Today, November 11, 2012, is the one-year anniversary of the initial release of the conspiracy theory movie Thrive. The film’s first birthday is, I think, an appropriate time to evaluate the film’s impact on the conspiracy underground and its continuing viability, as well as an assessment of our own efforts on this blog to correct and rebut the film. You might say that this article is a “postmortem” of Thrive, and that characterization wouldn’t be inaccurate. If the movie was intended to create a “new paradigm” or “wake people up,” it seems clear that Thrive has failed to do this on any significant scale. The main argument of this article is that, one year on, Thrive is “thriving” no more.
Thrive’s Declining Popularity: The Empirical Proof.
There is no doubt that Thrive is declining in popularity, and the numbers prove it. According to the website traffic analyzer Alexa.com (you can find stats here) the movie’s main website, thrivemovement.com, has been receiving markedly less traffic over the past several months than it did during either of the months it peaked—in November 2011, when Thrive was released, and April 2012, when Foster Gamble and Clear Compass Media made it available for free as opposed to a $5 fee. Alexa.com shows jagged spikes in the website’s popularity week by week (which is measured in terms of traffic ranking within the Internet as a whole), but each spike is successively smaller, the last one being barely a quarter of the website’s all-time interest spike.
On the day I checked, thrivemovement.com had gone down by 27.38% in “reach” over the past three months alone. That means that the site today is reaching 27.38% fewer people now than it was just three months ago. These stats change day by day, so if you check you will probably see a slightly different number.
The statistics on this blog match this trend almost exactly. Interest in Thrive Debunked has proven, over the past year, to be an extremely keen indicator of interest in the movie itself (I’ll explain why that is later in the article). The daily high for page views in the past year was April 13, 2012. Since then, this blog receives barely a quarter—on a good day—of the number of daily page views than it did on that day. The pattern of traffic on this blog mirrors almost exactly the ebb and flow of traffic for thrivemovement.com, with spikes of ever-decreasing intensity followed by prolonged valleys.
Furthermore, there has been much less comment traffic on this blog in the past few months than there was, say, before July 1. I used to receive as many as ten or more comments a day from various people either pro- or anti-Thrive (mostly pro). Now, days go by without any new comments being posted at all.
Speaking solely in terms of web traffic, Thrive Debunked is like a pilotfish on a whale. Wherever the whale goes, it goes along for the ride. The trajectory is down, down, down across the board. The numbers prove it beyond any doubt.
Why is Thrive Declining?
The answers as to why the movie is declining are less clear, but here I offer a few hypotheses.
1. The movie didn’t contribute anything substantially new—at least nothing that its fans could latch onto as new.
For all of its bluster and bravado about a “new paradigm,” Thrive contributed very little to the conspiracy theory underground that was fundamentally new. All that was new was the packaging, which is a shiny object that can only hope to distract the masses for a limited time. Ancient aliens? Been around since 1968. Crop circles? Old news. Money conspiracies? Lyndon LaRouche was doing that in the 80s. “Global Domination Agenda”? Every Alex Jones radio show since 1998 has been about that. Far right-wing Libertarian political propaganda? Ron Paul was peddling that folderol in 2007; now, after two spectacularly embarrassing failures at running for president, he has (mercifully) been put out to pasture, and his sycophantic fan base is finally fading away.
Substantively, the only truly novel idea contributed by Thrive was the obsession with the “torus” shape. (Of course the idea existed long before, but had never been injected into the conspiracy underground before). This proved to be a non-starter among conspiracy theorists, who revel in gloom, apocalypse and disaster. If it can’t oppress you, take away your freedoms, abduct you, give you an anal probe or blow up the World Trade Center, conspiracy theorists probably won’t be interested in it. So scratch the “torus” idea.
Conceptually and structurally, Thrive did make a significant contribution—that being the continued meld of conspiracy theory ideology and New Age sensibility, a toxic mixture that some academic researchers are beginning to term “conspirituality.” Essentially, Thrive is a document evincing the embryonic creation of a new quasi-religious belief system. But this alone won’t sustain its popularity among conspiracy theorists. If Thrive does go down in history it will be because of its contribution to conspirituality, but this is not an accomplishment that conspiracy theorists can sink their teeth into, because most of them vehemently deny that their belief system even is religious in nature. So, appealing though conspirituality is on a subconscious level, that alone is not going to sustain interest in Thrive.
2. The “Thrive Movement” is largely illusory and is not driving continued interest in the movie.
Another reason why the movie has failed to sustain and increase its reach is that there’s no real organization behind it that’s continuing to push it. We’ve blogged before about how ineffectual, illusory and ephemeral are the “solutions” proposed by the movie—they are mainly talking points aimed at ending the conspiracy theories that the movie insists are out there, but because of course these conspiracy theories do not really exist, the movie’s “solutions” are cures in desperate search of a disease. Beyond that, though, the “Thrive Movement” that you see touted (somewhat disingenuously) on the website does not exist in any real sense. Yes, there are small ad-hoc groups of the movie’s fans that have met on an informal basis in various parts of the country. But a mass movement to motivate action based on the movie’s principles? If such a thing exists, it’s keeping an awfully low profile–which can hardly be what fans of the movie want.
Here is one place where Thrive failed to live up to the predecessor it hoped to imitate, the Zeitgeist Movement, which was similarly a fan club of approbation for the infamous (and roundly debunked) 2007 conspiracy theory movie Zeitgeist: The Movie. As we all know, the Zeitgeist experience was the blueprint for Thrive. Although the Zeitgeist Movement imploded in 2011 and has now shriveled to a tiny burned-out nub of high-commitment supporters who have been largely forgotten by the outside world, between 2008 and 2011 at least there was an organization—centrally directed, and under the leadership of the film’s director and his close associates—out there pushing Zeitgeist: The Movie and its tiresome preachy sequels. Thrive has no such organization behind it. The effort that Foster Gamble has exerted to rally fans of the film around a set of action points has been minimal, and no one else has (so far as I know) stepped up to exert any sort of leadership role in this capacity. Without the benefit of a “street team” out there flogging it, Thrive must sink or swim on its own merit. You can see from the numbers that Thrive is not doing well in swimming against the current.
