While the Burst Housing Bubble Destroys America, He Says "Build, Build, Build!"

This post is cross-posted at the beta Clyde Fitch Report. Do check it out and send comments.

I didn't want too much time to elapse before commenting on an op-ed that ran in the Times last Sunday. It's written by a man named Charles J. Urstadt, and before I write a little bit about who he is, let's take a good look at his piece, in which he writes that "land expansion is now the key to our economic recovery." In fact, he says, there are five ways Manhattan (I guess the other four boroughs can sink into the sea) can grow:

1. Develop Governor's island. Among other things, "The success of Battery Park City shows that this can be done without government money: building owners would pay ground rent and payments in lieu of taxes (known as Pilot payments) to an organization not unlike the Battery Park City Authority, which would then deduct operating costs and pay the “profits” to the city." And yes, Urstadt addresses, rather flimsily in my view, the accessibility issue.

2. Tear down Pier A at the foot of Manhattan: "Better to replace the pier with a five-acre quay similar to the Circular Quay in Sydney. A quay could serve as a central ferry terminal, which would pay for itself with fees paid by the ferry boat operators."

3. Develop the South Cove of Battery Park City, adding two acres to Manhattan: "By simply extending the existing bulkhead, eliminating the cove and filling it with sand — as we did to create the rest of Battery Park City — we would have the base for an iconic building....Again, ground rents and Pilot payments would more than pay for the bulkhead and landfill with no expenditure of taxpayer money — and a monumental building on that new land could also produce a substantial profit for the city."

4. Develop 50 more acres of landfill in the Hudson River on the West Side, north of Battery Park City: "The cost of the landfill, as well as of the public park and recreational spaces that would be part of the new area, could be reimbursed from ground rents and Pilot payments collected from private developers. I have been advocating this additional landfill project for some time and have been faced with the bogus argument that it would kill the fish." Oh, and by the way, Urstadt says that "fish actually prefer the nooks and crannies of the rock formations surrounding Battery Park City’s north marina" and that "not a single fish was killed as we filled the original 92 acres of Battery Park City." (This may be giving you a clue as to who Urstadt is.)

5. Fill in the Harlem River: "....if we were to drain the Harlem River, we would actually restore the land to its original state....eventually the entire area would have some 3,000 acres that could be used for parks, schools, businesses and homes."

Notice how Urstadt referes to housing last. As if people matter less than buildings. Well, this man would know: he was the chairman of the Battery Park City Authority from 1968 to 1978, as per the tagline on the Times story. More pertinent, though, Urstadt is the author and/or purveyor of many anti-renter, anti-apartment dwelling law and guideline in New York City. In short, he is the reason your rent is so high. Check out this page on tenant.net:

The Urstadt Law, named after Charles Urstadt, former Governor Nelson Rockefeller’s housing commissioner, was enacted in 1971 as part of Rockefeller’s vacancy-decontrol legislation. It specifically barred New York City from adopting rent limitations that are “more stringent or restrictive than those presently in effect” even as the housing crisis deepened.

As a result the democratic will of New York City residents is frustrated and the local legislature left powerless to address local housing conditions. From the vacancy-decontrol disaster of the 1970s to the weakening of rent and eviction protections in 1997, New York City real-estate interests have been able to use campaign contributions to buy support from upstate legislators—while city voters are ignored. The Urstadt Law is the basis for a pending lawsuit by property owners challenging a New York City law concerning building valuation that prevented landlords from giving enormous hikes to New York City’s 70,000 remaining rent-controlled households. It also restricts the City Council from reversing the massive deregulation imposed by the state legislature in 1993 and 1997.

By preventing the City Council from acting to preserve affordable housing, the Urstadt Law is an unconscionable restriction on the democratic “home rule” of New York City residents. It restricts our ability to control our policy and our destiny on a strictly local issue.

…But even though the ETPA reversed Rockefeller’s vacancy-decontrol measure, state courts have held that the Urstadt Law remains in effect and prevents cities “having a population of one million or more” (i.e., New York City) from enacting stronger rent regulations without the approval of the state housing commissioner. The Urstadt law does not prevent cities from exercising “police powers” to protect life, health and safety by regulating building conditions, evictions and other areas where health and safety are involved.

Charles Urstadt’s curse on New York City tenants did not stop with the 1971 law which bears his name. A major real-estate owner, he was one of the architects of Governor George Pataki’s 1994 transition platform, which made explicit the intention to end rent and eviction protections entirely, a promise which took giant steps toward realization in the Rent Regulation Reform Act of 1997.

Here's an excerpt from another story -- this one from Gotham Gazette -- on this paragon of urban development:

Ask most housing advocates what one move would improve the lot of tenants in New York City, and they would answer: Repeal of the Urstadt Law. The state law, which then-Governor Nelson Rockefeller pushed through in 1971, and which Governor George Pataki strengthened in 2003, is named after Rockefeller’s housing commissioner, Charles Urstadt. For more than three decades, it has effectively handcuffed the city when it comes to dealing with the main problems facing housing here -- rents and evictions.

That is because the law largely took control of rent regulation out of the hands of the city government and gave it to the state legislature. The legislature, a body with many representatives from upstate districts that have few renters, has weakened rent regulation laws year after year. Changes in the rent regulation laws have resulted in what some estimate to be more than 100,000 rent stabilized apartments in New York City becoming “decontrolled” – the rents hiked up to whatever the landlord wants to charge.

Oh, and Mr. Urstadt appears to live in Connecticut. Go figure.

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Metropolitan Museum Slashing Staff

Sad stuff. Just received this press release from the Metropolitan Museum of Art:

As part of an ongoing, and increasingly challenging, effort to maintain budgetary equilibrium in this worsening national economic climate -- particularly for the retail sector -- The Metropolitan Museum of Art has announced that it must pare its merchandising work force by 74 positions, effective immediately. These staff reductions represent 27% of its full-time, and 9% of its part-time retail positions, and are in addition to the 53 positions eliminated in recent months through the closings of eight satellite Museum stores around the country. The decision acknowledges significant recent downturns in its merchandising sales, but also represents an effort to restructure this department so it remains competitive in the future and can continue to support museum programs.

At the same time, the Museum also anticipates the additional need to reduce the rest of its full- and part-time work force by approximately 10% in all other areas of its operations before the beginning of its next fiscal year July 1. Because The Metropolitan is so large and complex an organization, whose staff possess skill sets crucial to maintaining its buildings and collections successfully, such a contraction requires a deliberate and delicate process, which Museum management, while acknowledging the urgent need for reductions, is committed to undertaking with the greatest care. Among many recent costsaving efforts, the Museum previously instituted a hiring freeze and eliminated merit salary increases for the next fiscal year.

The Met is immensely grateful to all of its retail employees for their diligence and loyalty, and regrets deeply that recent losses in retail revenues -- as well as prospective, significant, and long-term reductions in annual operating income for the Museum from its endowment -- combine to make these extremely painful decisions absolutely necessary to bring the Museum’s operating expenses in line with reduced income during the difficult months and years to come.

