Paul Krugman has some insightful things to say about the urgent need for federal aid for struggling states during a fiscal crisis:

[S]tate and local governments operate under fiscal rules that lead to booming spending and tax cuts when the economy is strong and the reverse when the economy is weak. This is bad governance: services are cut precisely when people need them most. It’s also bad macroeconomics: it exacerbates the business cycle….

Obama mentioned aid to state and local governments in his press conference yesterday. Indeed. This is a very quick form of fiscal stimulus, because it’s not about starting new spending, it’s about sustaining current spending. It should be done immediately.

My own experience with the state budget process has been here in NY, where Fractured Atlas has gotten some generous line items from supportive members of the legislature.  The state also provides a vital bedrock of support to arts organizations through the New York State Council on the Arts.  Because of its dependence on Wall St. for tax revenues, NY is now one of the states most threatened by the economic meltdown.

Of course, NY is not the only state facing a looming budgetary collapse.  It’s happening across the country and it’s only going to get worse.  Krugman’s one of the smartest economic minds out there, and he’s dead right about the urgent need for federal aid.  As this debate unfolds over the coming weeks or months, we should all be prepared to make some phone calls and send some emails to our elected representatives.

If you’re feeling wonky or if you’re just looking for respected sources to cite in your next grant application, you should check out PolicyArchive.org, a new website from the Center for Governmental Studies.

PolicyArchive is an innovative, new digital archive of global, non-partisan public policy research. It makes use of the power, efficiency, and economy of modern Internet technology to collect and disseminate summaries and full texts, videos, reports, briefs, and multimedia material of think tank, university, government, and foundation-funded policy research. It offers a subject index, an internal search engine, useful abstracts, email notifications of newly added research, and will soon expand to offer information on researchers and funders, and even user-generated publication reviews. Over time, it will grow to include policy content from international and corporate organizations.

A quick perusal found a fairly small number of listings on cultural policy.  The site’s brand new, however, so hopefully it will grow over time.

“If every artist in America’s work force banded together, their ranks would be double the size of the United States Army,” reports Sam Roberts in today’s NY Times. This conclusion is drawn from a groundbreaking new report from the National Endowment for the Arts titled Artists in the Workforce: 1990-2005.

I realize not everyone will be as interested in this as I am. Not only do I run an organization whose customers are exclusively artists, but I’m a shameless statistics junkie. Still, what’s significant about this study (at first glance anyway; I haven’t had a chance to read the whole thing yet) is that is provides some of the basic data on our industry that has historically been entirely elusive.

Here’s how the NEA describes the study:

Artists in the Workforce: 1990-2005 is the first nationwide look at artists’ demographic and employment patterns in the 21st century. Artists in the Workforce analyzes working artist trends, gathering new statistics from the U.S. Census Bureau to provide a comprehensive overview of this workforce segment and its maturation over the past 30 years, along with detailed information on specific artist occupations.

The use of census data is probably the only practical way this research could have been conducted, but it does raise some important questions about the report’s comprehensiveness:

First, census data is biased towards a strictly economic definition of employment. The study does include people who identified an arts field as their second job, but it includes only 300,000 of such individuals, compared to 2,000,000 who claimed an arts field as their primary employment. While I don’t have any hard data to refute this, bushels of anecdotal evidence suggest there are at least as many, if not more, “semi-professional” artists as there are folks who make their living exclusively or primarily through their art. I even spoke with someone at the US Department of Labor who believed that their arts-related employment figures were 40-60% below the true numbers. So the fact that the NEA report counts just 300,000 artists whose income comes mainly from other sources strikes me as being seriously under-representative of this broad segment of the industry.

Second, census data is biased towards white, mainstream artists whose work falls into a European tradition. One of the things I’ve learned in our local advocacy work is that a white, middle-class college graduate is much more likely to self-identify as an artist than an equally talented, dedicated practitioner of a non-European folk tradition. Likewise, a graduate of Yale’s drama school who pays his rent by waiting tables thinks of himself as an actor, while a Latino janitor who happens to be a brilliant amateur photographer would never in a million years call himself an artist (this latter example is from a real person I met in Brooklyn). This is another factor that suggests the NEA data is almost certainly under-reporting certain large segments of the industry.

