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Documentary "Four Horsemen" - Review

Have recently watched "Four Horsemen" - documentary on current global economic issues. It was interesting, because I have recently read a book Confessions of an Economic Hit Man by John Perkins who is also featured in the documentary.



What I found is that though the general idea towards "greater good" is natural, the ways how issues are explained in the movie and the reasons and solutions that are briefly outlined are not consistent sometimes with either logic or obvious observations.

33:00 - The narrator states that the inflow of lending money into the housing market led to an unprecedent inflation. "House prices rose and rose."
This completely satisfies the classical economic theory that guys just praised a bit earlier in the video.
Because interest rates were low and people borrowed more and more to buy properties.
But is it not because there is always a demand for property? People have to live somewhere.

At 33:40 Prof. Simon Johnson (former IMF Chief Economist) was saying that in Germany people are ok to rent without owning the property and be perfectly comfortable.
But there is a difference between paying rent and paying a mortgage.
Rent is just paying money to somebody forever without generating any possession for yourself and therefore being always dependent on a landlord's will.
Mortgage at least allows individuals to secure properties for themselves or for their family at least.
That's natural and completely fit into the classic economic theory. However the Professor states that when people want to own a property (which is a necessity, isn't it?) it is not right.

By the way, neoclassical economics worked well in some countries where government controlled economy and where everybody could receive a place to live.
The size of the lot was depending on the family or other social circumstances and merit, but everybody could get a place.

Also I just can't see how deregulation say in property market will help people acquire properties?

45:50 - "we have to tolerate inequality..." says Lord Griffiths (former vice chairman of Goldman Sachs) - well physical inequality or inequality at birth - no problems. But when inequality becomes an everlasting system of increasing wealth for some and eternal race for the wage to the rest of the world - it shouldn't be tolerated.
http://www.theguardian.com/business/2009/oct/21/executive-pay-bonuses-goldmansachs

1:10:16 - Phillip Blond (Director of ResPublica), raised concerns that we have less relationships and marriages. When today's goal is to earn more money - all relationships especially ones with higher financial responsibility (marriage and children) are excluded.
All natural. Again later he says that money is not the main thing that matter to us. But he has possibly forgotten that all necessities in our life require money! Property or a rental place, food, education, electricity, transportation, health insurance etc. all these things have enormous cost at the moment.
If you add family and children here - how could you imagine living without money?

1:21:00 - Dr. Michael Hudson (Government Policy Adviser) has provided a good example of debt clearing in 1947 in Germany. This is a brilliant idea. Especially to those who currently hold mortgages or other form of huge debt (education, medical etc.)


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