In addressing these issues, the Trustees and management of the Metropolitan re-emphasize the institution’s determination -- even in the wake of unprecedented financial pressures -- to keep fully its longtime covenant with the museum-going public. The Met will continue to provide not only a safe repository for its vast collections, but a haven of enlightenment, education, and illumination for its diverse visitors from around the city and around the world, particularly at this time -- when institutions that provide solace and inspiration are needed more than ever.

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Can We Defend the $50M NEA Increase When It Only Protects the Status Quo?

So a variety of people, from arts leaders to bloggers to executive-director-level arts advocates, aren't thrilled with me taking issue with the $50 million NEA funding increase. I have suggested, and will continue to suggest, that while it does indeed represent a victory for the sector, it fails to address -- our arts leaders have failed to address -- the long-term fiscal issues that the nonprofit arts and humanities faces today and down the road.

Here is where the leadership-driven propaganda meets hard-numbers reality. Any number of news sources have reported the terms by which the NEA will disburse the money, but I wanted to make sure the information was logged on the CF Report for those who missed it. Notice the sentence I underlined in the third graph:

The American Recovery and Reinvestment Act provides $50 million to be distributed in direct grants to fund arts projects and activities which preserve jobs in the non-profit arts sector threatened by declines in philanthropic and other support during the current economic downturn. Forty percent of such funds will be distributed to State arts agencies and regional arts organizations and 60 percent of the funds will be competitively awarded to nonprofit organizations that meet the eligibility criteria being established for this program.

Applicants will be required to submit their applications electronically through Grants.gov, the federal government's online application system. All applicants must be registered with Grants.gov in order to submit their application. If you have already registered with Grants.gov, renew/verify your registration with Grants.gov and make sure that all of your information is current before you apply. Organizations that are not already registered should allow at least two weeks to complete this multi-step process. See the step-by-step instructions for registering.

Funding Program: Competitive Grants
One-time grants to eligible nonprofit organizations including arts organizations, local arts agencies, statewide assemblies of local arts agencies, arts service organizations, units of state or local government, and a wide range of other organizations for projects that focus on the preservation of jobs in the arts. All applicants must be previous NEA award recipients from the past four years. (Application deadline: April 2, 2009.)

Funding Program: Grants to State and Regional Arts Organizations
One-time grants to the designated 50 state and six jurisdictional arts agencies (SAAs), their six authorized regional arts organizations (RAOs), and the national service organization for SAAs and RAOs for projects that focus on the preservation of jobs in the arts. See the list of these organizations on our site. (Deadline: March 13, 2009.)

As Howard Mandel's Jazz Beyond Jazz blog noted, only those organizations that have received NEA grants during Bush's second term will qualify for the 60 percent of the $50 million that is being allocated competitively.

So what we really have is a scheme in which not being a prior grantee of the NEA means you're penalized: such groups, hundreds or thousands of them, are being instructed to sink or swim on their own. Now, perhaps the 40 percent of the funding directed to state and regional arts groups can help non-NEA grantees; I would like to think it could happen. But let's just be clear: When the defenders of the $50 million wax poetic about how indisputably vital this funding is, or when they criticize me for criticizing what I argue is a lack of long-term, creative, innovative thinking in terms of public funding for the arts and humanities, what they're also doing is endorsing the fiscal perpetuation of the sector's status quo.

Even the vaunted fiscal-impact argument I make -- a dollar of arts funding means more dollars in economic activity -- won't help much. If the NEA-funded Public Theater, for example, were to receive a sliver of this $50 million, how would it help the not-NEA-funded Stolen Chair Theatre Company via fiscal impact? It wouldn't, I believe. Behemoths win. Little guys lose. Welcome to America.

You know, we elected a president who aims to redress the economic stratification of the nation that was the hallmark and result of the Reagan, Bush and Bush presidencies (with the eight-year Clinton interregnum in between). In terms of funding for the arts and humanities, there has long been a similar fiscal divide. Do our arts leaders like it that way? They aren't saying.

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Ian David Moss: Backlash to the Future

At a blog that is new to me called Createquity, the blogger, Ian David Moss, has taken a few of us to task for questioning the prevailing arts-funding orthodoxy. I know I'm a prime target. And I should add that if the economy hadn't tanked as it did, if I hadn't been downsized out of my job after seven years as I was (eight including freelancing), I might not have concluded that our arts-funding philosophy and model is fundamentally flawed and must be scrubbed or radically reconstituted. Of course, it's not that my former job was predicated on arts funding; really, it was quite the opposite, working for a commercial enterprise. But it's more that I've had time to think about where the arts are as a national force, economic and otherwise. It's more that I've spent a great deal of time thinking back on this whole decade, trying to sum up where I think the arts have been, where the arts are, and where the arts can most effectively head from here.

You know, I wasn't a blogger in 2000, 2001, 2002, 2003, 2004, 2005 -- the years when I did most of the reporting, as opposed to editing and managing (which came later), that I did at Back Stage. Those were in the years in which I learned the basics of the arts funding model we have in place, and, more pertinent, how fragile that ecosystem is. During those pre-9/11 days, it was all about how the dot-com bust and the recession that followed would affect funding, and how very unprepared in so many ways the nonprofit theater world was for the very real structural and organizational and aesthetic challenges that were fast being thrust upon the sector. During the post-9/11 period, it was all about the same thing, but also how very magnified those problems suddenly were. It was also about how the arts could so easily be easily politicized, about what an endless uphill battle the arts have just to convince those elected officials who are sympathetic of its importance fiscally and societally to the nation. It was, again, how precarious the whole house of cards perpetually seems to be.

So when I take our arts leaders to task for rushing with palms open toward the Obama team, or for issuing statements recommending that the NEA should be funded at $300 million annually, it's not that I don't want the arts to be funded governmentally in the United States. Good grief, Charlie Brown, if you'd spoken to me four, six, eight, ten years ago -- at any rate, long before I blogged -- I would have been manning the rafters along with those leaders, screaming at the Obama people at the top of my lungs to do what is right as part of the stimulus package and to fund, fund, fund, fund, fund. Not just my palm would be open but also my mouth and a few other orifices geared toward arts funding. But as I say, current events have had a curious effect on me. I have had to rethink my assumptions about what is, in the long run, best for the funding of the arts and humanities in the nation. I believe we're in an economic pickle deeper and potentially more devastating than anything we've seen in three generations. I believe the yo-yo effect of up-and-down arts funding at the federal and state levels, ever-buffeted by the winds of fiscal facts, political sportsmanship and gamesmanship, is fundamentally unhealthy and destabilizing to the industry as a whole. I believe that while making the fiscal-impact argument is the most important thing arts leaders can do (I know Moss disagrees), I also believe that all sectors of the economy will someday have to take responsibility for the nation's welfare as a whole, that we will have to develop new economic models and perhaps even make, God help us, some real sacrifices.