3. Some conspiracy theorists distrust Thrive, thus limiting its reach even within its own target demographic.
Debunkers and other followers of rational, reality-based belief systems aren’t the only detractors of Thrive. Many conspiracy theorists are deeply distrustful of it, for two main reasons: (1) Foster Gamble’s familial connection to the Proctor & Gamble company, and (2) the film’s promotional poster, depicting a woman taking off a blindfold, which especially paranoid conspiracy nutters think is “Illuminati propaganda.” Thrive has been pilloried in the conspiracy underground for these two characteristics. As a result, the many hard-core, incorrigible, detached-from-reality conspiracy nuts—whom you would expect to be Thrive’s core constituency—reject the film out of hand for these very reasons.
This is a battle that Foster Gamble and Thrive can’t possibly win. It does absolutely no good for Foster Gamble to protest that he has nothing to do with his Proctor & Gamble relatives, because no one will believe him anyway. Conspiracy theorists are notoriously intransigent and will accept anything on faith, however bizarre or improbable, so long as it feeds into their paranoid delusions. Even the suggestion that Foster Gamble is an “Illuminati stooge” is, in the conspiracy underground, tantamount to an immutable sentence of guilty.
The controversy over the poster is even more ludicrous. Any image, anywhere, in any context of a person showing one eye is automatically construed by hard-core conspiracy lunatics as “proof” of “Illuminati symbolism.” No amount of remonstration on the part of Foster Gamble or the Thrive crew could possibly alter this. Therefore, Thrive and its makers are—in the zero-evidence-needed universe of hard-core conspiracy lunatics—guilty right out of the starting gate, and Thrive is viewed as dangerous “disinformation.” This is doubly ironic because many people who accept Thrive as gospel truth accuse rationally-based critics—such as myself and fellow contributor SlayerX3—of being “paid disinformation agents” for even daring to criticize the movie.
Thus, Thrive has a self-limiting factor even within its own target audience. The most paranoid and delusional of conspiracy theorists preach against the film because they think it’s part of a conspiracy, whilst debunkers pile on because it promotes conspiracy theories. In this sense Thrive embodies the worst of both worlds. There is no escape from this vicious circle. If Thrive can’t even unite conspiracy theorists across the wide spectrum of their beliefs, it has absolutely no hope of doing so in the mainstream world where conspiracy thinking is generally not accepted.
4. Thrive cannot make any inroads among mainstream (non-conspiracy, non-New Age) audiences.
This is the most important reason Thrive is declining: it simply can’t attract any mainstream attention, which means its potential fan base is limited to its core constituencies of conspiracy theorists and New Age adherents—at least the ones who don’t distrust it because of Gamble’s familial connection or the image on the poster. The reasons for Thrive’s inability to break through to the mainstream is the subject of the next section.
Preventing Mainstream Acceptance: The Repudiators (and the Debunkers).
Without any doubt the single most important event in the history of Thrive was the signing of a letter, by ten of the people interviewed in the film, repudiating it and stating that they were misled as to the film’s contents. If you’ve read this blog, you know all about the “repudiators” (and if you don’t, start here). This event was “game over” for Thrive. Almost single-handedly, the repudiation—orchestrated most vocally by John Robbins—ended any chance the movie ever had of gaining credibility in mainstream circles.
Now, wherever Thrive is shown or even mentioned, the story of the repudiation follows it. Although the repudiation is not generally a deal-breaker for conspiracy theorists and New Agers who like the movie, it certainly is a deal-breaker for anyone else out there who might otherwise have been attracted to the movie’s message or themes but who wasn’t already a conspiracy theorist or New Age adherent. The explanation Thrive’s makers give for the repudiation—that Robbins and company were part of a “disinformation” campaign against the film—is totally incredible and unlikely to satisfy anyone. It’s tough to interest mainstream media in hard-core conspiracy material anyway, but the repudiation is the kiss of death for Thrive. It simply can’t be explained away, ignored or rationalized. Robbins and company acted out of principle. That’s extremely persuasive.
The Thrive Debunked blog has arguably played a role in preventing Thrive from expanding its fanbase into the mainstream, but probably only a small one. I’ve said many times before that the repudiation, and especially the beautiful essay by John Robbins on why he did it, were far more effective in preventing gullible people from falling for Thrive’s nonsense than anything I or my contributors have done. What I believe we and other debunkers who have spoken against the movie have done is to make it very easy for rational people seeking information on the film to see just how wrong the film and its assertions are. The target audience for this blog has always been people who are curious about the movie, who might have some interest in the subjects it covers, but who are cautious enough to investigate the film before believing what it says. Although that universe of people is quite small compared either to the conspiracy fans who love the film or the vast mainstream who realize from the get-go that it’s not worth their time, this blog has been extremely successful at reaching that target audience. On that front, this blog has been a huge success.
The Cycle of Thrive Discovery—And Rejection.
This blog has become an integral part of the public conversation about Thrive. I know because WordPress tracks the “incoming” traffic to this blog and logs the pages that link to it. The vast majority of “incoming” links follow exactly the same pattern. Here’s how it works:
1. A conspiracy theorist or New Ager discovers the film, watches it online, loves it, and makes a post about it on a web forum or in a chatroom. Almost always this initial post praises the film and recommends it to others, like, “There’s this great movie that shows us how our world really works! Everyone should see it!”
2. A few other conspiracy theorists reply, expressing agreement with the film and thanking the original poster who brought it to their attention. Often, some type of discussion about the film’s specific theories (usually “free energy” or the “Global Domination Agenda”) results.
3. Another poster makes a negative comment on Thrive and says something like, “That movie is crap” or “Don’t be fooled by this nonsense.” This is the poster who will almost always post a link to Thrive Debunked.
