Freedom, Equity, and FDR’s “Second Bill of Rights”
This reposted repost comes by way of the Daily Speculations site, which explains why they reposted it. After the article, I have comments on each of the proposed FDR/Michael Moore “Second Bill of Rights.” Though FDR wasn’t able to add these Progressive-era policies to U.S. law, many were included in the founding documents of the United Nations. — Greg Rehmke
September 29, 2009 | 2 Comments
Editor’s Note: We do not usually publish material from other sites. But we thought this scintillating review from Michael Covel, a unique and pleasantly surprising source, is so good it is worth republishing.
A friend recently invited me to a private screening of Michael Moore’s new film Capitalism: A Love Story. The September 16th invite not surprisingly leaned a certain direction:
“[Michael] Moore takes us into the homes of ordinary people whose lives have been turned upside down; and he goes looking for explanations in Washington, DC and elsewhere. What he finds are the all-too-familiar symptoms of a love affair gone astray: lies, abuse, betrayal and 14,000 jobs being lost every day. Capitalism: A Love Story…is Michael Moore’s ultimate quest to answer the question he’s posed throughout his illustrious filmmaking career: Who are we and why do we behave the way that we do?”
Considering Moore was going to be there for a Q&A after (moderated by Arianna Huffington), I quickly signed on. Now before painting a picture of Moore’s new film let me be honest: my belief set is essentially libertarian (‘Government out of my bedroom and my pocketbook’). Not only do government solutions not excite me, they scare the living blank out of me. Remember when George Bush declared, “I’ve abandoned free-market principles to save the free-market system…to make sure the economy doesn’t collapse”? He might as well of said, “Hide your money, kids – ’cause I’m coming to take it!”
Oh sure, in theory I would like to see everyone with their own homestead, money in their pocket for regular shopping frenzies and no health worries despite eating at Burger King 24/7, but arriving at those goals is not exactly doable unless government robs Peter to pay Paul and or starts up the printing press.
And that view of course puts me in opposition to Moore since he has no problem with government as his and our father figure. That is his utopia. He truly believes warehouses of Washington, DC-based federal workers remotely running our lives is the optimal plan. He is an unapologetic socialist who really doesn’t care why the poor are poor or the rich are rich, he just wants it fixed. So not surprisingly, and with some generalization as I proffer this, Democrats like Moore and Republicans don’t.
However, I was excited to see a ‘mainstream’ film that was backed by big Hollywood bucks conclude capitalism as ‘evil.’ Arguably the most successful documentarian ever, a man who has made untold millions of dollars, was going to legitimately make the case that there was an alternative to capitalism. I sat down in a packed Mann’s Bruin Theater in Westwood, CA eager to see how his vision could possibly flesh out.
Moore is a rather simple guy. He is likable. He sees the world as good guys (people with no money) and bad guys (people with money). His Flint, Michigan union worker upbringing is his worldview. If you did not have that upbringing or if your life started less severe than his you are an evil capitalist. If on the other hand you were a laid off factory worker with a sixth grade education you are the true hero. I don’t care one way or the other that he has that view and I am not knocking union workers, but Moore sees the world through a class warfare lens resulting in a certain agenda: force wealth to be spread amongst everyone regardless of effort. Within minutes it was clear where Capitalism: A Love Story was headed. The ‘highlights’ included:
* We listen to heartbreaking stories of foreclosed families across America, but we don’t learn why the foreclosures happened. Did these people treat their homes as piggy banks? Were there refis on top of refis just to keep buying mall trinkets and other goodies with no respect to risk or logic? We don’t find out.
* We meet one family who was just foreclosed on so desperate for money that they were willing to accept $1,000 for cleaning out the house that they were just evicted from. Was it sad? Yes. But, should we end capitalism due to this one family in Peoria, IL?
