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Is Capitalism a Love Story or Nightmare?

Many Americans think that Capitalism and Democracy are the same thing.  This is simply not true.

Michael Moore has proven again and again that he has a remarkable feel for where the zeitgeist is heading. He’s like a zeitgeist divining rod.

Roger and Me was way ahead of the curve on the collapse of the auto-industry. Fahrenheit 9/11 was way ahead of the curve on the collapse of the house of cards the Bush administration used to lead us to war in Iraq. Sicko was way ahead of the curve on the collapse of the US health care system. And now with his new movie Capitalism: A Love Story he is riding the wave of the collapse of trust in our country’s financial system.

The film, which opens in New York and Los Angeles on Wednesday, and all across the country on October 2nd, is a withering indictment of the current economic order, covering everything from Wall Street’s casino mentality to for-profit prisons, from Goldman Sachs’ sway in Washington to the poverty-level pay of many airline pilots, from the tidal wave of foreclosures to the tragic consequences of runaway greed.

The film also turns the spotlight on some underreported gems: an internal Citibank report happily declaring America a “plutonomy,” with 1 percent of the population controlling 95 percent of the wealth; an expose of “dead peasant” insurance policies that have companies cashing in on the untimely deaths of their employees; and amazing footage of FDR, found buried in a film archive and not seen in decades, calling for a Second Bill of Rights that would guarantee all Americans a useful job, a decent home, adequate health care, and a good education.

In capitalism as envisioned by its leading lights, including Adam Smith and Alfred Marshall, you need a moral foundation in order for free markets to work. And when a company fails, it fails. It doesn’t get bailed out using trillions of dollars of taxpayer money. What we have right now is Corporatism. It’s welfare for the rich. It’s the government picking winners and losers. It’s Wall Street having their taxpayer-funded cake and eating it too. It’s socialized losses and privatized gains.

While unfurling yellow crime scene tape in front of a “too big to fail” bank, he became aware of a group of New York’s finest approaching him. Moore has a long history of dealing with policemen and security guards trying to shut him down, but in this case he knew he was, however temporarily, defacing private property. And his shooting schedule didn’t leave room for a detour to the local jail. So, as the lead officer came closer, Moore tried to deflect him, saying: “Just doing a little comedy here, officer. I’ll be gone in a minute, and will clean up before I go.”

The officer looked at him for a moment, then leaned in: “Take all the time you need.” He nodded to the bank and said, “These guys wiped out a lot of our Police Pension Funds.” The officer turned and slowly headed back to his squad car. Moore wanted to put the moment in his film, but realized it could cost the cop his job, and decided to leave it out. “When they’ve lost the police,” he told me, “you know they’re in trouble.”

Home Prices May Fall Another 25%

Home prices in the US could fall by another 25 percent because of high unemployment and another leg down will come for stocks, banking analyst Meredith Whitney told CNBC Thursday.

“No bank underwrote a loan with 10 percent unemployment on the horizon,” Whitney said. “I think there is no doubt that home prices will go down dramatically from here, it’s just a question of when.”

Local governments and states are chronically under-funded and “most states are under water,” adding to the problem of low private consumption, she said.

An eye opening video by our own politicians.  See what is really going on within the Federal Reserve.

Michigan Jobless Rate Leaps to 14.1%

Michigan’s jobless rate hit 14.1 percent in May, a near-26 year high, according to data released today by the Michigan Department of Energy, Labor & Economic Growth .

The U.S. unemployment rate rose by half a percentage point in May, to 9.4 percent.

“Major events continued to unfold in Michigan’s auto industry in May, which had a considerable impact on the state’s unemployment rate,” said Rick Waclawek, director of the state’s Bureau of Labor Market Information and Strategic Initiatives. “Curtailed production negatively influenced suppliers and other related sectors, resulting in further weakening in the labor market.”

It’s the highest monthly rate recorded in the state since July 1983. Since May 2008, unemployment has jumped by 274,000 people, or 67.2 percent. Unemployment nationally rose by a slightly larger 70.0 percent in the same period.

“It’s not good,” said Gov. Jennifer Granholm, at a Lansing press conference Wednesday

Unemployment Rising and Economy Still in Decline

For much of last week, it was possible to think that the economy was looking up. Various indicators, though weak, were not as bad as expected.

On Friday, reality bit back with the news that the unemployment rate spiked in March, to 8.5 percent, a 25-year high. The government’s report also showed that employers had shed 663,000 more jobs in March. Nearly two million jobs have vanished this year — 5.1 million since the recession began in December 2007. The ranks of the unemployed now stand at 13.2 million.

There is no longer any doubt that the current recession will be the longest yet in America since World War II. The previous record-holders — the contractions of the early 1970s and the early 1980s — each lasted for 16 months. As of now, the economy already has been in decline for 16 straight months.

The questions now are how much longer the recession will be and how much worse it will get. Measured by the labor market, the answer to both questions is “a lot.” That is because employers will continue to cut jobs as long as the economy is weakening and will resume hiring only once they are sure a recovery is under way.

In this recession, the traditional paths to recovery are especially blocked. Economic rebounds — especially from steep declines — are generally led by recovery in the housing market. This time, housing is unlikely to provide the spark. By prudent estimates, housing sales and prices will not begin to turn up appreciably until 2010 at the earliest.