Since the establishment of the renowned Best Picture oscar, studios have campaigned for their movie to compete for the award, spending millions per year, even if there hasn’t been an oscar “bump” since 2012.

The change of the oscar “bump”

An Oscar “bump” is the winner or nominee of the best picture category gaining more viewership and box office money after the Oscars award show. There hasn’t been more than a 7 million dollar “bump” at the box office since the silent film “The Artist” won in 2012. So why do studious such as Netflix, A24, and Columbia pictures continue to spend 10-20 million dollars a year to campaign their films if the box office success after the oscar bump does not outweigh the costs? Is it because of clout within the industry to gain more rights to critically acclaimed pictures? Or is it because the economy and social structure has changed to where less people go to the theatre and more people view movies on their laptop on streaming services? How about both? Viewership matters most to studios so it does not matter if the film is being viewed on streaming services or the theatre? Or does it? Obviously, studios like Sony and Columbia pictures would love everyone to get off streaming services and go to the theatre if they do not have a partnership with the given streaming service. But Netflix, that is buying enormous amounts of oscar-nominated content, would love the bulk of their viewership to come from their streaming service. The economic incentive to promote these movies for studios is to gain even more rights to other critically acclaimed movies. There is a cutthroat competition that is ensuing between theatre-driven companies such as A24, Columbia, and Sony, and streaming service giants such as Netflix and Amazon Prime(which both spend and promote tons of movie content to get people to watch). Furthermore, the “Oscar bump” is and isn’t what it used to be. It has always been to gain viewership of the movie they promoted but it’s not completely in the theatres anymore. The bump is happening much more on streaming services and to realistically gather the revenue/profits made off of the promotion, streaming service viewership data would have to be included with box office money to get an accurate description of if promoting the picture is worth it. I can tell you this though, if it wasn’t making them money, they would not continue to spend millions to promote it!

Further information on the economic incentive.

It is just as important for an independent company to invest in critically acclaimed pictures to enter the cutthroat competition. A few years ago, A24 was just a small independent studio trying to enter the competition. Since 2016, we have seen an independent film company such as A24 rise to prominence after “Moonlight” won the studio its first best picture award in 2016. Since 2016, not only has A24 received the rights to huge box office successes such as “Hereditary” and “The Lighthouse”, but also critically acclaimed films that are supposed to be up for multiple Oscar nominations such as the upcoming releases of “Waves” and “Uncut Gems”, and the already released “The Farewell” and “The Last Black Man in San Francisco”. Its 2016 best picture winner, Moonlight, did not have a huge “Oscar Bump” with box office success or streaming services until late 2018 when it appeared on the Netflix streaming service. Although Moonlight did not garner an extreme amount of box office success or streaming service recognition after its best picture win, it catapulted the smaller/independent studio in A24 to a household name that will continue to have rights to critically acclaimed films for years to come.

Conclusion!

In conclusion, the economic incentive for studios to promote critically acclaimed films relies on how much they make off both streaming services and box office money, and the prestige the award gives the studio to gain rights to more critically acclaimed movies. Promoting the film then proves to be an investment for the studio. Yes, sometimes the studio will lose money if their picture did not get nominated or win when they spent 10 million dollars promoting it. But, a lot of the time it will make the studios’ money in the long run as the investment will pay off. This gives more of an incentive for independent studios to look at A24 as an example to promote and gain rights to a critically acclaimed picture that will lose them money in the short run, but in the long run, it will catapult them into a competition to gain rights to more and more critically acclaimed films.

Venezuela’s debt has doubled in only one year!

Venezuela has been in the news over their economic collapse for the past couple of years. Some economists and historians have even deemed Venezeulas economic collapse as the biggest in decades outside of war. Most recently, Venezuela hit the news as their national debt doubled in one year and is not almost double the level of the country’s GDP. As Simon Constable says in his Forbes.com article “Venezeula Sinks Further into Oblivion” “At the end of the second quarter, total borrowing[in Venezuela] reached 198.4 percent of GDP”(Constable). When businesses and household debt become included in debt, the total debt comes out to be 221 percent of GDP.

Hyperinflation is at 9,072 percent!