So when I read Moss' post, called The Backlash Begins, and when in particular I read the way he rails against those questioning the status quo, it amuses me. The post makes assumptions about me, who I am, what I think. Well, to be fair, one can only respond in a post to what someone else writes in a post, and it's all part of the dialogue anyway. It makes me sad, though, because only I can fully know what journey I've been on; only I can do whatever I am capable of doing in terms of articulating the arc of that journey. And I know how much it probably upsets people like, say, Teresa Eyring of TCG, when I single them out or question the way they use their power or their influence toward the industry we all hold so dear. (And let's be clear: arts leaders are as devoted to promulgating their power and influence as to defending and addressing the needs of their constituents, for their work is fundamentally political in nature.) I write what I write and say as I believe because I believe that while I may not win friends (or jobs at TCG, clearly), I can stand up for the work on stage, for the art form, that I place second to none in cherishing.

Moss begins his post by writing:

Sure enough, the ink hardly dried on the American Recovery and Reinvestment Act of 2009 before the predictable chorus of complaints could be heard regarding the inclusion therein of $50 million worth of support for the National Endowment for the Arts. Following a week of Republican mockery on the subject, one might have expected the bulk of these disapproving murmurs to come from the right. Yet as it turns out, in time-honored liberal tradition, the loudest critics of all are much closer to home.

Well, I actually consider it a compliment to be lumped with this group. Republicans are, um, not exactly known for deviating well from policy orthodoxy (file under Steele, Michael or Limbaugh, Rush). Yet I don't view expressions of concern or criticism as tantamount to complaining. What I have been trying to do -- and what Moss is unwilling to acknowledge -- is move the discussion past the idea of another $50 million for the NEA, or even $300 million annually for the NEA, to a larger discussion about how we can best fund the arts and humanities and whether the notion of "best" can or should be limited to direct federal and state appropriations.

And yes, I did raise the prospect that a $50 million increase -- or any attention paid to the arts by the Obama Administration -- will give the right a tool with which they can unify their own troops. Not even because the GOP hates the arts or arts funding, but because the arts are easy for them to demonize, because they have a long history of doing so (file under Flanagan, Hallie) and because haven't much else going for them right now politically.

Later, Moss writes:

But the notion that this somehow doesn't represent a victory for the arts community is one that I just don’t get. What, exactly, is the glorious alternative? Yes, the NEA represents a tiny fraction of support for the arts in this country (0.3%, to be exact). But as of a couple of weeks ago, it’s one of the only arts funding bodies in the country, and almost certainly the largest, that is actually increasing its level of support in 2009. Including the stimulus appropriation, this year's NEA payout is the highest in its history. Now, as Jacobs says, much of that new money is going to offset cuts in state arts budgets, and only partially at that. But that certainly doesn’t make it a “zero-sum game.” It's not like the states are just taking money from the arts and using it as an excuse to shuffle it around to other parts of the budget, as Jacobs seems to imply. States are hemorrhaging money right now and as a result, cuts are happening everywhere. I've said it before and I'll say it again: for the purposes of stimulus, a job saved is just as good as a job created. The NEA money will save jobs, period.

Aside from the sarcasm of a phrase like "glorious alternative" (if I had used it, I'm sure people in the theatrosphere would have rolled their eyes), the question isn't whether the $50 million NEA increase represents a victory for the arts community; of course it is. For me, the question is, again, whether we are simultaneously looking beyond that appropriation at the larger scope of arts and humanities funding. Also, Moss want to rethink the phrase "one of the only arts funding bodies in the country, and almost certainly the largest," as that excludes foundations, corporate philanthropy and private giving. (The size of their current philanthropy, of course, is rapidly set to change.)

Let me add that most of the rationale for NEA funding isn't predicated on actual dollar amounts spent as their impact in the multiples of dollars. So let's say the NEA spends a dollar -- it creates four, five, or six dollars worth of growth and fiscal activity in the arts. That's easy stuff; we all, I think, understand this. What is less reported is the way it buttresses the work of the 56 state arts agencies, which do much of the day-to-day heavy lifting of arts and humanities funding in the nation. So I do understand how $50 million translates into positive vibes for the community. However, when Moss says that I implied that "states are just taking money from the arts and using it as an excuse to shuffle it around to other parts of the budget," that's misleading. I said it was a zero-sum game based on this post, which Moss does not to link to, and which is based on reporting from various publications and quotes from, among others, Bill Ivey, the former head of the NEA.

One last point on this topic. While it may be true that "a job saved is just as good as a job created" (if the job pays the same, a point Moss leaves unaddressed), and while it may be true that the "NEA money will save jobs," the real question is one of quantification. For if it is true -- and empirically provable -- that 14,000 jobs in the arts will be "saved" out of the 200,000-plus that are being lost as a result of this recession (Moss correctly attributes these statistics to Americans for the Arts), would $50 million, then, not represent weak ROI at best? What about the other 180,000-200,000 people? That's like saving 100 people on the Titanic while 1,000 people die and calling it a miracle.

Later, Moss writes:

As for Jacobs, he seems in love with this “long-term sustainable solution to arts funding” idea, since he mentions it in just about every other post. I'd like to think of myself as an arts advocate, and so I trust he won't mind my taking umbrage at his characterization of us as “pathetic paupers” and lacking "vision." (As an aside, later on Jacobs hilariously claims to "honor those who worked so hard to make that point [that the arts make good fiscal policy]." Yeah, that language certainly makes one feel "honored.")

Sigh. Look, I'm in love with the idea that I should have a job. I'm in love with the idea that we should have no national deficit or debt. I'm in love with the idea that my American brothers and sisters in uniform should come home from a war in Iraq that was created on the basis of a big, fat lie. I'm in love with the idea that everyone might learn to be kind to everyone else, and yes, that includes me. I'm in love with the idea that the nation can unify itself around common sense, left-of-center political ideas. Now, it's not that I'm in love with a "long-term sustainable solution to arts funding" so much as, once again, wanting to move us past the idea that our current funding philosophy is the best possible one that we can devise. (If Moss feels it's perfect, that's his right.) And, by the way, I consider myself an arts advocate, too. My degree is in the theatre and I've done plenty of no-money/slow-money theater in my time, and I've had two jobs and worked overnight shifts and struggled and had successes and failures and I still love the arts and I still plan to devote my life to it, so how about we not get all proprietary over what constitutes arts advocacy, ok? And yes, I feel it's possible for me to state that people are working hard to make the case for arts funding to political powerbrokers, we can also push them to think innovatively about our current model. It isn't about being hilarious, as Moss writes, though I'm glad I offered him such mighty mirth. It's about doing what an advocate does -- pushing for something better than the status quo, for fostering dialogue even if it should prove testy and difficult.