* We are introduced to a guy whose company is called ‘Condo Vultures’ buying and selling foreclosed properties. Since he acted like a used car salesman, the implication was that he was an evil capitalist. However, Moore doesn’t tell us if his buyers were ‘working class’ people making smart buying decisions after prices had dropped.
* We listen to Catholic priests who denounce capitalism as an evil to be eradicated. What they would put in its place and how would the new system work? The priests don’t tell us.
* We learn that Wal-Mart bought life insurance policies on many workers. We are then told to feel outrage when Wal-Mart receives a large payout from an employee death while the families still struggle with bills. I saw where Moore was heading here, but this was a reason to end capitalism?
* We hear a story from a commercial pilot so low on money that he has to use food stamps. Moore points out that many pilots are making less than Taco Bell managers and then attributes a recent plane crash in Buffalo to underpaid pilots. This one crash is extrapolated out as yet another reason to end capitalism.I was pleasantly surprised at Moore’s attempt at balance. For example, he included:
* A carpenter, while ply-wooding up a foreclosed home, says, “If people pay their bills, they don’t get thrown out.”
* A dressing down of Senator Chris Dodd (D) by name. Moore calling out a top Democrat? He sure did. He nailed him.
* A lengthy dissertation on the evils of Goldman Sachs. He rips Robert Rubin and Hank Paulson big time and I agree with him. In fact, I said to myself, “Moore you should have done your whole film on Goldman Sachs!”
Throughout the various stories and interviews he also weaves a conspiracy (all Moore films do this). The plot goes something like this: America won World War II and quickly dominated due to no competition (Germany and Japan were destroyed). We had great post-war success where everyone lived in union-like equality. Jobs were plentiful and families were happy. However, things start to go bad in the 1970s, and Moore uses a snippet of President Carter preaching about greed. This clip was predictably building to Moore’s big reason for all problems today: the Reagan revolution.
Moore sees Reagan entering the scene as a shill for corporate banking interests. However, everyone is happy as the good times roll all the way through into Clinton times. Moore does take subtle shots at President Clinton, but nails his right hand economic man Larry Summers directly as a primary reason for the banking collapse. So, while Moore sees Japan and Germany today as socialistic winners where corporations benefit workers more than shareholders, he sees America sinking fast.
So is that it? That was the proof that capitalism is an evil to eliminate? Essentially, yes, that’s Moore’s proof. What is his solution? Tugging on your idealistic heartstrings of course! Moore ends his film with recently uncovered video of FDR talking to America on January 11, 1944. Looking into the camera a weary FDR proposed what he called a second Bill of Rights – an economic Bill of Rights for all regardless of station, race, or creed that included:
* The right to a useful and remunerative job in the industries or shops or farms or mines of the nation.* The right to earn enough to provide adequate food and clothing and recreation.
* The right of every farmer to raise and sell his products at a return which will give him and his family a decent living.
* The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad.
* The right of every family to a decent home.
* The right to adequate medical care and the opportunity to achieve and enjoy good health.
* The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment.
* The right to a good education.
As FDR concluded and the film ended, I was shocked at the reaction. The theater of 400+ stood and cheered wildly at FDR’s 1944 proposal. The questions running through my head were immediate: How does one legislate words like “useful”, “enough”, “recreation”, “adequate”, “decent”, and “good”? Who decides all of this and to what degree? At past points in history to voice an opposition opinion in the middle of such a single-minded herd would have certainly been my physical demise! Interestingly, during the Q&A Huffington and Moore discussed bank failure fears during the fall of 2008. They asked for a show of hands of how many people moved money around or attempted to protect against a bank failure. I had the only hand that went up.
FDR’s plan hauled out by Moore six decades after it was forgotten reminded me of another interchange – this one from the 1970s. Then talk show master, the Oprah of his day, Phil Donahue was interviewing free market economist Milton Friedman and wanted to know if Friedman had ever had a moment of doubt about “capitalism and whether greed’s a good idea to run on?”
