Got to watch out for "people with average or above average intelligence". Wouldn't want to have anyone smarter than, say, Ted Nugent just walking around would we? Especially not in Jacksonville. I guess it is a pretty red state after all.
Great discussion. I didn't realize so many techdirt followers were amateur economists but I guess I should have.
One thing that hasn't been mentioned much is "reward for non-productive activity". Patent trolling is an example often discussed here, but the big kahuna by many orders of magnitude is derivatives trading and the like on by "Wall Street" and it's global analogues. The volume of trades on "synthetic financial instruments" is in the 10's of trillions any given year now. In normal economic activity, I produce a product (or service),and am paid a reasonable amount for it, so now there exists a tangible product in the world which fulfills a need. But Wall Street speculators never produce any tangible product of any use to anybody! They turn on their computer, push numbers around on a screen, and at the end of the day are rewarded with $20,000 (or $20 mil) more in their bank account. They didn't produce any product or service of any value to anyone, yet the economy still has to account for the money they are now holding. And the volume of this kind of activity is staggering. No economy could work with this kind of unproductive weight pushing down on it from the top.
I also think, especially in terms of the U.S. economy, you are underestimating the impact of automation and outsourcing. We've shipped several tens of millions of relatively high wage factory jobs to Asia and Mexico in the last two decades, and the average factory still here employs significantly fewer workers because of automation. Population keeps going up, people retiring later, -how could we not have a high unemployment rate?
Capitalism is obsolete
"In theory, we should all be working fewer hours now because it takes fewer manhours to product many things. But instead we have some people working long hours and others not working at all. And it isn't just a skills issue. We need people in childcare, elder care, and care of the disabled, but we don't want to pay people much to do these jobs."
If we divided up all the work that really needs to be done, and assigned it equally to all the available workers, we would all be working about 20-30 hours a week. But of course those of us who can compete won't do that because then your family is living in poverty. I average 60 hours a week so that my family can have a decent standard of living. My neighbor is jobless and broke and is going to lose his house. Such is the result of capitalism.
And let's look at some important jobs that aren't getting done: environmental restoration and infrastructure restoration. There are plenty of workers looking for work but no one can hire them to get this urgently needed work done because it isn't profitable. Patent trolling and foreclosing houses on poor families is handsomely rewarded by the system but things the world and it's people really need are not. Such is the result of capitalism.
It is high time we move past systems of artificial scarcity and into a more humane and sane economic system. In the future people will look back at capitalism and regard the same way we do feudalism now: an outmoded economic system that was a step on the way to something better.
"We run into problems when all you have is a "company town" where an entire industry is based out of one place. This isn't about "the tech industry" but the fact that every single industry is a tech industry, and tech jobs are everywhere -- and, given their economic impact, incredibly important."
Okay I realize I'm reaching a little here, but this is eerily reminiscent of some things I've been trying to tell you about the production industry (what you derisively call "Hollywood"). Yes, this industry was once based in it's eponymous town (along with New York), but has spread out (due in large part to film incentive programs). And "every single industry is a tech industry" (?) Are you taking a talking point from Chris Dodd? ("Every popcorn grower in Iowa, every supermarket bagger is employed by an IP intensive industry")
"... as the NY Times investigation pointed out, those "jobs" really don't seem to be appearing. Instead, film crews ship in a crew from LA or NY and hire just a couple of locals for low-level jobs... which last a few months and that's it. The impact on the local economy appears to be minimal."
This could be more than just a little misleading. It's anecdotal, but in my state the last few movies and TV shows have employed on average better than 80% local crew. A recent project is estimated to have spent $50 million. More than half that went to local businesses or local residents as wages. They took, I think about $3.5 mil in incentives, but a lot of this was in tax breaks -taxes they would not have paid if they had not brought the production here! So let's estimate: 30 million dropped locally minus 3.5 million in taxes that wouldn't have been collected anyway, oh, looks like my state benefited after all.
You keep bringing up Michigan and Iowa. Everyone in the industry knows MI and IA were fiascoes. Corporate welfare whether in the the form of tax abatements, stimulus or any other form is controversial, and I tend to be against it in general, but if you are going to do a film incentive program there are right ways and wrong ways to do it. There are success stories to balance out the horror stories.
