Tuesday, September 29, 2009

David Brooks, Fiscal Restraint, Culture Wars, and Hollywood

David Brooks has a good column today about a fundamental American value: fiscal restraint. He points out that over the course of our history, our materialism has been balanced by a countervailing thrift. He points to the old WASPs, immigrant families who sacrificed for their kids, etc. Then he throws out some numbers about how in debt we are as a country, and how we are going to have to experience a major cultural shift if we are to get our fiscal house in order. He ascribes equal blame to both sides of the ideological spectrum, conveniently forgetting that it was Ronald Reagan, George W. Bush and supply-side economics that have gotten in to this mess, while Bill Clinton managed to balance the budget. Other than willful blindness, I think he's basically right.

I am an eternal optimist, so it's not hard for me to find some encouraging signs; the decline and fall of the insane demand for luxury that has besotted us and driven developers to erect ever-more fabulous monuments to consumption. But I find the most encouraging sign in what may be the most unlikely, and yet the most likely, of places: Hollywood.

I say "most unlikely" because Hollywood is about the farthest from anyone's mind when looking for examples of monetary sanity; this is a community rather well known for spending lavishly.

But I saw "most likely" because Hollywood is also where many great trends get started. One trend in the box office this year has been the decline and fall of a fair number of movie stars and their potential for opening movies and making millions. So far this year, Duplicity, starring Julia Roberts, State of Play, starring Russell Crowe, and, just this past weekend, Surrogates, starring Bruce Willis, have all done much worse than expected. These people are not earning their $15-20 million paychecks.

Which raises the question: were they really worth $20 million? Presumably, yes; movie studio executives aren't that stupid, and, in fact, they tend to be fairly intellectually disciplined when calculating their bottom lines. Which is one reason Sandra Bullock starred in The Proposal, rather than Julia Roberts: Julia wouldn't cut her $20 million fee, Sandra Bullock was perfectly willing to do it for less, and wound up with the biggest hit of her career.

Movie stars are no more or less greedy than regular people; if I had the chance to make $20 million for 3-6 months of work, you damn well better believe I would take it. They are also no more or less greedy today than they were in previous generations; the nature of human greed has not changed in the last few years. Technology has, and with it certain aspects of the Hollywood business model. It's physically possible to distribute movies today in a way that wasn't possible even 30 years ago. A major studio release generally hits 3,000 screens on opening weekend; Star Wars, by contrast, opened on May 25th ,1977, on a grand total of 43 screens.

Movie stars have been making millions of dollars a movie because they could. Audiences, however, are also ever-more discriminating. The fact that Bruce Willis is in Surrogates is not a guarantee that it will be a good movie. Moviegoers are shade more conscious of what kind of value they are getting for their entertainment dollar. Studio executives are also, I hope, more conscious of the value of their budgets. There is some reason to be optimistic in the recent firing of Dick Cook from Disney. Bob Iger has made it clear that he isn't all that happy with Disney's slate of movies these days. Surrogates is a Disney movie. Bob Iger was worried that Disney is not making good movies, so he fired the head of the studio, Cook. Looks like Iger made the right call.

Money does strange things to peoples' brains: it takes a certain a certain amount of intelligence to make money, but too much money can give people the impression that they are smarter than they are, which leads them to making stupid decisions. We're in the post-stupid decisions phase in this country now. Too much money led way too many people to think that they were smarter than they are, which led them to make stupid decisions. This recession is a wake-up call. The generation that survived the Great Depression was a frugal one.

Money also has a strange way of convincing people that they are worth more than they really are. Certain movie stars seem to think that. They think of themselves as being worth vast sums of money, when their worth is really determined by that insanely fickle entity known as the audience.

What the market giveth, the market taketh away. We are seeing a certain rebalancing of the equation of inequality, at least in Hollywood. Personally, however, I think the best solution to rebalancing inequality is the old-fashioned one: tax the rich.

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