Former Labor Secretary Robert Reich, promoting the recently released documentary “Inequality for All,“ recently said that there’s a link between growing income disparity and the wave of states, including California, that are offering tax incentives for movie and TV productions.
Reich even called the bonanza of states offering production tax credits a “race to the bottom,” as competition sees governments sweetening the pot to try to lure movies and TV shows within their borders.
“These tax credits and tax incentives are a zero sum game,” said Reich in an interview last week. “They don’t create a single new job. They just move jobs around, and they rob the states of the money they need for education and infrastructure.” (Source: Variety.com)
He’s correct, of course. But the real endgame comes when cities and states bottom out because they can’t go any lower to entice such big business one-offs inside their borders. Once that happens, the heavily-courted film production companies will simply go after that tasty “zero” tax rate by exporting it ALL overseas. Like every other industry.
Having actually worked in a sub-niche industry monopsony (look it up) that pressured all involved to eventually “compete” themselves into bankruptcy, I’m appalled that this backward “screw yourself to stay in business” model goes all the way to the top. For independent business start-ups, for famous film VFX companies, and even for cities and states. Wow. Meanwhile, the money vacuum keeps right on sucking, converting American wealth into the private off-shore stored cash reserves of the micro minority who’ve purloined the only keys to the system. And when too much wealth has been robbed from the economy for ever-spiraling credit to replace, the bottom is going to drop out. In “French Revolution” proportions.
Our economy is like any engine: the fuel it needs to power it efficiently is liquid wealth. But if those in charge of running the machine keep reducing the amount of actual fuel that keeps it going by upping the oxygen, you’ll eventually wind up with an engine that is running on mostly hot air. Keep it up long enough and the engine will sputter and die.
When that happens, it will be horribly difficult to restart. You might dump mass quantities of fuel into it trying to prime the pumps and plugs and get it going again; but that’s only if you have any fuel left. If all that fuel is sitting in an offshore storage facility run by people who have been skimming it off the top for decades, and who deny that it even exists… well, that’s quite a serious problem, yes?
Our biggest problem is also our greatest advantage, in this situation: the process is slo-o-o-o-w. And credit can stretch out a long, long, long way. So there’s still time to fix it. Except the fuel skimmers don’t WANT to fix it. And they are the only ones with the keys to the engine room.
You might try making any and all interference in government elections or legislative processes by corporations or paid lobbyists completely illegal, which hearkens back to how corporations used to exist in the early days of our country. Then cut corporate subsidies, and stop pumping our “fuel” directly into the offshore “fuel tanks” (overseas banks) of the biggest economic vampires. And break up the largest banking conglomerates so no one is ever “too big to fail” ever again.
Or, we can just sit back and watch reruns of Here Comes Honey Boo-Boo while sucking colored sugar water through a straw, munching a tasty side order of processed chemical death snacks and genetically-reconfigured Frankenfood. Go USA!