The Arts Hit Hard by the Global Recession

Art galleries and their patrons are suffering the harsh consequences of the credit crunch and the global financial crisis. As early as 2009, art museums in the United States began to report deep losses in the size of their endowments and contributions. Museum directors have been forced to reduce their annual budgets by as much as 20 percent. State and local governments often resort to implementing funding cutbacks for the arts at the first sign of economic downturn, and with the protracted financial slump in the US, the cutbacks are bound to continue.
Even the richest American museums have been deeply affected by the lethargic economy. The prestigious Guggenheim museum was forced to reduce expenses by trimming its operating budget by as much as 10 percent. The Seattle Art Museum lost more than $4 million a year when former banking giant Washington Mutual (WaMu) failed to recover from a liquidity crisis that prompted a takeover by the federal government. WaMu used to lease eight floors of a commercial tower in which both the bank and the museum held ownership interest. In late 2008, the Saint Louis Art Museum was forced to put a $125 million expansion plan on hold due to economic uncertainty.
The credit crunch may have delivered a strong blow to art museums, but to many art galleries, the blow wasn’t just strong: It was lethal. Art galleries are far more sensitive to economic gyrations than established art museums, and thus many galleries were forced to completely shut down during the Great Recession.
For people who make their living from the arts, the global financial crisis turned into a more personal crisis. Art galleries and museums are very dependent on the financial health of their patrons to stay afloat. The patrons are getting squeezed by the economy as well, and it is only natural that trips to the art museum or the occasional purchase of a painting are no longer on the to-do lists of patrons.
The arts have always exhibited a great resilience and capacity for survival even during the worst of times. When it comes to saving money, one can always count on artistic creativity to save the day. In 2010, the Saint Louis Art Museum announced that it was breaking ground on its expansion project and that its doors would remain open to the public while the project is underway. In the United Kingdom, artists are taking advantage of abandoned office buildings and retail storefronts to set up galleries and workshops. At a time when one in ten commercial spaces in England are vacant, artists are capitalizing on the slow-moving economy by renting vast amounts of space at deep discounts.
Art patrons are also starting to shake off the economic fears. Online art galleries are reporting greater numbers of visitors in the last few months, and art curators are getting bolder in their approach to attract patrons: A performance artist in New York City is planning to give birth in front of a live audience at the Microscope Gallery in Bushwick.

Denny Jones

Hi, I'm Denny Jones, a seasoned financial advisor and writer passionate about helping others conquer debt and achieve financial stability. With over a decade in the industry, I've guided countless individuals toward smarter financial decisions through practical advice and insightful writing. Join me as we navigate the path to financial freedom together.

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