Moss then writes:

Jacobs argues, in a column I linked to a while back, that the annual NEA appropriations should be converted into a real endowment--you know, the kind that invests in the capital markets. This idea isn't totally without merit, but there's one rather gigantic problem with it. You remember how I said earlier that the NEA is one of the only arts funders out there right now that is increasing its funding levels? That's because, in case you haven't heard, capital markets are kind of in the toilet right now. At this moment, arts organizations are being hit from all sides: their own endowments are shrinking, the assets of the foundations and individuals that support them are shrinking, earned income is going down because people have less money, and state governments are cutting back because of reduced tax revenue. In such an environment, the federal government is the only entity in the country that has the power to step in and do something to stop the bleeding -- that's the whole macroeconomic argument for the stimulus in the first place. In other words, the NEA is an important diversifying funding stream for the arts, one of the few that can be countercyclical to the general economy. Put all of its money in stocks and bonds, and you lose that crucial differentiation.

Well, Moss can win on points, but not on philosophy. When the market is down this much, I think everyone breathes a sigh of relief that we didn't let George Bush put the Social Security Trust Fund into the market. But here's the thing: If he read my post, he knows, again, that I've argued for the public/private endowment idea equally to shield the arts and humanities from being politicized, something which remains a very real danger and which will always be a very real danger so long as Congress has the ability to fund or not fund the arts and humanities at a federal level in the U.S. Moss seems to imply that simply by creating a Secretary of the Arts that we can prevent such politicization, that somehow such a position will become a part of the overall governmental infrastructure. I don't think this is naive. I think this hands more unifying force to the right at precisely the moment we have the ball and can run with it. I also think categorizing the NEA as "an important diversifying funding stream for the arts, one of the few that can be countercyclical to the general economy" is misleading. Unlike the banking system, which turned to the government as the savior of last resort, Moss would have us believe that the arts would not exist, or would be incalculably decimated, without the extra NEA funding. If things are that dire -- and they're not terrible, to be sure -- how does $50 million radically change any of that? My recommendation, noted on various posts, is that Congress should fund the NEA to the tune of quite a few billions and launch it as a public/private enterprise with a board composed of equal numbers of Republicans and Democrats. If we're going to have something like the NEA, could it be better considered as a kind of sacred national trust and not a "diversifying funding stream"? I don't even understand that term.

Finally -- whew! -- Moss writes:

Jacobs's charge that arts advocates lack "vision" appears to be rooted in the idea that eventually, we'll have to pay down the national deficit, and at such time those appropriations will have to be reduced. In other words, there is risk that arts funding will decrease from one year to the next. But hello! Isn't that exactly what would have happened this year if the NEA money had been in an endowment? At least this way, the government retains the flexibility to make decisions about funding levels. Anyway, freaking out about the budget deficit implications of a program as small as the NEA is disingenuous at best. The Pentagon blows through more money every two and a half hours than the NEA does in an entire year -- and that's without even counting the wars in Iraq and Afghanistan. In any case, it's unfair to assume that the folks at Americans for the Arts and other service organizations are not thinking long-term. Changing the conversation about an issue like this takes a long time, especially when there's not an easy way to draw media attention to it. But mark my words, it is happening. The establishment of creative economy-related posts, studies, and task forces in local, regional, and state governments across the country is a testament to this. How many of them existed ten years ago?

Well, we will have to address the deficit and the debt. Period.

Second, while Moss has a point that if the NEA was like any other foundation or endowment the available monies would have dropped in this market, when he praises the government retaining "the flexibility to make decisions about funding levels," what he's really saying is that we have a president and a Congress favorably disposed to arts funding. That's all. That's not flexibility so much as pure politics. And it's not disingenuous to worry about the deficit or the debt. As noted before and as I'll note again, my worry is also about the politicization of the arts and preventing it as well as what to do in order to ameliorate the yo-yo funding effect that has consistently irked and buffeted the nonprofit theatre industry in this country for the last 25 years.

Perhaps it is "unfair to assume that the folks at Americans for the Arts and other service organizations are not thinking long-term." Sure, I'm sure they are. But if one is an arts advocate (watch Moss redefine it for me), one has the opportunity to let arts leaders know that we are looking at these issues, that we are on top of these issues, that we are debating these issues, that we are arguing -- loudly, if need be -- these issues, that we expect them dealt with and struggled through and examined and put forth in a transparent way. I'm not interested in a philosophy of "Let's let Mommy and Daddy fix it"; I'm not interested in "Let's not fight for what we believe in because the media won't pay attention." I'm interested in change. And while Moss can enjoy the support of those of the comments on his blog (including one trust-funded soul who happily put a stake in my back), I am happy to thrust and parry.

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Should Some Theaters Die?

I took a look at Chloe Veltman's post Tragic Magic the other day, which talks about how a group of San Francisco stage folk gathered, as they've been doing semi-regularly, to discuss issues of the day, and how the elephant in the room (to use her phrase) wasn't just the fact that the Magic Theatre was nearly knocked off the map a few months ago due to recession-related fiscal pressure, but how...

With the exception of a few dissenting voices, nearly everyone in the room had said that they hadn't seen anything at the flagship new play theatre in around a decade that they thought was any good. Yet despite the negative attitudes surrounding the theatre's artistic output, most Salonites believed that the disappearance of the Magic -- if it were to go under for good as threatened a couple of months ago -- would be extremely detrimental to the local ecosystem in terms of such things as lost jobs and even fewer mid-sized houses.

So this raises a question: Must all theaters -- should all theaters -- be saved? I've seen one production at the Magic (I've only been to San Francisco twice), so I can't judge the artistic merit of the organization's output, plus that's a totally subjective assessment anyway. The point is, if you have a theater that is indeed crucial to the "local ecosystem" in terms of jobs but is not crucial in terms of artistic quality, is it more moral, is it more ethical, to save the theater and hope for better artistic work in the future, or is it better to accept the possibility that theaters do die, that they indeed have lifespans, and that it's a natural part of the ecosystem for some organizations to wither while others bloom?

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Another Theatre on the Brink, Part II: Foothills Theatre Company

Apparently I posted too soon: the Foothills Theatre Company, which is in Worcester, Mass., will also go under if it is unable to raise $200,000 in the next two weeks, according to this story in the Boston Globe.

You know, perfectly good and smart people like Teresa Eyring, head of Theatre Communications Group, spent all this time with all those arts leaders and advocates pushing for another $50M in NEA funding, but what is really happening here? This isn't about NEA funding, is it? This is about About Face, the Magic, Foothills -- I could call up the whole list of nonprofit theatres that have imploded or nearly imploded in what is really just proof positive that the fiscal system for supporting the American theatre isn't working. And yet some people -- I'll be posting about this shortly -- rail against me for going on and on about the need to make the nonprofit theatre in our nation economically self-sustaining. No, they say, just get the government, federal, state and local, to just hand out more money. It's imbecilic. It's like crying out for a bucket of water when all of Rome is burning.

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Another Theatre on the Brink: Chicago's About Face

Courtesy of Facebook, I received a note that I know many people in the business received. It's very long, but it's a real action item. I've covered work coming out of the About Face in the past and I hope the industry is able to save it.