You read that right! Another economic indicator that is plaguing the Venezuelan economy is its 9,072 percent inflation rate! Well at least its better than deflation right? Only if you can recover from 9,072 percent worth of inflation! Foreign investors have placed such high interests rates on Venezuela’s lackluster cryptocurrency- the Petro which also further raises in the inflation rate and debt since it is impossible for Venezuela to pay their debt back. Venezuela has also taken out massive loans of 63 billion dollars from China since 2007, which also looks like they will not pay back anytime soon. Also, since 2016, every quarter has produced double-digit declines in GDP. Furthermore, when inflation was at 7,000 percent, President Maduro implemented a policy to eliminate the zeros from paper Bolivar bills so that a ten thousand Bolivar bill would be now worth ten. This further raised inflation and caused more economic turmoil. It is also important to note that the 9,072 percent inflation rate is just right now and the total inflation rate is expected to eclipse 15 million percent by the end of the year.

Why is Venezuela in this economic collapse if they have the most oil-rich country in the world?

You read that correctly. Venezuela, in the biggest non-war related economic collapse in decades, has the most oil reserves of any other country in the world. So how are they in crisis with an extremely valuable resource in oil? Well, that is a great question and is a big factor of why the Venezuelan citizens are so critical of the people in power. In fact, the only reason why Venezuela is not recovering from the economic collapse is because not only is President Maduro taking most of the money and resources in for himself, but also the actual leading oil company in the country, PDVSA, is so terribly run.

Conclusion

In conclusion, Venezuela is not just in an economic collapse, but also a political one. Because the country has virtually no assets or wealth, besides their terribly run oil reserves which aren’t helping decrease inflation, civilians are starving and homeless, while the political leaders use the mere money and resources left to live lavishly. To fix this issue, first off President Maduro needs to be out of office, and a new economically driven candidate can be elected to at least stop hyperinflation from getting worse. The head of PDVSA needs to be fired so the resource-rich company can promote value within Venezuela.

After being in a debt crisis since 2009, consumer confidence is at its highest level since 2000 and GDP is expected to have almost 2 percent growth following the fiscal year.

How did Greece’s debt crisis get even worse after 2015?

Back in 2015, Greece was still trying to move in a positive direction following an already six year debt crisis. So when the July elections of 2015 came around, the people believed they needed drastic change and elected Alexis Tsipras and his super “left-winged” Syriza party to try and move the economy forward for a change. Tsipras implemented corporate taxes, regulations on international trade, and tons of entitlement programs that the government could not pay for. All of these policies made the debt escalate further which created a major recession.

The Change in the Right Direction!

Greek citizens became extremely frustrated at the results of Tsipras and the Syriza party through their term, and earlier this year in the July elections opted to elect Kyriakos Mitsotakis, leader of the fiscally conservative “New Democracy” party. After years of different right and left-winged parties running the economy, Greece finally has returned to the two-party system that had them flourish in 2000. Many people worldwide were scared prior to the election that Greece would lean toward right-winged extremism”, but “The New Democracy” party beat out the right-winged “Golden Dawn” party to ensure that democracy is still alive and can flourish again in Greece. Mitsotakis did just that, reversing the socialist agenda that plagued the economy prior to his election. Mitsotakis has implemented corporate tax cuts, lifted restrictions on international trade, and limited entitlement programs within Greece since the government cannot afford it yet. He will continue to reform and work on these policies in the next couple of years as well. These policies are predicted to help the economy grow further and cause GDP to have 2 percent growth at the end of this fiscal year saw. Even though Mitsotakis has just been elected, many economists now believe the Greek economy is stable and will continue to get even better as the economy is at its best since 2000.

Returning to Normality!

Greece’s capital controls and restrictions are a thing of the past with Mitsotakis in office. Unemployment is still the biggest issue in the Greek economy, but it’s down to 17 percent from its peak at 28 percent in 2013. Granted, many Greek workers do not get fired, as discussed in class last week, so people of college-age or in their young 20’s have a hard job getting employed. That problem is not only an economical issue but a political one as well which makes it hard to judge Greece’s economy on that 17 percent unemployment. Because international trade does not have as many restrictions anymore, Greece is all of a sudden a player in the foreign market, which in the next couple of years will spur the economy to grow even more. Another policy Mitsotakis has implemented is the banks getting rid of “non-performing” or “bad” loans which is set to help grow the economy as well. Greece’s new finance minister Christos Staikouras plans to re-pay 3 billion of Greece’s 8.5 billion euro debt this year as well. All of these policies are not only moving the Greek economy forward but also preventing it from future crashes.

