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The Phony Radicalism of Michael Moore

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With phony radicals like Michael Moore around, the ruling elites have nothing to worry about.

The filmmaker likes to pose as a radical critic of the status quo, but he isnt. All the evidence you need is in his latest documentary, Capitalism: A Love Story. Sure, he rails against home foreclosures, bank bailouts, low wages, and other real and imagined problems, but his solution would not disturb the sleep of any big banker, corporate bigwig, or political big shot.

The tipoff comes right at the beginning of the movie. He paints an idyllic picture of life in America in the 1950s. His father worked for a big auto company, through which the family got free medical and dental care. All was well. He realizes that a major reason things were so good was that the U.S. military had destroyed Japans and Germanys competitive industrial bases in World War II. But the dominance was great while it lasted. It happened at a time when an alliance of big government, big business, and big labor ruled the roost. The military-industrial complex was thriving. This seems fine with Moore, which puts him in the camp of the corporatists of Franklin Roosevelts Brain Trust, who thought free markets and competition among independent firms were pass. The new world required big monolithic entities that sat down together and worked things out nicely. The spirit of Mussolini hovered over all of it.

Of course, Moore blasts Wall Street because it got all that taxpayer money and is not being held accountable for it. The bailouts are worth getting mad about. But how would he feel if the money had been given with lots of conditions and regulations? He might have liked that. Nowhere does he suggest that failing companies should be left to sink, which is what would happen under free and open markets.

He certainly doesnt mind that the government had the taxpayers money to give away in the first place. He never once suggests that the people should keep their own money because the political elites have no right to it. He has no problem with politicians having the power to decide how the peoples money will be spent.

Moore always sides with the politicians who like high taxes and high government spending (except for a few who got sweetheart deals from the mortgage company Countrywide). In his movie he visits AIG and other companies and demands that they give back the TARP money they got from the government. What did he plan to do with that money? I have a feeling he would have delivered it to the Treasury. But, need I say, the Treasury is not the taxpayers.

Moore even complains that the top income-tax rate was lowered from 90 percent some years ago. Conveniently, he gets the history wrong. He says Republican Ronald Reagan cut the 90 percent rate, but it really was Democrat Lyndon Johnson who did it, following through on John Kennedys proposal. (Reagan presided over a cut from 70 to 50 and then to 28 percent.) At any rate, Moore is perfectly comfortable with governments taking 90 percent of wealthy peoples earnings and seems indifferent to whether the money is made through honest trade or political privilege.

Favoring a high top rate may not win him favors from some in the establishment, but for generations there has been a wing of the ruling elite that has understood that high marginal rates are the price of the lucrative corporate state. So Moore may not be the pariah among the establishment that he makes himself out to be. Besides, he knows full well that we arent likely to see such high rates again, even in a war, so his complaint is just idle blustering that may be calculated to appeal to his more envious fans. (Moore is wealthy enough to pay a high marginal rate.)

Incidentally, he never indicts the Federal Reserve for its legal counterfeiting, which inherently favors some over others and creates misery for the people he claims to champion. That would be the true radical position.

Moores movie contains much else to make us doubt his radical bona fides. He blusters about Robert Rubin, Timothy Geithner, and Lawrence Summers, and their relationship to the current financial problems. Rubin, a Wall Street hotshot, and Summers were Treasury secretaries under Democratic President Bill Clinton. Geithner ran the New York Federal Reserve Bank from late 2003 to 2009 and oversaw the Wall Street bailouts. In Moores eyes, they are the rogues who, along with former Fed chairman Alan Greenspan and former Treasury Secretary Henry Paulson, gave us the meltdown of 2008.

So far so good, though he misses all the politicians who championed Fannie Mae and Freddie Mac, the government-sponsored enterprises he also never mentions. But when he gets to the election of Barack Obama in November 2008 he declares, This is not what Wall Street wanted. Oh yeah? Then why are Moores btes noires Rubin and Summers close Obama economic advisors, and why is Geithner now secretary of the Treasury? Moore quickly mentions that Obama got big money from the Wall Street giant Goldman Sachs, whose fingerprints are all over the Bush bailout program Obama has continued, but in the end, hes firmly in Obamas camp. (Moore doesnt deal with foreign policy, so we dont know what he thinks of Obamas carrying on the Bush war and detention program.)

A true radical would not have given Obama a pass like that.

State capitalism

Moore says hes for socialism, but I dont believe him. I think he just finds the term radical and romantic. When he tries to define the word, he says it means that workers have some democratic say in their companies. Nothing very radical about that. Walmart gives a huge amount of authority to its employees. He certainly doesnt call for the nationalization of the means of production and the abolition of trade, which is what Marx meant by socialism. In fact, he praises worker-owned companies and points out that hundreds of them exist today. If he were more astute, hed realize that such companies are perfectly consistent with the free market and are disadvantaged by taxes and regulations, which always hit smaller companies harder than larger ones. But then he might find himself critical of government regulation. His whole world would be rocked.

Moore asks Sen. Bernie Sanders, the only self-proclaimed socialist in Congress, to define socialism. Sanders responds that it means the government represents the middle and working classes. Moore had no problem with that somewhat watered-down definition.

Moore wants to indict capitalism, but what he means by that is the system we have today. Fine. Theres much to indict. As I said elsewhere, had he called his movie State Capitalism: A Love Story, Id have applauded (with some reservations). But his indictment is a mish-mash of confusion. He dislikes that making money is at the heart of the system. But he never distinguishes making money by offering goods to consumers (except for his worker-owned firms) and making money by raiding the Treasury, which got it through taxation in the first place. Moore makes plenty of money with his movies, but I doubt that he thinks of himself as an exploiter. And I dont think his company is worker-owned. So he doesnt really mean that all moneymaking by business is bad. Too bad he didnt take the time to think things through and distinguish political from economic entrepreneurship.

Maybe we shouldnt blame Moore for his confusion. Pro-business commentators, such as Ben Stein and Lawrence Kudlow, routinely praise the current American system as capitalist. In their conservative view (and, alas, in the view of some libertarians), the essence of todays political-economic system is capitalist and worthy of support. Scrape away a thin layer of intervention, cut some tax rates, and all will be fine, they say. The radical libertarian analysis, on the other hand, says things are not so simple. The alliance of government and business runs deep and has shaped the system for generations, particularly in banking and finance. A little deregulation and tax-cutting will not be enough to create a free market. That will require what Thoreau called striking the root.

If Moore were truly a radical critic of capitalism as he conceives it, hed be for its true opposite: the radical separation of business and State that is, the free market.

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    Sheldon Richman is vice president of The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.