And as much as I hate to say it, we're back to the same thing I've been saying over and over -- we've got to address the systemic fiscal problems that exist in the nonprofit theatre by means other than arts leaders making the same old arguments for increasing NEA or state or municipal legislative cash.

Anyway, here's the information:

Dear friends and family,

Today, I am calling on you for a very important favor to help save About Face Theatre, which you may have heard is in dire financial trouble. As one of my most treasured artistic homes, my connections to this company run very deep. At About Face Theatre, and with my dear friend and founder Eric Rosen, I developed I AM MY OWN WIFE, ONE ARM and 33 VARIATIONS. And so it is my responsibility to turn this moment of crisis into a statement of my gratitude for this powerful company. As an artist, I am indebted to their investment in my work, and as a gay man, I am indebted to their mission.

I have had the honor of attending most of the About Face Youth Theatre productions over the past decade. As a direct witness to what this company accomplishes with young people on the stages of Chicago, I can tell you its legacy is so vital, so rich, so significant, it cannot be lost. From the stage, these young queer artists grab hold of their own lives, and they change all of our futures.

This is not the year to lose a company whose mission is to advance the national dialogue on sexuality and gender. If we lose this theatre today while the country is caught at the crossroads, we will lose crucial ground for the LGBTQ community. It is our collective responsibility to carry this brave company over this difficult economic terrain.

I urge you to donate to today.

Yours,
Most urgently,
Most warmly,
Moises Kaufman

And here is the call-to-action that prompted Moises' note:

Save About Face Theatre!

About Face Theatre, one of Chicago's leading LGBTQ institutions and the original home of Pulitzer-prizewinning I AM MY OWN WIFE, is in danger of closing.

To confront this immediate crisis, About Face has launched a national "FACE THE FUTURE" campaign to save the organization and ensure its future. The About Face Board of Directors is asking for immediate financial contributions in order to keep its doors open, staff paid, and the youth theatre program intact.

About Face Theatre creates exceptional, innovative and adventurous plays to advance the national dialogue on gender and sexual identity. If About Face does not survive, the country will lose one of the few high-profile theaters making new work by and about the LGBTQ experience. The award-winning About Face Youth Theater serves queer youth by providing artistic experiences and leadership training.

In response to the economic downturn and significant debt, About Face has reduced its budget by over 30%, implementing staff and production cuts while also postponing our third show, WHAT ONCE WE FELT. This is the responsible action to take, but it is not enough. If you help us raise $300,000, we will solve our immediate crisis and build a foundation for ongoing financial health. Here's what you can do:

DONATE NOW
Donations can be made at www.aboutfacetheatre.com, by calling (773)784-8565, or by mailing a check to the theatre at 1222 W. Wilson, 2nd Floor West, Chicago, IL 60640. About Face Theatre is a 501c3 organization and all donations are fully tax deductible.

SPREAD THE WORD
Join our "Face The Future" Facebook group
Visit and share our "Face the Future" blog
Use the "Forward to a Friend" link at the bottom of this email

POST A VIDEO
Artistic contributions are encouraged as well, as About Face organizes a web-based video forum for testimony on the importance of About Face Theatre, of mentoring queer youth, and the vital need for innovative artmaking in today's society. To participate, please email dav@aboutfacetheatre.com or call 773-784-8565.

A BRIEF HISTORY OF ABOUT FACE THEATRE
About Face Theatre is one of Chicago's most acclaimed theatre companies, and is a
national leader in the development of new work exploring gender and sexual identity. Since its founding by Kyle Hall and Eric Rosen in 1995, the company has premiered more than 30 new plays by writers and directors who have been recognized with several Tony Awards, The Pulitzer Prize for Drama, The MacArthur Fellowship and dozens of Joseph Jefferson Awards.

Landmark world premieres include Doug Wright's Pulitzer and Tony-winning "I Am My Own Wife"; Moisés Kaufman's production of Tennessee Williams' "One Arm" (a co-production with Steppenwolf Theatre Company and Tectonic Theatre Project); Mary Zimmerman's "M. Proust", and, with Lookingglass Theatre, the famed "Eleven Rooms of Proust" and "Clay" that went on to be performed at Lincoln Center and Center Theater Group; Frank Galati and Stephen Flaherty's "Loving Repeating: A Musical of Gertrude Stein" (a co-production with the Museum of Contemporary Art, Original Cast Album recorded by Jay Records); the multi-award winning musical "Winesburg, Ohio" by Eric Rosen, Andre Pluess, Ben Sussman and Jessica Thebus; and the cult hit "Pulp", by Patricia Kane.

In addition to its award-winning mainstage performances, About Face is known nationally for its ground-breaking Youth Theatre, which creates critically acclaimed new work by and about LGBTQ youth and their allies. The Youth Theatre has performed on major stages across the country, and, through its outreach tour, changes the lives of thousands of young people each year. Building on the success of the youth theatre model, About Face recently launched its corporate outreach program to provide diversity training and onsite workshops to the corporate community.

In summer 2008, About Face welcomed Bonnie Metzgar as its new Artistic Director and Rick Dildine as its new Managing Director. Metzgar is a nationally known producer, director, playwright and dramaturg who has made a career developing innovative new work in the theater. Metzgar was co-creator of the grassroots 365 Festival, based on 365 Days/365 Plays, a yearlong play cycle written by Pulitzer Prize-winning playwright Suzan Lori Parks. As artistic leader for 365, Metzgar shaped a global premiere involving 600 theaters around the world. Time Magazine named the 365 Festival one of its top ten theater events in 2006. Previously, Metzgar served as Associate Artistic Director of Curious Theatre Company in Denver. From 1995 to 2003, she served as Associate Producer at the Joseph Papp Public Theater under George C. Wolfe, where she oversaw a wide range of works including Broadway transfers Bring in 'Da Noise, Bring in 'Da Funk and Elaine Stritch: At Liberty. As founding producer of Joe's Pub at the Public Theater, Metzgar provided the creative vision for a now world-famous performance venue. Previously, Metzgar served as Artistic Director of Brown University's New Plays Festival with Paula Vogel and is currently teaching at the University of Chicago.

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What? Market the Humanities? Make Their Study Job-Oriented? Oh, Stop!

Courtesy of my friend Susan Hefti of the 93rd Street Beautification Association, I was led to this story by Patricia Cohen in the Tuesday Times. I won't reiterate what the intellectual and philosophical rationale for offering humanities studies at universities is and has always been; my degree from NYU was in Liberal Arts with a concentration in theatre. But this paragraph kind of stunned me:

But in this new era of lengthening unemployment lines and shrinking university endowments, questions about the importance of the humanities in a complex and technologically demanding world have taken on new urgency. Previous economic downturns have often led to decreased enrollment in the disciplines loosely grouped under the term “humanities” — which generally include languages, literature, the arts, history, cultural studies, philosophy and religion. Many in the field worry that in this current crisis those areas will be hit hardest.

