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Media Ignores Costs In Film Coverage

Lawmakers exchange bad policy for Hollywood glitz

The Michigan film subsidy program is a perfect example of how the traditional media can play into the hands of the government and elected politicians. 

While virtually no economist or researcher who has looked at the program finds a net benefit for citizens, the media rolls out story after story of positive parts of the program while almost never mentioning the costs.

For example, MLive has done dozens of stories about the Disney film, "Oz: The Great and Powerful," but I am unable to find a single recent article that discusses the nuances of the program. The Detroit News and the Detroit Free Press are similar, with fawning coverage about Hollywood stars and directors who are coming to Michigan.

This is a classic case of the "seen vs. the unseen," an economic concept identified by the French economist Frederic Bastiat in 1850. He wrote, "There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen."

In other words, what is seen by Michigan citizens and helped by a willing media, are Hollywood stars coming in to the state and stories of workers who got jobs on movie sets. The unseen comes later: As a Senate Fiscal Agency report found the year "Oz" was granted its subsidies, the film program brought the state only $0.11 per dollar spent. Michigan taxpayers dished out $125 million in 2010-11 to get back $13.5 million, and as Mackinac Center for Fiscal Policy analyst James Hohman concluded, the subsidies achieved no growth in film jobs in the meantime.

The film subsidy program takes tax dollars from Michigan citizens and businesses and redistributes them to big business with the assumption that the latter spends the money better than the former.

A media obsessed with the easy story of glitz and glam will not talk to the unseen family that is struggling because state resources were used for billionaire movie makers, or see the story of the worker laid off because the state insists on spending money for an "expensive game" that creates the illusion of jobs.

Northern Michigan University economist Hugo Eyzaguirre discusses how raising the minimum wage will hurt emerging local economies. See more at "Raising the Minimum Wage, Lowering Opportunity."


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