I wrote this on screen tuesday morning. I just edited it to make it less of a mess. I’m not an economist, and the first draft had some questionable/waffley connections. My apologies if any remain.
Sometimes it seems to me that there are really only two economies: the bitter economy, and the generous economy.
The Bitter Economy – deserves everything that is gets and sees everyone as competition
The Generous Economy – sees itself as part of a community and its goods/services as one of many deserving options
I’ve been thinking and reading about the economy lately. How can we help our economy? Congress is looking at spending a whole bunch of money to help the economy… why is that?
The Federal Government really has very few options to influence the economy. Interest rates, and taxes/spending. If you never studied economics, I’d suggest skipping down to below the seond graph. If you have, please excuse some of the shorthand conclusions that I’m drawing toward my point.
Given that the country is already living with massive debt, and a large trade deficit, we have to be very careful to avoid inflation. When inflation gets out of control market actors end up in a spiral running after credit. Here’s a little image of the US CPI (Consumer Price Index.) You can see from this, or extrapolate, that our low unemployment and stable growth correlates to a stable CPI (controlled inflation rates.) Sorry the numbers are so small.
We’re looking at a global situation, and we have very few levers to push to influence things immediately. Interest rates are not a tools for us because of the potential to create inflation. We have to use taxes/spending. But we already have a massive deficit (which undermines the efficiency of the economy.) Any increase in spending will also increase the deficit.
We are not starting from moment one. Over the last hundred years we have been using more and more efficient/complex means to help our economy. We were employing all of these means as we descended into the current morass. It’s not like now we suddenly have new tools. Our use of the ‘spending will help’ tool is has (helped) create our problems.
Looking at graphs of rising debt is like looking at graphs of rising green house gasses. It’s really easy to sort of say, ‘hey, that doesn’t matter’. But it really does. Deficit spending is like running up your credit card. At some point you end up having to make more and more money just to pay off the minimum. Deficits have to be controlled so that they don’t undermine the value of investment. If investment is less attractive, no matter where our currency and interest rates sit, our economy slows.
The government is looking at sector by sector investment, because everyone knows the debt is a threat to our economic health. Everyone knows that adding debt is unlikely to increase our economic health. But we ‘need to do something’.
The government can’t say, “Money for all my friends!!!”. So it is now in the process of prioritizing. Money for banks? Money for auto-makers? Money for green economy? Money for arts? The Institute for Policy Studies has suggested that one percent be spent on the arts. This would be an investment in human capital and communities.
We need to help our economy, but we also need to spend as little as possible helping our economy. The arts are an incredibly efficient investment. You get more bang for your buck with arts spending. It’s actually a little off-topic, but consider the following, which I pulled from Artslynx:
The three failed launches of satellites from Titan IV rockets in the 8.5 months before June 1999 totaled $3,000,000,000 in losses, an amount that could have funded the NEA for nearly ONE THIRD OF A CENTURY (AP & Denver Post 5/5/1999)
The $40,000,000 settlement made to the Italian victims of the ski gondola killed by US flier’s jockeying could have funded the NEA for more than HALF A YEAR (NPR Morning Edition 3/24/99)
On March 20,1999, The AP (read in the Denver Post) reported that The US Senate had voted to grant hog farmers an added $250,000,000 in aid to help them weather a free-market drop in prices. Such a subsidy could have matched our annulal NEA appropriation for TWO AND A HALF YEARS.
The arts are a very efficient economic investment, bearing many fruit. But like foreign aid, it is politically very bad. All government spending bears political risk. Arts funding is scary because when you give enough artists money you’re liable to end up with a piss-christ, and some flower penis, in addition to a mountain of bad poetry.
We need to encourage our politicians to fund the arts, and we must let them know that creative expression – even when it offends or bores – is part of what makes our country great. Politicians now need our vocal support to take risks, or, just like artists, we’ll only get more of the same.
What are our economic priorities? Innovation? Stability? Creativity?
How can the bailout be used for both short term good and to reinforce long-term priorities?
Arts sector investment makes sense as an efficient economic tool. In making immediate spending decisions arts spending must be considered a part of the generous economy, and must be defended from the interests of bitter economy actors.
Here’s a graph showing spending withing the US budget. Very simply: note that arts spending does not even register as a category.