And frankly, this paragraph later in the piece stunned me -- and is probably continuing to stun, if not threaten, the academic establishment that doesn't much live in the real world in the first place:

The study of the humanities evolved during the 20th century “to focus almost entirely on personal intellectual development,” said Richard M. Freeland, the Massachusetts commissioner of higher education. “But what we haven’t paid a lot of attention to is how students can put those abilities effectively to use in the world. We’ve created a disjunction between the liberal arts and sciences and our role as citizens and professionals.”

Yep, people needs jobs, people. And that doesn't always necessarily mean jobs in the academy where the academy's perpetuation is what is taught and learned and demonstrated. Sad to read this story, but amen.

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New Article: Obama’s Foreclosure Fix — What’s McCain Thinking Today?

The Fox Forum asked me today if I'd be interested in writing something about the housing stabilization plan offered by the President, and here is what I wrote. It's very short, but I think it does make the point.

Here's the tease:

The proactive and progressive nature of President Obama’s plan should give Senator McCain a bit of pause, for it was he, let’s recall, who placed squarely within the center of the national spotlight his belief that the recovery of the economy would not be possible without the immediate stabilization of the housing market.

For the rest (just a little bit), click here.

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Obama Unveiling Foreclosure and Housing Stabilization Plan Today

I have in my possession an advance copy of the speech President Obama is due to deliver later today in Arizona, announcing his plan to forestall more foreclosures in the national housing market and thereby begin to stabilize the housing situation.

The speech itself was embargoed until 9am EST this morning; he's delivering the speech at 12:15. Here it is:

I’m here today to talk about a crisis unlike any we’ve ever known – but one that you know very well here in Mesa, and throughout the Valley. In Phoenix and its surrounding suburbs, the American Dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighborhoods. It is a crisis that strikes at the heart of the middle class: the homes in which we invest our savings, build our lives, raise our families, and plant roots in our communities.

So many Americans have shared with me their personal experiences of this crisis. Many have written letters or emails or shared their stories with me at rallies and along rope lines. Their hardship and heartbreak are a reminder that while this crisis is vast, it begins just one house – and one family – at a time.

It begins with a young family – maybe in Mesa, or Glendale, or Tempe – or just as likely in suburban Las Vegas, Cleveland, or Miami. They save up. They search. They choose a home that feels like the perfect place to start a life. They secure a fixed-rate mortgage at a reasonable rate, make a down payment, and make their mortgage payments each month. They are as responsible as anyone could ask them to be.

But then they learn that acting responsibly often isn’t enough to escape this crisis. Perhaps someone loses a job in the latest round of layoffs, one of more than three and a half million jobs lost since this recession began – or maybe a child gets sick, or a spouse has his or her hours cut.

In the past, if you found yourself in a situation like this, you could have sold your home and bought a smaller one with more affordable payments. Or you could have refinanced your home at a lower rate. But today, home values have fallen so sharply that even if you made a large down payment, the current value of your mortgage may still be higher than the current value of your house. So no bank will return your calls, and no sale will return your investment.

You can't afford to leave and you can't afford to stay. So you cut back on luxuries. Then you cut back on necessities. You spend down your savings to keep up with your payments. Then you open the retirement fund. Then you use the credit cards. And when you’ve gone through everything you have, and done everything you can, you have no choice but to default on your loan. And so your home joins the nearly six million others in foreclosure or at risk of foreclosure across the country, including roughly 150,000 right here in Arizona.

But the foreclosures which are uprooting families and upending lives across America are only one part of this housing crisis. For while there are millions of families who face foreclosure, there are millions more who are in no danger of losing their homes, but who have still seen their dreams endangered. They are families who see “For Sale” signs lining the streets. Who see neighbors leave, and homes standing vacant, and lawns slowly turning brown. They see their own homes – their largest single assets – plummeting in value. One study in Chicago found that a foreclosed home reduces the price of nearby homes by as much as 9 percent. Home prices in cities across the country have fallen by more than 25 percent since 2006; in Phoenix, they’ve fallen by 43 percent.

Even if your neighborhood hasn’t been hit by foreclosures, you’re likely feeling the effects of the crisis in other ways. Companies in your community that depend on the housing market – construction companies and home furnishing stores, painters and landscapers – they’re cutting back and laying people off. The number of residential construction jobs has fallen by more than a quarter million since mid-2006. As businesses lose revenue and people lose income, the tax base shrinks, which means less money for schools and police and fire departments. And on top of this, the costs to a local government associated with a single foreclosure can be as high as $20,000.

The effects of this crisis have also reverberated across the financial markets. When the housing market collapsed, so did the availability of credit on which our economy depends. As that credit has dried up, it has been harder for families to find affordable loans to purchase a car or pay tuition and harder for businesses to secure the capital they need to expand and create jobs.

In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to deepen – a crisis which is unraveling homeownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, every American will benefit. And that’s what I want to talk about today.

The plan I’m announcing focuses on rescuing families who have played by the rules and acted responsibly: by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in sub-prime mortgages they can’t afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments.

At the same time, this plan must be viewed in a larger context. A lost home often begins with a lost job. Many businesses have laid off workers for a lack of revenue and available capital. Credit has become scarce as the markets have been overwhelmed by the collapse of securities backed by failing mortgages. In the end, the home mortgage crisis, the financial crisis, and this broader economic crisis are interconnected. We cannot successfully address any one of them without addressing them all.

Yesterday, in Denver, I signed into law the American Recovery and Reinvestment Act which will create or save three and a half million jobs over the next two years – including 70,000 in Arizona – doing the work America needs done. We will also work to stabilize, repair, and reform our financial system to get credit flowing again to families and businesses. And we will pursue the housing plan I am outlining today.

Through this plan, we will help between seven and nine million families restructure or refinance their mortgages so they can avoid foreclosure. And we are not just helping homeowners at risk of falling over the edge, we are preventing their neighbors from being pulled over that edge too – as defaults and foreclosures contribute to sinking home values, failing local businesses, and lost jobs.

But I also want to be very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans. It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell. It will not help dishonest lenders who acted irresponsibility, distorting the facts and dismissing the fine print at the expense of buyers who didn’t know better. And it will not reward folks who bought homes they knew from the beginning they would never be able to afford. In short, this plan will not save every home.

But it will give millions of families resigned to financial ruin a chance to rebuild. It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone. According to estimates by the Treasury Department, this plan could stop the slide in home prices due to neighboring foreclosures by about $6,000 per home.

Here is how my plan works:

First, we will make it possible for an estimated four to five million currently ineligible homeowners who receive their mortgages through Fannie Mae or Freddie Mac to refinance their mortgages at lower rates.

Today, as a result of declining home values, millions of families are “underwater,” which means they owe more on their mortgages than their homes are worth. These families are unable to sell their homes, and unable to refinance them. So in the event of a job loss or another emergency, their options are limited.

