The American Dream (by The Provocateur Network): informative if biased documentary on money and American banking

Tad Lumpkin and Harold Uhl / The Provocateur Network “The American Dream” (2010?)

This is a well-made animated documentary that tries to explain how the American people have been misinformed and exploited by agencies of the US government to support the current financial system and the banking industry’s control of it. Everyday man Pile rejoices in having bought a beautiful McMansion house only for his bank manager to foreclose on it because Pile can barely afford the hefty monthly mortgage payments. Desperate to get his house and dog back, Pile is visited by an old childhood friend Hartman who takes him on a voyage through time and space to show Pile how money and banks originated in response to human needs for the exchange of goods and services, and how debt became part of early financial systems. They find out how Pile’s bank gets its money from the Federal Reserve Bank through the Federal government which then taxes the public through income taxes to pay back the Federal Reserve with interest. Hartman then shows how through the ages banks and financiers profited from lending money to governments to pay for expensive wars. They stop off in Revolutionary America to see how Thomas Jefferson and Alexander Hamilton argued over the merits of having a central bank (Jefferson was against, Hamilton was for). Viewers also discover when and how the US Federal Reserve Bank was established in 1913 after several previous attempts to establish a central bank failed. Owned and operated by private interests, the Federal Reserve took over the power to print money from the US government. Interestingly the film pauses for a moment in 1963 when then US President John F Kennedy signed Executive Order 11,110 to regain US government control of creating money instead of giving that power away; six months later, Kennedy was dead in Dallas and his successor Lyndon B Johnson put the order aside. Since then, successive US governments have ignored Executive Order 11,110 and have continued to borrow money from the Federal Reserve and to pay that money back with interest with US taxpayer monies.

In explaining the basics of the US financial system and how it rips off the American public at a level that most people, even school-children can understand, “… Dream” glosses over many details in an effort to keep things simple and on track to its ultimate message which is that Americans must reclaim their money and the power to print it back from the banks that operate the Federal Reserve. The “elite” that controls the Federal Reserve is portrayed as “the Red Shield” (the Rothschilds); according to Wikipedia, the Federal Reserve’s structure and leadership are complex and involve a Board of Governors chosen by the US government and many member banks throughout the country so the organisation ends up being a mix of private and public owners. A notable flaw in the film is one where the US Mint produces dollars (it actually produces coin). If viewers are interested in finding out more about the history of banking in the United States since 1776, and in particular about how the banking and finance industry came to have such a stranglehold on the nation’s economic direction, they should go to the film’s website www.americandreamfilm.com which has details about some of the real-life characters Pile and Hartman see in the film and which also suggests what people can do to protest against the conduct of banks and how to rein in their rapacity.

The style of cartooning is based on that of Matt Stone and Trey Parker’s “South Park” with less crudely drawn bug-eyed characters moving more freely than Stan, Kyle, Kenny and Cartman. The film’s pace is fast and very focussed which can be a bit inconvenient for some viewers with no prior knowledge of banking and finance trying to digest the information thrown at them. Fractional reserve banking is covered in a big rush without much explanation. The plot builds up to a suitably dramatic climax where Hartman leads an army of everyday folks like Pile against the banks and Hank Paulson tries to inveigle him into changing sides.

Yes it’s quite a biased film but “… Dream” at least attempts to explain to a general audience how the current financial system in the United States is structured and how debt and inflation are incorporated into it. Several myths and misconceptions about how banks operate and how money is created are met head-on and demolished. My main complaint is that the film falls into a good-versus-bad plot stereotype with no suggestion of what alternatives exist to replace the present debt-based fiat money system. The film does not differentiate between commercial banks (the banks that lend for business purposes and provide savings, cheque, credit and fixed-term deposit accounts) and investment banks; a little information about these types of banks and how they were kept separate by the Glass-Steagall Act from 1933 to 1999 would have been helpful so that viewers can see that having banks is still beneficial and that regulating banks’ activities for the benefit of the real economy (that is, an economy focussed on producing and supplying goods and related services) is necessary.

For US audiences, the film is worth watching as many times as is needed to understand the concepts spelled out and families with children will find it helpful in gaining a basic understanding of how debt operates and how banks try to rope in more people into borrowing on credit. The film will be of limited benefit to overseas audiences but its explanation of the role that debt and inflation play in financial systems is still relevant. Funnily, I found out about this film on the same day I read on CommonDreams.org that Citibank in New York tried to get several customers arrested by police for daring to close their bank acounts!