And Mike, this is not any kind of an ad-hom, but just to examine your motivations, aren't you a tech writer? Isn't this a little off your beaten path? I realize you dislike "Hollywood" because it gives us the MPAA and crap like SOPA and so forth, but it really seems like you are trying to discredit an entire industry out of spite when the topic at hand doesn't have anything to do with tech, piracy, copyright maximalism or anything else you normally write about. And if you are going to crossover into covering the production industry, hey that's good. I value your perspective, but I would heartily advise you to learn more about the industry you're so gleefully bashing. You have an impressive ability to pull together and analyze data, but you certainly don't seem to have spent much time on set.
Now a few questions:
- Have you looked at the incentive programs in the Canadian provinces? These are the ones that really kicked it off in the '90s.
- Are there any incentive programs in the tech world?
- How do film incentive programs stack up against corporate and economic growth incentives in general? Are there any industries in which you would support incentives and why?
Keep trying Mike. I value your contributions to the dialogue but I just wish you could have the experience of working in the business for a while before you start pontificating about it.
I read this science fiction book once where, to keep the populace under control, it was illegal to remember where you worked or, after 5:00 pm, what you had done during the day. They administered the amnesia chemically.
I see a lot of anecdotes about how one state lost money on the deal, another benefited in the long run and so on. What you need to remember is that each film incentive program is structured differently. Each state, province or country has a different offer. Michigan's was a disaster in 2010 because it was way too much and didn't say anything about requiring local hires. Georgia and South Carolina seem to be much better written and are worth it to those states for what they give back. Louisiana has spent a huge amount of money and they have a more or less permanent industry there now. Was it worth it? I don't know. But I do know lots of industries benefit from government subsidies of some sort.
I think some jurisdictions already have experimented with the idea of the public partially owning the film. I think British Columbia's has an optional clause like that.
And anyone who has the idea that all film crews come from Hollywood, Los Angeles is truly talking out their ass. I've made a living in this business for 15 years and you know how many days I've worked in L.A.? One. I live and work in a mid size city. Stop lumping us in with L.A., you undermine your credibility when you do that (and I need you to stay credible). Every once in a while, when we are filming on location, some dumbass will drive by, flip us the bird and yell "Go back to L.A." or equivalent, not realizing that 85% of the crew working there permanently live, work and support families in this city.
I'm generally against corporate welfare. But when the incentive program is up for renewal in my state I'll support it. It's the difference between having production in your state or not. For the studios it's just a business decision. They don't care about the scenery or anything else. It's all about the money. Corporations have no soul. I've always said that if you want to get rid of these incentives, you have to get all the states (and the Canadian provinces) to do it at once. Put everyone on a level playing field. (The L.A. union locals would love that!)
New Zealand. $120mil for one production. Wow. True it's a multi year production that could drop close to a billion, but still. Lot of dough.
I tell you what those of us who make a living at this really got to worry about: China. Production companies don't like to go to China for a variety of reasons but the winds are changing. They're becoming more responsive to outside business interests and with their artificially devalued currency they could offer the mother of all incentive programs. Slave labor available too.
First of all Mike, good article. Thanks for pointing these things out and I totally agree with the main gist here. However, as is usual when you write about my industry you've gotten a few details wrong, so let me add my 2 cents.
I remember the year Michigan offered it's most generous subsidies, 2010. I was one of the crew who flew in to work on those projects, but, no, not from "Hollywood". I don't live in L.A. and am not in an L.A. local. It is true that every movie brings some crew from L.A.. Producers and directors natch, and usually department heads. At least 15% of the crew, sometimes much more. The studios prefer and will try to hire local from there on down, mainly because it's cheaper for them, (those of us not based in L.A. make $10.00/hr. less than our "Hollywood" brethren). The reason so many flew in to Michigan that year is because local crew was quickly depleted. Michigan's movie production union local is combined with their stagehand union, as several states are. They had a small pool of seasoned film people, and a lot of marginally qualified folks who normally worked in theater (although now there are a lot more experienced film workers). I work in set lighting and the local was sending us makeup and wardrobe technicians! The point I want to make though, is that not all the crew flying in is from Los Angeles, we come in from all over the country.
The whole tax-rebate film incentive idea is actually a Canadian idea. British Columbia and Ontario kicked off the trend in the 90's with agressive incentives, and that's why so much film work went there. They've continued to have a successful industry there as well. Yes the industry and it's cheerleaders have the states competing to offer the best incentives. I hate it, it's a form of corporate welfare. But when it comes time for incentive renewal in my own state I will campaign for it, because if it gets cancelled, there goes my job. To put thing in perspective though, my state in a typical recent year gave less than $8 mil in film subsidies but almost $200mil in subsidies to hi-tech companies to build and run chip fabs and the like. This kind of tax abatement corporate welfare goes on in a lot of industries.
