How The Economy Killed Gossip Girl

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On a recent evening, as I weaved my way through a crowded Manhattan sidewalk, I phoned my boyfriend to tell him I’d be home late.

Just before we hung up, I looked around nervously to make sure no one was overhearing our conversation, then lowered my voice to make a humiliating request: “Could you DVR Gossip Girl?”

It wasn’t always this way. Gossip Girl, which will air its series finale Monday, was never meant to be quality television, but for a while it occupied the same cultural space as ABC’s Revenge, one of those so-called guilty pleasures you didn’t actually have to feel guilty about enjoying.

It was a teen drama whose sophisticated setting and elevated references seemed equally appropriate for an adult audience. Gossip Girl even charmed most critics.

In an initial review, Mary McNamara of the LA Times swooned over “the leggy glamour of it, the pretty rich girls at cocktail parties, the rumpled sexiness of those school uniforms, the gothic romance of stone-mansioned New York,” comparing the show to both The Catcher in the Rye and A Separate Peace.

Midway through the first season, New York magazine ran a cover story titled “The Genius of Gossip Girl,” naming it “the greatest teen drama of all time.”

For a show that won such effusive early praise, Gossip Girl‘s decline was precipitous, its consignment to the realm of the embarrassingly passé sudden. Most fans view Season 3, the first season after the majority of the characters graduated from high school, as the beginning of the end for the program.

In fact, the trouble started even earlier than that, and can be traced to an event entirely beyond the writers’ control: the financial crisis. The show’s fall serves as a clear example of how economic realities and cultural tastes are unavoidably linked.

Gossip Girl premiered on September 19, 2007, only a few weeks before the stock market hit an all-time high. America was already feeling the effects of the subprime crisis, but the economic meltdown wouldn’t penetrate the popular consciousness until a year later.

When banks began to fail and the market plummeted in October 2008, a few episodes into Gossip Girl‘s second season, public opinion turned swiftly and dramatically against the very rich. The New York story pointed out that the show’s appeal was in how it “mocks our superficial fantasies while satisfying them, allowing us to partake in the over-the-top pleasures of the irresponsible superrich without anxiety or guilt or moralizing.”

But in the throes of the most catastrophic recession in several generations, that kind of magical, aspirational thinking became more difficult with each passing week.

The show’s Season 2 ratings reflect this abrupt shift. Less than two months after Gossip Girl soared to a September 15, 2008 series high of 3.73 million viewers, its audience began to drop below three million. The attrition continued into the winter and spring of 2009, when not one of the season’s final 10 episodes drew more than 2.5 million viewers.

Bravo’s clearly Gossip Girl-inspired reality show NYC Prep, which followed real-life Manhattan prep schoolers, debuted in June of 2009 and fared so poorly its low ratings prompted an incredulous analysis by The New York Observer. Although it outlived NYC Prep, which only lasted eight episodes, Gossip Girl never regained the ground it lost that year. Viewership dropped off gradually over the four seasons that followed. Earlier this fall, its sixth and final season premiered to an audience of just 780,000.

The show’s creative decline can’t be considered in isolation from the financial crisis, either. It wasn’t just the characters’ departure from the confined world of the Upper East Side that disrupted its storylines; it was also the increasingly amoral trajectories of even the most initially sympathetic characters.

Earlier rich-kid dramas that aired during more prosperous eras descended into the same kinds of repetitive romances and sensationalized plots that have plagued Gossip Girl without demonizing their central clique. Over the course of Beverly Hills, 90210‘s decade-long ’90s run, haughty Kelly Taylor and meathead Steve Sanders actually became more likable and human.

Even Gossip Girl co-creator Josh Schwartz’s mid-2000s teen soap, The O.C., managed to navigate dark storylines without turning every character into a villain.

The ways in which Gossip Girl‘s characters have devolved since Season 3, the first complete season to air after the economic meltdown, echo the ambient cultural suspicion of the group now known as the one percent.

