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[Vancouver Dispatch] The Travis Bickle Effect

John AuthersThe FT’s “The Short View” columnist John Authers is blogging for FT Alphaville from Vancouver at the annual gathering of the CFA Institute:

What was the greatest wealth-creating film of all time? Titanic might be a popular guess, but the answer, according to Columbia University’s Nobel laureate economist Robert Mundell, 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 also 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 Ronald Reagan in 1981, claimed that he was inspired by it. He said that his action was an attempt to impress Foster. (The movie features a scene in which a mohawked De Niro attempts to assassinate a politician.)

According to Mundell, the wave of sympathy for President Reagan that was engendered by the assassination attempt deterred Democrats in Congress from voting against his proposed tax cuts. Due to 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 Professor 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. “It’s the movie that made the Reagan revolution possible. That movie was indirectly responsible for adding between $5 trillion and $15 trillion of output to the US economy.”

Article Series - Vancouver Dispatch

  1. The smart money has spoken
  2. The consensus play: hold tight
  3. Seeing the Black Swans coming
  4. So if Taleb is so clever....
  5. The Travis Bickle Effect
  6. Investment Committees Behaving Badly
  7. We know what the quants did last summer
  8. From Black Swans to White Eagles
  9. Opportunities from the Credit Crisis?
  10. Prediction Markets 101
  11. The view from Janet Yellen
  12. Malkiel makes a Great Leap, continues his Random Walk
  13. Three's a trend in the investment jungle

This entry was posted by John Authers on Monday, May 12th, 2008 at 22:00 and is filed under Capital markets, People. Tagged with . You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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Comments

  1. May 17   16:08 Posted by Taxi Driver: The Greatest Wealth-Producing Films of All Time? - Right Mind [report]

    […] From the Financial Times: […]

  2. May 15   17:33 Posted by The $15 Trillion Movie | smoky/glass [report]

    […] (via FT Alphaville) Sphere: Related Content […]

  3. May 15   17:24 Posted by You talking to me? | Dominik Mueller [report]

    […] It is a post by FT Alphaville columnist John Authers, which is titled “The Travis Bickle Effect” and explains that Martin Scorsese’s 1976 movie Taxi Driver might very well be the most wealth-creating film in the history of motion pictures. Not the most serious theory in modern economics, but worthwhile and interesting nevertheless. What was the greatest wealth-creating film of all time? Titanic might be a popular guess, but the answer, according to Columbia University’s Nobel laureate economist Robert Mundell, is Taxi Driver. […]

  4. May 15   15:23 Posted by Taxi Driver: The World’s Most Lucrative Film | Yes and Not Yes [report]

    […] FT.com reports that Columbia University’s Nobel laureate economist Robert Mundell says Taxi Driver is the world’s most lucrative film for a very interesting reason: John Hinckley, the deranged would-be assassin who attempted to kill Ronald Reagan in 1981, claimed that he was inspired by it. He said that his action was an attempt to impress Foster. (The movie features a scene in which a mohawked De Niro attempts to assassinate a politician.) […]

  5. May 15   6:57 Posted by FT.com | The Undercover Economist | The most lucrative movie of all time is… [report]

    […] …Taxi Driver, claims Robert Mundell. John Authers has the scoop: John Hinckley, the deranged would-be assassin who attempted to kill Ronald Reagan in 1981, claimed that he was inspired by [Taxi Driver]… According to Mundell, the wave of sympathy for President Reagan that was engendered by the assassination attempt deterred Democrats in Congress from voting against his proposed tax cuts. Due to 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 Professor 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. “It’s the movie that made the Reagan revolution possible. That movie was indirectly responsible for adding between $5 trillion and $15 trillion of output to the US economy.” […]

  6. May 13   3:08 Posted by Hey Taxi Uncle, how’s life? ;) « ANTAP [report]

    […] http://ftalphaville.ft.com/blog/2008/05/12/12971/the-travis-bickle-effect/ […]

  7. May 12   22:30 Posted by CS [report]

    Mundell’s is really reaching on this one. It’s much more reasonable to argue (1) that Hinckley would have found some other fictional inspiration (or scapegoat), and (2) that Reagan would have carried the day anyway.

    That last point is hardly disputable. I remember the Democrats being just as eager to carve some tax cuts and cut themselves in on the credit that would come with it, because those tax cuts were quite popular at the time among the voters (perhaps not so among the talking heads). Some readers might remember the “pigs at the trough” comment from a certain budget director of the time.

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