Friedman was quick in response, “…is there some society you know that doesn’t run on greed? You think Russia doesn’t run on greed? You think China doesn’t run on greed? The world runs on individuals pursuing their separate interests. The great achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history are where they have had capitalism and largely free trade. If you want to know where the masses are worst off, it’s exactly in the kinds of societies that depart from that. So that the record of history is absolutely crystal clear: that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”
Donahue (and the video of this on YouTube is classic) then countered saying that capitalism rewards the ability to manipulate the system and not virtue. Friedman was having none of it, “And what does reward virtue? You think the communist commissar rewards virtue? …Do you think American presidents reward virtue? Do they choose their appointees on the basis of the virtue of the people appointed or on the basis of their political clout? Is it really true that political self-interest is nobler somehow than economic self-interest? …Just tell me where in the world you find these angels who are going to organize society for us?”
Friedman’s logic was what I was remembering as a theater full of people cheered wildly for a second Bill of Rights. How did this film crowd actually think FDR’s 1944 vision could be executed? Frankly, it was clear to me at that moment capitalism was on shaky ground. Starting with Bush ‘abandoning’ capitalism to bailouts for everyone to Obama gifting away the future – we seriously might be past the point of no return toward a socialization of America.
Figuring someone else must see the problems with this film, I started poking around the net for other views. One critic declared that the value of Capitalism: A Love Story was not in the moviemaking, but in its message that hits you in the gut and makes you angry. This film did not make me angry, but it did punch me in the gut. The people in that theater with me were not bad people, including Moore. They just seem to all have consumed a lethal dose of Kool-Aid! And at the end of his Q&A Moore pushed the audience to understand that while they don’t have the money, they do have the vote. He implored them to use their vote to take money from one group to give it another group. Did he really say that openly with no ambiguity? Yes, sadly.
Dr. Covel is the author of Trend Following: Learn to Make Millions, FT Press, 2009
[My comment on this post and the Second Bill of Rights, also from 2009.]
Greg Rehmke offers:
I enjoyed your description of the film. … One problem with ideological documentaries is that usually only people who already agree go to see them, just as with Fox News or the many ideological magazines and blogs. So most people hear only cherry-picked stories that support their biases and beliefs.
I have a few quick notes on the “Second Bill of Rights – an economic Bill of Rights for all…” that see them through the lens of “freedom to” rather than “freedom from”:
* The right to a useful and remunerative job in the industries or shops or farms or mines of the nation. [Rehmke comment: On first glance, this sounds like “freedom from” unemployment. But is can also be seen as calling for an economic right to launch industries, shops, farms, and mines. Few people today can succeed, either individually or as small teams, in getting permits to start any of these enterprises. The rich can because they have lawyers, tax accountants, contacts in state and local government regulatory agencies, and contacts with government-backed bankers. Corporate farming thrives on subsidies, pushing out family farms. Inner city entrepreneurs in Detroit need seventy permits for home-based businesses, etc. This is all the fruit is state-capitalism, and is the status quo for much of the economy. If the poor could legally provide transportation services to each other, that would create both a million more jobs and provide cheap transportation for poor people to nearby employment and social services.]
* The right to earn enough to provide adequate food and clothing and recreation. [Rehmke comment: Minimum wage laws and payroll taxes combine to make low-wage jobs generally hard to find for the low-skilled (because low-wage jobs are made expensive for employers). Technology innovation and fairly free trade has dropped the price of clothes so today’s poor can afford what middle-income Americans in the 1940s could only dream of. Food is inexpensive too, even with all sorts of tariffs, taxes, and agricultural price supports. In 1944, single people lived with families or as boarders. Inexpensive housing is also blocked by local zoning and building codes. If group housing, boarders, and factory housing were not banned by most local zoning, the poor today would live much better on below-minimum wage jobs than middle-income Americans of the 1940s. “Average home size has doubled from the 1950s” yet most families are smaller.]