These are real concerns, but they shouldn’t seriously diminish the significance of the NEA report. Frankly, despite the fact that the report’s numbers are probably much lower than reality, I suspect many will be shocked at the sheer size of the U.S. arts sector. Artists are often seen (and see themselves) as operating within a strange niche at society’s margins. It’s hard to retain this stereotype when you learn that our ranks exceed those of lawyers, doctors, police officers, or farm workers, and roughly equal those of the active and reserve armed forces.

Think about that the next time someone implies that you’re not an authentic American or that you don’t contribute anything meaningful to society. Oh yeah, and don’t forget to vote.

It’s been a while since a bill in Congress has sparked as much panicked hand-wringing in the arts community as the Orphan Works Act of 2008 (pdf).

The Illustrators’ Partnership of America calls it “cultural theft on an unprecedented scale.”

Tom Richmond says it is “a license to steal.”

Mark Simon really goes over the top:

You May Lose All the Rights to Every Piece of Art You Have Ever Created!… [T]he Orphan Works bill … affects every artist and photographer in the world…. [Y]ou are about to lose your copyright protection. Every one of you needs to stand up and be heard in order to protect what we have all created.

So just what is this terrible legislation that will punch your mother in the nose and drink the blood of your first born? Here’s a fairly straightforward description of the legislative intent from Arts Technica:

The “Orphan Works Act of 2008″ (HR 5889 and S 2913) attempts to create a system where new creators can use old works without fear of massive lawsuits, provided that a good faith effort has been made to find out if the work in question is copyrighted.

If the provisions in the bill are followed and a copyright holder does emerge later, the bill prevents the copyright owner from seeking the normal penalties for infringement. These can include massive statutory damages that need have no relation to any actual losses, and even the threat of such a lawsuit often leads creators to avoid using archival material in documentaries and other such works. Under the Orphan Works Act, a copyright holder can only claim “reasonable compensation,” which is defined as “the amount on which a willing buyer and willing seller in the positions of the infringer and the owner of the infringed copyright would have agreed with respect to the infringing use of the work immediately before the infringement began.”

To qualify for this protection, creators must perform (and document) their “good faith” search for the copyright owner. They must be able to show that they could not locate any owner. They must file a “Notice of Use” with the Copyright Office before using the orphan work. They must provide attribution about the original copyright owner, if they can find this information (imagine a publisher who owned the copyright in a book but went out of business thirty years ago). They must include a special “orphan works” symbol that will be determined later by the Register of Copyrights. If all of these prerequisites are met, the creator can use the work in question with confidence, knowing that he will only have to pay a reasonable license fee if the copyright owner does emerge.

The Copyright Office also has to certify databases that can aid in the search for “pictorial, graphic, and sculptural works that are subject to copyright protection.” While it won’t actually run such a database, it will make sure that private databases meet proper criteria and that they are able to do visual searches.

I’ll be honest, I haven’t yet decided whether I think the Orphan Works Act is good, bad, or neutral. But I have serious concerns about the overheated rhetoric, rife with factual inaccuracies, that I’m hearing on this topic.

Please, before you allow yourself to be worked into a frenzy and sign on to fight in a holy war, read the bill. It’s not long and, compared to most legislation I’ve read, it’s fairly easy to follow. Maybe you’ll come to the same conclusion as those folks above or maybe you’ll decide the bill is innocuous or even positive. Either way, hopefully you’ll discover that much of the shrillest critiques are based on “facts” that just aren’t in the bill. For example:

1. Under no circumstances can you lose your copyright on a work because it is “orphaned”. You are always entitled to reasonable compensation for the use of your work, even if your copyright is infringed upon by someone who is protected under the Orphan Works Act.
2. The bill does not propose any requirement that works be documented in paid registries. Registering your work would simply be one way to minimize the likelihood that a “reasonably diligent” would come up empty handed.
3. Some folks are saying that the legislation is just a giant hand out to companies like Corbis or Getty, which would presumably establish commercial registries. That may be true, but only if those corporations can add real value to the process. After all, it would be trivial for a non-profit organization like Fractured Atlas or the Illustrators’ Partnership to set up a free registry for the artists in its constituency.

