The Recession and US Museums

This observation is hardly revelatory. The past five years of the decade-long upswing of the art market—predominantly the contemporary art market—has been largely speculative in nature, and the market correction that we are experiencing has been predicted by most parties who do not have a vested interest in the prolongation of the bubble: a period of declining volumes and prices and a shrinking of the market’s entire infrastructure—galleries, auction houses, art fairs and ancillary publications, and public relations. (In February, Standard & Poor’s gave Sotheby’s a credit rating of BBB, for example.) The scale and duration of the contraction will be directly related to the scale and duration of the wider recession. The art market trails the economy—as a whole reluctantly, but obediently. To give some indication of what’s ahead, the last time the art market experienced a major slump followed the 1987 stock-market crash. The art market fell later but further than the stock market, finally hitting bottom in 1993, with prices falling 56% on average. The market was thinner then, and therefore more volatile, but the current recession is broader and deeper, and likely to last longer; and the fall is from a higher speculative peak.