To entice filmmakers to choose Michigan over other competing states, the state legislature passed bills creating refundable tax credits of up to 42 per cent for in-state movie production expenses.

Giving businesses tax credits is nothing new, and such credits can reduce a company’s tax bill to little or nothing.

But refundable credits go further. They’re like a rebate for production expenses and can require the state to cut the moviemaker a cheque.

That’s six times the increases of up to 2 per cent the state gave public universities and community colleges this budget year.

Republican Senator Jud Gilbert said traditional Michigan businesses are paying higher taxes while “we turn around and send a cheque to somebody from Hollywood, some Pee-wee Herman type. I think that’s very hard to justify.”

But not every filmmaker is from Hollywood, and there’s no doubt the incentives are bringing movie companies and jobs to the economically sluggish state.

Cinepro Pictures Studios was set to film The Steam Experiment in Florida, where the company is located.

But it shot the independently produced thriller in Grand Rapids after hearing about the incentives.

The Michigan Film Office has approved tax breaks for more than 60 movies this year and next. Just two or three films were made in 2007.

The question, it seems, is whether a truly lasting industry is being hatched in Michigan.

Critics depict the business as fleeting because other states may increase their incentives to keep pace.

And while the state has nowhere near enough infrastructure to support all the new films, it’s further along than Louisiana, New Mexico and Massachusetts were at this point when they began luring the industry, said Anthony Wenson, chief operating officer of the Michigan Film Office.

He’s in a little bit of a slump right now with the terrible reviews of W, but this could be the exact thing to get Josh back on his feet.

Comic book movies have done wonders for Robert Downey Jr., Christian Bale, and Tobey Maguire.

Producer Scott Rudin has abruptly walked away from the forthcoming film The Reader and removed his name from its credits, following a vitriolic dust-up with his co-producer, the movie mogul Harvey Weinstein.

The two men, who have apparently hated each other for years, had been quarrelling over when to release the highly-anticipated love film, directed by Stephen Daldry and starrings Kate Winslet and Ralph Fiennes, which has been tipped as a major contender for next February’s Oscars.

A compromise appeared to have been reached in what was becoming a bitter and increasingly-public dispute last week when Rudin and Weinstein issued a joint statement saying they were finally “working together” and that The Reader would be released in US cinemas on December 12th.

However late on Thursday, it emerged that their relationship had taken a turn for the worse. Variety, the Hollywood bible, confirmed reports that another highly-strung dispute had seen Rudin finally leave the project. According to friends, Rudin resigned because he felt unable to set aside his differences with Weinstein, and was anxious to protect his working relationship with Daldry and Winslet.

The resignation of Rudin marks the latest in a long series of setbacks for The Reader, which recounts the love affair between a teenage boy and a much older woman who eventually turns out to have been a Nazi war criminal.

Initial production on the film which was adapted by David Hare from the Bernard Schlink novel was delayed by eight weeks after its original star, Nicole Kidman, pulled out after discovering she was pregnant. When Winslet was cast as her replacement, Daldry

was forced to factor in a further delay so that an actor could reach the age of consent before filming a sex scene.

Double-stage winner Stefan Schumacher and Italian Leonardo Piepoli both tested positive for CERA - an enhanced version of the blood-boosting hormone EPO - after giving samples during this year’s Tour.

And triple gold medallist cyclist Chris Hoy believes the decision to re-test the samples at the Olympics should be welcomed in the continued battle against drug cheats.

“The examiners can have up to eight years to dip into the samples taken and hopefully this sort of strong action will make people think twice about trying to cheat in the future.

Usually, a lowering of the federal funds rate eventually trickles down and helps ease interest rates that consumers pay on credit cards, adjustable-rate mortgages and auto loans.

But this time, economists say, only those with stellar credit ratings likely will see their credit-card rates drop.

Also, banks aren’t making very many loans at any rate right now. So any decrease in rates will have a limited effect on the economy.

“People who couldn’t get loans yesterday . . . can’t get a loan today,” said Carl Weinberg, chief economist for High Frequency Economics, a consulting firm.

Borrowing costs, however, could drop for consumers with variable-rate home equity and other loans that are tied to the prime interest rate, which JP Morgan Chase, Bank of America Corp., Wells Fargo & Co. and other banks cut by a half point Wednesday.

The Federal Reserve’s action dropped the federal funds rate to its lowest level in more than four years — another in a chain of efforts to keep credit moving and avoid a deepening financial crisis.

Central banks in England, China, Canada, Sweden and Switzerland and the European Central Bank also cut rates after a series of high-stakes phone calls over several days between Fed Chairman Ben Bernanke and his counterparts.

Indiana Bankers Association President Joe DeHaven said the rate drop will be more significant for business borrowers than for consumers.