You are correct that film production tends to be ephemeral. Some states have done well with it on a long term basis however. Louisiana has a thriving film industry that's been going more than a decade now, started off by subsidies. I believe South Carolina has done well, because their union locals have been stricter about requiring local hires. New Mexico benefits from long term success. And of course the Canadians continue to do well.
Good article overall though. I agree with your main points.
As a usual enemy of anything the Republicans suggest, I have to admit they are dead right on this. Too bad they are so very wrong on almost everything else. I must admit I have a touch of cynicism about their motives. Could there be a touch of populist mongering here? Anyway at least the direction is good. And I can think of at least one Democratic Senator who will agree with them, indeed who's been blazing the trail for a while now.
First of all I have to wonder about how definitions are applied. When the article says "used their work computers to access unauthorized music" I am reminded of a place I used to work at. A lot of us liked to listen to Pandora while we worked, but then the bosses banned that, so then we were listening to "unauthorized" music. (and some people will purposefully obfuscate the meanings of "download" and "obfuscate"). I also wonder how their "porn" filters are actually set up.
But my main reaction is OMG! This is obviously a bureau with some problems. Now, granted, we need to hire highly intelligent specialists for a job like this, not mindless worker drones, and make no mistakes their job is genuinely stressful, but still WTF!
Also, to those of you suggesting we should gut the agency because of their inefficiency, that would be a huge mistake. In fact we really need to increase their funding (along with the banking arms of the consumer protection agency, if such a thing exists). You see Reagan and his successors already gutted this agency, and we got unregulated derivatives trading, the financial crisis and the bailout as a result.
We need more people in the SEC, and we need them to do their jobs.
It's a sad situation when a loosely knit hacker group like Anonymous can set up more effective communications channels with practically no budget than a supposedly elite arm of the U.S. government can with a budget larger than the entirety of some 3rd world governments.
"1. The government completely fails at something.
2. This complete failure is touted as an obvious reason to expand the scope of the government in that area. (See: Banking Regulation)"
Actually that's a pretty bad distortion of how the government failed at banking regulation. It really went more like this:
1. Starting with Carter, and ramping up massively under Reagan, the government agencies regulating banking practices were dissolved, defunded and generally eliminated.
2. In the absence of meaningful oversight, the big banks get away with murder, destroying the economy in the process.
3. Sane people (many of whom warned about this decades ago) renew calls for government regulation of speculative banking to be restored to appropriate levels.
What exactly do you mean by "digital health care startups"? Does it refer to health care for the fingers? Or perhaps we are considering health care provided by droids and computers a la Star Wars and Star Trek?
While I support technology growth in general and believe the law and government support could be tweaked a bit to help startups, I am very leary of the implications of some of your suggestions. Specifically in education, the interest of venture capitalists in exploiting the education market all to often harms students and the school system in general. The public school system is being gutted of its tax funding as that money is diverted to for profit private schools that offer in the end less educational quality than their public counterparts (while using unfair comparisons to make themselves seem better). And teachers lose living wage, union jobs with health insurance to be replaced by near minimum wage slaves without benefits. Entrepreneurial exploitation of the education market is as much a danger as an opportunity.
Most movies/TV shows etc. assiduously get "clearance" on any recognizable brand name before including it in the film, but this isn't because they strictly speaking have to -it's just cheaper than fighting potential civil suits later. The pressure to pre-clear absolutely everything comes down strong from the corporate offices onto the director and crew, such that it is practically impossible for us to use uncleared brands in the production. The fact they included these brands in this movie without clearance shows they cared about authenticity and resonating with viewers. It is certainly a calculated decision on their part. And I applaud them for it.
Well, long past time actually. Assuming we defeat the menace of Darth Romney (yeah, see previous post), one way to apply pressure is the next Democratic presidential primary. Biden will be the presumptive nominee, but what if he got some serious competition from a challenger who was strong on civil liberties? If we can get more people in congress agitating about his as well we might see real progress.
Assuming we defeat the menace of Darth Romney, Biden will be the presidential nominee in 4 short years. We need to keep hammering this administration hard to get them to ease up on the copyright/patent maximalism. Make it a campaign issue. I wouldn't hope for them to join EFF and condemn the MPAA, but a position of moderacy might be achievable.
I kind of skimmed the article quickly so maybe I missed the comments you are referencing, but it seems like he makes some points in our favor: he admits SOPA/PIPA were flawed and attempted to be snuck through, he opines that copyright terms are too long, and comes out against sueing individual end users for infringement. Doesn't go far enough for me it at least it's progress.