Sources: https://www.ft.com/content/c2c42066-d93c-11e9-8f9b-77216ebe1f17 https://tradingeconomics.com/greece/gdp-growth-annual https://www.southeusummit.com/europe/greece-marks-major-economic-milestone-in-advance-of-a-month-of-financial-planning/

Argentina’s inflation rate has risen to as high as 57 percent this year and has stayed at around 55 percent since its peak in May of 2019.

In recent memory, Argentina has been known for two things: Really good homegrown beef and an extremely high inflation rate. Thank god for the high-quality beef, a key trade asset that has kept some value in the economy. However, even the best beef in the world can’t save the economy from an inevitable crash or crisis. Argentina’s inflation rate at the end of 2017 was only 24 percent, still unbearable, but nowhere near as bad as 57 percent. So the question is, what is the reason behind their 30 percentage point spike in inflation and how do we fix it?

Background information on how we got to this point

The Central bank has tried to control the Argentinian inflation rates in the past, but has proven unsuccessful. The Argentinian peso lost almost 51 percent of its value in 2018, and this year has lost 15 more percent of its value compared to the U.S. Dollar. The disesteemed peso has caused an extreme recession in Argentina, where poverty rates have gone up tremendously. The economy contracted 5.8 percent in the first quarter of 2019. This has left foreigners skeptical to invest in the Argentinian peso, but many continued their investments due to confidence in a turnaround. The spike in inflation in 2019 has not only driven most investors to stay away from the Peso, but has also forced banks to ease limits on foreign exchange interventions. The President of Argentina, Mauricio Macri, has been under a lot of pressure to fix the inflation rate or at least make the economy emerge in the right direction. But with election day coming in October, Macri’s chances of being re-elected are diminishing. Macri was elected as a moderate that would be fiscally conservative, a polar opposite to the “free-spending” 2015 president Cristina Fernandez, who originally started the extreme spike in inflation.

The Inflation Spike!

When Macri was elected into office in 2015, he started off with major budget cuts to offset the “free-spending” of Fernandez. Macri was furious with the free public subsidies given to families to get back on their feet from the 1998-2002 Argentine Great Depression that left millions impoverished. He believed that these subsidies caused an extreme spike in inflation and when Macri became elected, he got rid of the subsidies right away. People had relied on many of these subsidies to help provide for their family, and when these were taken away, they were not prepared to pay for things that had previously been taken care of by those subsidies. Once the budget cut kicked in, “Every time a water, electricity, or home heating gas subsidy was reduced, people’s monthly utility bills went up”(PRI.org), which caused consumer spending to go down dramatically. Business’s also had to pay off the utility bills which raised prices on goods and services. The people could not afford the goods and services anymore. The central bank then raised interest rates tremendously, thinking it was a good decision since the safe United States economy among other safe economies were doing it as well. Instead, private investment went down even more, and the recession got worse as inflation skyrocketed.

Lowering the inflation rate and Argentina’s big decision in October!

People put Macri at fault for the whole situation and blame his moderately conservative policies as the leading indicator for the spike in inflation. However, those policies did not spike inflation on their own as Private investors staying away from the devalued peso helped skyrocket inflation as not enough money was coming into the economy. Many are so angry with Macri that they want to venture back to “free-spending” and vote for the ultra-liberal and former president Cristina Fernandez. Citizens believe that Fernandez will at least lower the inflation rates back to 25 percent from 56 percent, since it hovered around there for part of her presidency. However, many of these citizens are uninformed and there are many lurking variables behind the spike in inflation and what caused it. Yes, Macri made the spike in inflation worse with his policies driving investors away, but this crisis could have been avoided if Macri implemented his policies at a slower rate, rather than drastically changing the economy right away which he did. Fernandez will make drastic changes as her free-spending agenda will raise inflation even more, ultimately making Argentina unlivable. Argentina needs a moderate with a fiscal agenda to take over. Macri was not the right fit, but someone who can read economies better than him, use similar fiscal policies, and implement those policies at a slower rate will make the economy better. If the people of Argentina decide to go ultra-liberal with their inflation rates at 56 percent, then an even bigger crisis is inevitable.

Sources:

Main source: https://www.pri.org/stories/2019-05-06/how-argentina-crept-threshold-crisis-again

Source 2: https://tradingeconomics.com/argentina/inflation-cpi

Source 3: https://www.forbes.com/sites/stevehanke/2019/03/16/argentinas-peso-nothing-but-trouble/#1f5a1d262a9a