4. The original poster returns, defending the movie (usually in a shrill, angry and indignant tone), denouncing this blog and calling me a “paid disinformation agent.” Then the original poster will add a bunch of links to other conspiracy theorist material that supposedly “validates” Thrive.
5. The pro-Thrive and anti-Thrive forum posters argue amongst themselves for a few more posts.
6. The original topic goes fallow and is forgotten as the posters move on to something else.
This pattern repeats day after day, all over the Internet, in country after country. (If you want a recent example of this effect, go here). What is clear from this cycle of discovery and rejection is that Thrive has no staying power. It’s a shiny toy that attracts the temporary attention of conspiracy theorists, and then after it’s been debunked and the requisite “paid disinformation agent” accusations have been vomited up against the doubters of the film, the conspiracy nuts lose interest and move on to the next shiny toy. This demonstrates that, even among conspiracy theorists, Thrive operates at a highly superficial level. It generates very little sustained contemplation, thoughtful discussion or even self-reflection. It’s bubble-gum candy, intellectual junk food. To be sure this is as much the fault of the defective mentality of the conspiracy theorist underground—which vociferously discourages any attempt at intellectual analysis—as it is the failure of Thrive, but it’s telling that there’s so little “there” there behind most public discussions of the film.
But Isn’t The Film Valuable Because It Gets People Talking About Important Issues in Our World?
This argument presupposes that Thrive is ethically neutral–that if it is not true, its untruth is harmless, but if (by wild coincidence) the filmmakers happen to aim a wayward arrow at some real-world issue that needs addressing, Thrive is a net positive because it’s directed at least some energy toward addressing that issue. That’s not the case, because the great deal of damage that its untrue and disingenuous depictions of societal issues cause far outweighs any marginal benefit the film might have by “accidentally” aiming at a valid target.
Let me give you an example. The dependence of industrialized societies on fossil fuels is a crucial issue in our world that must be solved, before anthropogenic climate change renders our environment uninhabitable or hostile. Thrive implicitly does accept the premise that dependence on fossil fuel is bad. However, Thrive’s proposed solution is to rely on “free energy” machines, built from plans given to us by aliens, which will miraculously liberate us from all our energy problems. This is a false solution. Even a fan of the film who is motivated to take action to advance a solution to fossil fuel dependence will have his or her energy diverted in a completely useless direction: advocacy for “free energy” machines that do not exist.
In order to turn this hypothetical Thrive fan into an activist working toward real solutions to energy problems–for example, political lobbying for greater public investment in R&D to develop solar, wind, or geothermal energy–will require reeducating the person to realize that “free energy” is a falsehood and that Thrive has misled them. If they’re already interested in working toward energy independence, it’s likely that whatever stimulus sets them on a more productive path could have interested them in the real solution at the get-go, which means the fact that Thrive turned them on to the issue of fossil fuel reliance is totally irrelevant. In fact, Thrive in this example has been counterproductive, because it wasted the would-be activist’s (and society’s) time by encouraging him to tilt uselessly at the windmills of imaginary “free energy” machines. This is not a net positive.
Even this hypothetical example is extremely speculative because it’s not likely that Thrive will interest people “by accident” in genuine issues and genuine solutions anyway. The issues Thrive cares most passionately about are the conspiracy theories. Consequently, what little “activism” it can hope to ignite will almost invariably be directed at ending these horrible conspiracies. That is not a net good for society. It’s a net negative, because conspiracy thinking is part of the problem and is not a solution to anything.
The Final Truth—The One Thrive Fans Will Never, Ever Admit.
There’s a line in Michael Jackson’s song “Beat It” that goes, “No one wants to be defeated.” Conspiracy theorists are more ferociously resistant to admitting failure and defeat than just about anyone else. In fact, they’re so resistant to the notion that their theories are failing to “wake people up” that they will engage in the most egregious contortions of reality to avoid accepting that the mainstream world either treats them as irrelevant wingnuts or incurable lunatics. Consequently, I predict that Thrive fans who choose to comment on this article will never, ever admit that Thrive is losing, rather than gaining, viewers, and that instead of “waking people up” it’s falling quite quickly into well-deserved obscurity.
Conspiracy theorists love to assert that more and more people are joining their side. They love to say things like, “The worm is turning!” or “We’re gaining critical mass!” Bizarrely, they persist in these delusions even long after the party is over, after it becomes painfully obvious that the mainstream world has passed them by.
Take, for instance, 9/11 Truthers. Right now, the conspiracy theory that maintains “9/11 was an inside job” is less popular now than it has been at any time since the attacks of September 11 happened. I proved this in this article, refuting the absolutely false assertion made by Foster Gamble in Thrive that “a growing number of people” believe in this delusion. In fact, based on poll data, the numbers of people who believe in “9/11 was an inside job” theories is shrinking, not growing. But Truthers will never admit this. To them, the conspiracy theory has to be gaining converts every day. The lack of evidence that Trutherism is becoming more popular is treated as irrelevant, or (more typically) that news of its supposedly growing popularity is suppressed. Truthers will never—never—admit that mainstream society rejected this conspiracy delusion long ago and moved on.
In fact, I’ve had 9/11 Truthers try to tell me that the reason nobody talks about 9/11 conspiracy theories much anymore is because they (the Truthers) have already won—they think the vast majority of the public considers 9/11 a closed issue, having concluded that it was a conspiracy, so there’s no need to debate it anymore! They’re right on one score—there is no need to debate it—but for precisely the opposite reason: mainstream public opinion long ago tossed 9/11 conspiracy theories on the dustbin of history, and trying to gain new adherents to the theory is like trying to sell tickets to the Titanic after the ship has already gone down.
There’s one more powerful piece of evidence indicating that the mainstream world has forgotten about Thrive, and that’s here: the very interesting discussion that took place behind the scenes at Wikipedia over whether Thrive was “notable” enough to warrant an entry in the database. Despite the frenzied efforts of Thrive partisans, the Wikipedia gatekeepers decided that Thrive wasn’t even worth their time. There is no Wikipedia page on Thrive. Nor will there be. It’s not suppression; it’s not propaganda; it’s not the “Global Domination Agenda” paying Wikipedia to snub them. It’s much simpler than that: no one cares.