Again, I’m not saying that I support the Orphan Works Act. There are some legitimate problems with it that I haven’t seen anyone address, such as the extent to which it relies on internet-connected databases which aren’t universally accessible. But before we get our collective knickers in a twist, let’s all take a deep breath, read the bill, and then make an honest assessment of the dangers and opportunities it proposes.

Once more:
House version (HR 5889)
Senate version (S 2913)

Feel free to use the comments on this post as an opportunity to have at it!

My apologies for another wonky health insurance post hot on the heels of the last one, but when there’s a major newspaper op ed on a subject I’ve been ranting about for years I can’t resist…

In today’s Wall Street Journal, Congressman Ed Royce (R., Calif) makes the case for federal regulation of the insurance industry:

Because of a Supreme Court decision nearly 140 years ago, the states have sole regulatory authority of insurance. What has resulted since is a bureaucratic cluster of 51 different regulators (every state, plus the District of Columbia) overseeing their individual jurisdictions, punishing American consumers and insurance providers alike.

At Fractured Atlas we’re living this nightmare every day. Mainly it affects our health care program. Despite our community of over 52,000 arts professionals nationwide, we’re forced to fragment our group into 51 sub-groups. This seriously undermines our negotiating leverage with insurance companies. We also have to wrestle with 51 different health insurance regulatory agencies, which I promise is neither easy nor fun.

The most common justification for state-based insurance regulation is that the state insurance departments are the best providers of consumer protections. In truth, some states get it very right, others get it very wrong, and most are somewhere in between. There’s no reason to believe, however, that federal regulators can’t enact their own adequate consumer protections. And a simplified and streamlined regulatory environment would facilitate much greater competition than currently exists in the market for private insurance, which can only benefit consumers.

Two of my intellectual heroes, Paul Krugman and Richard Florida, are in the midst of a cross-publication debate over the macro-economic significance of “mega-regions”. It began with Florida’s piece in the Wall Street Journal, which was greeted with skepticism from Krugman. Florida got a bit nasty in response.

Understanding the role and significance of cities in the modern economy is critically important. This area of inquiry is close to my heart, and I’m fed up with America’s cities being bled dry to subsidize rural regions. Richard Florida is one of the few major voices out there making the case for cities and the benefits of population density. This is his area of expertise, and he clearly knows his stuff.

On the face of it, however, Krugman’s analysis has a stronger ring of truth. From my own experience observing the migratory patterns of artists, once someone’s decided to leave a city like New York, they’re as likely to head for San Francisco (or even Berlin) as Philadelphia. And, as Krugman suggests, there is a powerful draw to neighborhoods like Williamsburg Brooklyn, where the “positive externalities” of a vibrant arts community create a sense of geographic meaning.

One of the unsexy, macro-problems that the arts community faces is a dearth of quality data. Official statistics gathered by government agencies almost always define and quantify things based on economics. This works just fine for most industries, but it’s a terrible model for the arts. Under this view, an artist who earns the majority of her income as a bartender but spends nearly all of her time in the studio is a bartender with a hobby and delusions of grandeur. Not only is this offensive, but it’s bad data. An expert at the US Department of Labor estimated that their figures undercount artists by at least 50%.

The American Time Use Survey (ATUS), which became fully operational in 2003, offers a glimmer of hope. The annual survey, contracted by the Dep’t of Labor and carried out by the Census Bureau, “measures the amount of time people spend doing various activities, such as paid work, childcare, volunteering, and socializing”. What’s important here is that the survey looked at how people actually spend their time, not just how they make their money. Many social scientists called it the most important new data initiative begun by the U.S government in at least 35 years.

Unfortunately, President Bush’s proposed Fiscal Year 2009 budget zeroes out funding for ATUS. It would cost just $6 million to collect ATUS data from the full sample originally planned for the survey. Alternatively, just $4.3 million would be sufficient to maintain the program at current levels. In a budget that exceeds $3 trillion, this is truly peanuts, especially when you consider the hugely important social implications of the data (not just for the arts, of course, but for lots of purposes).

