Coyote Blog

The MPAA wrote me back in response to my post here thanking our local paper for actually considering (for the first time I have ever seen locally) that subsidizing movie production locally might not be a good idea.  The MPAA sent me a response, which in full is online here.

I will state in general that the whole academic sub-field of making net economic contribution calculations (always full of fact juicy multipliers) is a total write-off in my mind.  You can pretty much throw out everything you read as crap.  Because most are funded by the folks (e.g. sports team owners) who want the subsidy, so the analyses almost always miss the unseen:  Here are all the job gains and benefits in our industry!  But these studies almost always miss the opportunity cost effect of taking tax money and revenues from other industries.  Besides, I truly believe the economy is far too complicated to pull out one single variable out of billions and forecast changes to overall economic numbers from changes in that single variable.

Here is the email I wrote back:

Sorry, but all industry-specific government subsidies are a total useless gravy train for the politically-connected industries that are able to obtain them.

1. These state subsidies are only shifting jobs from state to state.  Why should Americans be paying taxes just to move companies to different places around the country?
2. The implication is that somehow your jobs you provide are better than the jobs my company provides, since you get taxpayer money handed to you and I don't.  Why?  Can you really make an academic argument that your multiplier of your jobs is somehow higher than my employees' multiplier?  Your jobs last 3 months or so in my state, and the highest skilled and highest paid jobs go to people who travel only temporarily in from out of state.    My jobs in my company have lasted for over 25 years.  Remember -- you are essentially demanding that I be forced to pay money from my business to yours.
3. Markets do a really good job of allocating capital.  No industry, I suppose, feels like investors give them all they deserve.  But what you are doing in effect is demanding that the market's allocation of capital be interrupted, and capital that would have been used for other purposes should be forced to be used for your purposed instead.  What basis do you have for claiming this?  And do your analyses ever consider the opportunity cost of what that tax money you are using would have been used for if it were not grabbed away for you?
4. Your problem is basically that your movies don't make enough money on their own to cover costs and you need taxpayers to make up the difference.  After all, you are arguing that less activity would occur without these subsidies so these subsidies must be the difference between losing and making money (and thus between greenlighting and turning down certain projects).  To which I would provide a suggestion -- you need to do what all the rest of us business owners who don't have access to Uncle Sugar's money spigots must do when revenues don't cover costs:  Fix your costs or increase your revenues.  Make better movies or get your costs under control.  Don't demand that I, as a taxpayer, have to make up the difference because you are too lazy or greedy to fix your own financial problems.
5. I can't prove it, but I am not at all convinced subsidies make more movies.  I think that subsidies tend to just increase the income of those in the movie production chain with the most bargaining power, such as actors and producers.  This certainly is what has happened with sports subsidies.  We insanely subsidize every pro sports team in America.  Do you really think we would have fewer pro sports teams without the subsidies?  No -- the subsidies have simply flowed to increasing the income of the top athletes and team owners.

At the end of the day, your industry is particularly good at getting this money forced out of taxpayer hands for two reasons.  The first  is that politicians hope for financial support from you in the next election.  Hell, you might even convince me that local small-time politicians do it entirely just for a photo op with some actor or celebrity.    And the second is that you make for a sexier press release.   Politicians like saying they funded Apple or Tesla or highbrow art like "Sausage Party" -- it makes for a better soundbite in their campaigns than saying they funded a call center or a machine shop.

Update:  The Tax Foundation has also replied to the MPAA

A while back, I pointed out this poll from some group called the Commonwealth Fund.  In mid-October, on average about 15-18 days into the exchange process, they polled a group of non-corporate-insured adults (e.g. individual market or uninsured) about whether they had visited an exchange and what had been their experience.

The finding that stood out to me was that 21% of the people they interviewed that said they had visited an exchange reported that they had signed up for a policy (from the wording of the question, this probably includes both private policies and Medicaid signups).

I thought this seemed crazy-high.  And now new data from the Administration is confirming it.   The Administration is reporting about 106,000 "selected a plan" in October -- a very generous definition since it includes people who put a plan in their shopping cart but did not purchase it.  Not a definition of a sale that Amazon.com would ever use.    Further, another 400,000 or so were "found eligible" for Medicaid, whatever that means though it sounds well short of "enrolled."  So call it generously 500,000 people by the end of October.  The other key bit we need is that the Administration is reporting about 27 million unique visitors to these sites.  So at best we are looking at 1.9% of exchange visitors kind-of-sort-of-maybe having done something that approaches being enrolled.

This puts the Commonwealth Fund polling an entire order of magnitude off, at 21% vs. 1.9%.  And remember their survey occurred in the middle of the month, when the web site was not even working, and one can assume that successful enrollments were back-end loaded in the month.  The CF was nice enough to respond to my emails but were unable to explain the discrepancy, other than the sample size was low making the results unreliable.  So why the hell do it, and then put out a press release?

