Went to see Inside Job last night, and it’s definitely a “must see” for anyone that gives a damn about the future of this country — although I suspect the number of people who will actually take the time to go see it will be painfully small. Alas, there were only two other people in the theater last night when I went. My takeaways:
1) As a country, we are pretty much fucked, although this is hardly news these days. The movie does a good job of driving home the point that this raping of America by the financial industry is not a recent phenomenon, but something that’s been going on for over 30 years, starting with the Reagan administration. And it also does a good job of dispelling the notion that anything has changed at all since Obama was elected. The reality is that Obama has staffed his administration with the exact same people who have been pillaging the country over these last 30 years, and that surprise, surprise, even after the Wall Street melt down of 2008 there’s been no significant legislation passed or even proposed to fix anything. Again, nothing newsy here, but it’s especially disturbing to have this fact shoved down your throat non-stop for two hours straight.
2) Free market capitalism is no longer relevant to the world we live in. Unfortunately the movie makes a great case for this, but never comes right out and says it. Adam Smith’s version of capitalism was based on small, independent, non-incorporated merchants who actually produced consumer goods competing against each other in highly competitive local markets. There’s no room in his model for billion dollar financial monopolies contributing nothing of substance to the economy, and particularly no room for the runaway greed that drives that industry. To even use the word “capitalism” to describe the way Wall Street works is ludicrous. Adam Smith is surely rolling over in his grave.
3) Finally, it occurs to me that perhaps one way of dealing with the problem is just like we deal with cigarette smoking — why not just tax the hell out of greed the way we tax cigarettes? You can’t make greed illegal, just like you can’t make cigarettes illegal, but you can use taxes to discourage the bad behavior. Put the marginal tax rate on the highest income group back to 70% like it was pre-Reagan, or hell, for that matter take it all the way to 91% like it was in the 50’s and 60’s. In fact, 1950-1970 marked one of the strongest periods of economic prosperity in the history of this country. And the period since the Bush tax cuts for the wealthy marks the worst economic period since the Great Depression. You see a correlation there? And don’t give me this nonsense about higher taxes being a disincentive to work beyond a particular income threshold. For every high-paid exec who wants to stop working once they hit say $250K in annual salary, I guarantee you there are a thousand people just as qualified who would be more than willing to step in to that job that pays “only” $250K.
But this is all just dreaming, as the rich are way too powerful to be held accountable, and too many Americans are way too stupid to see what’s being done to them. And so as Paul Krugman notes “When you ask how the even worse crisis of, say, 2015 happened, the fact that these people got away with it will loom large.” Indeed.