Eat the Peanut Butter!

We are receiving reports from various arts supporters that legislators and newspapers have received letters that target the Vermont Arts Council and a few other small agencies for elimination.

I have read a few of these letters and their basic argument is that, as with household budgets when there is less money available, Government should cut programs (like the Arts Council) until it is operating within its means.

To me this sounds like a contestant on The Biggest Loser being told to eliminate the tablespoon of peanut-butter from his diet instead of addressing his 10-chili-cheese-dog-a-day habit because the peanut butter has, pound for pound, more calories.

Eliminating the peanut butter will, like cutting the Arts Council budget, result in two sure things: the problem won't go away, and worse, without it we will suffer from the lack of some crucial nutrients which our bodies and our society can ill-afford to be without.

The Government is not the same as a Household

The basic flaw with the letters I have read is the assumption that Government functions like a household. Government is supposed to protect its interests and the citizenry (sometimes even from the citizenry itself!), negotiate with foreign countries on behalf of the people, and provide programs and services that are in the people's interest but for which there is no market incentive for investment (like schools and health-care, and teacher's and veteran's retirement programs, all of which are topics that are too big to discuss here!).

A head of household, however, tends to preserve and protect what is dear to him/her, even if it is at the expense of a neighbor or the community-at-large. Nowhere is this behavior more pronounced, its effects more devastatingly felt, than when people charged with acting in the public trust behave instead like individuals bent on preserving and protecting "what's theirs." This is essentially what happened in Washington and on Wall Street during the past five or six years during which regulations were either gutted or ignored. Speculators created high risk/high reward instruments that created fortunes for themselves overnight, and when everything went sour, turned to the Federal Government for a bail-out. So-called public servants protected their own assets at the expense of everyone else.

So here we sit in a recession/depression with private capital more or less dried up, unemployment at a 25-year high, and private enterprise at best, in a state of paralysis. It is very tempting to cut Government spending until we have once again reached the point where our revenue equals or exceeds our expenses; where our annual deficit disappears; where are accumulated national debt starts to decrease.

The problem is that if the Government does this, then unemployment will get much worse and inflation will skyrocket because there are fewer goods and services being produced. Depression in every possible meaning of the world will be the status quo on a scale not seen before...

It seems counter-intuitive to individuals dealing with their own household budgets to say that the best possible way to improve things is for the Government to spend more, but Government is the only player right now who has access to capital.

Government must invest borrowed capital in order to invest in private enterprise to create jobs and restore consumer and market confidence. It is these jobs, these industries that receive this investment that will, eventually, and not without great anxiety, allow us to move towards a recovery.

Arts=Jobs; Arts = Community

State Arts Agencies not only recognize and support vital cultural institutions and artist projects, we partner with a variety of private and public partners to showcase various attractions and festivals that cause huge numbers of visitors and entrepreneurs to come to our state. These visitors spend enormous sums in our shops, restaurants, and hotels. The entrepreneurs start businesses, employ people and contractors, and make positive demands on and contributions to our community's social fabric.

Arts agencies also serve as a catalyst that allows significant amounts of supplemental educational experiences to engage students in our schools, most of which is directly related to the schools' curriculum goals and all of which is directed towards specific performance goals for every student, not the least of which is developing skills for the 21st-century workforce that are highly prized--like collaborative decision-making, public speaking, and creative thinking.

The two most frequently cited reasons why a business chooses to locate in one community over another--all other factors like tax incentives and regulations being equal—are the quality of the schools and the quality of community life, both of which are highly dependent on a thriving arts sector.

Cutting Government’s small investment in the arts, far from improving our economic situation, will actually make if far worse. Not only will the cut place at risk 2000 jobs throughout the state, but the closing of perhaps dozens of our cultural institutions, and the drying up of arts education programs in our schools will make Vermont a significantly less attractive place for people to visit, to invest in new businesses, and to raise families.

