Bush Economic Miracle: International Art Market Collapsing-- Along With Every Other Market

Damien Hirst's "Adam & Eve Under the Table." The seated lady isn't part of the exhibition

Sunday I was laughing about some of the Times' top 44 tourist destinations for 2009, especially how they crowned Marrakech the world's primo culinary offering and Doha the place to go for culture. Doha? Yeah, it's in Qatar. Qatar? Yeah it's on the Arabian Peninsula, jutting out into the Persian Gulf and Al Jazeera is based there. You know, one of the United Arab Emirates. And the Emir's 26-year old daughter, Sheikha al Mayassa, recently bought up $160 million worth of Mark Rothko, Francis Bacon and Damien Hirst. Voila! That and it's own Tribeca Film Festival and an I.M. Pei-designed Museum of Islamic Art and you can forget Paris, London, Rome, Istanbul, Cairo, New York, Mexico City... Doha's where it's at for the culture thing.

Except... today's Times has some bad news for all Damien Hirst purchasers. His edgy art may have been a better investment before Lehman Brothers filed for bankruptcy protection (the same day his work peaked at a Christie's auction). As we reported last fall, the Bush Economic Miracle is flushing art prices down the toilet along with the price of homes, stocks and everything else. Christie's is starting to lay off employees.

In the last months, auction prices dropped together with financial markets, ending a decade-long boom in the art market that was buoyed by record bonuses paid to financial executives.

Lehman plans to sell about $8 million in artwork to help pay its creditors, but if a recent auction by the bank’s former chief executive and his wife is anything to go by, it might be a challenge to attract buyers as many still wait for bigger bargains. Richard S. Fuld Jr. and his wife, Kathy, sold 16 drawings for $13.5 million through Christie’s in November in New York, below the $15 million low estimate.

...Its rival, Sotheby’s, said in December that it planned to reduce costs by $7 million in 2009 by cutting jobs and salaries, citing an “uncertain and challenging macroeconomic environment.”

Initial predictions by some art investors last year that oil-rich Arab countries, Russia, India and China would continue to spend on art, even as the United States and much of Western Europe stumbled into a recession, proved too optimistic.

A two-day sale of paintings and jewels in Dubai by Christie’s in October yielded only about half of what the auction house expected. A sharp drop in the price of oil since its peak in July made the region, identified by Christie’s as a growth market, less open to investing in art.

At an auction in New York in November, almost a third of the pieces remained unsold, including a self-portrait by Francis Bacon.

And if Bacon is selling low... it's all over. Cancel that trip to Doha.

And you know what? It could be worse. Imagine you were stuck in an accelerating recessionary trend, with unemployment spiraling out of control and... your unemployment insurance dries up. And you don't have a Hirst or Bacon to sell even at reduced prices. These aren't people who expected to ever go on welfare, but that's what's coming next for a couple hundred thousand people in New York, Massachusetts, Texas, Virginia, Pennsylvania and 20 other states across the country.

Obama asked Bush to request the rest of the bailout money ($350 billion) from Congress to stabilize the financial system. But I don't see banksters loosening up the credit market. I don't see them as part of the solution. I think they are the problem. The money should go to trickle up programs (an idea that banksters and their well-paid Washington shills abhor), not more failed trickle down programs. Screw the banksters; they screwed the whole country world.

Obama began calling lawmakers, promising to respond to their intense criticism of the financial rescue program by expanding its scope to aid struggling homeowners, small businesses and others. His top economic adviser, Lawrence H. Summers, sent a three-page letter to congressional leaders, vowing to better track how the money is spent and bolster oversight.

The president-elect plans to appear today at a luncheon in the Capitol where he will ask Senate Democrats to stand with him on an issue that is shaping up as an early test of his ability to build bipartisan consensus. Yesterday, he was forced to relent to skepticism on a separate politically complicated initiative, the economic stimulus package, by dropping his proposal to give businesses a $3,000 tax credit for every job they save or create.