Posts Tagged ‘film’

 

Apparently, there’s a new documentary film [ht: ja]—Boom Bust Boom, directed by Monty Python’s Terry Jones—whose aim is to to popularize the work of Hyman Minsky.

Minsky’s genius was to show that financially complex capitalism is inherently unstable. Under conditions of stability, firms, banks and households will, over time, move from a position where their income pays off their debt, to one where it can only meet the interest payments on it. Finally, as instability rises, and central banks respond by expanding the supply of money, people end up borrowing just to pay back interest. The price of shares, homes and commodities rockets. Bust becomes inevitable.

This logical and coherent prediction was laughed at until it came true. Mainstream economics had convinced itself that capitalism tends towards equilibrium; and that any shocks must be external.

This is the latest attempt, in a long sequence since the crisis of 2007-08, to rediscover and examine the implications of Minsky’s work (which I’ve discussed many times on this blog).

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I haven’t read Fifty Shades of Grey nor have I seen the film. But at some point I may have to, given what others are writing about this particular phenomenon in popular culture.

According to Heather Havrilesky,

the story of Anastasia Steele and Christian Grey isn’t really about dominance or bondage or even sex or love, despite all the Harlequin Romance–worthy character names. No, what Fifty Shades of Grey offers is an extreme vision of late-capitalist deliverance, the American (wet) dream on performance-enhancing drugs. Just as magazines such asPenthouse, Playboy, Chic, and Oui (speaking of aspirational names) have effectively equated the moment of erotic indulgence with the ultimate consumer release, a totem of the final elevation into amoral privilege, James’s trilogy represents the latest installment in the commodified sex genre. The money shot is just that: the moment when our heroine realizes she’s been ushered into the hallowed realm of the 1 percent, once and for all.

Lynn Stuart Parramore offers a similar interpretation:

Author E.L. James has often insisted that Fifty Shades of Grey is wildly popular not because of its titillating trappings of transgression, but because it tells a simple love story for the ages. But this is a romance for a particular kind of age — a time of growing inequality. The social order is breaking up and leaving massive human wreckage in its wake. Dreams of love turn into fantasies of power – who has it and what they can do to those who don’t have it. . .

The film is the dispiriting denouement of this late stage of capitalism, where cruel conditions are accepted and you learn to suffer the whims of the rich — and pretend to like it.

Havrilesky and Parramore have succeeded in doing something I hadn’t expected: they’ve made me rethink my initial ignoring of Fifty Shades. . .

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The second part of That Film about Money is even better than the first.

That’s because it explores the connection between money and the crisis of 2007-08, including giving the working-class more debt instead of increasing wages (which is why, as you can see below, household debt service payments as a percent of disposable personal income rose so precipitously from the early-1990s onward, until the crash) and why the banks have recovered since the crash (by taking cheap money from the government and lending it back, to finance the deficit, at higher rates of interest).

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This is the first part of a two-part series on money, directed by James Schamus (best known as the producer of such films as Hulk and Brokeback Mountain). The films about money are part of We the Economy, 20 Short Films You Can’t Afford to Miss (from writer and director Morgan Spurlock and Microsoft cofounder Paul G. Allen).

That Film about Money does a good job challenging certain common myths about money and banks, especially the idea that currency and money are the same thing, and it introduces important ideas, such as debt as the basis of the expanding money supply.

I only wish, during the discussion of trust, Schamus and the people he interviews had introduced the notion (developed within Modern Monetary Theory) that the basis of our trust in fiat money is the fact that only specific monies—in the United States, the U.S. dollar, the national money of account—can be used to pay taxes. That places the state (and its sovereign authority to levy and collect taxes) at the center of the process of accepting and issuing a particular kind of fiat money.

We can conclude that taxes drive money. The government first creates a money of account (the Dollar, the Tenge), and then imposes tax obligations in that national money of account. In all modern nations, this is sufficient to ensure that many (indeed, most) debts, assets, and prices, will also be denominated in the national money of account.

(Note the asymmetry that is open to a sovereign: it imposes a liability on you so that you will accept its IOU. It is a nice trick—and you can do it too, if you are king of your own little castle.)

The government is then able to issue a currency that is also denominated in the same money of account, so long as it accepts that currency in tax payment. It is not necessary to “back” the currency with precious metal, nor is it necessary to enforce legal tender laws that require acceptance of the national currency. For example, rather than engraving the statement “This note is legal tender for all debts, public and private”, all the sovereign government needs to do is to promise “This note will be accepted in tax payment” in order to ensure general acceptability domestically and even abroad.

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Special mention

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Only in Britain

Posted: 24 January 2014 in Uncategorized
Tags: , , , , ,

 

Benefits Street is Britain’s latest contribution to poverty porn.

Fortunately, there’s also a parody: Tory Benefits Street.

And a much better tradition of representing the contradictions of life on the “dole” on the big screen, including my favorite: Ken Loach’s Ladybird, Ladybird.