Money and Life
Directed by Katie Teague (2013)
I highly recommend this film for its clear explanation of the mechanism by which private banks (not government) create money out of thin air by initiating loans. Because the banks don’t create the funds to pay the compound interest on their loans, the borrower must find it elsewhere in the economy – when other new debt is created. This leads to the continual creation of new debt, which can only be sustained by continual economic growth. This, in turn, results in major depletion of all the earth’s natural resources, while simultaneously poisoning our air, water, and food with toxic waste.
The film features interviews with world famous antiglobalization and sustainability activists, including Vendana Shiva, David Korten, Ellen Brown, Charles Eisenstein, Bernard Lietaer and Vicki Robin.
For me, a high point of the film was the discussion of the role of artificially created consumer demand in this frantic drive to “liquidate” the earth’s resources. I also enjoyed the section on the psychological factors driving billionaires to constantly acquire more money – and the replacement of “trickle down” with “suction up” economics.
A Cancer on the National Economy
My favorite part, however, was the section describing American’s finance sector as a “cancer” on the nation’s economy. As investment banking has morphed into casino capitalism, only 5% of Wall Street transactions relate to the production of real goods and services. This is in contrast to a healthy economy, where the finance sector functions like a utility and consumes only 10% of national wealth.
The trillions of dollars investment banks like Goldman Sachs, JP Morgan, and Bank of America speculate on derivatives is little different from betting on horses or roulette. The only difference, according to one economist, is that Las Vegas won’t let you gamble with money you don’t have. With some derivatives purchases, traders commit their banks to positions that are 30-40 times greater than their entire holdings.
I found the solutions portion of the documentary somewhat disappointing.
The need to end the role of private banks in money creation, by handing this role over to publicly owned banks federal and state banks, is a no-brainer. The film calls for viewers to join grassroots groups (such as the US and UK Green Party) organizing to remove control of our monetary system from private banks.
The suggestion for people to opt out of the corporate money system by joining local groups using barter and local currencies is another extremely practical suggestion.
Their third suggestion is to find concrete ways to value relationships more than money. Examples include socially responsible investing and extreme charitable giving (in the example, one family gives away 60% of their income). While the life histories of these individuals is extremely inspiring, I suspect they’re unlikely to resonate with the vast majority of Americans. They’re too busy working three jobs to put food on the table – or borrowing on their credit cards to buy shoes for their kids.