At first, Gossip Girl revolved around the sweet, unlikely romance between Brooklyn-dwelling outsider hero Dan Humphrey, described in the New York magazine feature as “sensitive and wise,” and repentant Upper East Side party girl Serena Van Der Woodsen. But in recent years, the central (and by now painfully redundant) romantic tension has been between scheming achiever Blair Waldorf and debauched Chuck Bass—a character so originally vile that he attempted to force himself on Dan’s 14-year-old sister in the series premiere.

And yet, it’s not surprising that viewers’ allegiances have shifted so dramatically when Gossip Girl has also become the story of Dan’s moral downfall, presented as an inevitable side effect of his integration into ruthless Upper East Side society. Just a few weeks ago, the rising literary star rekindled his relationship with Serena purely to exploit her in a tell-all Vanity Fair essay. Now that everyone has sunk to Chuck’s level, it makes as much sense to root for him as anyone else.

And it makes sense that Gossip Girl‘s cast members have come to express embarrassment about their involvement in the show. A few weeks into Season 4, Chace Crawford was poking fun at his character Nate Archibald’s stupidity and Penn Badgley was summing up his feelings about Gossip Girl with the cliché, “It is what it is.” A year later, Badgley implicitly yet radically distanced himself from the show’s sparkly economic elitism by visiting and speaking out in support of Occupy Wall Street.

Gossip Girl tried to sell escapism, and until the recession hit, it succeeded. But when the real world encroached upon its high-society fantasy, the show faced an impossible dilemma: Would it dispel what was left of its glamorous illusion by changing with the times or continue as though conspicuous consumption had never gone out of style? Already hemorrhaging viewers, Gossip Girl did a bit of both, keeping the posh costumes and lavish parties while dropping any pretense of making its characters likable.

The series that was outmoded the moment the Dow Jones dropped below 9000 hung on for far longer than it had any right to, all the while diluting its glamour with heavier and heavier doses of contempt. When Gossip Girl ends on Monday, it will go out like the waning aristocracy it is—dripping with jewels, mired in scandal, and with the stubborn tenacity of a dying breed that once ruled the world.

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USDA Chief: Rural America Is Becoming Less Relevant

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Agriculture Secretary Tom Vilsack has some harsh words for rural America: It’s “becoming less and less relevant,” he says.

A month after an election that Democrats won even as rural parts of the country voted overwhelmingly Republican, the former Democratic governor of Iowa told farm belt leaders this past week that he’s frustrated with their internecine squabbles and says they need to be more strategic in picking their political fights.

“It’s time for us to have an adult conversation with folks in rural America,” Vilsack said in a speech at a forum sponsored by the Farm Journal. “It’s time for a different thought process here, in my view.”

He said rural America’s biggest assets — the food supply, recreational areas and energy, for example — can be overlooked by people elsewhere as the U.S. population shifts more to cities, their suburbs and exurbs.

“Why is it that we don’t have a farm bill?” Vilsack said. “It isn’t just the differences of policy. It’s the fact that rural America with a shrinking population is becoming less and less relevant to the politics of this country, and we had better recognize that and we better begin to reverse it.”

For the first time in recent memory, farm-state lawmakers were not able to push a farm bill through Congress in an election year, evidence of lost clout in farm states.

The Agriculture Department says about 50 percent of rural counties have lost population in the past four years and poverty rates are higher there than in metropolitan areas, despite the booming agricultural economy.

Exit polls conducted for The Associated Press and television networks found that rural voters accounted for just 14 percent of the turnout in last month’s election, with 61 percent of them supporting Republican Mitt Romney and 37 percent backing President Barack Obama. Two-thirds of those rural voters said the government is doing too many things better left to businesses and individuals.

Vilsack criticized farmers who have embraced wedge issues such as regulation, citing the uproar over the idea that the Environmental Protection Agency was going to start regulating farm dust after the Obama administration said repeatedly it had no so such intention.

