Taxi Driver and Ronald Reagan
What was the greatest wealth-creating film of all time? Titanic might be a popular guess, but the answer, according to Robert Mundell, Columbia University’s Nobel laureate economist, is Taxi Driver.
The 1976 classic, directed by Martin Scorsese with Robert De Niro as the bitterly alienated protagonist, gave the world De Niro’s catchphrase, “You talking to me?”, and introduced a young Jodie Foster. But what does it have to do with the world economy?
John Hinckley, the deranged would-be assassin who attempted to kill US president Ronald Reagan in 1981, claimed that he was inspired by it. He said that his action was an attempt to impress Foster. (The film features a scene in which a mohawked De Niro attempts to assassinate a politician.)
According to Mundell, the wave of sympathy for Reagan that was engendered by the assassination attempt deterred Democrats in Congress from voting against his proposed tax cuts. Because of this accident of history, the US administered a big fiscal stimulus at the same time that Paul Volcker at the Federal Reserve was administering tight money. This, for Mundell, was vital in creating the era of prosperity that followed.
“Taxi Driver is the most important movie ever made from the standpoint of creating GDP,” Mundell told delegates at the annual gathering of the CFA Institute of chartered financial analysts in Vancouver earlier this year. “It’s the movie that made the Reagan revolution possible. That movie was indirectly responsible for adding between USD5 trillion and USD15 trillion of output to the US economy.”
– The Financial Times
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Hey Daphne, that’s quite a stretch. Interesting, considering the current global economic troubles. And troubling, considering the interesting times in which we live.
I’m not sure I figured this out. Who should we try to kill here? Lorry or Joey? :D
Stretching things a bit, isn’t it? Seems to me like the tax cuts stimulated the economy. They were the primary cause. ‘Taxi Driver’ was about four causes removed. Sounds like Mundell is a fan of the Chaos Theory. According to his reasoning, the prankster who called Palin may yet become the saviour of the global economy…
[Daphne – Did you watch the film Sliding Doors?]
I’m afraid not, so I can’t understand the reference. Would you be able to explain, or is it too involved?
[Daphne – http://www.imdb.com/title/tt0120148/
It’s a ‘double’ story about what happens to a woman when, one boring humdrum morning, she chooses to get into carriage X on the underground train to work, and then what happens if she gets into carriage Y instead. In other words, it’s all about how the direction of our lives is shaped not so much by major decisions as by minor, routine and insignificant ones.]
OK, I’ve googled it, and I get it.
Sliding Doors is more about Schrodinger’s cat and Multiverses, rather than Chaos theory. Lovely film that. It’s based on sound scientific principles, mind you.
What exactly are you suggesting? However it is interesting that you quote Reagan, the right wing secret racist and his loony economic theories.
[Daphne – Quite aside from your description of Reagan, where exactly am I quoting him? This is a piece from The Financial Times, and the story doesn’t quote him either. It can’t, because he’s dead. As a reporter, you should know what a quote is. It comes between inverted commas.]
yes ok but what’s the point of your post? I’m not a reporter btw now Assistant Editor,
[Daphne – There’s no point to it. Just as there is, apparently, no point to history and literature.]
Gerald: The concept of not over-taxing things that you actually want to encourage (such as hard work and entrepreneurship) is now accepted by most mainstream politicians and most people don’t see anything ‘loony’ about it.
As for the Reagan+Democrats combination of the 1980s it produced mixed results: an end to stagflation but also huge budget deficits. In the 1990s, the Clinton+Republicans combination built on this by cutting spending and keeping taxes low. Together they created the longest and most powerful economic expansion in US history.