Right now, Fannie Mae and Freddie Mac – the institutions that guarantee home loans for millions of middle class families – are generally not permitted to guarantee refinancing for mortgages valued at more than 80 percent of the home’s worth. So families who are underwater – or close to being underwater – cannot turn to these lending institutions for help.

My plan changes that by removing this restriction on Fannie and Freddie so that they can refinance mortgages they already own or guarantee. This will allow millions of families stuck with loans at a higher rate to refinance. And the estimated cost to taxpayers would be roughly zero; while Fannie and Freddie would receive less money in payments, this would be balanced out by a reduction in defaults and foreclosures.

I also want to point out that millions of other households could benefit from historically low interest rates if they refinance, though many don't know that this opportunity is available to them – an opportunity that could save families hundreds of dollars each month. And the efforts we are taking to stabilize mortgage markets will help these borrowers to secure more affordable terms, too.

Second, we will create new incentives so that lenders work with borrowers to modify the terms of sub-prime loans at risk of default and foreclosure.

Sub-prime loans – loans with high rates and complex terms that often conceal their costs – make up only 12 percent of all mortgages, but account for roughly half of all foreclosures.

Right now, when families with these mortgages seek to modify a loan to avoid this fate, they often find themselves navigating a maze of rules and regulations but rarely finding answers. Some sub-prime lenders are willing to renegotiate; many aren’t. Your ability to restructure your loan depends on where you live, the company that owns or manages your loan, or even the agent who happens to answer the phone on the day you call.

My plan establishes clear guidelines for the entire mortgage industry that will encourage lenders to modify mortgages on primary residences. Any institution that wishes to receive financial assistance from the government, and to modify home mortgages, will have to do so according to these guidelines – which will be in place two weeks from today.

If lenders and homebuyers work together, and the lender agrees to offer rates that the borrower can afford, we’ll make up part of the gap between what the old payments were and what the new payments will be. And under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower’s income. This will enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure.

So this part of the plan will require both buyers and lenders to step up and do their part. Lenders will need to lower interest rates and share in the costs of reduced monthly payments in order to prevent another wave of foreclosures. Borrowers will be required to make payments on time in return for this opportunity to reduce those payments.

I also want to be clear that there will be a cost associated with this plan. But by making these investments in foreclosure-prevention today, we will save ourselves the costs of foreclosure tomorrow – costs borne not just by families with troubled loans, but by their neighbors and communities and by our economy as a whole. Given the magnitude of these costs, it is a price well worth paying.

Third, we will take major steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages.

Today, most new home loans are backed by Fannie Mae and Freddie Mac, which guarantee loans and set standards to keep mortgage rates low and to keep mortgage financing available and predictable for middle class families. This function is profoundly important, especially now as we grapple with a crisis that would only worsen if we were to allow further disruptions in our mortgage markets.

Therefore, using the funds already approved by Congress for this purpose, the Treasury Department and the Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities so that there is stability and liquidity in the marketplace. Through its existing authority Treasury will provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down.

We’re also going to work with Fannie and Freddie on other strategies to bolster the mortgage markets, like working with state housing finance agencies to increase their liquidity. And as we seek to ensure that these institutions continue to perform what is a vital function on behalf of middle class families, we also need to maintain transparency and strong oversight so that they do so in responsible and effective ways.

Fourth, we will pursue a wide range of reforms designed to help families stay in their homes and avoid foreclosure. My administration will continue to support reforming our bankruptcy rules so that we allow judges to reduce home mortgages on primary residences to their fair market value – as long as borrowers pay their debts under a court-ordered plan. That’s the rule for investors who own two, three, and four homes. It should be the rule for ordinary homeowners too, as an alternative to foreclosure.

In addition, as part of the recovery plan I signed into law yesterday, we are going to award $2 billion in competitive grants to communities that are bringing together stakeholders and testing new and innovative ways to prevent foreclosures. Communities have shown a lot of initiative, taking responsibility for this crisis when many others have not. Supporting these neighborhood efforts is exactly what we should be doing.

Taken together, the provisions of this plan will help us end this crisis and preserve for millions of families their stake in the American Dream. But we must also acknowledge the limits of this plan.

Our housing crisis was born of eroding home values, but also of the erosion of our common values. It was brought about by big banks that traded in risky mortgages in return for profits that were literally too good to be true; by lenders who knowingly took advantage of homebuyers; by homebuyers who knowingly borrowed too much from lenders; by speculators who gambled on rising prices; and by leaders in our nation’s capital who failed to act amidst a deepening crisis.

So solving this crisis will require more than resources – it will require all of us to take responsibility. Government must take responsibility for setting rules of the road that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that got us into this crisis in the first place. Individuals must take responsibility for their own actions. And all of us must learn to live within our means again.

These are the values that have defined this nation. These are values that have given substance to our faith in the American Dream. And these are the values that we must restore now at this defining moment.

It will not be easy. But if we move forward with purpose and resolve – with a deepened appreciation for how fundamental the American Dream is and how fragile it can be when we fail in our collective responsibilities – then I am confident we will overcome this crisis and once again secure that dream for ourselves and for generations to come.

Thank you, God Bless you, and God bless America.

The specific, line by line details of the plan can be seen at this PDF here.

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NYU Pres. Sexton Proclaims Fiscal Stability: What Isn't He Disclosing?

The letter sent out by President John Sexton, via email, to the NYU community is a classic move on the part of the man who'll be remembered for his rough disregard for the greater Greenwich Village community, and for his equally abominable disregard for historic preservation. But if you read between the lines of this letter, it suggests -- to me, anyway -- that everything isn't as rosy along Washington Square as Sexton and his chieftains might prefer people to believe. I've reprinted the text of the letter below; you can also read a more detailed version on line.

There's one thing I'd point out that particularly makes me think Sexton knows more about the real financial state of NYU than he's letting on. It's this graph:

On a separate matter relating to the NYU endowment, you may have read about our losses resulting from the Bernard Madoff fraud. In the mid-1990's, a portion of the NYU endowment was invested in a fund managed by Ezra Merkin. Recently, Merkin requested - and was denied - the University's permission to entrust part of our invested assets with Madoff, and he failed to inform us that he had already done so. The University has sued Merkin to recover our losses. According to a letter we received from Merkin in December, the loss is estimated at approximately $24 million, representing slightly less than one percent of our endowment.

So, if the university didn't know that 1% of the endowment was invested in the Madoff scam, what else didn't the university know -- what else isn't Sexton saying? To be sure, he'll send his henchwoman, Alicia Hurley, who lies better than anyone I've ever met, to tamp down concerns should further information come to light. For now, here's Sexton's letter:

Dear NYU Alumni, Parents, and Friends:

The impact of the global economic crisis has been widespread, and each institution of higher learning has had to chart its own course in confronting it. It is now almost conventional wisdom that over the next year or two universities will have to make cuts in staffing, halt faculty searches, and wring as much as possible out of their administrative expenses. NYU will not be immune from these measures and sacrifices. However, it is in a better position than many institutions.