* The right of every farmer to raise and sell his products at a return which will give him and his family a decent living. [Rehmke comment: Well, the farmer should have the right to try, without being badgered by regulators. Farms and orchards in California, Oregon, and Washington require inexpensive and reliable workers, and many of these hard-working people are from Mexico. They are regularly harassed for not having adequate documentation to prove they have permits from the federal government to work in the U.S. as free and responsible human beings. (The Krieble Foundation guest worker plan would resolve end illegal immigration.) Without inexpensive labor, few family farms can survive, especially as farmers get older.]
* The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad. [Rehmke comment: Governments create and maintain monopolies. State capitalism has created vast swaths of monopolistic professions across America. From doctors to electricians, hair stylists to legal advisors, teachers to nurses, transit drivers to bed & breakfast operators–expensive permits, government-sanctioned “training”, dense regulations, and special taxes are the rule rather than the exception. Mercantilistic regulations make business services more costly, and restrict business opportunities to those how have skills not only to run a business, but also to navigate regulations usually erected by established competitors, plus complex tax codes and labor laws. Plus established competitors can often find a way to litigate new competitors out of business.]
* The right of every family to a decent home. [Rehmke comment: Again, freedom to build and live in homes would be helpful. Builders could construct 1944-size homes very, very inexpensively, if they were legally allowed to by local zoning boards and urban planners. Government has driven up the price of housing, prodded by elites already in comfortable homes and not wanting too many neighbors, especially poor ones. Randy O’Toole’s Best Laid Plans, tells this sad story. Housing and land use regulations not only raise the cost of housing but contribute to regular housing bubbles.]
* The right to adequate medical care and the opportunity to achieve and enjoy good health. [Rehmke comment: I agree that access to medical care should be free. If it were, hundreds of thousands more people would quickly move into medical fields, being trained to provide diagnostic services with support of sophisticate software and teleconferencing with doctors). Thousands, then tens of thousands of highly-trained doctors would move to America from India and Mexico (and tens of thousands more would gain access to training in those countries). Hundreds of thousands of trained nurses would move to America from the Philippines and Kenya. Incomes for many of today’s doctors and nurses would drop, but services for the poor would expand. Wal-Mart and other firms would likely provide free or near-free medical services just to bring in customers (though they might expect a blizzard of malpractice lawsuits that activists would likely hit them with). “Enjoying good health” requires people exercise and eat healthy foods. This behavior would be encouraged if insurance companies were allowed to set catastrophic insurance rates on the basis of exercise, diet and other behaviors that influence medical risks. Government shouldn’t hector overweight people to diet and exercise, but medical insurance premiums $100 or $200 a month higher, based on actuarial data, would provide strong and reality-based stimulus for active lifestyles and healthy diets.]
* The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment. [Rehmke comment: the above suggested reforms would move Americans toward these goals. Sound currency would encourage savings just as unsound currency punishes saving for old age. Transfer-based Social Security and Medicare are unsustainable, so individual retirement accounts of some kind would provide the financial safety net that would provide adequate protection. Government tax policy distorts medical-insurance, and people should be allowed to opt-out of government welfare/social security programs.]
* The right to a good education. [Rehmke comment: A dose of freedom would improve education. James Tooley’s excellent book The Beautiful Tree looks at successful private schools for the poor across Africa, India and other poor countries. If only America’s inner-cities could enjoy the freedom to educate that the poor have in Latin America, Africa, India, and communist China. America’s thriving homeschool movement is developing into hundreds of fast-growing firms offering a wide range of quality educational services, and innovative private schools are expanding too. Again, here as with other areas, entrenched elites operate and benefit from an expensive government education “monopoly” that offers mediocre or poor education with expensive, watered-down, politically-correct and colorful but boring textbooks.]
Gregory Rehmke is the author of The Complete Idiot’s Guide to Global Economics, Alpha, 2008