One Wikipedia editor summed up the argument against Thrive with these very telling statements, which ultimately won the debate:
“This page [the one on Thrive that was eventually deleted] reeks of promotion and has the barest credentials. I must agree with nominator that page created by a known sock puppet of an indef-blocked socker [translation: a known conspiracy theorist troll] should be subject to close scrutiny. [An anti-Thrive Wikipedia user] makes the valid points above this film has no wide interest and zero sources other than blogs…”
This is the truth. No one cares anymore. No one should care. Thrive is dead. John Robbins and the other nine repudiators ended the Thrive phenomenon, if indeed there ever was one. Game over.
This is my final article for Thrive Debunked. After seven years in the arena, I have retired from actively debunking conspiracy theories, and Thrive marks the final chapter in that journey. My contributors and I have, in the past year, successfully refuted every major assertion made in the film. There’s nothing of substance left standing of Thrive. Our work is completed. Thrive has been completely debunked. Even if it wasn’t, John Robbins and the repudiators have rendered further effort in deconstructing the film largely pointless, because it’s clear that the film is not going to have any real resonance in the future beyond the realm of conspiracy theorists and New Agers who already know about it.
But, like a dead oil tanker that continues to leak toxins into the environment decades after the main oil spill has been contained, Thrive will continue to infect a small, steady trickle of viewers with its conspiracy poison, whether its new victims are young people who are just entering the dark and nihilistic world of paranoia, or other potential fans who simply haven’t heard about the movie before. For that reason, this blog will remain up for at least a while. It’s already helped a lot of people, and can continue to do some good, even if it is no longer actively updated.
The conspiracy theorists out there will invariably interpret this as some sort of victory, or perhaps further “proof” that I am a “paid disinformation agent”—maybe my CIA/Project Vigilance masters have stopped paying me, or transferred me to another assignment!—but there’s nothing I can do about that. Conspiracy nutters will make that accusation anyway, regardless of how stupid it is. I am not a “paid disinformation agent,” of course, but the fact that paranoiacs continue to believe that I am gives me no grief at all. I have nothing to prove to conspiracy theorists. This blog wasn’t meant for them anyway; it was meant to reach people who are still capable of rational thought.
What I feel most toward fans of Thrive is not anger or even pity, but sadness. What could have been great hope, promise and energy of a generation of young people who want to change the world has been squandered, bastardized and ultimately wasted by sad obsessions with bizarre conspiracy theories that can do nothing—absolutely nothing—to move our society forward or address the problems within it. This is the tragedy of conspiracy thinking. It is a tragedy upon which I can no longer dwell, and with Thrive now debunked, I no longer have to.
I want to thank the contributors to this blog (SlayerX3 chief among them, though he’s by no means the only one), as well as those behind the scenes who helped me research, fact-check, and keep ahead of developments I wouldn’t have heard about otherwise. I want to thank the readers (you know who you are) who respond tirelessly in the comments, slamming down the endless assaults of idiocy and irrationality spouted by Thrive’s more militant fans. If by some miracle of fate Thrive’s fortunes do turn around—or if Foster Gamble decides to make a Thrive 2, perish the thought—I will be looking to you to carry on my work, and to defend rationality, sanity and reason against the endless waves of woo, bullshit, paranoia and propaganda in which our world is sadly awash. Thanks for a job well done.
Foster Gamble or his fans may not think so, but I, for one, am thriving quite well.
Thanks for reading.
One of the central passages of Thrive is a section often referred to as “Follow the Money,” which Thrive fans treat as some sort of slogan. This section contains Foster Gamble and others’ views on fractional reserve banking, the Federal Reserve, the economic crisis, and conspiracy theories related to these. This article debunks those ideas.
Fraction Reserve Banking
Before the Wikipedia bashing begins, I’m using Wikipedia for two reasons: (1) Simplicity, and (2) it works well for summaries of information, even though I will provide further sources and more detailed information links than Wikipedia can provide.
PS: This part of the movie is incredibly complicated for anyone involved here to deal with, as given that most people don’t understand how economy and politics work by themselves, much less together, unless you’re well-versed in mathematics, economics or political science. Comments that simply complain about how wrong or rigged the actual political and economic systems are will be seen basically as an opinion and not fact.
It also doesn’t help that for the makers of Thrive the current economic system is a scam/conspiracy created by a powerful Financial Elite to perpetuate their own power. Arguing the existence of this conspiracy (Thrive mostly uses misinterpretations and opinions that they exist instead of verifiable facts) feels like beating a dead horse, thanks to our good old friend Confirmation Bias.
When they begin talking about Fractional Reserve Banking, Foster Gamble and and David Icke get a few things right at the beginning. They are right about how saving deposits are used by banks for loans and financing, but the film cuts short the explanation of why this happens and the economic reasons to use fractional reserve banking. Instead of explaining the real reasons behind this, the movie simply dismisses it by saying “it creates money out of nowhere.”
What is Fractional Reserve Banking?
Fractional Reserve Banking (FRB) is a form of banking where the deposits made on the bank are separated in two parts. The first is the amount the bank is allowed to loan and the second is the part the banks is obligated to keep as a reserve. This amount is dictated by the central bank of the country where the bank is operating.
Does it really “create money out of nowhere?”
The answer will depend of which kind of money you’re talking about. If you’re referring to printed money, it can’t “create money out of nowhere,” as the values being loaned and being circulated haven’t been made or printed yet.
If you’re talking about value: yes it can create more value since there is more money circulating than there is physical printed money.
This is much better explained by the links I’ll provide.
Why do banks work with FRB and how come they don’t “run out of money”?
