respond by being energetic and doing things for ourselves and our communities.

A scrappy production, not always very clear but fervent in its aims at taking down the rich and fatuous, “The Yes Men …” is enjoyable comedy and proof that humour is a weapon of first resort if you want to take on the world.

Money As Debt 3 (Evolution Beyond Money): pointing to a renewed and sustainable world beyond debt-based money systems

Paul Grignon, “Money As Debt 3 (Evolution Beyond Money)”

In the final episode of the series, Grignon looks at how the world can rid itself of the current debt-based monetary system and move to new systems of exchange that don’t involve debt creation to circulate money and which provide alternate ways of valuing real goods and services. In order to explain why alternate systems of money supply and circulation are needed, rather than simply move back to a gold standard as some reformers advocate, Grignon spends at least the first half hour of the film explaining the flaws of debt-based financial systems and the unequal power structures they bring with them. This part of the documentary overlaps with previous episodes and can be a little repetitive. The last 20 minutes of the documentary are the most interesting part as they deal with the pros and cons of returning to the gold standard and adopting fiat money, and espouse the use of self-issued credit to replace debt money.

Bob Bossin’s distinctive Canadian-accented voice-over narration adds a homely and easy-going touch to a topic that can be hard to understand, mainly because it operates according to its own logic and defies an ethics based on compassion, sharing and looking after one’s community and others beyond. Simple cartoon-like animation that does not rely too much on graphs and figures but uses diagrams already encountered in previous episodes help to illustrate Bossin’s narration. Viewers may still need to watch the documentary at least twice or a few times to fully understand the explanations given.

Perhaps the major problem with this film is that it gives no real-world examples of the problems that arise from debt-based banking systems. In the sections in both this film and a previous episode, there is mention of businesses taking on more debt to cover previous debt and what consequences might arise from accumulating debt upon debt but the films offer no real examples or generic versions of real examples put together. Once again also the film applies no political or immediate historical context to its topic: one reason that debt financing has brought the world to crisis now and not, say, 50 years ago is that Western governments have been following economic policies based on monetarism and economist Friedrich Hayek’s neoliberal ideology for the past 30 years. The film says nothing about the effects of these ideologies and their assumptions about markets and human nature.

The film concludes by asserting that future monetary systems, if they are to succeed in encouraging sustainable economic practices that conserve environmental and human resources and rid us of a sociopathic set of values that privilege self-interest, greed, competition and wastage leading to anomie, exploitation of others, pollution and exhaustion of the planet’s ecosystems, must be more like barter exchange systems, serve communities, give economic power back to individuals and communities, and decentralise control of and power over money and money substitutes. This itself is a positive note to conclude on, in that it identifies the solution and the trail we must take: now, the task is to set out on that trail.

Money As Debt 2 (Promises Unleashed): a homely ramble through the global financial system

Paul Grignon, “Money As Debt 2 (Promises Unleashed)” (2009)

Where the first episode in Paul Grignon’s “Money As Debt” series is a general overview of the global financial system and the problems associated with it, the subsequent episodes delve into more detail of how this system operates and the alternative economic and money systems that could replace it. The second episode “Promises Unleashed” explains more fully how banks work, starting with an everyday experience that most viewers born before 1985 would be familiar with: earning money from odd jobs like delivering newspapers around the neighbourhood or mowing the lawn for the elderly lady down the road, a child fills its piggy bank and with the help of mum and dad takes the piggy bank to the local bank and opens a savings account with it. Everyone in the family thinks the savings account is a record of the money the child owns and puts into the bank. Far from it: the account is actually a record of what the bank promises to pay the child in the unlikely event that the youngster will suddenly want to pull out all the money – in other words, the savings account book is just a listing of transactions of money the bank owns. From this misconception of the function of a deposit account – that it’s a record of the money owned by the child – develops the film’s deconstruction of myths surrounding money, its supply and creation, and the revelation of who actually does create and circulate money and why debt is so central to the continued circulation of money.

Using simple, easy-to-follow computer-generated animation and graphs, narrator Bob Bossin leads viewers through the distinctions between creating counterfeit money and creating real money, and pointing out that there’s not much difference between crooks making money and banks making money: the difference is that where the victims of the crooks can be identified, the victims of the legally fraudulent way of making money are harder to find because the way in which they are affected is so indirect. (They turn out to be the real world resources and the owners of those resources and the labour that go into making and supplying products that are paid for with loans from banks.) We then go through various topics arising from the debt-based system of money creation and circulation: how business cycles are made up of overlapping individual loan cycles which themselves incorporate a life cycle of inflation in money, a plateau and then a deflation as the principal and interest are steadily paid off. From this concept of the business cycle, we can see how business cycles are inherently unstable especially when crossed with aspects of human social psychology.

Bossin’s homely voice-over belies the seriousness of some issues dealt with: the narrative touches on how the Great Depression of the 1930s, caused by a series of events which included an economic boom in the US resulting in an oversupply of goods and an overheated stock market among other things, leading to a share price crash, panic resulting in a run on banks as investors tried to cash in on their shares all at once, bank failures when banks couldn’t pay out and declared themselves bankrupt, leading in turn to more panic, more withdrawal attempts, further reductions in bank lending and business investment, and subsequently loss of jobs, high unemployment, lost savings and reductions in consumer spending. This in turn led to even more reduced business investment and a vicious cycle was in place. Although President Franklin D Roosevelt attempted to kick-start the US economy out of the Depression with his “New Deal” package, it was with a boom in jobs making armaments and military hardware and increased government spending during World War II plus the Marshall Plan that revitalised war-devastated Europe after 1945 that the Great Depression ended. This had the unfortunate effect of linking war with a booming economy; war became profitable for banks. From 1945 onwards, the world was at war in one way or another: for 45 years the Cold War allowed governments to build up their military forces and armaments; and after the Soviet Union fell, the United States found new enemies to replace its old foe to justify continual arms spending.

