Monday, June 20, 2011

But the art market is HOT HOT HOT!

"A man's Self is the sum total of all that he can call his." William James, 1890

America is sinking deeper into a managed depression. Corporate profits are at all time highs, executive compensation is booming, and the stock market has recovered much of what it lost in 2008. Simultaneously, unemployment seems intractable, wage growth has stagnated, and the political climate is poisoned by calls to further reduce wages and benefits.

Austerity is fashionable for the masses. But not as fashionable as the baubles the superrich are collecting. Today, Marilyn Monroe's "Seven Year Itch" dress sold for $4.6 million, well above the predicted $2 million sale price. Mega-art show Art Basel sales "were spectacular and fast." “We’ve seen a feeding frenzy of buyers and some very good works on sale fetching world record prices, above 2007-2008 levels,” stated Phillip Hoffman, CEO of the Fine Art Fund Group.

And why not? The superrich are rolling again. Declaring 2010 the year "the empire snuck back" Crain's New York Business noted that financial CEOs have returned to their pre-recession posts atop the list of highest paid New York CEOs. Of course, they are showing some restraint:
“There is a bit of sensitivity now on what amount of pay is too much, and what people are going to say when they see the numbers,” said Steven Hall, a Manhattan compensation consultant. “Some of what you're seeing is companies and boards trying not to look like pigs.”
It's a tough task, but I'm sure their flacks are up to it!

They'd better start by doing something about the fantastic Washington Post article outlining the rise of income inequality in the U.S. from 1970-2008. Please read it - it's depressing and enlightening and infuriating all at the same time. Here's the stat that grabbed me - from 1970-2008 the income of the top 0.1% in the US grew 385%, over the same period, the income of the bottom 90% decreased by 1%.

According to the CIA, American income inequality has grown to the point where our income inequality peers are banana republics and autocracies. The following list is from the CIA Yearbook, and rates countries by the Gini index, a measure of unequal income distribution.

35 Rwanda 46.8 (2000)
36 Philippines 45.8 (2006)
37 Uganda 45.7 (2002)
38 Jamaica 45.5 (2004)
39 United States 45.0 (2007)
40 Cameroon 44.6 (2001)
41 Cote d'Ivoire 44.6 (2002)
42 Iran 44.5 (2006)

Iran, a repressive, authoritarian, oil-dependent regime, has a more equal income distribution than the U.S. At least we're ahead of the Philippines, a country whose unequal distribution of wealth was famously embodied in Imelda Marcos's shoe collection.

Meanwhile, the superrich build their own collections of dresses and art. Don't worry about the shrinking job market and cuts in wages and benefits, Americans. At least the art market is booming.

Follow me on Twitter @aaronklemz

(Image: Detail from Raphael's Sistine Madonna, public domain, Wikipedia)

EDIT: Corrected - Marilyn Monroe's dress came from "The Seven Year Itch."

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