Monday, November 2, 2009

Four a Year?

I love Reagan's stories, and Mankiw cites Stockman for one, yesterday:
The starting point for Ronald Reagan was the idea that people respond to incentives. The incentives that he most worried about were those provided by the tax system. According to his budget director, David A. Stockman, Mr. Reagan would regale the staff with stories of how he, as an actor, used to alter his work schedule in response to the tax code.“You could only make four pictures, and then you were in the top bracket,” Mr. Reagan would say. “So we all quit working after four pictures and went off to the country.”
The great thing about Reagan's stories isn't that they're true, since they usually were not, but that often it's fun to find out where they came from.

Let's see...first thing to check here is whether Reagan actually made four pictures a year. I can't quite check that, but I can check imdb's version, which goes by release date. Here's Reagan's number of movies released, by year:
1937 2
1938 9
1939 7
1940 7
1941 4
1942 3
1947 3
1948 0
1949 4
1950 1
1951 4
1952 3

After that, he tailed off.

Hmmm...doesn't look quite right for four-a-year, does it? Reagan went into the Army (to make training films, not included in these numbers) just after King's Row made him a star; King's Row was made in 1941, and released in 1942. Before that, he probably wasn't in the "top bracket," so it wasn't really relevant. After, he missed time in 1948 with an illness and 1950 with an injury. He did have two years there with exactly four movies (1949 and 1951), although again those are release dates.

Let's try a couple of other relevant actors. John Wayne? He did have four movies released in 1938. Stagecoach was released in 1939, and he had six movies. He occasionally after that had a year with four, but not often. Of course, he presumably made more than Reagan. How about Bob Cummings, who starred in Reagan's "King's Row"? Same thing: some years with four, some with fewer, a lot with more, earlier in his career. Note too that most of those early career years with more than six movies include several, in each case, that are not full-length feature films; at any rate, those movies were surely cranked out quickly, while stars would be in movies that took a lot longer to make. Cannon, in his 1982 biography, has Reagan in London for four months in 1949; that's not a recipe for making five movies a year, whatever the tax situation.

The only other reference I can find quickly is from the great Garry Wills book on Reagan; Wills has Lew Wasserman, in 1949, negotiating Reagan away from a deal that had had him obliged to do three pictures a year.

Oh, there's one other thing. Wills quotes Reagan's campaign biography, Where's the Rest of Me, on the subject of Reagan's post-King's Row contract, which would wind up being the biggest one of his acting career:
One thing about the new contract puzzled me. All contracts are for forty weeks a year; mine was for forty-three. This particular demand of Lew's puzzled Jack Warner too. [Later, Wasserman told Warner:] "I knew you wouldn't go higher than three thousand five hundred dollars," he said, and I've never written a million-dollar deal before -- so three extra weeks for seven years make this my first million-dollar sale."
Add it all up, and I think it's fairly improbable that Reagan ever took the rest of the year off for tax purposes. Not only that, but the Wasserman anecdote (which might not be true either! Same source!) tends, as I read it, to contradict the point of the "off to the country" anecdote.

In other words, the whole thing is bunk.

Granted, however, that I know practically nothing about studio system Hollywood contracts. For example, I don't know if the "million dollars" in Reagan's contract was real, or if it was more like the contracts that NFL teams give to newly drafted players. If anyone is better informed, please leave a comment -- with Reagan, odds are that one or both of these stories owe their origins to some movie that Reagan saw one time.


  1. The less I hear about Reagan, the better.

  2. A book came out a few years ago:
    Does Atlas Shrug?: The Economic Consequences of Taxing the Rich (Russell Sage Foundation Books at Harvard University Press) (Paperback)
    by Joel B. Slemrod
    which points out that after the large tax cuts of 1986, the labor supply of the rich remained unchanged.

  3. Even if there is some dispute about the exact number of movies, perhaps we can at least agree that 4 Ronald Reagan movies a year was quite sufficient. Having a tax code that discourages a few already well-compensated actors and thereby allowing other talented actors to make a decent living seems like a good thing.

  4. Maybe it would help if you read a bit on the history of Hollywood. This was a real contract, not at all like the NFL: back in the day, the big studios paid the stars on their roster a salary, or retainer ($3500 per week in RR's case here). And the stars were more or less expected to show up for "work" during that time.

    It doesn't work that way anymore, of course--now actors are all freelancers who contract to do a picture for a fixed amount.

  5. This comment has been removed by a blog administrator.

  6. The most interesting aspect to Reagan's story is that the top rate during this period was 80% to 90%. He and his actor friends kept working as their tax rate went past 50%, 60%, 70% and didn't drop out until they reached an 80% rate.

    The top rate today is 35%, so by Reagan's standard it could double to 70% and he would not be discouraged from working.


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