Documentaries on Economic Issues

Documentaries about economic issues are a favorite of mine because they explain in more understandable terms the very complicated economic forces that shape our society. Inequality is a big issue right now; just recently President Obama had declared it the defining issue of our time. In my day-to-day I do not interact with supremely wealthy people. My family and I have never been in that socioeconomic strata, and I am not well-connected with anyone who is. Therefore it was somewhat mind-blowing to realize the magnitude of wealth disparity while watching the documentary Park Avenue: Money, Power, and the American Dream. I did not realize just around 400 Americans own most of the wealth in the country, and that many of those 400 live in New York on Park Avenue. Just a few months ago I was interviewing for residency at a hospital on the upper east side of New York, and I distinctly remember an interviewer telling me I would never be rich as a doctor living in the city. Afterwards, a resident was giving the applicants a tour of her apartment close by to the hospital, and told us all the hospital was generous to subsidize rent which brought the cost of her 1bdr (without washer/dryer) down to 3,000+. I almost had a physical reaction to that number (to be fair my salary would have covered rent...just not food or anything else), and then vowed I would never live in the city even though it's the cultural center of the country and a fabulous place to visit. According to the Park Avenue, doctors making 450,000/yr, I think it was, could be considered to be on the bottom rungs of the top 1%, but those at the top of the 1% make billions.

Inequality For All, a documentary narrated by former US Labor Secretary Robert Reich, delved into a deeper analysis of the dangers of inequality. Much of the documentary shows Reich lecturing to his class at Berkely. During his lecture he likes to use a graph showing income inequality of the American people over time. I forget the axes, but the gist of the graph is that the periods of greatest income inequality were in the late 1920s and then again in the 2000s, which correspond to the great market crashes in our country's financial history. Meanwhile, the average income for American has not risen appreciably over the decades, but the average income for those in the top 1% has increased several fold. The movie makes a case that the rise in income inequality is a result of cutting taxes on the rich (Warren Buffet and Mitt Romney were taxed around 15% last year) and the dissolution of labor unions (spearheaded by Reagan), which contributed to diminished workers' rights. To add even greater emotional appeal to the movie, billionaires Nathan Hanauer and Warren Buffet themselves are filmed imploring the government to raise their own income tax rates. Hanauer goes as far to say that it is the middle class who drives the economy, since it is people in the middle who buy the most goods and services that generate demand and therefore business. He asserts that it is the middle class who are the true job creators of this economy.

Inequality For All, by and large tries to dispel the theory of trickle down economics by showing how the middle class is suffering with lower wages and lower buying power, while the wealthiest of the country are wealthier than ever. It seems to be warning against the establishment of an oligarchy of wealthy individuals who use their power to exploit consumers, shareholders, the average citizen. It is becoming increasingly difficult to move up socioeconomically in America, especially with rising costs in education. I know this firsthand; as a medical student, my education up to date has cost hundreds of thousands of dollars. Not everyone can afford this, and despite this huge financial sacrifice there is no guarantee that you will have a job at the end of it as evidenced by our recent match results. I am so angered by the way our system works, and I believe it is utterly unacceptable for people not to have jobs after the 4 years of indentured servitude, I mean medical school/training, we just completed, but that's a different topic for a different post.

My two fundamental beliefs on human nature and society are as follows: 1) Absolute power corrupts absolutely (Baron Acton) 2) The social contract (Hobbes, Locke, etc). Therefore, power concentrated in a few number of individuals, in the form of communism or capitalism, will lead to societal instability. The problem with individual power is that it is human nature to lose accountability to the community once a person gains enough power. There is no stopping them from behaving in wantonly selfish ways. It makes sense to me that the role of government should be to monitor and check the powers of different institutions including its own governmental power as well.

Perhaps my favorite documentary I've seen in the past few days is Enron: The Smartest Guys in the Room. How appropriate that Jeffrey Skillings favorite book is The Selfish Gene! The very same book that almost threw me into an existential crisis Sophmore year of college. I suppose that just goes to show you, Richard Dawkins, what happens when self-interest becomes the sole motivator of ones actions. Yes, you get Enron. When I was in Houston, I used to work in the old Enron buildings, and worked for a company spun off from Arthur Andersen, Enron's ill-fated accounting firm. And yet, I am ashamed to say I knew very little about the Enron Scandal until I watched this documentary. It was horrifying to hear how the Enron traders orchestrated the rolling blackouts in California by producing fake power outages to raise the price of electricity. They were given the power to artificially manipulate the supply-demand curve, and they did so without any regard to the people they were affecting. It's sickening to hear recorded conversations of the traders gleefully disrupting the power grid - positively sociopathic is the only way to describe their behavior. It just goes to show how quickly the moral compass is lost when power gets to people. They get caught up in their own power and disregard the rules of society, and, ironically, the customers / shareholders who gave them the power in the first place. Other human beings become mere pawns and obstacles in the all out struggle for power and money - the survival of the financial fittest.

Documentaries Mentioned:
1) Park Avenue: Money, Power, and the American Dream
2) Inequality For All
3) Enron: The Smartest Guys in the Room