The joke, I'm sure I don't need to explain, is that not every state can succeed by poaching productions from other states, since what's made in one state can't be made in another. But that's not quite right. A subsidy allows a business to cut prices and artificially raise demand. Given generous enough subsidies, many more movies would be made, and each state could, potentially, have a thriving film industry. This is how higher education works, more or less. New Mexico has state universities just like California and Iowa and Alaska. These schools are understandably viewed as foundations of the local economies in which they're located, as well as important cultural institutions. And we obviously view the subsidisation of the production of college graduates as a worthwhile contribution to long-run growth, again, understandably.