TERRY GROSS, host:

On September 15th, 2008, Lehman Brothers declared bankruptcy, an act that prompted widespread recognition that the U.S. was caught in a full-scale financial crisis. Now, a year later, we're seeing a spate of films that attempt to grapple with that crisis and the role of the economy in American life. One of them, Marc Levin's "Schmatta: Rags to Riches to Rags," will be playing for the next several weeks on the various HBO channels. Another, Leslie and Andrew Cockburn's "American Casino," is currently in theatres but also available on DVD.

Our critic-at-large John Powers has seen them and says both have things to teach us about economic processes we often take for granted.

JOHN POWERS: In good times, most of us don't give much thought to capitalism. We simply live within it. All that changes when things go bad, which is why we're now seeing a flood of movies about the economy. The most publicized is Michael Moore's "Capitalism: a Love Story." But frankly, it's sort of the kind of scattershot tirade I used to hear in my college dorm. If you actually want to learn something, two other new documentaries do far more to explain how grand economic forces shape our daily lives.

"Schmatta: Rags to Riches to Rags," is an engrossing, elegiac history of the New York garment industry, largely seen through the eyes of those who've worked there. Starting with the early sweatshops, filmmaker Marc Levin shows how the notorious Triangle Shirtwaist Factory fire of 1911, in which 146 female workers died after being locked in their burning workplace, helped jump-start the entire American labor movement, leading to widespread prosperity.

By the 1950s, garment workers were buying houses in the suburbs and sending their kids to college. Four decades ago, 95 percent of our clothes were made in America. Today, it's 5 percent. What happened? The short answer is the globalized marketplace. Companies began finding it more profitable to outsource their manufacturing to places like China or Bangladesh, whose un-unionized workers make a twentieth of American wages.

Meanwhile, back in New York's Garment District, the unions declined and American workers lost their jobs, even as the companies that once employed them prospered and fashion designers became celebrities selling an image of luxury. Here a former Ralph Lauren designer explains how you make a really, really expensive pair of jeans.

(Soundbite of movie, "Schmatta: Rags to Riches to Rags")

Unidentified Woman: When I was at Ralph, I was working on jeans for $750. How do you make a jean for $750? I mean, even me, I was like, how do you do that? I mean, my God. You know, unless it had Cher's fingerprints on it or something, what could make it worth $750? Well, you develop the denim using organic yarn - cotton that wasn't treated with insecticides, grown under really strict conditions. You cut that denim in Hong Kong, then you ship it on over to India for hand embroidery.

Then you add a little purse, also handmade. Then you ship it on back to Hong Kong because you don't trust India to close it. And then they close it, and then they ship it on over to us again. And that's how you make a jean for $750. Oh yeah, and you also market it correctly.

(Soundbite of music)

POWERS: Those jeans won't be bought by the people you meet in "Schmatta," nearly all of whom love the garment industry but can no longer find work there. Nor will you see them being worn by the ordinary homeowners you meet in "American Casino," Leslie and Andrew Cockburn's film about the subprime mortgage crisis. Following E.M. Forster's old command, only connect, this smart, touching documentary traces the connections between Wall Street's high-flying practices and the countless citizens on Main Street who now face bankruptcy or eviction.

"American Casino" links the crisis to three things: the ideological belief in unregulated capitalism embraced by the likes of former Fed Chairman Alan Greenspan; a political class, both Republican and Democratic, that lifted longstanding restraints on financial institutions; and brokers who used their new freedom to pioneer risky financial strategy from the feverish promotion of subprime loans to mathematical models that supposedly made it safe to create a market in those dodgy loans.

The result was a deeply corrupt system in which everyone from local mortgage officers to Wall Street banks made big profits on dangerous transactions, then passed on the risk like a hot potato. As an in-house memo at Standard and Poor's put it, let's hope we're all wealthy and retired by the time this house of cards falls. Of course, the house of cards did fall and as the film shows, we now have empty McMansions whose untended swimming pools breed West Nile mosquitoes.

"American Casino" introduces us to several people who are losing their homes, a group that's disproportionately African-American. Far from being schemers, they're likable, heartbreaking figures who teach school and work for churches. And using interviews with former financial insiders, the Cockburns reveal how the whole subprime loan business wasn't just predatory - systematically targeting the poor and preying on ignorance - but often criminal.

Near the end of "Schmatta," history comes full circle when a century after the Triangle Shirt Waist Factory fire, female garment workers again burned to death, this time in Bangladesh. Looking at their bodies, we're reminded of the great paradox we also see revealed in "American Casino." Capitalism is the greatest engine for creating growth and wealth the world has ever known. Even Karl Marx was impressed. But if you don't control it, capitalism can be as destructive as it is creative.

It creates good jobs for American garment workers, then takes them away. It invents seemingly magical ways of letting people buy homes, then throws them out. Nothing is immune from its genius for creative destruction, although one thing does seem to remain constant: The system is far kinder to bankers and CEOs than to those who cut fabric or teach in our schools.

GROSS: John Powers is film critic for Vogue and writes the online column Absolute Powers. You can download podcasts of our show on our Web site, freshair.npr.org.

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