Inside Job: hard-hitting documentary about 2007/08 Global Financial Crisis

Charles Ferguson, “Inside Job” (2010)

 For many people, this incisive documentary on the immediate origins of the 2007 – 08 Global Financial Crisis will prove a real eye-opener into the workings of the various large American investment banks, insurance and other finance corporations all collectively known as “Wall Street” and of the failure of the US government and its agencies to monitor and regulate the industry’s activities. The consequences of the failure of successive US governments from the 1980’s onwards to control Wall Street’s rapacity and excesses are becoming all too apparent as “Inside Job” makes clear: collapsed banks and insurance companies; economic instability resulting in over-caution on lenders’ part, forcing businesses to downsize operations and lay off workers; huge public debts which force government cut-backs in spending on education, medical and social welfare services; increased debt burdens on households; people’s savings and superannuation and pension funds wiped out, among other results. Director Charles Ferguson who also wrote the script and produced the documentary tracks down and interviews a number of bank executives, public officials and economists about aspects of the GFC, and many of the interviewees who appear in “Inside Job” reveal themselves as corrupt or corrupted participants in and beneficiaries of Wall Street’s greed, arrogance and lack of ethics.

The film traces the roots of the GFC to the early 1980’s when the Reagan government began deregulating the banking and finance industry and watered down a number of government acts and regulations that came into force after the Great Depression of the early 1930’s. Even after the collapse of savings and loan associations in late 1980’s which should have been a warning that something was not right in the finance industry, deregulation continued well into the next decade and after the Cold War ended in 1991, a number of physicists and mathematicians entered the finance industry with ideas on playing the stock market like a giant casino, and many creative and convoluted ways of converting mortgage and other types of loans into more lucratvie financial instruments, backed by other weird, wonderful and wacky financial products whose origins were so diverse and complex even for finance industry workers to trace, came into being. Eventually a crisis of trust and confidence developed and spread like a wildfire, undermining large corporations like Bear Stearns, AIG and Lehman Brothers which ended up being taken over by large banking corporations, and the US government under President George W Bush was forced to bail out Wall Street for US$700 billion.

The film’s major strength is its examination of the incestuous links among US government officials and agencies charged with supervising and regulating Wall Street activities, the financial corporations themselves and university academics who basically performed a cheerleading function for the often unethical if not illegal activities of the banks. The interviews with two university academics at Columbia and Harvard Universities are very entertaining in this respect, with the questions hitting a very exposed raw nerve for one economist who challenges the film-maker to make the most of a suddenly shortened interviewing time of three minutes. Other entertaining interviewees include an expensive callgirl and a psychiatrist / therapist both of whose Wall Street clienteles must have overlapped considerably.

Unfortunately the film falls flat with a watery conclusion that Wall Street must be subject again to regulation to avoid repeat crises and leaves it at that. Having exposed the collusion that went on between Wall Street and the White House, Ferguson’s retreat into a call for re-regulation is a huge letdown and disappointment for this particular viewer. A future of re-regulation followed by deregulation followed again by re-regulation can never be a viable solution as long as an “old boys’ network” continues to operate between governments and the financial sector. As long as people forget or refuse to learn the lessons of previous financial crises and continue to believe in political and economic ideologies that prize self-interest, the quick accumulation of wealth at any cost and extreme dog-eat-dog competition (which feeds on fear and encourages a herd mentality and irrational behaviour), the global financial system will remain essentially unstable and prone to crises. The effect of regulation will only soften the more extreme effects of such a system but can’t prevent crises from happening. We need to re-examine our assumptions about our current financial systems, what place they should have in a real economy based on producing goods and services to suit all people, and in particular we need to question the role that money, debt and banks play. Already there are commentators like Ellen Brown (www.ellenbrown.com) and websites like Social Credit (www.bleedingindebt.com) who question the worth of a financial system in which money can be created and start to circulate only if someone asks for a loan and incurs a debt. There need to be better ways to stimulate production of goods and services other than creating debt that attracts interest that accumulates and produces more interest. Islamic financing which prohibits usury and systems based on social credit and ingenious forms of bartering are some alternatives that could be considered.

Apart from a weak ending, “Inside Job” is a thorough hatchet-job on the architects and builders of an elaborate edifice that took years to build but fell apart very quickly with effects on the economy, society and culture in the United States that may still be working (and wrecking) their way through. We may not have seen the full outcomes of the GFC and it may be that its worst effects will be felt by the very poor and most disadvantaged people in American society.