Is Hollywood the next Detroit?

Is there anything the United States does right in the business world any more? As our position in the manufacturing economy becomes weaker and weaker, we continue to hear talk about the shift to a service economy; but, according to this week's economic reports, the service sector is doing no better than the manufacturing sector. Indeed, taken as a whole, the five seasons of The Wire amount to a narrative of the deterioration of socio-economic institutions, port operations, real estate, education, and now journalism, leaving the impression that not only does crime pay but that, at least in the world of drugs, it sometimes seems to be the only thing that pays. Then we realize that we are having these thoughts by watching a program produced for cable television, and a new hypothesis arises. Does our economic viability now reside in our capacity to satisfy indulgences, primarily through entertainment offerings? Has the "logic of Hollywood" become the primary economic driver, just as the "logic of Detroit," derived from all businesses connected one way or another to transportation, once was?

Put aside any moralistic questions about whether or not the only thing we are still good for is entertaining the rest of the world (as well as ourselves). Consider, instead, that, as Detroit ultimately succumbed to Japan, Hollywood may be on the path to succumbing to India. Consider, then, one of the more memorable scenes from the film made of All the President's Men, when Deep Throat advises Bob Woodward and Carl Bernstein to "Follow the money." In the entertainment business Variety is probably a better source than The Wall Street Journal when it comes to following the money. (This may change now that the Journal has been sucked into a conglomerate that derives most of its revenue from entertainment.) Here, in a report by Patrick Frater, is what the smart money of George Soros is doing:

Iconic financier George Soros has paid $100 million for a stake in Indian movies, gaming and Internet conglom Reliance Entertainment.

He is picking up a 3% stake in the privately held operation controlled by the billionaire industrialist Anil Dirubhai Ambani's Reliance ADAG. Deal values Reliance Entertainment at some $3.3 billion, making it the most valuable entertainment company in the fast-developing territory.

Reliance Entertainment controls the Adlabs group, which is India's biggest film processor, and in recent years has diversified to become a front-running movie production and theater operation.

Put in simpler language, Soros is buying into Bollywood, long viewed as the production center of overly-long spectacles with cheesy effects and an abundance of song-and-dance, whether the narrative calls for it or not. Well, if the "generation gap" was ever putting us at risk, it is by having the shots called by a generation too young to remember when Japanese cars were viewed as a cheap joke in the United States. Whatever the prevailing claptrap may be about innovation (collaborative or otherwise), it is indulgence that seems to be driving our economy; and, in that implicit tendency that history has to repeat, our ability to satisfy indulgences may get taken away from us by Bollywood and other sectors of the Indian economy. What shall we then have to offer to justify our existence as a sovereign economic power?