I generally agree with this argument, though I doubt we'll see a full recurrence of the 70s aesthetic. For one thing, in the 70s there was a fully viable arthouse scene, which coexisted and competed with the studio system, and also managed to drive innovation within the stolid studio scene. Keep in mind that Scorsese, Altman, Ashby and the rest of them were all studio brats and not avant-gardists like Cassavetes. But they were significant artists who largely got freedom to fulfill their visions because, aside from money, what studio heads want most is prestige. Hence Oscar bait these days, though in the 1970s it meant more experimental and personal films, since Hollywood didn't want the arthouse to get all the praise. These days, the arthouse is long gone, dead by the hand of the studios, sure, but it's not like the arthouse helped itself with self-indulgence of the type that resulted in Heaven's Gate. Of course, these days we have independent movies, and a few studios have tried to ape some indie characteristics and have quasi-indie units like FX Searchlight. Indies, though, are not nearly as popular as the arthouse was in the 1970s, nor do they have nearly the level of quality that one saw in its predecessors. Even the better examples of the indie phenomenon--such as last year's Juno--are pervaded by a calculated artificialness that, after a fashion, can be entertaining and might well explore interesting ideas and themes, but just don't ring true. More often it's just random quirkery like the recent Gigantic.A lot of 70s movies were like that (“Chinatown”, “The Long Goodbye”, etc.), but it really went out of style in the 80s. Roughly speaking, in 80s and 90s Hollywood movies, the hero prevailed by doing what was right, whereas in Hollywood 70s movies there really was no right thing to do. In 80s and 90s movies, the heros tended to be bad-asses or idiot savants or upper middle-classers with some remarkable store of courage and resourcefulness. In the 70s, they tended to be down-on-their luck idealists dealing, often unsuccessfully, with some kind of awful situation.
This seems to me to be indicative of a cultural shift: conservatives tend to believe that if one just stands tall for a grossly simplified set of American values, then one will always prevail, whereas liberals (speaking for myself at least), tend to think things are more complicated than that. Conservatives believe that the gods will always shine on the true and the good, liberals (at least me) believe being true and good will meet with no reward.
I also think that the role of the motion picture has shifted in the public's imagination. In the 1970s, social realism and conscientious filmmaking could find an audience. Not all 70s filmmaking was socially concious, but there were a number of successful films that would later become classics. A Clockwork Orange, for example, was one of the biggest-grossing films in history at the time of its release. These days, though, I think that things have changed significantly. My experience is that most people see films as pure entertainment and would be heavily disinclined to watch such provocative movies. Satire, in particular, is a very hard sell. I am tempted to play armchair psychologist and say that the decline in interest in films of a social realist/politically aware/morally ambiguous films is due largely to a decline in civic engagement, courtesy of the mercenary ethic of the Baby Boomers. In the meanwhile, smug and artificially uplifting movies that praise the Boomer worldview have become de rigueur since the early 80s. These would be the sort of people who thought that Born In The U.S.A. was a straight-up salute to the Stars And Stripes, or who thought that the repugnant protagonist of Wall Street was some sort of capitalist hero. There was some obvious missing of the point in both cases, but that's life.
Then again, this seems a little neat. After all, it's not like there isn't any social realism being made at all--The Wire ended only last year and was a masterpiece. Of course, this only proves my point as the show's audience was terribly small, thus proving that America is still very much an inward-looking nation (though the show's format no doubt made its appeal more selective).