“Whatever impact there is, it will probably just affect the short-term environment” for business loans that are quickly paid off, he said.

Sugato Chakravarty, professor and head of consumer sciences and retailing at Purdue University, doesn’t think the rate cut will have much impact on consumers or the economy.

“The problems are just too fundamental right now” for a rate cut to be an effective antidote, he said.

Normally, a cut in the key rate fans inflation pressures by putting more money into the economy. But the Fed said a significant drop in the past several months in energy and commodity prices has reduced inflationary risks.

Even so, the Fed’s move amounts to a gamble and could be inflationary, said Matt Will, finance professor at the University of Indianapolis.

“They’re kind of going in the dark. None of us has seen this kind of environment before. The flow of money has slowed down dramatically, and everybody is confused.”

The Fed typically uses the flow, or velocity, of money as it passes from banks to businesses or consumers and into wide distribution as a key gauge of how much money to put into the economy. But the flow is a trickle, with banks reluctant to lend and consumers unwilling to spend much.

“God bless Bernanke, I wouldn’t want his job at the moment,” Will said.

In an attempt to revive Japan’s depressed economy then, the Japanese central bank cut Japan’s federal funds rate to zero, with little gains to show for it, Will said.

“They were giving free money to their member banks,” which were saddled with commercial loans that had lost much of their value, much like the crisis from devalued residential loans that’s bedeviling the U.S. economy today, Will said.

Chakravarty said the U.S. is less reliant on industry than Japan and might be better able to weather the storm.

Any unsecured lending would be a radical departure for the Fed. Central banks almost never make unsecured loans, and the Fed has never done so in its history.

The Fed and Treasury are working together on how that might work but were not ready to announce it -yesterday. It is awkward for the Treasury to move to supporting a big unsecured lending programme when the core of its pitch to Congress was the plan to purchase troubled mortgagerelated assets.

There remains some chance that the US authorities will not be able to reach agreement. But the urgency of the situation - and the fact that the Fed referred to unsecured lending in a press release yesterday - suggests that it will happen.

This reliance on overnight money is dangerous for the financial system. It makes banks vulnerable to short-term market dislocations or loss of confidence, increasing the likelihood of failures and firesales of assets.

There are two reasons why banks cannot obtain term unsecured loans from the private market. There is a classic financial-crisis coordination problem, characterised as: “I won’t lend you money for a month if I think that everyone else will only lend you money for a day, allowing them to pull out tomorrow and leave me stranded.” This “roll-over” risk is a form of liquidity risk. The second reason is the credit risk of lending to banks, which has been elevated by the financial and economic turmoil.

The Fed’s existing liquidity operations - ramped up again yesterday - reduce liquidity risk by providing a large backstop source of funds. But they are imperfect substitutes for unsecured borrowing, as they are only available on a secured basis. Unsecured term loans - for instance at 100 or 150 basis points over the federal funds rate for three-month money - would provide a near-perfect substitute.

The unsecured Fed term loan rate would act as a ceiling for Libor. Banks would be able to use these loans to reduce their reliance on overnight borrowing, making the system more stable.

Moreover, banks would in theory become more willing to lend spare funds to each other, reviving the private interbank market, since the borrower or lender could turn to the Fed for unsecured loans if it suddenly needed additional liquidity.

“Beverly Hills Chihuahua,” a computer-animated production featuring a dog cast set in ancient Mexican ruins, took 29 million dollars on its debut weekend, according to preliminary figures from box-office tracker Exhibitor Relations.

Second place with 17.7 million dollars was taken by “Eagle Eye,” a futuristic thriller about a Big Brother-style villain who infiltrates phones, TVs and computers.

A new romantic comedy called “Nick and Nora’s Infinite Playlist” featuring the hottest geek in Hollywood at the moment, Canada’s Michael Cera, opened in third place with 12 million dollars.

In fourth place, with 7.4 million dollars in sales, was romantic drama “Nights in Rodanthe” starring Diane Lane and Richard Gere, set against the seaside backdrop of North Carolina’s Outer Banks.

The movie, the third time Lane and Gere have co-starred together, tells the story of a doctor who falls for an unhappily married woman.

One of the surprises of the week came from “Appaloosa,” which leapt from number 36 to fifth with takings of 5.0 million dollars.

The film starring Jeremy Irons and Renee Zellweger features two gunslingers who take on a bullying rancher but see their job complicated by the arrival of a young widow.

Samuel L. Jackson’s latest movie, a dark thriller called “Lakeview Terrace,” slipped from third to sixth, taking in 4.5 million.

Seventh was “Burn After Reading,” the latest movie from Oscar-winning film-making siblings Joel and Ethan Coen, with 4.08 million dollars in receipts.

