Risky Arts Business

Monday, August 31, 2009

James Panero, art critic, managing editor of New Criterion and author of City Journal article, "The Culture Crash: How risky investments have endangered New York’s leading arts institutions" talks about how the city's arts institutions have been affected both by the recession and their investment strategies.


James Panero

Comments [8]

Jamie from NYC

It would have behooved both Lehrer and Panero to be more judicious in their use of the word "risk." Even Treasuries are assets that bear a degree of risk. It all depends on the investor's tolerance.

This is where Panero rightly curtails his thesis: private equity and illiquid investments can be appropriate for some investors, but they are not appropriate for an institution dependent upon cash flows that diminish during downturns. Though he'd be better served to couch this in terms of an asset/liability mismatch, which is the source of the cultural institutions' problems, "risk" is okay for the radio-listening lay person.

Because he used the word "risk" in its vaguest sense, Lehrer expanded Panero's argument to concepts beyond those addressed in the article by discussing retirement plans and whatnot. Risk for an investor with retirement plans, i.e. 20 years down the pike, would be more open-ended than that for an institution that may need the cash tomorrow. Once again, it's a question of matching assets (investments) and liabilities (the need for the cash).

It's an easy, and all-too-common, trope for interviewers to take arguments against certain forms of financial risk-taking and expand them to all forms of financial risk-taking. A good interviewer would be careful to avoid this.

Sep. 01 2009 05:57 PM
Ann Shipley from Connecticut

I enjoyed your discussion with Mr. Panero. Arts and other non-profit institutions seemed to have forgotten that their funds are like trust funds and need to be invested cautiously. I also wonder how many members of the Boards of Directors and financial advisors received fees for steering their organizations into certain investments. That was certainly the case in the Madoff scandal and I wonder if it was not more widespread.

Sep. 01 2009 09:20 AM
Isadora from NYC

There was a change in the 1980s in the way that Boards led NYC cultural institutions, which extended not only to their endowments, but to their "corporate culture." I witnessed it and continue to as one of the worker bees - the educated underclass at the invisible front lines.

Today, the last vestiges of that trend are an incredible bleed-off of knowledge and experience, and a generalization of roles among the [formerly known as] experts. The exhibitions and educational programming at the larger institutions demonstrate this woefully. Fortunately, NYC still has lean mean culture that refuses to sell its soul to the devil.

Aug. 31 2009 11:40 PM
Daniel Cannon from New York

Great show. I very much appreciated Mr. Panero's comments. Everyone wants to see our cultural institutions prosper, but we need to be careful about our investments, too--most especially when it comes to our artistic patrimony.

Aug. 31 2009 09:42 PM
Jonathan Leaf from Manhattan

Great interview with a very interesting and compelling critic. Thanks. Hope there's more of this coming in the future.

Aug. 31 2009 02:57 PM
Michelle from New York, NY

Thank you for this segment with James Panero. As you intimate at the end of the discussion, perhaps this tumultuous time will cause us to reconsider our cultural standards. We need to reassess not only what we expect from our institutions, but also from the works of art they contain. If I never saw another work by Jeff Koons or Damien Hirst, it would be too soon! Let's rediscover art without bells and whistles. Truth and Beauty, anyone?

Aug. 31 2009 12:41 PM
Nick Obourn from Brooklyn, NY

I enjoyed listening to your interview with James Panero about his assessment of how arts organizations spent and invested their money. It's a difficult time for the arts right now and not only do we need to put our attention toward how to get out of this mess, we need to understand the root causes. That's the only way we learn. As Panero stated, many arts organizations were caught up in the windstorm of new investment strategies, but they also happen to be the centers for our cultural learning, which makes their actions very dangerous and somewhat reckless.

Nick Obourn
The Culture Spoke

Aug. 31 2009 12:29 PM
Bill from New Rochelle

HA !
You rich arts people! You don't know how lucky you are!

Try running a small American history museum on the outskirts of NYC. I wish we could dance and sing for our suppers. We get no support from government, (other than a one time capital grant to preserve a historical building from NYS a few years ago.)

But, come anyway, to the TOM PAINE COTTAGE in New Rochelle, (and see how we raise funds with no government subsidy.) (We are 45 Minuttes from Broadway.)

Come, bring the kids, learn that history is just an ongoing story. See how people lived in colonial and historical times.

FREE ADMISSION (hear that, arts people?)
But, come and see the Colonial Fair
Saturday, October 3,
Tom Paine's Cottage, New Rochelle, NY

Aug. 31 2009 11:48 AM

Leave a Comment

Email addresses are required but never displayed.

Get the WNYC Morning Brief in your inbox.
We'll send you our top 5 stories every day, plus breaking news and weather.