Because it is fluid, FRB allows banks to generate profit and still provide access to people or business to acquire money for whatever reasons they need it–for example, to buy a house or start a business. FRB guarantees there will be money circulating for investments, consumer goods and to accommodate a growing and active economy.
[Muertos comment: this is not a new invention. If we did not have FRB in some form, our economy would be stuck in the early 19th century. The whole concept of modern banking, historically, developed as a means to permit sufficient capital to be accumulated to fund large-scale projects, both public and private. Without something like FRB, we would not have public works projects like dams, sewer systems or transportation, and we would not have privately-funded industries such as computers and information technology, because it simply wouldn’t be possible to get enough capital together to even begin to pay for these things. This is the historical reality that critics of FRB refuse to understand.]
The influx of savings deposits and payments on loans that they make usually are enough for most banks to be secure they will have the money needed to honor the withdrawals, as there are more people making payments and saving deposits than there are people making withdrawals of their own savings and assets.
What if there are more people making more withdrawals than the bank has money on reserve?
Remember the credit crisis that started in 2008 and is still kicking? One of the reasons why it went from bad to worse and from worse to a total disaster was because of this–people making more withdrawals than banks had in reserve. In times of economic crisis, if there is a doubt that the banks will be able to honor the deposits made on them, this leads to people and investors to withdraw all their assets within the bank in a really short amount of time, before other depositors can withdraw their share. This creates a cascade effect that can possibly (almost certainly) cause a bank run. This forces the bank to call in its short term loans, draw upon credit lines with other banks or ask for last resort rescue loans from the central bank.
Okay, but how this is bad for people?
In time of a stable economy this not bad for financially responsible people, those who take out loans that are smaller than their average yearly income and can make sure that the accumulated interest won’t surpass all their earnings during the intended financing period. Take for example financing the purchase of a house with a 10 year mortgage plan. It is, however, extremely dangerous for people who to borrow who are in unstable financial situations (like no job security, health problems, addictions) or do not measure how much interest they’re incurring compared to how much they earn, or people who simply don’t care about the long term consequences of their lack of foresight (I can’t miss the chance to throw this jab at the American reader).
In times of instability, however, irresponsible borrowing (and lending) can hit hard even the responsible people hard. This is what happened in 2008.
Gamble continues with a story telling how the fractional reserve banking system was born.
Setting aside Mr. Gamble’s implications of how it is used to create money on the backs of people (which is an arguable question), if you want to know how central banks and fractional reserve banking came to be, look for the history of the Bank of Amsterdam.
Here are some links that further explain what FRB is and how it came about:
https://www.youtube.com/watch?v=nH2-37rTA8U (Khan Academy on FRB, quite educational I must add, as long as you avoid the comments section).
http://econpapers.repec.org/paper/wpawuwpma/0203005.htm (look for the download link)
Later Gamble states how FRB is used to create a population that is tied to their debts to the bank.
Then Thrive provides us with this quote: “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning” – Henry Ford, 1922
The quote appears to be completely fake. Although it is commonly cited on conspiracy theorist, 9/11 Truth and “End the Fed” websites, there is no source and no context linking it to Henry Ford. Not even the dates that Ford supposedly said it are consistent.
[Muertos comment: conspiracy theorists love to use fake quotes, and this is not the only fake quote in Thrive–there’s a quote by Henry Kissinger that is equally false. The problem with these quotes is that, once it gets out there and conspiracy theorists decide they like it, a quote gets repeated all over the place on all sorts of conspiracy theorist websites–thus creating the erroneous impression that, because the quote appears so often, it must be true and accurate. If you don’t believe that this happens all the time, just think back on all the things comedian George Carlin is supposed to have said–only a small fraction of them are actually real Carlin quotes, and as he is dead, he can’t dispute that he didn’t say them.
When conspiracy theorists are challenged on fake quotes, many of them will say something like, “Well, you can’t prove that he didn’t say it!” That, of course, is asinine. You can’t just make up any crap you like, put it in someone’s mouth and then challenge people to prove they didn’t say it. But, sadly, this is how conspiracy theorists think. Quotes about banking are particularly attractive to conspiracy theorists because they love the idea of respected figures from history having supposedly “warned” us about the dangers that they (conspiracy theorists) insist are right around the corner.]
After the fake Henry Ford quote, Gamble resumes his rant on how we have become debt slaves of a financial elite who has rigged the system to their benefit.
Take this as you will, but you’ll become a debt slave if you decide to acquire (too much) debt in the first place. For many this seems unavoidable.
[Muertos comment: the term “debt slave” bothers me because it’s misleading. Suppose you have a good job and a family. You take out a 30-year mortgage at a reasonable interest rate in order to buy a bigger house to raise your kids in. You can easily make the payments and your house increases in equity in the meantime. Are you still a “debt slave” for the next 30 years? If you decide to sell the house you pay off the mortgage, and can take the equity and invest in a bigger house elsewhere. How is this “slavery”? And what’s the alternative–live in a smaller, crappier place and try to raise your kids there, where you don’t have room for them? Why is taking advantage of the opportunities that debt creates necessarily a bad thing? Thrive doesn’t see distinctions along these lines. In its ideology, all debt is bad.]
Catherine Austin Fitts
“Catherine Austin Fitts was Assistant Secretary for Housing in 1989-90 under the first George Bush. She is also a Wall Street banker. She currently works for an investment advisory firm called Solari, Inc.”
Ms. Fitts, along with Mr. Gamble, keeps reaffirming how FRB is used to print more money and enslave more people through debt. Later she makes a comparison with ordinary people counterfeiting money being a crime, while the [central] banks printing money being called “increasing the money supply” as if there’s no distinction here. There is a distinction. I don’t know, maybe it’s related to the fact that central banks are trusted institutions, and they are an effective way to control interest rates and the amount of money being circulated so as to make sure hyperinflation or hyper-deflation do not take place. Yes, said measures can fail, but it’s certainly not the same as “printing money” just for the hell of it.