So, please, don’t be fooled. Eat the peanut butter. It's good for you. The real threat is those chili-cheese-dogs.

Perspective Anyone?

I don't remember too many details from Fine Arts 13, my undergraduate survey course on the History and Appreciation of Western Classical Art. But I remember vividly the Venus of Willendorf, a squat fertility figure dating back many thousands of years, and I remember a lot of classical statuary, Roman architecture, and the Moorish influence in Spain in the late Middle Ages. But mostly I remember the profound feeling of relief that came over me when, as we started in on the Italian Renaissance in the early 15th Century, artists (Brunelleschi comes to mind) started to use perspective as a principle tool for organizing three-dimensional images on a two-dimensional canvas.

Ahhhh. Perspective. Something we all need. Something we rarely enjoy.

In art, of course, perspective is often something that professional artists love to play with. I have a couple of coffee-table books and many ties in my closet with images taken from the works of M. C. Escher. They provide hours of amusement for my children and me as we trace the passage of someone walking up the underside of a staircase and emerging through a door sideways. It's a little disconcerting but also a useful tool to explore how different points of view result in different outcomes.

Of late I have been reminded how a little more training in the use of perspective might have been useful during the past couple of months on the economic front. I've already raved about the ridiculousness of the US Senate getting all crazy about $50 million of the stimulus bill going to support efforts by the National Endowment for the Arts (NEA). $50 million, for those of you who missed my post, is about 63/10,000ths of 1% of the total $789 billion stimulus package. Kind of puts things in perspective, doesn't it?

But then I remembered something important. The Senate used to get all crazy over the NEA's $172 million budget back in the early 1990s. As a percentage of the Federal Budget, the NEA's budget was even smaller than its current portion of the stimulus package.

Fast forward a bit to this week. Perspective again becomes an important issue.

The general public is understandably outraged that AIG bosses received $160 million in retention (NOT performance) bonuses even as that sad-sack corporation was receiving $170 billion in tax-payer funds to--what's the phrase?--"cover its nut."

Now I don't have exact figures here, but it seems to me that, as justified as this outrage over bonuses is, it pales in comparison to the tens of billions of dollars that AIG is spending on, are you sitting down?, paying large international banking firms for having taken unconscionably bad investment positions in derivative swaps (or whatever they're called).

So, let's run a few numbers and get some new perspective on this AIG mess.

For ease of computation, I'm going to assume that AIG has paid out $50 billion to about a dozen banks all over the world to compensate them, dollar for dollar, the amount that they lost on derivative swappage.

What would have happened if, as frequently happens during a bankruptcy proceeding, AIG had said to these banks, "look, you're about to drive us out of business. But we're about to get some tax money. We'd like to offer you $0.90 on the dollar, since the alternative might just be for us to declare bankruptcy in which case you might get less than $0.10 on the dollar. Would $0.90 be okay?"

Assuming the banks said yes (and how could they refuse? THEY were the ones who made the bad investments to begin with!) tax payers could have saved $5 billion.

So here you have the poor schlubs who are busy "winding AIG down" getting retention bonuses (if they didn't, NO ONE would work for AIG), and getting beat up by the press, the Congress, and the American Public. Their collective bonuses represent just 3.2% of the money that could have been saved if only AIG had offered 90 cents on the dollar. But no one but me seems to be in a dither about it.

See what perspective does to you? It reveals a whole new side to a situation that makes you madder than you were before.

Perspective also reminds you that $160 million is frequently the cause of a lot of gnashing of teeth and flailing of limbs in political circles. We're in the Arts, after all, and we have that perspective down cold.

If this hasn't made you mad enough yet, then consider this.

The $50 million that caused such a furor in the Senate several weeks ago is exactly 1% of the $5 billion that might have been "saved" had AIG done the right thing.

Doesn't this make you want to pick up and head to Montpelier on Wednesday for Arts Achievement Day or to Washington DC next week for Arts Advocacy Day? At least there you'll be among people who share your perspective...