In his Washington speech, he also cited criticism of a proposed Labor Department regulation, later dropped, that was intended to keep younger children away from the most dangerous farm jobs, and criticism of egg producers for dealing with the Humane Society on increasing the space that hens have in their coops. Livestock producers fearing they will be the next target of animal rights advocates have tried to undo that agreement.

“We need a proactive message, not a reactive message,” Vilsack said. “How are you going to encourage young people to want to be involved in rural America or farming if you don’t have a proactive message? Because you are competing against the world now.”

John Weber, a pork producer in Dysart, Iowa, said Friday that farmers have to defend their industries against policies they see as unfair. He said there is great concern among pork producers that animal welfare groups are using unfair tactics and may hurt their business.

“Our role is to defend our producers and our industry in what we feel are issues important to us,” he said.

Weber agreed, though, that rural America is declining in influence. He said he is concerned that there are not enough lawmakers from rural areas and complained that Congress doesn’t understand farm issues. He added that the farm industry needs to communicate better with consumers.

“There’s a huge communication gap” between farmers and the food-eating public, he said.

Vilsack, who has made the revitalization of rural America a priority, encouraged farmers to embrace new kinds of markets, work to promote global exports and replace a “preservation mindset with a growth mindset.” He said they also need to embrace diversity because it is an issue important to young people who are leaving rural areas.

“We’ve got something to market here,” he said. “We’ve got something to be proactive about. Let’s spend our time and our resources and our energy doing that and I think if we do we’re going to have a lot of young people who want to be part of that future.”


AP Director of Polling Jennifer Agiesta contributed to this report.


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Marijuana goes legal in Washington state amid mixed messages

Marijuana is seen in the hand of a person after the law legalizing the recreational use of marijuana went into effect in Seattle, WashingtonSEATTLE (Reuters) – Washington state made history on Thursday as the first in the nation to legalize marijuana possession for adult recreational use, an occasion celebrated by dozens of users near Seattle's famed Space Needle tower amid blaring reggae music and a haze of pot smoke. The public gathering defied a key provision of the state's landmark marijuana law, which forbids users from lighting up outside the privacy of their homes. And it underscored mixed messages that law enforcement officials have conveyed about the new statute. …

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PG-13 Movies Earned The Most Money At Theaters This Year

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Hollywood studios have released 33 percent more R-rated films in 2012 than last year, but the wealth of adult offerings hasn’t translated into a box-office boom. Instead, audiences have flocked to PG-13 fare.

This year, 168 films have carried the “restricted” rating, which requires youths under 17 to be accompanied by an adult, and they have taken in $2.3 billion at the box office. That compares to 113 PG-13 films, with a $4.7 billion take, and 52 PG movies with a combined gross of $1.8 billion.

Only one R-rated film, Universal’s “Ted,” has cracked the year’s Top 10 grossing films. Six of the Top 10 — including the top four — carry PG-13 ratings, while three are rated PG. In 2011, nine of the Top 10 movies were rated PG-13 with the remaining slot taken by “Cars 2,” with the all-but-extinct G rating from the Motion Picture Association of America.

So if the money is in PG-13 movies, why do the studios keep releasing more R-rated films?

“In most cases, you don’t really make a decision — or have a choice,” Lionsgate’s head of distribution, Richie Fay, told TheWrap. “It’s usually a case of what the material demands, and whether it’s organic. But you know all that going in — it is part of the process. You see it when you read the script, and you factor it in when you’re planning.”

Also read: As a hit man, Brad Pitt Misses at Box Office in Killing Them Softly

Indeed, the majority of the R-rated releases aren’t major studio productions, they are independently produced and niche films. For example, nine of the 12 films released this year by the Weinstein Company, which focuses on adult specialty releases, were rated R. But of the 19 films released this year by market-share leader Sony, only four were rated R, two were PG and the remainder were PG-13. Eight of Universal’s 14 releases this year have carried an R, but none of the 11 movies released this year by Disney have been R.

