Before I say a few words about my favorite films of 2008, let me mention my favorite films of 2007.

Film critics often write about “the movies” or “directors” as if annual changes in quality or taste or choice of material are solely the result of artistic decision – that if the films of a given year aren’t up the ones of the year before it must have something to do with the filmmakers not being sufficiently serious-minded enough. Looking back on 2007, however, from the viewpoint of 2008, favorites like There Will be Blood, Zodiac and I’m Not There seem like pictures enabled by not only creative vision but also the availability of capital and the presence of executives willing to take financial risks in the hopes of making not just a profit but also a mark, a name, or their company a beacon for talent. In other words, these were the pictures of an “up” economy in which spending (and overspending) were seen as shrewd actions.

As 2008 ends, the world is clearly and suddenly in a “down” economy, although independent film got there first. The trades were full of Sundance doom’n’gloom last winter, noting the decline in top-dollar sales from the fest. Shortly thereafter producers were stunned by the bankruptcy of Axium payroll. And then there was the slow-speed crumbling of THINKfilm, a meltdown marked by unpaid advances, litigious filmmakers, and an overleveraged owner who seemed to view his company’s unmet promises as just the normal economic churn of some industry of widget-makers. Through it all was the slow disappearance of producer overhead deals and the vanishing of even more studio specialty divisions and distributors (Picturehouse, Warner Independent, Yari Releasing and Tartan, among them).

The result of all this is an independent economy that is actively disincentivizing investment. Private money is sometimes snarkily called “dumb money” because, presumably, non-industry investors are thought to be unmindful of the business’s economic underpinnings. I’d call such investment “idealistic money.” From my experience, investors know perfectly well the vicissitudes of film investing. They are people with high risk tolerances, but they are also people who expect that fairness and honest rules of business be present when they do invest. When a distribution promise is broken and a film is dumped to video, or when a minimum advance doesn’t even get paid, these people more often than not don’t get mad, and they usually don’t sue. It’s not worth their time and money. They just never invest in a film again.

Okay, aggrieved producer rant over. When I look at my list of favorite ’08 films, I appropriately see a list that almost (but not entirely) neatly divides between films from two film economies not dependent on either specialty division largesse or large-scale private investment. (Like other respondents, I’m not calling this list a “best of” – there is simply far too much I haven’t seen yet, like most of the year-end stuff, including Gran Torino, as well as Happy-Go-Lucky and Waltz with Bashir.) The films I liked a lot this year seemed to be, with an occasional exception like The Dark Knight, either rigorous international art films supported by European broadcasters and funds, or else small-scale, very-low-budget American indies made by filmmakers who were able to build their own sustaining communities of willing collaborators and crew. I loved There Will be Blood, and I love these smaller films too. They represent their own moment in time just as much as Anderson’s film represented his, and they may point towards a more realistic model for readers of this magazine going forward.

My 2008 favorites (that had some kind of release this year): Hunger (pictured), The Pleasure of Being Robbed, My Winnipeg, Trouble the Water, The Edge of Heaven, The Class, Wendy and Lucy, Paranoid Park, The Wrestler, Frownland, Momma’s Man, Silent Light, The Dark Knight, Mister Lonely, Reprise, Milk, Mary, Be Kind, Rewind, Ballast, WALL E, Frozen River.

Favorite 2008 Fest Films Due for Release in ’09: Goodbye, Solo; Medicine for Melancholy; Loot; Examined Life; Soul Power, Summer Hours.

Favorite Undistributed Film: Wellness.

Favorite Performances: Eleonore Hendricks (The Pleasure of Being Robbed, pictured), Sean Penn (Milk); Mickey Rourke (The Wrestler), Misty Upham (Frozen River); Ken and Flo Jacobs (Momma’s Man); Sara Simmonds (In Search of a Midnight Kiss); Dore Mann (Frownland); Souleymane Sy Savane (Goodbye, Solo); Beyonce Knowles (Cadillac Records).

Favorite Screenplay: Reprise.

Favorite Narrators: Guy Maddin (My Winnipeg); Taylor Greeson (Meadowlark).

Favorite Cinematography: Sean Bobbitt (Hunger); Christopher Doyle and Rain Li (Paranoid Park).

Favorite Criterion Reissue: Blast of Silence.