The 1976 classic, directed by Martin Scorsese with Robert De Niro as the bitterly alienated protagonist [Travis Bickle], 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.”
Um... I'm not quite sure what to say about that, but, setting aside my disagreement on the merits of Reagan's economic policies (see, e.g., this earlier post), here are several thoughts:
- It was also very crucial that Hinckley missed - as an opponent in the 1980 Republican primary, Vice President Bush had referred to Reagan's economic proposals as "voodoo economics."
- Reagan did have a complicated relationship with movies, as this story told by former House Speaker Tip O'Neill reminds us:
When Reagan commented on O'Neill's huge oak desk, the Speaker said it had once belonged to Grover Cleveland. Replied Reagan: "You know, I once played Grover Cleveland in the movies." O'Neill had to correct him: "No, Mr. President. You're thinking of Grover Cleveland Alexander, the ball player."
- Movies are endogenous - the same climate of disaffection that made films like "Taxi Driver" resonate with the public also led to the political shifts that allowed Reagan to be elected.