2012 movie grossing chartThere is money to be made. Besides the top-earning R-rated film “Ted,” Universal scored with the R-rated “Safe House” ($126 million), “Prometheus” did the same for Fox and Sony had “21 Jump Street” ($138 million). Even with PG-13 appearing to offer the most direct shot at blockbuster box-office numbers, there are reasons the studios make R-rated films, Universal’s distribution chief Nikki Rocco told TheWrap.

“Mainly, you want to stay true to the material,” Rocco said. “You couldn’t make a film like ‘Savages’ anything other than an R. By the time we greenlight a picture, we know what its rating will be.”

Creative considerations aren’t all, though.

“Another reason is to bring some diversity to the marketplace, to offer something specifically for adults, so that there is in theory something for everyone out there,” Rocco said.

Warner Bros. had six R films among its 14 releases (not counting Imax nature films and re-releases) and had a major hit with the R-rated “Magic Mike,” which cost just $7 million to make and took in $113 million domestically. The studio’s Oscar frontrunner “Argo,” which over the weekend topped the $100 million plateau at the box office, is also rated R. That rating won’t hurt should the film claim a Best Picture nomination; seven of the last winners at the Academy Awards have been R-rated.

Also read: How ‘Ted’ Became Summer’s Surprise Box-Office Superhero

Obviously, an R-rating offers filmmakers the ability to more accurately portray real-life situations. But that’s not the goal for every filmmaker. 

“If Spider-Man were really out there battling crime in the streets of New York City, don’t you think he’d be inclined to drop an F-bomb now and then?” wondered Exhibitor Relations senior analyst Jeff Bock.

He might in the real world, but he won’t be dropping them at the multiplex anytime soon. Nor will Batman or Katniss Everdeen — at least not if they intend to draw the droves of teenagers that power the grosses of the biggest franchise films.

TwilightThere was never any doubt that the “Twilight” films – including the nation’s current top film for two weeks running, “Breaking Dawn 2” — were going to be rated PG-13, according to Fay.

Also read: How ‘Twilight’ Made the Movie Business Respect Girl Power

Author Stephenie Meyer was very specific with her edict that there would be nothing in there that would put us in the position of getting an ‘R’,” Fay told TheWrap. “She knew the audience that bought the books and had a lot of communication with those folks, and she was very clear on that.”

Both Universal and Warner Bros. have successfully bucked the trend with comedies recently, Warner Bros. with its two “Hangover” films and Universal with this summer’s “Ted.”

“They’ve shown you can get away with an ‘R’ with comedies,” Bock said. “But with an action film, if you want to make $200 million, $250 million at the box office, you’ve got to get the biggest possible audience in there.”

Also read: ‘Silver Linings’ David O. Russell on How Jennifer Lawrence Skyped Her Way to Oscar Front-Runner

This year’s top four films  — “The Avengers,” “Dark Knight Rises,” “The Hunger Games” and “The Amazing Spider-Man” — are all rated PG-13.  And of the top 25 film franchises of all time, only one  — “The Matrix” — carried an “R” rating, so it’s a dollars and cents issue. It’s hard to imagine any project with franchise potential — and a franchise-sized budget — that could get a studio green light today without assurances that it could play to teenagers. 

This summer’s “Prometheus,” tied to director Ridley Scott’s earlier “Alien” film, was the rare R-rated project that seemed to have franchise potential.

It opened to $51 million in June and topped out at $126 million domestically. The grittiness and freedom that the R rating allowed Scott no doubt lured some adults, but it’s impossible to determine how much it would have made had it been more accessible to teens.

2012 movie grossing chart by ratingDick Rolfe, who heads the Dove Foundation, a nonprofit organization that has been trying to push Hollywood in a more family-friendly direction for more than two decades, isn’t surprised that audiences are choosing the non-R titles.

“I think there is a kind of wearing-out of the public in terms of explicit material,” Rolfe told TheWrap. “People are just getting tired of exploding body parts, naked body parts and abusive language.”

