Economics 101 and The Villagers Attack

Muvico has sold its Egyptian 24 multiplex cinema in Arundel Mills to Cinemark, along with 3 other theatres in its upscale, modern movie palace chain. The Arundel Mills theatre is one of the top-grossing theaters in the nation. The Muvico chain has built some of the most opulent modern multiplex movie houses in the country, and in better economic years, they have been highly successful. But Muvico sold the 4 theatres in a bid to stave off bankruptcy as a result of the economic downturn.

But Florida-based Muvico ran into trouble as the recession hit the credit markets. The company said it would use the proceeds of the sale to retire a $55 million debt to iStar Financial.

The Miami Herald and other Florida newspapers have reported that the company has been in default since October and is in danger of being taken over by iStar. The other three Muvico theatres included in the sale are in Florida.

The worst economic conditions since the great depression have caused numerous other corporations in all kinds of industries to go bankrupt. It seems like every day, we hear about a major bank in trouble, the entire Detroit auto industry ready to go down the tubes, or some other such impending economic disaster.

Outside the banking and auto industries, other corporations that have recently failed include Nortel Networks, CompUSA, The Sharper Image, Shoe Pavilion, Linens ‘n’ Things, Mervyns, Circuit City, Levitz Furniture, Lenox, Lillian Vernon, Mattress Discounters, Gottschalks, Trump Entertainment Resorts, and Waterford Wedgewood, to name just a few.

The historic Senator Theatre in Baltimore recently closed its doors and stopped showing first-run films for the first time in 70 years, but if you read the Baltimore Sun, you might gather that this particular business failure exists in a void that isolates it completely from disastrous economic conditions. Other businesses have failed because the housing bubble burst, the credit industry collapsed, and Wall Street’s ponzi scheme was finally revealed. Not The Senator. That one business failure is all Tom Kiefaber’s fault…at least if you read the Baltimore Sun.

This, in spite of the fact that the Maryland Daily Record has reported that Kiefaber stopped making payments on The Senator's mortgage in October, exactly the same month that Muvico, one of the biggest and most powerful movie chains in the country, started having problems. So, was there really nothing wrong with the economy in the past few months that might have affected The Senator? Was it really all Kiefaber's fault?

There is a bizarre local reaction of scorn and aggression toward Tom Kiefaber, now that his heroic efforts to preserve The Senator over more than 20 years (and plan for its future as a multi-purpose entertainment community asset) have finally left him bankrupt. It begins to resemble something out of the Salem witch trials or Nathaniel Hawthorne’s early American novel, “The Scarlet Letter.” By blaming Tom for something that is the result of economic conditions beyond his control, city officials and the Baltimore Sun have incited some kind of weird mob scene, with the villagers lighting torches and closing in on the imagined villain, who has actually done nothing wrong. In Kiefaber's case, he has in fact done a lot right for the community by sacrificing so much to keep The Senator available as a community resource.

If there was anything remotely funny about it, it would remind me of this:

Unfortunately, this isn’t Monty Python. It’s real life, and Tom Kiefaber’s family, while going through what must already be some of the hardest circumstances a family can face, is also being subjected to public scorn and ridicule directed at their most publicly visible family member. If this is the thanks that Baltimore gives to the family that has preserved The Senator for all of us, what kind of illogical, vindictive mob have we become?

Book review: Making Money (Terry Pratchett)

If laughter is, as they say, the best medicine, then I think the doctor might prescribe a Terry Pratchett book from time to time, at least if the doctor is a cynic who thinks it particularly healthy to laugh at the foibles of this world through the lens of a snarky imaginary one. Unfortunately, doctors today are too busy prescribing expensive patented pharmaceuticals, guaranteed effective by the salesman who takes them golfing.

Pratchett's Discworld is a carnival fun house mirror image of our own, but with fairytale creatures like dwarves, golems, and Igors (yes, that's plural) thrown in for good measure.

Making Money (Harper, October 2007) is typical Discworld fare in which Moist von Lipwig, "an honest soul with a fine criminal mind," follows on his success with reinvigorating the Post Office (in Going Postal), becomes the head of the Royal Mint and invents paper money. He also inherits the guardianship of the Chairman of the Royal Bank of Ankh-Morpork, and takes him for walkies every day (the Chairman is a dog).

Anyone in control of the money supply is naturally a bit of a target, so it must come as no surprise that complications ensue. Among other threats, the board of the bank is composed of a hereditarily wealthy family, the Lavishes, who are not exactly pleasant sorts.

The family's default leader seems to be Cosmo Lavish, who, like many of those born into the upper classes, has been trained by the Assassin's Guild. He also has an unhealthy admiration for Ankh-Morpork's ruthless, but sometimes beneficent dictator, Lord Vetinari. The chief cashier of the bank, Mr. Bent, is forbidding, ominous, and dull, and there may be something quite unnatural about him. It seems some sort of plot is afoot against von Lipwig and the Chairman.

A year ago, before this was published, I might have questioned the timely relevance of a satire about taking a banking system off the gold standard. That was a done deal long ago, and would seem to be mostly uncontroversial. With recent scares within the banking industry, however, an examination of the value on which our money is based, if any, seems timely. It's also much more palatable with tongue firmly planted in cheek, and preferably stuck there with toffee. It may even be fair to say, as Pratchett does, that "whole new theories of money were growing here like mushrooms, in the dark and based on bullshit."

Crazy as Pratchett's Discworld might be, it does ring frighteningly true. I ask you, who hasn't encountered a banker much like Moist von Lipwig?

" 'Well, I'm going to do my best to get my hands on your money!' he promised.

This got a cheer. Moist wasn't surprised. Tell someone you were going to rob them and all that happened was that you got a reputation as a truthful man."

If you haven't yet encountered Pratchett's Discworld series, I recommend it as light, enjoyable reading that will sometimes make you laugh out loud. I wouldn't rate Making Money as one of his best, but it's possible that's because I've now read several of his books and maybe the humor doesn't seem quite as fresh to me now. It must be extremely difficult to keep writing novels that deliver laughs on every page.

His earlier Witches Abroad, a delightful send-up of fairytales, which proposes that perhaps it's not always good for the heroine to marry the prince, is one of my favorites in the series. (The Discworld series does not need to be read in any particular order.)

Making Money is still well worth reading if you want a good chuckle at just how shaky the financial industry really is, or if you want to laugh in the face of possibly losing your shirt. With the economy seeming more uncertain every day, at least we can find some humor in it.

Making Money is currently available in hardcover from bookstores and all of the major online booksellers. It is due to come out in a mass-market paperback edition in October, and that can be pre-ordered now.

Sad note: In the course of writing this review, I discovered that Mr. Pratchett has been diagnosed with early onset Alzheimer’s. You can read his speech to the Alzheimer’s Research Trust Conference in the UK here. I hope that if you like his books, you’ll consider a donation to the Alzheimer’s Association, to help fund Alzheimer’s research.