Short and sweet
I attended the premier of I.O.U.S.A. last night. Included in the opening was a live simulcast discussion with Warren Buffett (Berkshire Hathaway), Peter Peterson (Blackstone Group), David Walker (former head of the GAO), William Niskanen (Cato), and William Novelli (AARP).
The movie’s subject…the national debt, and the format was designed to explain to the average American (i.e. the ones that either don’t pay attention to national affairs and/or don’t grasp complex economic concepts) what the growing liability means for future generations. I’m certain that before days end, a few on the payroll of the legacy media are going to trot out their thumbs, which will invariably be pointed downward. Of course it’s not their job to inform you – they get paid keep you thinking everything is fine, that social security will cover your retirement, and that you should keep buying those Chinese-manufactured widescreen TVs so often advertised in their publications. Saving is for the birds – real people consume!
Personally, I thought the producers did a fine job with the documentary. Yes, it was slightly boring at times, but this is macroeconomics – I’m sure a lot of folks would rather watch a documentary for the search and subsequent discovery of Atlantis built entirely of gold, but Nick Cage already has a lock on that subject. The creators broke the base down into four subtopics, fiscal deficits, trade deficits, personal savings and consumption, and elected officials, and then reviewed each’s contribution to the present crisis with an even supply of nifty full motion graphics and narration. I may have yawned a few times because I’ve already heard the story, but I don’t think many people have (and therefore won’t). My only real problems with the product – they could have slowed down the graphic effects (and maybe personalized them a bit with direct human interaction/presentation), the “man on the street” interviews too predictably uncovered the public’s naivete, and I’m tired of hearing politicians whine about the issue as though they are concerned (which was peppered throughout the film – the choicest were Sen. Kent Conrad a.k.a. Mr. Cheap Mortgage and Former Treasury Secretary Robert Rubin a.k.a. Mr. I Didn’t Get Fired). I’d say the film was on-par with An Inconvenient Truth, only much less convenient and lined with significantly more truth.
The townhall discussion, hosted by Becky Quick of CNBC’s Squawkbox with the above mentioned participants, was the real highlight of the show – hopefully the producers will include a taped version of the segment with both future screenings and the DVD. I have to say I was most impressed with David Walker – the guy may sound alarmist to some, but I think he’s just plain tough. He, like several others, talked straight, and he in particular pulled no punches with the audience or the other panelists. Least impressive, Warren Buffett. At one point he discussed the shift from manufacturing to the “brain power” economy, with choice references to Microsoft, Google and eBay, despite the fact he’s oft quoted for his lack of understanding of internet business, and failed to make mention of the US education system’s ongoing failure to prepare young American’s for this change. However I do give him credit for emphasizing the disparate income tax rates effecting the investing class versus the working class, although I did smell what might have been a hint of partisanship there that might be a pre-cursor to tax hikes (and I’ll note that a hike in the capital gains rate might not make much difference to a guy worth tens of billions of dollars who is admittedly now looking beyond our borders for new investments, but to someone with say a million or two in investable assets it would be a very very big deal).
As for the other guys: Peter Peterson showed he’s a statesman, William Niskanen appeared both grounded in pure logic and seeking workable solutions, and William Novelli generally exercised caution with his words (particularly when social security privatization was mentioned).
Anyone who doesn’t understand what the national debt is, what contingent obligations such as unfunded entitlements (i.e. off balance sheet liabilities) are, and/or how their 52-inch widescreen and matching credit card bill are going to effect their childrens’ children, they should go see this movie (or buy it). If you are already part of the “get it” crowd, you may find the panelist discussion interesting, so make sure it’s included (and keep stuffing those gold ingots under the mattress).