On the other end of the ratings spectrum, the “G” rating has essentially vanished. There were only nine films released with that rating this year. Three were re-releases, two were Disney nature films and the other four were independent animated kids films. Among those was “Oogieloves: The Big Balloon Adventure,” which set a record for box-office futility.

Also read: Oogieloves’ Worst-Ever Box Office Bow: ‘This Is the Notoriety We Were Looking For’

“It’s just not cool for kids — at least kids old enough to care about stuff like this — to go to G-rated films anymore,” Bock said.

There were 261 films that were released without MPAA ratings, mainly small foreign films, independent features, documentaries and re-releases. They grossed $45.4 million, or an average of $174,000.

Only two films have been released with an NC-17 rating in 2012. LD Entertainment’s “Killer Joe,” which starred Matthew McConaughey, grossed $1.9 million and Kino Lorber’s “Elles” brought in $754,000.

SEE ALSO: The most expensive movies ever made >

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Bill Gross Presents The Big 4 Structural Issues That Will Haunt The US Economy For Years

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In his latest monthly newsletter, PIMCO’s Bill Gross presents the big four structural issues that will haunt the economy for years.

They are: Debt, demographics, technology, and globalization.

Some good food for thought from the letter:

1) Debt/Delevering
Developed global economies have too much debt – pure and simple – and as we attempt to resolve the dilemma, the resultant austerity should lower real growth for years to come. There are those that believe in the “Brylcreem” approach to budget balancing – “a little dab‘ll do ya.” Just knock a few percentage points off the deficit/GDP ratio, they claim, and the private sector will miraculously reappear to fill the gap. No such luck after 2–3 years of austerity in Euroland, however. Most of those countries are mired in recession and/or depression. Political leaders there should have studied the historical evidence presented by Carmen Reinhart and Ken Rogoff in a critically important paper titled, “Growth in a Time of Debt.” They conclude that for the past 200 years, once a country exceeded a 90% debt/GDP ratio, economic growth slowed by nearly 2% for both developed and developing nations for an average duration of nearly a decade. Their work displayed below in Chart 1 shows the result in the United States from 1790–2009. The average annual U.S. GDP rate growth, while clearly influenced by the Great Depression, was -1.8% once the 90% barrier was exceeded. The U.S., by the way, is now at a 100% debt/GDP ratio on the basis of the authors’ standard measuring yardstick. (Note as well the 5½% average inflation rate during the same periods.)


In addition to sovereign debt levels which were the primary focus of the Reinhart/Rogoff studies, it is clear that financial institutions and households face similar growth headwinds. The former needs to raise equity via retained earnings and the latter to increase savings in order to stabilize family balance sheets. The combined need to increase our “net national savings rate” highlighted in last month’s Investment Outlook is a long-term solution to the debt crisis, but a near/intermediate-term growth inhibitor. The biblical metaphor of seven years of fat leading to seven years of lean may be quite apropos in the current case with the observation that the developed world’s growth binge has been decades in the making. We may need at least a decade for the healing. 

2) Globalization
Globalization has been an historical growth stimulant, but if it slows, then the caffeine may wear off. The fall of the Iron Curtain in the late 1980s and the emergence of capitalistic China at nearly the same time was a locomotive of significant proportions. Adding two billion consumers to the menu made for a prosperous restaurant, increasing profits and growth in developed economies despite the negative internal effects on employment and wages. Now, however, these tailwinds are diminishing, producing an airspeed which inexorably slows relative to the standards of prior decades. Is it any wonder that markets now move up or down as much on the basis of policy changes coming out of China as opposed to the U.S. or Euroland? If China and the accompanying benefits of globalization slow, so too may developed economy growth rates.  