The film digresses to explain the history of bills of exchange and how they facilitated overseas trade. Legislation enacted by the Parliament in England from 1664 to 1699 legitimised bills of exchange and encouraged the rise of stock exchanges. In the last few minutes, the narrative calls for returning the function of creating and supplying money to governments and offers alternative financial systems based on economic conservation and sustainability to the present debt-based one which is premised on unending economic growth.

Although the film has a relaxed pace and explains the concepts and issues associated with our flawed financial systems in a gentle and straightforward way, some viewers may need to see the documentary at least twice to get a full grasp of the issues and what is at stake when banks deliberately encourage or at least appear indifferent to people’s misconceptions of what banks do and don’t do. Grignon’s narrative points out the ultimate effects that debt-based finance has on society, culture, the way resources are allocated and used (or misused) and the environment: the results certainly aren’t pretty at all. The film does not go into all the details of the tyranny exercised over all aspects of life by debt-based finance; a fuller picture can be found in books like Michael Rowbotham’s excellent “The Grip of Death”.

Where the film falls flat is in not providing a fuller historical context to the way in which banks have seized control of Western economies and societies, and how governments now collude with banks or dance to their tune. Although the film does a good job of explaining the phenomenon of spiralling debt, in which debt is paid off only with more debt and that ends up snowballing into bigger debt, it has little to say on how banks have forced individuals, households and businesses to take on more debt and how this has warped the ethical fabric of business transactions and ultimately the societies in which the transactions take place. There is no mention of how US governments in particular (because the documentary is aimed at a US audience) have removed regulations on the financial industry since 1980 at least and how such removals have gradually led to recurring financial crises. There is also no mention of the close links that banks have with companies manufacturing and selling armaments and military equipment.

Nevertheless for its faults and controversies, the film is a much-needed introduction for the general public into the workings of the global financial industry and how it has brought global civilisation to its current crisis where it must now choose between endless cancerous economic growth leading to environmental crisis and breakdown on the one hand, and economic contraction to preserve planetary environmental systems.

What the Heck is a Bail-Out? – a very brief, simplified exposition of how debt-based financial systems lead to collapse and ruin

Paul Grignon, “What the Heck is a Bail-Out?”

Part of a body of work investigating the role of money in modern society and how banks came to exercise so much psychological and financial power over the world, this 9-minute film is a quick introduction to the debt-based monetary system that operates in most countries and especially in Western countries. Using cartoon-styled animation with some action, centring around one character, Grignon explains how current Western financial systems have brought economies to the brink of collapse and ruin by accumulating huge amounts of debt. In doing so, he destroys a number of common myths and perceptions about how modern banks operate.

Grignon begins by explaining the concept of legal tender and banks’ obligations to the public with regard to holding sufficient legal tender to pay out depositors. From banks’ point of view, depositor accounts are money they owe us so they are listed as part of bank liabilities. (And cheques and other money transfers are bank promises to supply legal tender on demand by depositors.) On the other hand, loans that banks make are their assets. Since at any time when a balance of accounts is undertaken, assets should equal liabilities plus proprietorship, it follows banks might be eager to maximise their assets and minimise their liabilities.

Since in practice depositors do not often demand the money in their accounts, and usually demand small amounts, banks can lend the same amount of money again and again (under a system known as fractional reserve banking) without having the legal tender to back up the amounts. The result is that much money in circulation is only backed by a promise to pay out legal tender and since we don’t know when depositors might have to recall ALL their money, banks cover current debts with new debts. For those having trouble understanding this, imagine taking out a second mortgage on your house to cover the outstanding debt of your first mortgage plus interest, then take out a third mortgage to cover your second mortgage plus the interest the SECOND mortgage incurs! Once this notion is grasped, one can see an endless chain of more debt covering previous debts plus all the interest these incur.

Viewers quickly see how debt creation drives money circulation and banks’ business: if banks aren’t lending money, they risk losing business and face closure. With an endless and escalating chain of debt creation, the situation is soon reached where banks have issued enormous amounts of debt, often to borrowers who can ill afford to pay back the debt, and entire financial economies now stand to collapse with deleterious effects to the real economies that produce and supply goods and services, people’s living standards and even people’s ability to plan for their long-term futures. As I write this, I am mindful of news I have seen that the government of Greece has sold off or is selling off important institutions and infrastructure and is closing down universities in violation of the Greek constitution that guarantees free publicly-funded education.

In a 9-minute video, the full complexity of the current state of Western financial systems can’t be conveyed: in particular the history of how governments allowed banks to take over economies and rule them and entire nations with their rapacious ethics is absent. The film ends with Grignon urging viewers to visit his Money As Debt website to view the “Money As Debt” film trilogy.

This mini-documentary is an informative if very simplified sketch of how societies have come to be dominated by the activities and sociopathic thinking and behaviour of banks.