January 21, 2009

Rough estimate

With the advent of an Obama administration, there seems to be an inchoate expectation—one, it should be said, based on not much concrete evidence as yet—that the arts are going to finally get the government attention they deserve, with the Quincy-Jones-inspired petition for a cabinet-level Arts Secretary probably the most prominent effort on the Web. I've always thought that was a good idea, on the grounds that a lack of high-level advocacy has contributed to the underfunding of arts initiatives. So what would constitute an appropriate amount of federal support for the arts? Well, you can calculate an intriguing ballpark figure based on, oddly enough, the auto industry. And according to the auto industry, the federal government should be annually funding the arts to the tune of twelve billion dollars.

It's no secret that American automakers have been in trouble for some time. There's a number of reasons why—the turning radius on the Chevy Cobalt we rented last week being but one datum—but the point is, with the economy gasping for breath like Violetta in Act III, the automakers have come, hat in hand, to beg for money from the government. And to make their case, they did what arts organizations like to do—they cited an economic impact study.

Last November, the Center for Automotive Research released a memorandum on what would happen if the Big Three automakers suddenly stopped or contracted production. Here's what it had to say about the worst-case scenario—a complete cessation of operations within the next year:
In economic terms, the rapid termination of Detroit Three U.S. operations in 2009 would reduce U.S. personal income by over $150.7 billion in the first year, and generate a total loss of $398.2 billion over the course of three years. The impact of this personal income loss on fiscal government operations at the local, state and federal levels include an increase in transfer payments, a reduction in social security receipts and personal income taxes paid. The net impact of all three of these categories is negative on the government balance sheet, resulting in a loss to the government of $60.1 billion in 2009, $54.3 billion in 2010, and $42.0 billion in 2011—a total government tax loss of over $156.4 billion over three years.
That's calculated from the loss of jobs in the car factories, indirect or supplier jobs, and spin-off jobs (those jobs that would be lost from the decline in income among the first two groups)—in other words, it's an attempt to measure total economic impact on the affected communities. If you add up the three-year totals of lost income and lost tax revenue, you get a yearly average impact of $184.9 billion.

How's that compare with the arts? Well, according to the 2007 Arts and Economic Prosperity III study by Americans for the Arts, arts organizations generate $104.2 billion annually in personal income, and $29.6 billion in tax revenue. That's a yearly total of $133.8 billion.

So that means that the Big Three automakers' yearly economic impact is about 1.4 times that of the "non-profit arts and culture industry," as Americans for the Arts puts it. Which is interesting, since in the past year, the auto industry received 120 times as much federal money than the arts.

The bulk of the government's bailout response to the financial crisis has been in the form of the Troubled Assets Relief Program, or TARP—that's the $700 billion figure the media has been tossing around. According to The New York Times, out of that, $17.4 billion in loans so far is going or has gone to General Motors and Chrysler, two-thirds of the Big Three. (That doesn't include automakers' financing arms, such as GMAC.) For the record, the 2008 budget of the National Endowment for the Arts was $144.7 million.

Extraordinary times, apples and oranges, &c., &c.—but isn't the crisis hitting arts groups just as hard? Maybe the Baltimore Opera isn't too big to fail, but what about The Metropolitan Opera? The troubles of the Museum of Contemporary Art in Los Angeles might pre-date the financial crisis, but so do the auto industry's; does MOCA get a bailout? How about the Detroit Institute of Arts? Do the math: based on the TARP money collected by automakers and the relative economic impact, the corresponding amount of annual arts funding would be $12.4 billion. Do you expect the government to hit that mark? Me neither. But then the government ought to be telling us one of two things: either what makes the auto industry so special, or else what makes the arts so unloved.


rbonotto said...

12 ... billion?

You could get a half-way decent production of Stockhausen's "Licht" for less than a *third* of that.

Lane Savant said...

Yeah renting a Cobalt was a big reason why we bought a Prius.
GM et al has watched Toyota for years build and thrive building quality products and payed no heed.
I really can't say how important money is to the arts. My money doesn't seem to get me anywhere.
If there is an arts bailout, I hope it comes after the Seattle Symphony dies and B-Hall falls into the train tunnel it's built over.

Milena said...

Can anyone explain what a Minister of Arts will do that the NEA and NEH are not or could not? I'm baffled that anyone wants to add one more bureaucrat to police artistic expression.

Matthew said...

Milena: It would make the NEA and the NEH a more prominent part of policy discussion. It's not necessarily a bigger bureaucracy, just one on a higher level of the pecking order. And what makes you think that such a department would "police" artistic expression any more than the market already does? The censorship in the "NEA Four" days came from Congress, not from within the NEA. And it came because the NEA was an easy target. There's a reason Congress doesn't gang up on, say, the Department of Commerce that way.

Here's another concrete example: if there had been a cabinet-level advocate for the arts, No Child Left Behind probably wouldn't have gone through without at least a consideration of how much it screws over arts education.

I think people have been conditioned by the culture wars in the 80s and 90s (and, if you're historically minded, the anti-left controversies surrounding government-funded arts in the 1930s) to regard any mix of government and arts as automatically detrimental to artists, but I'm inclined to chalk those messes up at least in equal measure to a failure of leadership. I also think a lot of those critics are put off by the thought of having to go in and fight for artistic ideas and principles, and think it's better to just stay out of the political fray. But the fact is, the arts are a valuable part of society—culturally, economically, educationally—and the sort of mutual neglect of artists and their elected representatives is out of proportion with the importance of the arts.

There's a great Chairman Mao quote, one of the few that still, I think, remain applicable: "Dare to struggle and dare to win." Sure, making the arts that much more prominent in government is a risk, and, like anything, if you end up with bad leaders, you're likely to get bad policy. But my feeling is, if you don't make the effort, you're likely to get bad policy even more often, because you're giving people who don't have your best interests at heart a blank check. To use power wisely, you have to have the opportunity to use power at all.

Donna Dodson said...

This is a timely post- (from Artnet news) NEA IN RECOVERY PACKAGE
The vast $825-billion economic recovery package unveiled by congressional Democrats on Jan. 15, 2009, does have a tiny little boon for the arts: a $50-million budgetary boost for the National Endowment for the Arts. Despite the modesty of the request -- about 3/500ths of one percent of the total -- some Republicans have already taken issue with the allocation. According to the Chicago Tribune, Rep. Jerry Lewis (R-Calif.) said arts support was "a far cry from the traditional tools of stimulating the economy." The strategy is a familiar one from the "culture wars" of the 1990s, when the right wing made regular attacks on government support for the arts. The economic recovery package faces further scrutiny in Congress, though it is expected to pass in some form within a month. NEA’s 2008 budget is $144.7 million.