Today we live in a world that has gotten smaller and smaller. Everything that happens, no matter where, seems to impact everything else—sometimes for better, sometimes worse. It’s called globalization.
What got me thinking about this, simply enough, is that I find the movies at the local Malibu movie house are movies I seldom want to see. Very few are story-driven. Most are action or animated films. The reason is simple; go online and check out “2013 Box Office Mojo.” The top 10 films are all action or animated, and they’re made for an international market. For most of the films, well over half of their revenue comes from overseas, and today that means the world. So every major film has to be loud, fast, with a minimum of dialogue, sort of Schwartzneggerism in dialogue. “I’ll be back” is easy to translate.
The impact on us is enormous. A friend of mine in the industry was complaining about the lack of films being shot here in LA. That’s not going to happen unless you can bring in small films for $10 million or so, and I’m just stabbing at the number. That certainly won’t happen if they continue to operate as they have in the past. Last week, they were filming on the Malibu Pier. It took a virtual army of people to do it, most of whom seemed to spend a lot of time standing around waiting. Until they can cut that kind of group by twothirds, we’re not going to see a lot of movies shot in LA. I’ll believe they’re serious when I see the caterers disappear and everyone just gets a boxed lunch, and mind you, we have film caterers in our family.
I don’t want to just pick on the film industry. Every year corporate America, American corporations that do business internationally, pay a smaller share of income taxes in the U.S. They do because their income comes from all over the world and much of it doesn’t come back to America. It sits in other countries and, more often, offshore tax havens, which means we the individual taxpayers in the U.S. each have to pay more to cover them.
Walk through any parking lot in Malibu and look at the emblems on the cars. You don’t need an expensive survey to tell you that Lexus, Mercedes and BMW far outsell similarly priced domestic brands. I globalized my auto purchase 50 years ago with the VW bug and Detroit sneered. It took the auto industry a very long time, too long in fact, to confront and meet the challenge.
Globalization has totally changed the way we earn our living. Sixty, seventy, eighty years ago, we were a manufacturing economy and people worked in factories. Today, we are an information economy. In the 1930s, the largest manufacturing plant in America was the Ford River Rouge plant in Dearborn, Mich., employing more than 100,000 people. Today, the University of California alone has more than 220,000 students at the various campuses and probably an equal number of faculty and staff. In a globalized world, that’s where the jobs are but you have to be educated for those jobs, and many Americans haven’t kept up, nor has it been a big societal priority to educate those people.
Walk into any high-end clothing store and most of it is made in Asia in large factories that are essentially American companies working through foreign subsidiaries or with contract labor. Clothing is relatively cheap. What you pay for in Malibu is designer or brand labels. That is not cheap. In fact, marketing is very expensive because marketing can’t be shipped off to Asia, although many industries are trying.
Bottom line is that many of the old rules no longer work. The world has changed and a legal and regulatory world, designed for the 1950s, is ineffective and porous in the 21st Century, when everything is portable. We’ve got to make changes because of the new reality. Our tax laws are antiquated, and for good reason. I’ve been told that the largest tax department in the world is at General Electric and they have 1,000 lawyers. Imagine the cacophony of 1,000 lawyers speaking. It’s frightening.
Usually I have some solution to propose, but not this time. We are all going to have to change and adapt to the new game, or the Chinese and others are going to beat our brains out. I’m still optimistic. Americans work hard and probably work longer hours than most western nations, and we take fewer vacations. Our education system is superb, but getting less so, unless we make it a priority. We’re living longer and healthier and retiring later, which gives us a large trained workforce. Obamacare over time will unquestionably improve our national health, as more people are covered.
But we need the will to make the changes, and we have to stop this absurd partisanship which is poisoning everything in which everything is judged by whether it’s good for our team and bad for the other guy, or vice versa.