3) Technology
Technology has been a boon to productivity and therefore real economic growth, but it has its shady side. In the past decade, machines and robotics have rather silently replaced humans, as the U.S. and other advanced economies have sought to counter the influence of cheap Asian labor. Almost a century ago, Keynes alerted the economic community to a “new disease,” what he called “technological unemployment” where jobs couldn’t be replaced as fast as they were being destroyed by automation. Recently, Erik Brynjolfsson and Andrew McAfee at MIT have affirmed that workers are losing the race against the machine. Accountants, machinists, medical technicians, even software writers that write the software for “machines” are being displaced without upscaled replacement jobs. Retrain, rehire into higher paying and value-added jobs? That may be the political myth of the modern era. There aren’t enough of those jobs. A structurally higher unemployment rate of 7% or more is the feared “whisper” number in Fed circles. Technology may be leading to slower, not faster economic growth despite its productive benefits.  

4) Demographics
Demography is destiny, and like cancer, demographic population changes are becoming a silent growth killer. Numerous studies and common sense logic point to the inevitable conclusion that when an economic society exceeds a certain average “age” then demand slows. Typically the dynamic cohort of an economy is its 20 to 55-year-old age group. They are the ones who form households, have families and gain increasing experience and knowhow in their jobs. Now, however, almost all developed economies, including the U.S., are gradually aging and witnessing a larger and larger percentage of their adult population move past the critical 55-year-old mark. This means several things for economic growth: First of all from the supply side, it means productivity and employment growth rates will slow. From the demand side, it suggests a greater emphasis on savings and reduced consumption. Those approaching their seventh decade need fewer cars and new homes as shown in Chart 2. Almost none of them have babies (thank goodness!). Such low birth rates and a significant reduction in demand have imperiled Japan for several lost decades now. A similar experience will likely turn many developed economy “boomers” into “busters” within the next several years.


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The Euro Crisis Will Only End When Unemployment Falls

Greece Depression Election Graffiti

There has been a lot of legitimate good news from the euro zone in recent months.

Renegotiation of the rescue package with Greece may represent can-kicking, but every day you’re able to kick the can is a day you haven’t allowed the euro zone to blow up.

Bond yields across much of the periphery have fallen to lows not seen since 2011, and equity prices are at comparable highs.

The crisis isn’t over, but one is tempted to begin thinking that maybe the hard institutional work has been done and things should get easier from here.

But complacency is the enemy, and the crisis remains dangerous. In the first act of the euro crisis, the biggest threat was a financial meltdown due to a spiraling loss of confidence in sovereign bonds and bank solvency.

That threat has been greatly diminished, thanks in large part to the actions of the European Central Bank. Beginning with the implementation of the ECB’s long-term refinancing operations roughly a year ago, the biggest threat to the euro zone became another nasty feedback loop: that between macroeconomic deterioration and political change.

Greece may be technically equipped to stay in the euro zone. But it has been in a serious recession for 5 full years, and it is very unlikely to see meaningful growth until 2014 at the earliest. Its unemployment rate was over 25% at last check and its youth unemployment rate is 57%.

The technical wherewithal to stay in the euro zone will not matter if bitterness, anger, and frustration with the economy lead the Greeks to choose a government in favour of outright exit. Unless the euro area is preparing an occupying force, they can’t make Greece stay in. And once Greece is out, whatever the cause, contagion will return. 

Greece is not at all the only potential flashpoint. Spanish unemployment is over 26%. Italian unemployment is above 11% and Italy’s youth unemployment rate has risen by nearly 6 percentage points in just the last year. Portuguese unemployment is disturbingly high, as is joblessness in Belgium and France.

Labour-market numbers across much of the euro zone may well get worse. The euro area as a whole remains in recession and is expected to continue contracting into 2013.

All it takes is one government to decide that it has had enough. The more places that have chronically underemployed workers as a large plurality of the adult workforce, the more likely such decisions become. If that were to occur, all the hard work European leaders have gone to to save the single currency would probably be for nought.

The crisis will be over when unemployment is falling, fast and steadily, around the periphery. And not one minute before.

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