But the broader point is that we are all artists, and to sell one group out for another is damaging to all of us. Though he theoretically may have changed his mind, the phenomenon still exists.

I don’t know about that story you mentioned, but I’ll look it up.

Thanks for reading. I haven’t had any feedback for this post in awhile even though it is one of the most read.

And, have you read the information about Rocco Landesman who is the new head of the NEA and is saying nobody gets nothing from them unless they can prove quality? It’s caused a bit of a stir in the provinces.

Let me answer your questions:
1. In terms of non-monetary gain from the arts, yes, there are fields of economics that try to put a ‘value’ on the arts. The thing that is confusing to non-economists is that economists have a different view of the word value than accountants. Accountants and macroeconomists, the macroeconomists that blather on about fed fund rates and all that (the only economists you are likely to ever hear on the news) view value in terms of what something costs, which is the normal use of the word. A field called welfare economics tries to quantify the value that you place on the arts (and a whole lot of other stuff like getting rid of pollution for example) by estimating what value there is to the arts. This is done by placing a dollar value on the arts, but an important point here is that it’s not an actual dollar value, but rather dollars here are a proxy value for the true value, which you and I value in an imaginary unit called ‘Utils’, because it is impossible for you to tell me how many utils you gain by listening to Brahms.

Consumer confidence actually is absolutely critical. I do not say that in the post-9/11-bush way, “go buy a refrigerator”, but rather, when everyone feels calm about the future, things will actually be more calm. I feel that seeing artists at work could be a great way to (even if people don’t think much about it as they pass by) make people feel better about things. That was an important part of the public works efforts of the 30s, large murals and the likes.

2. I think food stamps and unemployment benefits are critical. We would have never had as severe a depression in the 30s with provisions as strong as we have now. Even if there were no such idea as a stimulus package, we would need to do what we are doing there.

3. The big fear about $1 trillion dollars dumped on the economy at once is massive inflation. We have to be very careful when looking the monster of inflation in the eyes. Normally the federal reserve moves to both grow the economy and keep inflation in check. Right now, it’s pretty obvious that the fed isn’t able to entice any one to do anything with its normal policy, so something is needed. Now, if we gain massive growth after this recession period, growth and inflation simultaneously,not so bad. Contraction and inflation, very bad.

Essentially all we are doing with this stimulus package is moving debts around. For a basic example, imagine that you have 3 credit cards. You have debt, but you would like to buy some things now, so you buy them with card 1. When it comes time to pay card 1, you just pay with card 2. And so on. Government has the ability to do that, but not forever.

4. Well, this is probably my cynicism in terms of government. There are many who (look for R after the name), if the NEA gets money in the stimulus package, will say when the economy is doing well, “What do you think you need more money for? things are going well, you already got your piece.” So, yes, I don’t think this is a bad time for the arts to get some money, but, I think it should be brought up outside of the stimulus if at all possible.

I suppose I only have myself to blame. The post is not meant as being for or against the NEA funding via the stimulus package. However, it can come across as such.

My larger point is that there is a categorization of artists both inside and outside of the artistic community as if it were a monolithic group. Perhaps the NEA itself does this. One person says certainly that giving money to artists would not stimulate the economy. What is his definition of an artist? Another says that giving money to the NEA is like supporting “Dancing with the sluts”. What is HIS definition of artists? And lastly, a writer, argues, essentially, that some artists are relevant and others are not.

I don’t think that these categorizations are correct. Perhaps, I needed to explain myself better in the original post.

However, I do have questions, and I mean these mostly in earnest and only a little bit rhetorically:

1. Are there economic models that gauge what effects the arts have on the economy beyond their immediate economic ones? For example, the arts have a certain educational aspect to them. Does this influence society as a whole in some macroeconomic way? Is there a way to find out? Also, what is the benefit to working with our own creativity more as a society? Does this help bring creativity and innovation to other areas of the economy? What is the effect on consumer confidence of seeing well produced works of art?

2. The stimulus, as I understand it, has provisions for food stamps and unemployment benefits. How do you feel about those? Do they help encourage a more productive economy?

3. Should the “stimulus” package even be called a stimulus anymore? It seems that it is partially a “sustaining” package so that we do not fall deeper into economic woes. Is there value to this?

4. Why do you say this, “Supporting the arts now with the idea of stimulating the economy removes the incentive to support the arts through grants later when the economy is better” ?

I have more, but this comment is going on too long.

However, claiming that output will be permanently changed by a one time stimulus, or that money given to the arts community have a long-run positive effect on the macroeconomy is fallacious. Certainly, there are models that predict with an increase in government spending will increase output. However, they also predict that when that government spending goes away, output will decrease. If you think of it that way, we aren’t avoiding recession, but rather re-allocating them across time.

The arts have, almost by definition, an income elasticity of demand which is greater than one. That means, simply, that as aggregate incomes increase, demand for artistic pieces increase. If incomes fall, demand for these goods fall.

as a quick example, the income elasticity of demand for symphony orchestras in the US was found in one study to be 1.26. Therefore, for a one unit increase in incomes, there will be a 1.26 unit increase in the quantity of symphony orchestra performances demanded. But the reverse is also true. A one unit decrease in incomes will lead to a 1.26 unit decrease in the quantity of performances demanded.

The outcome of the stimulus that would have a positive effect for artists would be to increase employment and wages to previous levels. To claim that supporting the arts should be done to boost the economy is misguided. By the logic that artists will spend the money on goods and services, the money could be given to any random person in the state of Ohio and have the same macroeconomic effect.

I feel that the grant should be given to the NEA. However, it should be given outside of the auspices of the stimulus package. Supporting the arts now with the idea of stimulating the economy removes the incentive to support the arts through grants later when the economy is better.