One explanation for part of the discrepancy may be in those who have created user accounts (normally a trivial task on a private site but a Herculean accomplishment on Healthcare.gov) but have not actually purchased a plan.  The Obama Administration says that there are about a million of these, so in addition to the 1.9% that put a plan in their shopping cart, there are another 3.7% that created a user account and gave the Feds enough info to assess subsidy eligibility, but who have not selected a plan.  Remember, that this was the minimum hurdle the Obama Administration originally set even to see insurance plan prices, and is still the minimum hurdle to get a subsidy quote.  It will be interesting to see the conversion rate of people once they find they are not getting free stuff from Uncle Sugar.

Even so, this only adds up to 5.6% of people who visited the exchange and had any sort of success (in most cases far short of enrollment) at all.  Way short of 21%.  Remember that we you see "studies" like this in the future.

As much as I enjoy seeing Yale circling the drain of self-destruction, I am simply flabbergasted by the most recent discrimination suit it faces from a group of current and former female students.

The Yale group's confidential Title IX complaint to the Department of Education's Office for Civil Rights (OCR) reportedly includes testimony about sexual assaults, but the hostile-environment charge against the university rests as well on a litany of complaints about offensive exercises of First Amendment freedoms. A December 2010 draft complaint letter, obtained by the Foundation for Individual Rights in Education (FIRE), focuses on these "incidents": In 2006, a group of frat boys chant "No means yes, yes means anal" outside the Yale Women's Center. In 2010, a group of fraternity pledges repeat this obnoxious chant outside a first-year women's dorm. In 2008, pledges surround the Women's Center holding signs saying, "We love Yale sluts." In 2009, Yale students publish a report listing the names and addresses of first-year women and estimating the number of beers "it would take to have sex with them."

There are few adults who would not recognize these incidents as stupid, boorish frat-boy behavior not to be emulated.  But taking Yale to court, in effect seeking to force the University to punish such speech, takes the current college trend of protection the right not to be offended to absurd extremes.

Consider for a moment that there are radical women's organizations on most college campuses that take it as an article of faith that all men are rapists and all men are complicit in violence against women.   How is this speech any less aggressive, though it is treated with complete respect by universities.  In fact, many integrate this point of view into required Freshman sensitivity training.   Women on compuses routinely engage in speech saying that every man is a guilty felon complicit in awful crimes, and I don't see any men whining and running to Uncle Sugar to protect their delicate ears from offense.  At least the frat boys were probably drunk and joking -- the women are sober and dead serious.

Don't not be mistaken -- this is not about rights or freedom, but about a bid for totalitarian control of campuses by a niche group.  From Wendy Kaminer

Sad to say, but feminism helped lead the assault on civil liberty and now seems practically subsumed by it. Decades ago, when Catherine MacKinnon, Andrea Dworkin, and their followers began equating pornography with rape (literally) and calling it a civil-rights violation, groups of free-speech feminists fought back, in print, at conferences, and in state legislatures, with some success. We won some battles (and free speech advocates in general can take solace in the Supreme Court's recent decision upholding the right to engage in offensive speech on public property and public affairs). But all things considered (notably the generations of students unlearning liberty) we seem to be losing the war, especially among progressives.

This is not simply a loss for liberty on campus and the right to indulge in what's condemned as verbal harassment or bullying, broadly defined. It's a loss of political freedom: the theories of censoring offensive or hurtful speech that are used to prosecute alleged student harassers are used to foment opposition to the right to burn a flag or a copy of the Quran or build a Muslim community center near Ground Zero. The disregard for liberty that the Obama administration displays in its approach to sexual harassment and bullying is consistent with its disregard for  liberty, and the presumption of innocence, in the Bush/Obama war on terror. Of course, the restriction of puerile, sexist speech on campus is an inconvenience compared to the indefinite detention or show trials of people suspected of terrorism, sometimes on the basis of un-reviewed or un-reviewable evidence. But underlying trivial and tragic deprivations of liberty, the authoritarian impulse is the same.

PS-  The last part in the first quote about rating women as related to sex is ironic, as, if memory serves, Yale was the location around 1980 when a group of female students created a guide rating male students on their sexual talents.  When women do it, it is a brave act of liberation.  When men do it, it is sexual harassment.

PPS-  My son is going through the college admissions process.  All these schools stress how much they are looking for future leaders.  How can Yale be so selective that it has an admissions rate around 7% of applicants but still end up with so many people who cannot function in the world as an adult?  The women are begging to have a daddy to protect them and the men seem to need a daddy to kick their ass until they act like adults.