Gamble then cites the gathering of the “secret” Morgans and Rockefellers on Jekyll Island, where (he says) the draft of the Federal Reserve was created.
First he fails to mention that a central banking system was already in place in Europe–especially in Germany–long before the bankers and politicians in US were considering using a central banking system. Second, politicians in US were already studying alternatives to the US Treasury bonds and lack of liquidity and access to credit, mostly in response to the Panic of 1907.
After this Gamble beings talking about the creation of the Fed and the Internal Revenue Service in the same year, “forcing us to pay for the politicians’ debt”, and introduces the viewer to G. Edward Griffin and his book.
G. Edward Griffin
Writer of “The Creature from Jekyll Island” which is about the creation the Fed, Griffin is a critic of the current banking system and advocates private currency as being “real money.” Needless to say, his ideas are quite popular amongst libertarian circles.
(If you want to know how bad this idea of “real money” is, just imagine going to the state next to yours just to find out that the private currency of your local bank, backed by a commodity like silver or gold, is worthless because the other state operates at different standards or doesn’t accept your currency. Or, worse yet, imagine if the bank goes bankrupt, all your assets in said bank are gone, and there is no central bank or institution to guarantee the bank will have the resources to honor its deposits).
[Muertos comment: we had precisely this problem in the Great Depression, which resulted in an entity called the Federal Deposit Insurance Corporation–an agency that makes sure that you, as a bank depositor, will be able to retrieve your money from that bank (up to $250,000, I think) even if the bank fails. Where would the money come from if the FDIC had to make you whole after your bank fails? It would come from a fund administered by the federal government. Doesn’t sound so bad when you think about it like that, does it?]
Griffin goes on about how the central banks are cartels that work with governments and have the legal power to create money out of nothing when the government needs it.
I think the “out of nothing” part of the money is not entirely nothing. There seems to be a massive misconception that when a central bank prints more currency, it’s simply creating more money out of nothing. First, it doesn’t happen this way. Even though the money is not backed by a scarce commodity (like gold), the value attributed to it is related to how trusted and reliable the country’s central bank is. Printing more money without the generation of wealth decreases the value of the money. This is why you can trade one US Dollar for 10,000 Zimbabwe Dollars, and the same reason why the Zimbabwe 1000 Dollar bill is worth less than the paper it’s printed on. Printing more money without generation of wealth will lead to inflation and the loss of value for the currency.
[Muertos comment: this has been proven time and time again historically, such as in the U.S. when “greenbacks” were printed to help finance the Civil War. It didn’t work then either.]
The central banks are not only able to create more money. They are also capable of removing money from circulation when needed. For example, during Christmas the US Federal Reserve prints more money to assure all the withdraws will be possible, and then they remove the extra bills from circulation afterwards.
When this happens, the fiat currency doesn’t lose its value because it is just a representation of the wealth that already does exist, even though most of this wealth is in form of data like the amount you have in your bank or how much all your declared belongs are worth. It doesn’t mean it’s worthless. It’s a representation. It’s not wealth itself.
Let’s put this way. The amount of wealth in dollars is X and the amount of printed paper money is Y. Because most of the wealth being traded, stored or transferred is in the form of savings, credits, stocks, checks and representations other than printed fiat currency, X will be always higher than Y, but when people are making withdrawals, collecting their payments or selling things, more money will begin to circulate from hand to hand. Since there is more money in data form than there is in the form of printed money, the Central Banks print the money and send bills to the local banks to make sure they are capable of handling all the money being moved and spent. This will make Y approach the amount of X, but if the amount of Y being printed and in circulation is getting closer to the amount of X, there is a chance that Y will surpass X. This will lead to the devaluation of the currency on which X and Y operate, leading to inflation.
To put it in even more simple terms: when you print currency to represent wealth, you’re not creating money out of nowhere. When you print more currency than you have wealth, you’re lowering the value of the money. The amount of wealth is still the same but the value of the currency changes.
Bill Still on the Federal Reserve
Bill Still is another Libertarian film producer, highly critical of the monetary system in US. He is also seeking the nomination from the Libertarian Party for the 2012 elections.
During his short appearance in Thrive, Mr. Still claims that the Fed is a privately-owned bank made to look like a government bank. To get his point across he says the Federal Reserve, instead of being on the blue government pages in the Washington DC area phone books, is on the white pages. He thinks this is evidence!
Since I don’t live in the US and I didn’t look at a phone book from the DC area during my short but pleasant stay in US, I have to say that was a really bad choice for evidence.
[Muertos comment: there are a lot of stupid assertions in Thrive, but this one has got to be in the top five most ridiculous things in the entire movie. I can’t believe Mr. Gamble let this one through–it’s simply insulting to the intelligence.]
Alan Greenspan on the government’s relations with the Federal Reserve
At 1:00:02 of the movie there is a short video clip in which Alan Greenspan claims that the Federal Reserve doesn’t take direct orders from the president or the Congress. This is used to show the Fed as a rogue agency that answers to no one.
This is totally wrong. Mr. Greenspan’s quote is taken out of context.
For starters, all members of the Federal Reserve Board of Governors, are handpicked by the president and approved by Senate vote. They are required by law to have a “fair representation of the financial, agricultural, industrial, and commercial interests and geographical divisions of the country.” This means they have to be scholars in economics, politics and above all they must represent the economic interests of the nation, not the interests of the Congress and not of the president. They are accountable for their actions which can lead to members of the board not being nominated again as well the formal and informal relationships of the board members with the president and the Congress.
There is a really good reason why the central banks usually don’t answer directly the executive chief in office and the Congress: if they did, politicians could use these banks for political gain and directly affect the economy. We need an independent Federal Reserve.
A brief study of history, especially looking at some South American countries and African countries, will show that when the politicians can control the decisions of the central banks and therefore dictate the course of the economy, the results are not pretty. More often than not this is completely disastrous for the country.