There’s a movement afoot to urge congress to correct this error. If you’re feeling wonky, take a minute to send a letter of support.

I realize that I’m a healthcare policy nerd and that most folks find this stuff boring and impenetrable. That’s one reason why organizations like Fractured Atlas are needed; we deal with the esoteric minutia so you don’t have to.

Still, it never hurts to educate yourself, especially with an election coming up. The Kaiser Family Foundation has developed an excellent website for comparing and contrasting the major candidates healthcare policy platforms.

I’ve been tracking this stuff pretty closely, myself. To a certain extent it’s all fairly predictable. The Republican candidates mainly talk about increased competition and tax incentives for individual purchasers. The major Democratic candidates all offer proposals aimed at achieving universal coverage, generally by strengthening employer-based coverage and providing access to government-sponsored plans.

I could ramble on endlessly about this stuff, but if you’re actually interested, you’re probably better off just reading the proposals themselves (which are all accessible at health08.org).

Still here? Okay, then permit me one tiny bit of wonkishness. There’s been a lot of media coverage lately about the big dispute among the Dems, which is about whether or not to include a mandate that everyone must have insurance (Clinton and Edwards support the idea, Obama opposes it).

I’m basically a libertarian, so the very idea of such a mandate makes me squirm. However, as a practical matter, it’s absolutely essential for these kinds of “universal coverage” models to work. Clinton, Edwards, and Obama all propose new federal regulations which would require health insurance companies to insure people on a guaranteed issue, community rated basis. (Guaranteed issue means they can’t turn you down for coverage. Community rating means everyone pays the same premium, regardless of health status.) The practical problem with both of these well-intentioned concepts is that healthy people quickly figure out that they’re paying artificially higher rates to subsidize coverage for unhealthy people. Many of them, therefore, opt out of the system and decide to take their chances, rather than “overpay” for coverage. This creates a vicious circle of spiraling rate increases, as the risk pool steadily gets less and less healthy and more and more people find coverage too expensive to purchase. We’ve seen this happen in NY State, and it isn’t pretty.

An individual mandate solves this problem. By forcing everyone to have coverage, healthy or not, you stabilize the risk pool and prevent adverse selection. In my semi-educated opinion, the guaranteed issue, community rated model is simply unsustainable without either a mandate or some form of single-payer national coverage. Since the latter seems unlikely to happen in the foreseeable future, mandates are probably the way to go.

My comrade-in-arms Paul Nagle has just published a paper on the economics of live/work space for artists in cities. Room for Creativity: The Role of Affordable Artists’ Live/Work Space in the New Economy is a short and accessible version of his much longer and denser thesis on the same subject. If you’re interested in this stuff (and you should be if you care about the future of the arts in this country) then I highly recommend you check it out.

You can get an electronic version for $5 or a print version for $10.

It’s not often that events in the auto industry have a major long-term impact on the arts community. However it’s worth taking note of the groundbreaking new contract that GM just signed with the UAW. As this morning’s Wall Street Journal reports:

The labor agreement reached by General Motors Corp. is the most striking example of a bigger trend sweeping U.S. health-care: employers renouncing their decades-old role as chief health-care buyer.

Let us all hope this trend continues and expands! Perhaps more than any other industry in America, workers in the arts are poorly served by an employment-based healthcare system. For the most part, artists are either self-employed, or they enjoy erratic and episodic employment, or they take “day jobs” like waiting tables or temping that rarely provide benefits. Relying on a paternalistic employer to procure and pay for one’s healthcare is simply a lousy model for us.

GM’s move (which actually leaves both GM and the union in much stronger positions) is being seen as big domino falling, with other companies and other industries likely to follow suit. So if we, as a society, abandon the notion that people ought to get health insurance from their employers, what are our other options? Well, there are three:

1. individuals go direct to insurance companies;
2. the government (state or federal) picks up the tab for everyone;
3. individuals form large, stable groups through non-employer intermediaries who negotiate and purchase coverage on their behalf.

In my view, any of these is preferable to the status quo, though I believe the third option is a nice middle ground that preserves market forces but doesn’t leave individuals alone to wrestle with opaque, cruel bureaucracies.