"All Thanks to Taxi Driver?"
Robert Mundell says Taxi Driver was the most important film in the history of wealth creation:
John Hinckley, the deranged would-be assassin who attempted to kill US president 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 Reagan that was engendered by the assassination attempt deterred Democrats in Congress from voting against his proposed tax cuts. Because of 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 Mundell, was vital in creating the era of prosperity that followed.
Frankly, all the evidence used in this argument strikes me as suspect. John Hinckley was a crazy person, and I see little clear reason to believe that in a Taxi Driver-less world he wouldn’t have seized on some other putative reason to shoot the president. Nor do I see clear reason to believe that the Hinkley shooting was essential to getting the tax cuts passed (Reagan’s large electoral win plus the fact that tax cuts are popular seem like an adequate explanation), or that the tax cuts had such a large positive impact on economic growth (after all, within a couple of years even Reagan was agreeing to start rolling them back).
But apparently Mundell has a Nobel prize, so what do I know?