Even though the title of the linked video and the comment section of the youtube page follow the same line of thought of the people featured in Thrive, I’d like the viewer to see the part beginning at 8:00 where Greenspan remembers that the actions taken by the Fed would hurt G.H.W. Bush’s reelection. Just think about that for a few minutes. What if Bush was able to change the decisions of the Fed for his own political gain? What would that do to the economy of the United States? This could potentially harm the economy more than it was already harmed in 1992 (which at that time was in a deep recession). This is why the Congress and the president don’t have much say in the decisions of the Fed, but the Fed is still accountable for its decisions. The people on the Federal Reserve Board were chosen by the president and approved by the Senate in the first place, making them accountable for their actions inside the Federal Reserve.
Here are some documents containing detailed explanations of the relations of the Federal Reserve with other branches of the US Government. As you will see, it’s far from an unaccountable rogue entity.
After this, Mr. Gamble and Ms. Fitts give us analogies on how the bankers use their data on the economy to benefit themselves at expense of others. I won’t argue much with that because it is happening, but not for the reasons Gamble & friends would you like to believe.
Since it is Mr. Gamble talking about the FBI raiding her (Ms. Fitts’s) company not her saying it, and nowhere in her company’s website or her bio mentions the said raid, I’m skeptical that it even happened. I also tried to look for news articles mentioning this raid hoping to see something like the paper shot Gamble gave us on the screen, but the only places I saw any mention of it were 9/11 Truth websites and a few truthers’ blogs without any external links or sources to this event beyond what their word for it.
[Muertos comment: always be skeptical of anything that appears on 9/11 Truth websites and nowhere else. 9/11 Truthers are notoriously incapable of getting almost anything right.]
Unless Ms. Fitts herself can come forward and explain in her own words what happened, or if someone can provide me a reliable link or newsfeed with info validating Mr. Gamble’s characterization of what happened, I’ll keep my sense of disbelief about the big government suppressing her findings, specially someone with credentials and political reach like her. (Blogs or forums do not count as reliable source; I’m talking about newspaper articles or public data).
[Muertos comment: given the fact that ten people who appear in Thrive have signed a letter repudiating the film and saying the movie was misrepresented to them, I wouldn’t be at all surprised if what Ms. Fitts would say about what happened would differ significantly from the way Mr. Gamble puts it in the film.]
The Dollar and the Sub-prime crisis:
Gamble begins this part with a moot point about the devaluation of the dollar, showing it from 1913 to 2010.
Remember when I discussed the matter of currency in circulation vs. the real value of wealth? Well, this is what happened: when the Federal Reserve came into being, having a regular universally recognized currency made trade easier both on the internal market as well the international market. It made the US economy more open to these markets, generating more trade, and as result more currency started to circulate. To compensate for the new amount of money circulating and more people earning more money, prices rose, because people where consuming more. This effect is called “demand-pull inflation.” This is regarded as the good kind of inflation because it shows that the country is THRIVING.
This doesn’t make people poor. If the prices are rising, so are peoples’ wages. Even if products have higher prices they still hold the same value. (The kind of inflation that rises both price and value is called “cost-push inflation,” and this happens due to the increase of production cost or scarcity. This is the bad kind of inflation).
But why doesn’t the currency return to its original value after a while? This happens because of an economic effect called “built-in inflation,” where past experiences dictate how the wages and prices will rise. Workers expect inflation to pinch in the future, so they start asking for higher wages to compensate. As a result, companies start raising the price of their products so they don’t lose their profit margins. Because this builds over time it becomes something like a change of currency or a hard economic crisis, where money is being hoarded and trading comes to a halt.
Even if you look to Mr. Gamble’s graph you’ll notice the periods when the dollar’s value rose were in the interwar period and during WWII, when US was still suffering from the 1929 stock crash that brought the US economy to its knees, and during WWII where all the US economy was focused on the war effort instead of producing consumer goods and trading. After those periods were over, trading resumed and, as expected, the value of the dollar declined as more currency began circulating again.
Same case as the “economic parasite” claim: the gap in wealth is a big problem, but Thrive has the wrong take on what is the cause.
No, I don’t have a magic bullet solution for wealth disparity. No one does. I do, however, support several policies involving fiscal responsibility, fair taxation, better public health and education plans, transparency from both government and corporate business and not reelecting the same politicians with histories of corruption and incompetence.
Bankers and crisis
Gamble tries to correlate the stock crash of 1929 and the Great Depression to the creation of the Fed. Logically correlation does not equal causation. If you take a look at what happened, the stock crash of 1929 was caused by reckless investments on high risk and speculative shares. With the investments boom more people where buying shares and raising market prices. This would only become viable if the stock market kept rising at a quick rate. If the rise wasn’t fast enough, halted or went into a downturn, those shares would lose their value. This was combined with the massive loans stock brokers were making to investors (called “margin”). The investor only had to pay 50% of the share value and the broker would complete the rest with his own money. Thousands of people taking loans to purchase more shares didn’t help as it was creating a massive economic bubble. As expected, once the stock market faced a downturn, mass panic selling followed, forcing the share’s values down creating a cycle where investors had to sell their shares to pay their brokers and avoid losing too much money with shares that by this time had lost all their value.
[Muertos comment: the causes of the Great Depression are still highly controversial today. There is no one clear answer, but what you’ve identified is clearly part of the problem–any basic book on the crash will make this case. It’s also not limited to 1929. I was working in the financial sector during the “dot com bust” of 2000-2001, and much the same thing happened–shares were grossly overvalued, and there was too much credit attached to financial speculation. When dot coms started to post less than impressive profit numbers, the whole thing collapsed. Something similar happened in 2008, except instead of stocks it was financial products tied to real estate.]
It is also worth remembering that the both people buying and selling the shares are normal people, prone to make mistakes, get nervous or act on impulse. This means one bad rumor in a highly volatile place such as the stock market can cause many stocks’ value to plummet. Do this on a large scale and you can get yourself a nice big crisis on your hands.
http://stocks.fundamentalfinance.com/stock-market-crash-of-1929.php (this is a TL;DR version of the previous link)
I also would like to have access to this “research” Mr. Gamble claims did on the “major banks” moving their money away from the stock market before the crash, because I’m not able to find any reliable link or article showing that this in fact happened.
