ALL BUSINESS

Fact-checking Moore's 'Capitalism'

[September 24, 2009]  NEW YORK (AP) -- Despite the title of his new movie, Michael Moore really hates capitalism. He says it's a scheme for businesses to profit at the expense of the little guy.

The provocateur filmmaker is campaigning for an end to what he says is the "evil" in our economic system and a return to the days when our lives weren't so defined by money. It's an ambitious theme, but some of his arguments in "Capitalism: A Love Story" fall apart on closer inspection.

Moore's trademark attack style will be familiar to viewers of his previous movies like "Roger & Me" and "Fahrenheit 9/11." The opening scene includes shots of different bank robberies, which Moore sees as a metaphor for how taxpayers were looted. The film closes with him putting crime-scene tape around the New York Stock Exchange and some Wall Street banks.

In between are old-time film clips, heart-tugging scenes as families are forced out of their homes by foreclosure and stunts like showing up at American International Group's headquarters in New York with a bullhorn, insisting he wants to make a citizen's arrest.

His message is that capitalism brings out the worst of society. How else to explain why owners of privately operated juvenile detention centers in Pennsylvania paid off two judges to lock up young offenders?

There may be more to the story than is told in the film, which is now playing in New York and Los Angeles and opening across the country Oct. 2. That's partly a function of events overtaking the narrative since filming ended. But that's not always the case. Consider these three points in the film, which Moore discussed with The Associated Press in a telephone interview.

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MOORE'S TAKE: Wall Street robbed taxpayers.

It's pure theater when Moore arrives in an armored bank truck at the headquarters of Goldman Sachs Group Inc. Holding a white bag with a big dollar sign on it, he tells a security guard he is there to collect the $10 billion in taxpayers' funds that went to the investment bank. He doesn't get past the front door.

THE FACTS: Three months after that scene was shot, Goldman Sachs was one of 10 large banks that repaid in June some $68 billion they received from the $700 billion Troubled Assets Relief Program. Since then other large financial companies have repaid funds, too, including Chrysler Financial and American Express Co.

Still, many large banks haven't repaid the TARP money. Citigroup Inc. and Bank of America Corp. each received $45 billion and have yet to repay those funds.

Not all of the $700 billion in TARP funds have been disbursed. The total peaked at $425 billion.

MOORE'S RESPONSE: "Let's be clear on this. We're not talking about the majority of people who took the money ... not even 10 percent of the $700 billion has been returned."

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MOORE'S TAKE: You're better off dead -- at least that's how some companies view their workers.

THE FACTS: Moore highlights an ugly truth about insurance policies that benefit companies, not the employees, when workers die. Wal-Mart Stores Inc. is scathed for its use of such "dead peasant" policies. Moore notes how the sudden death of a 26-year-old former Wal-Mart worker resulted in a $81,000 life insurance payout to the retailer.

But it's never mentioned in the body of the film that in 2000 the world's largest retailer canceled all 350,000 of these policies it took out on employees between 1993 and 1995.

MOORE'S RESPONSE: No misrepresentation here, he says: Wal-Mart's termination of the insurance policies is included in a 7-minute-long presentation of facts and quotes on different issues relating to the movie shown in the closing credits.

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MOORE'S TAKE: Sen. Chris Dodd, D-Conn., and other government officials unfairly and hypocritically benefited from financial programs not available to all.

Moore asserts that Dodd received more than $1 million in discounted loans for being a "Friend of Angelo," referring to Angelo Mozilo, the former CEO of Countrywide Financial Corp. That lender, which was heavily involved in the subprime-mortgage business, was sold last year to Bank of America.

Also, Moore highlights that as chairman of the Senate Banking Committee, Dodd has oversight over the mortgage and banking industries and has been critical of predatory lending.

THE FACTS: Dodd has acknowledged that he participated in a VIP program at Countrywide, refinancing loans on two homes in 2003. One was a 30-year adjustable rate loan for $506,000 with an interest rate of 4.25 percent and a fee of 0.45 percent. He also got a 30-year adjustable rate mortgage for $275,042 with an interest rate of 4.5 percent and a fee of 0.73 percent.

Both interest rates and fees were within industry norms for that time, according to data provided to the AP by Bankrate.com.

Last month, the Senate's Select Committee on Ethics cleared Dodd and Kent Conrad of North Dakota of getting special treatment on the mortgages. But the bipartisan panel also said the senators should have "exercised more vigilance" in their dealings with Countrywide to avoid the appearance of sweetheart deals.

MOORE'S RESPONSE: "Why wasn't (the ethics panel's ruling) in this film? Because the story isn't over.

"I would hope that the Justice Department doesn't just let this drop," Moore said. Moore is calling for an investigation into how the loans were made, "not just to Senator Dodd, but to all those in both the Clinton and Bush administrations that benefited from this."

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Moore was unapologetic when asked how his beat-down on capitalism squares with the benefits he earns by teaming with big names in the entertainment industry including Paramount, the Weinstein Co. and Overture Films, which is part of John Malone's Liberty Media.

Moore says his life has greater purpose now that he has found success, and he doesn't mind paying more in taxes. "It is not right, if you get through the door and get to enjoy the good life, when everyone else struggles and lives paycheck to paycheck," Moore said.

His passion is to convince moviegoers that the game is rigged against most Americans, while Wall Street, big business and the wealthy keep coming out ahead. Moore says the taxpayer-funded banking bailout amounted to a "double robbery" because average people lost money in the market and then were asked to prop up the same companies that lost it for them.

Instead of laying all the blame on banks, Moore could have made the message of "Capitalism: A Love Story" even more powerful with a more nuanced approach. He does note how some individuals unwisely used their home equity like personal piggybanks, but there isn't much discussion about how some of the people facing foreclosure got to that point. That would have bolstered his arguments and shown how damaging it is when greed is everywhere.

[Associated Press; By RACHEL BECK]

Rachel Beck is the national business columnist for The Associated Press. Write to her at [e-mail].

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