<p> One of the most startling statements to come from the 2008 economic meltdown occurred during Alan Greenspan's testimony before Congress. When asked about the ideology that guided him, he confessed: “Yes, I found a flaw… and I've been very distressed by that.” Greenspan discovered a flaw in his Ayn Rand free market belief system? It's as if Mao Zedong had admitted to finding the glitch in Marxism. </p> <p>David Sington's documentary <em>The Flaw</em> (out on DVD) explores the crisis of capitalism in the face of widespread denial at the highest echelons that anything is fundamentally wrong. Searching for different perspectives, the award-winning filmmaker interviews Nobel laureate Joseph Stiglitz and economic historian Louis Hyman as well as victims of the 2008 housing market meltdown. Going beyond simply stating that all of the trusted figures proved untrustworthy, the film examines what Greenspan called the flaw in the model that, for him, “defines how the world works.” Free market economists have proposed an absurdly optimistic view of human nature, imagining that people usually act rationally in their own self-interest and that the collective “wisdom of the crowd” will dictate market values and prevent bubbles. History has shown again and again that none of this was ever true. </p> <p>Other problems have distorted the customary workings of capitalism. Real wages in America have been flat at best for decades while spending, stimulated by our consumption society, continued to rise. Debt was the only way to pay the bills and when credit cards were maxed, many applied for loans on homes whose values were expected to climb steadily and forever. And then there was the practice of lenders, which became common in the '90s, of packaging and selling debt in complicated schemes. The bottom line? Buying mortgage debt became more profitable than investing in factories or other productive enterprises, with ramifications we are only beginning to feel. </p> <p>Entertaining and informative, <em>The Flaw </em>provides many strong arguments against the blind-sighted zealots of a free market society. </p>
