It's the only fair solution to all Michigan residents
In previous weeks I’ve stressed the importance of Detroit rescuing itself from a bankruptcy of its own making. Among the possible solutions are asset sales, competitive contracting, ending unnecessary services and more, including some big, bold, outside-the-box ideas (see “Could Detroit Support Two Airports” and “Belle Isle Proposal To Be Featured On Fox Business”).
Among the most newsworthy possible asset sales (but hardly the only one) is selling some paintings that currently hang in the city’s art museum. Estimates for the entire collection range from a low-ball $454 million to $2 billion (the city owns some highly valuable pieces).
Along with many other assets owned by Detroit, these paintings should not be held sacrosanct. Selling a few would not be unique to Detroit, either: The Delaware Art Museum recently announced that “with heavy hearts, but clear minds” it will sell some art to dig out from debt incurred in an earlier expansion.
Interest in art sales has been brought to the forefront thanks to a proposed partial state bailout, a primary goal of which is to forestall any sales. Detroit’s Emergency Manager Kevyn Orr was in Lansing recently pitching the $350 million proposal to hesitant legislators. Yet selling some paintings is a legitimate move that many Michigan voters would insist should be taken before giving yet more state money to a city whose own fiscal malpractice is responsible for the predicament it’s in.
It has been said before but bears repeating, there are many good reasons to oppose a bailout. Among them:
- It’s unfair. Most Michigan residents did not elect the politicians who led Detroit to ruin, and few will ever have the opportunity to visit the city’s art gallery.
- Detroit has been bailed out before. The state has provided Motown with countless special fiscal favors.
- It creates what economists call “moral hazard” by implicitly encouraging more of the same behavior, not just in Detroit but also in other municipalities. This would set a dangerous precedent.
- Protecting art for the highbrows at the expense of improving roads (or other state spending) is elitist.
- It’s bad economics.
On that last point, in a recent New York Times piece columnist Robert Frank estimates that a single DIA painting called “The Wedding Dance” has an estimated market value of $200 million, which means it costs about $1,200 an hour for each visitor to view.
Frank admits the figures are just rough estimates, but he is precisely correct about the trade-offs involved. As every child learns when getting an allowance, opportunity costs are the soul of economics. To have more of “candy X” a kid has to choose less of “ice cream Y.”
This is the existential truth of a world where resources are scarce and human desires are limitless. “Yes, communities benefit from famous paintings,” Frank concludes, “but they also benefit from safer roads and better schools.”
And perhaps Detroit will learn that you cannot have luxury items while doing everything possible to drive people away and not fund city debt.