“There is a sense now that these political films can really be successful, and they’re a genre aimed at one side of the political spectrum or the other,” said Robert Thompson, professor of media and popular culture at Syracuse University.

Next week, controversial director Oliver Stone lands his satirical biopic “W.” that attempts to deconstruct Bush’s faith and marriage and the days leading up to the 2003 Iraq invasion.

Tom Ortenberg, executive producer of “W.”, said filmmakers were mirroring society, even if the release date of the Stone movie could be seen as politically charged.

“We don’t attempt to shape society, but we do reflect it,” Ortenberg said. “The movie is an examination of how a man like George W. Bush became president, and frankly how anyone can become president.”

Director David Zucker’s farce “An American Carol” and talk show host Bill Maher’s documentary that mocks faith “Religulous” opened on the same day in movie theaters last week.

Weinstein and Rudin, who are rumoured to have hated each other for years, have been quarrelling over when to release the movie The Reader, which they are co-producing. The film, starring Kate Winslet and Ralph Fiennes, is expected to be a major Oscar contender next February.

The dispute has been characterised by public arguments, threats of legal action, a leaked email making an allegation that Weinstein tried to harass a famous Hollywood figure on his deathbed, and a reckless, million-dollar personal bet by Weinstein.

Weinstein wants The Reader, directed by British director Stephen Daldry, released this year, so it can qualify for the Oscars. The film, adapted by David Hare from a novel by Bernard Schlink, is about an adolescent boy who falls in love with a much older woman, only to discover she is a Nazi war criminal. It is the kind of difficult, literary film that will need Oscar nominations to become a hit. But Rudin wanted to push the release date into next year so that Daldry could have more time to finish post production. Daldry is facing another deadline he is also directing the Broadway version of Billy Elliott: the Musical which opens on 13 November.

Insiders believe the row between Weinstein and Rudin is a Hollywood grudge match that neither wants to be seen to lose. Friends of Rudin believe it is fuelled by Weinstein’s urgent need to get money flowing into his new company. Weinstein’s supporters believe Rudin wanted to push The Reader into next year because he doesn’t want it to compete at Oscar time with two other films he is producing, Doubt, starring Meryl Streep, and Revolutionary Road, which stars Kate Winslet and Leonardo DiCaprio and is directed by Winslet’s husband, Sam Mendes.

‘The feud is over,’ wrote the Los Angeles Times, optimistically. Weinstein and Rudin ‘have put all the bad blood behind them’. But within just a few hours, internet journalist Nikke Finke had released a leaked email written by Rudin which claimed that Weinstein had ‘harassed’ the Oscar-winning director and producer Sydney Pollack, an executive producer on The Reader, ‘on his deathbed until the family asked him to stop’, in an effort to speed up release of the film. Pollack died of cancer in May.

The Reader is the kind of highbrow literary adaptation that has proved an Oscar-winning gold mine for both Weinstein and Rudin in the past. From the late 1990s Weinstein’s company Miramax seemed to have a lock on the Oscars, with films including Shakespeare in Love, The English Patient and Chicago. But Weinstein was often accused of buying Oscars with expensive marketing campaigns and of bullying directors.

More recently, the run of success has petered out. Since Weinstein and his brother Bob were forced to sell Miramax, the company they founded, to Disney, and set up the Weinstein Company in 2005, they have struggled to recapture their Oscar-winning and money-making form.

That has led people in Hollywood to wonder whether Weinstein, who became known as Harvey Scissorhands for his penchant for recutting movies, had lost his aggressive mojo.

‘I miss the old Harvey, the cinema carnival barker whose passion for film was often indistinguishable from his paranoia, abusive behaviour and vitriol,’ Patrick Goldstein of the Los Angeles Times lamented last year. And as Weinstein’s Oscar star waned, Rudin’s waxed. Earlier this year two films Rudin was involved in producing competed for Oscars: No Country for Old Men and There Will Be Blood

Amid all the unseemly acrimony, there is a silver lining for Weinstein fans. However damaging the rows may be for production of The Reader, they have at least thrilled Hollywood insiders, who are claiming that at last the ‘old Harvey’ is back albeit a million dollars lighter.

That price rise probably accounts for some of the success of the recent Cans Film Festival, which featured free admission with a donation of three cans of food for Marion-Polk Food Share.

Still, it’s a sorry sign of a changing economy when a populist art form that offers escapism in hard times such as the Depression and world wars, is getting priced out of reach.

By contrast, movie rentals are a bargain, not to mention film series.

Cable television brings us many of the movies on the day and date they become available on video, and some movies, such as the recent release “Humboldt County,” are available on demand on cable as soon as they hit theaters. As a whole, it’s fractured our idea of the local movie theater as the ideal and only place to see a movie and undercut the excitement of seeing films when they first come out.