The 2008’s credit bubble crisis
This is the only thing preventing me to copy paste the debunking of Zeitgeist here and calling it a day.
But where do I start? First Foster Gamble and David Icke and their “research” (really, I’d like to see the data Gamble uses to make his statements) want to lead the viewer to believe the 2008 economic crash was a ploy engineered by the major banks to consolidate their power by breaking smaller business and seizing their assets.
But there are a few problems with this. For one those assets (mostly houses) have become worthless, and the bail outs are not even close to the amount lost by the banks during the crisis. Plus, why create an economic crisis in the first place? The last thing you want, if you’re a banker or an industrialist, is an economic crisis where people stop spending and the economy stagnates.
So what happened in the 2008’s subprime crisis?
It was caused by a combination of lack of foresight, greed, high interest rates, high risk investments and a complete lack of regulations for the financial sector (I can hear from here all the libertarians shrieking in horror after reading this).
Putting it in layman’s terms, before the 2008 crisis the housing sector in United States was one of the most attractive investments for a few reasons. First, the continuous rise of housing prices and the demand for new houses, and second the too low interest rates from the Federal Reserve that were not attractive to the investors anymore (they were around 1% during 2008).
Okay, what was the banks’ deal then?
They were buying the mortgages from lenders and then reselling them to investors looking for investments with better rates. The banks would proceed to lend more money, mostly from other major banks and from central banks, to acquire more mortgages. Then the banks would generate massive profits from all the homeowners paying their mortgages.
So far so good. But for them there was a problem: since this was one relatively safe and high profit deal, the banks wanted more people paying more mortgages on the rising housing prices.
When a financing company sold the mortgages for the banks, if the homeowner went into default the bank would get the house. This was attractive for the bank because the housing prices were rising at the time. This meant that when the mortgage broker sells the house at a new higher price, the lenders and the banks would make a better profit with the new mortgage payers.
Okay, but where do the problems begin?
The number of AAA home buyers (meaning, reliable and financially responsible people) buying houses was too low to sustain the kind of profits they wanted to make selling and flipping mortgages. So, not wanting to miss the opportunity of selling the houses at higher prices and collecting the higher mortgages, the banks and lenders started selling the houses to subprime families (non reliable people) that they knew would go into default in a matter of time so they could resell the house again and again. Major profits were made this way. The lender would sell the mortgage for the banks and then the bank would sell it to an investor willing to take the risk.
With this happening soon the number of houses going into default was increasing. The number of houses being placed on the market for sale was also rising, but the number of people looking for a house was not. Actually most of the people who could afford a house already had one and with the subprime families simply not paying, this was starting to drive the housing prices down. To make things worse, the people who could afford their high mortgages simply started abandoning their houses because now they were worth a fraction of what they used to be worth, and yet their mortgage was the same.
This left the banks with a lot of houses, but with no one paying for them. The banks borrowed massive amounts of money to buy those mortgages, and the lenders had a lot of houses with people who were going into default, and the investors had a lot of high risk deals that have become worthless. The investors were not able to sell the risk to anyone because by this time everyone noticed that things were not going as planned and stopped buying or selling, essentially freezing the banking and the financing market, bankrupting the banks, the investors and the lenders.
And the banks owned a lot of money they couldn’t pay back, usually to other large banks either in US or Europe, thus dragging those banks down into the crisis with them.
This is the simple explanation, but there are other factors that contributed to the crisis. For example, easy credit (it stimulated not only banks to borrow huge sums of money but also common folk), predatory lending (lending deals so long and prone to change that people were deceived into deals that aren’t what they are advertised) and underwriting (banks with mortgages that didn’t meet proper standards and selling them to other banks and investors) and deregulation of the banking industry (this made easier for banks and financing companies to pull their stunts without the government being able to interfere).
This showed that the banking system had serious problems both ethically and financially, but the reality is much less Machiavellian (and boring) than Gamble would you like to believe.
Back to the movie. We have Mr. Gamble explaining the crisis using a fish hook analogy to show how the financial elites consolidate their power. I’d bother to explain who this logic is wrong if I didn’t do it already above.
Again the banks won’t make major profit from a lot of houses with devaluated prices and with their credibility shot.
Gentlemen! Behold the links!
http://crisisofcredit.com/ (a friendly video explanation about how the crisis came to be)
“Give me control over a nation’s money and I care not who makes her laws.”–Baron Mayer Amschel Rothschild
I can’t find this quote in any history source or website. The only result that purported to show where it came from besides attributing it to Amschel Rothschild is from The Creature of Jekyll Island.
And it featured in America: Freedom to Fascism.
Too bad Mayer Amschel Rothschild died in 1812, virtually a hundred years before the quote started making its first appearances during the early 20th century.
Bank for International Settlements (BIS) and the International Monetary Fund (IMF)
There isn’t much to talk about the BIS and the IMF. The BIS acts like a hub for central banks to organize themselves, regularize the sector and push for transparency on the business. The IMF is a bank responsible for money lending programs enjoyed by its contributors. It is infamous for cases of sheer incompetence due to lack of touch with the reality of the countries they were lending money to or how the assistance programs are perceived by the local population. Depending on who you ask or which country you’re talking about, the IMF can be either seen as a major tool for the development of a country or just a means for the developed and industrialized nations to explore the undeveloped ones.
Like the Federal Reserve and other “major banks,” Gamble also claims they are controlled by the financial elite.
As with much else in Thrive, the “Follow the Money” section is long on rhetoric and short on identifiable facts. There are oversimplifications, important concepts left out, quotes whose truth can’t be identified, and a lot of distortions. This section isn’t done very much better than any other section in Thrive.
As difficult as this subject is, hopefully this analysis gives you something to work with as you evaluate the claims made by the movie.