In 2007, well before the contours of the economic crisis became clear, we began an effort to achieve substantial administrative savings and redirect the funds to our academic mission, an effort we called re-engineering. This effort saved a net of $5 million in 2007, and recurring annual savings of over $25 million in 2008. We have also created a contingency reserve fund that now totals about $26 million. And in the next year we hope to expand annual administrative savings by another $10 million. This separate fund will continue to grow, ultimately reaching 10% of NYU's operating budget and creating a substantial pool of funds to help sustain the University in truly exigent circumstances.

Our early initiative has allowed us the ability to move ahead, and thanks to the measures that were taken before the economic crisis struck, NYU's budget is sound. Unlike many other schools, the crisis has not caused us to cancel faculty searches or capital projects. However, we cannot be complacent, and as a university that means we will need to become even more disciplined and focused.

Far and away our largest source of revenue is tuition; it accounts for some 60 percent of the University's annual revenues. Thankfully, NYU's strong academic reputation ensures a deep pool of applicants with exceptional qualifications even in the face of this economic crisis. Indeed, this is a record year, with more than 37,000 applications for freshman admission. Roughly nine students apply for each spot in our freshman class. We are thus in the enviable position of not having to choose between financial stability and student quality. However, the economic downturn gives us cause to worry about the increased financial stress being experienced by some NYU families.

We recognize that university endowments have been the subject of much interest in recent months. The NYU endowment currently stands at just over $2 billion, absorbing a decline between June 30 and December 31 of 19.6 percent. NYU experienced less of a decline than many peer schools, and considerably less than the market as a whole. Also, investment earnings make up a much smaller portion of our annual revenues (approximately five percent) than other major private research universities (some of which are as high as 50 or 55 percent). Thus, in a downturn, the impact on our budget is less great.

Nevertheless, there is a related issue that presents a potentially significant problem for NYU: current New York State law prohibits non-profits from allocating funds for spending from any individual endowment account whose market value has fallen below its original gift value. For NYU, in the current market, this prohibition could reduce the permitted spending from our endowment return by tens of millions of dollars compared to previous years. We are working with other non-profits to update this law in the current session of the New York State legislature, as many other states have done in recent years. Passage, though, is by no means assured.

On a separate matter relating to the NYU endowment, you may have read about our losses resulting from the Bernard Madoff fraud. In the mid-1990's, a portion of the NYU endowment was invested in a fund managed by Ezra Merkin. Recently, Merkin requested - and was denied - the University's permission to entrust part of our invested assets with Madoff, and he failed to inform us that he had already done so. The University has sued Merkin to recover our losses. According to a letter we received from Merkin in December, the loss is estimated at approximately $24 million, representing slightly less than one percent of our endowment.

In August 2008, NYU successfully concluded the largest fundraising campaign in the history of higher education at that time (over $3 billion). Since our campaign was completed, we fully expected that our fundraising this year would be down from last year's record totals. Now, the nation's financial crisis means we will experience an even steeper decline. Still, our donors to the campaign continue to honor pledges; the University has raised over $100 million since August 31; and Annual Fund donations are holding steady (both in dollars and in the number of donors). That said, we cannot expect fundraising to be as robust as in recent years.

Because of all the risks to the University's sources of revenue and the possibility of additional shocks we do not now foresee, NYU has undertaken contingency planning to address the challenges that would result from additional budgetary shortfalls.

Still, we intend to pursue our priorities. For example, we will continue with our plans to hire faculty across all schools, and to expand our Arts and Science faculty. Likewise, we will press forward with capital projects for academic programs and other important capital needs, as well as our long range space planning process for the Washington Square campus. And we will maintain the quality of the student body.

As I stated earlier, NYU is dependent on tuition revenue. Yet in this economic climate - when many are losing their jobs or seeing significant income reductions - one of our key priorities must be to hold down tuition growth in an attempt to ease the burden on students and families. For that reason we hope to hold the tuition increase for 2009-10 to the lowest in recent years.

Beyond that, we need to be able to target tuition assistance for those who have the greatest need. The percentage increase in our undergraduate financial aid budget this past year was more than double the rate of tuition increase; we hope to follow this same formula next year, even though the economic climate is less favorable and endowment is less able to support that increase.

For this reason, we will be looking to our faculty, alumni, parents and friends to help us meet our students' growing needs. At this moment of crisis, scholarship support is of pivotal importance, and our fundraising efforts will be redeployed to focus in this direction.

We cannot know for certain what the coming years will bring in the economy or for our University. However, NYU will use every tool at its disposal to sustain our academic momentum and protect our academic mission; and will do all that is possible to aid our students and their families, to preserve our sense of community and our collective morale, and maintain our robust academic momentum.

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The Hidden Truth of the Kennedy Center's "Arts in Crisis" Initiative?

There is no question the recently unveiled Arts in Crisis initiative of the Kennedy Center represents an important moment -- good and bad -- for the nonprofit arts movement in the nation. It's good that an organization with the heft and might of the Kennedy Center would recognize the fiscal moment we're in and, as its press release states, "provide free consulting from both Kennedy Center President Michael M. Kaiser and members of the Kennedy Center's executive staff." It's bad in the sense that it points up just how dire things are becoming in the sector. It also occurs to me that this is the sort of the thing that commercial Broadway producers would never do for their nonprofit (or commercial) Off- and Off-Off-Broadway brethren.

Something bothers me, though, and it should bother you, too. I learned of the initiative through coverage in the Washington Post, in which Kaiser is naturally quoted extensively. Read this:

The center's president said he is not as concerned about smaller organizations -- which are used to dealing with difficult situations -- as he is about groups that are misdirecting efforts at downsizing. "I'm worried that people are cutting the wrong things first, and that makes it much harder to compete for funding," he said. "Those who cut the programming first wouldn't look as attractive to the funders."

Yes, the first sentence is the Post's -- the writer is Jacqueline E. Trescott -- but the set up for Kaiser's quote sounds like the Kennedy Center is going to make it clear that larger organizations will get priority and more focused attention. In other words, everyone is getting into lifeboats, but Kaiser says that only the wealthiest adults may be saved. If true, that's shameful.

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Alliance for the Arts Releases White Paper, "The Recession & the Arts"

Very smart of Alliance for the Arts to jump into the fragmenting fiscal fray by issuing a report -- the full title of it is "The Recession and the Arts: The Impact of the Economic Downturn on Nonprofit Cultural Groups in New York City."

Because of the depth of the crisis we're in, let me skip to the basic findings of the report:

In December 2008, the Alliance for the Arts fielded a survey to nonprofit cultural organizations in New York City about the impact of the recent economic downturn. The responses came from a crosssection of organizations in all boroughs—reflecting the diversity of nonprofit cultural organizations in terms of audience, discipline and budget size.

The survey results capture a snapshot of the current climate of the cultural industry. Of the 100 responding organizations, 78 percent indicate that they have reduced their budgets or plan to do so; 50 percent plan to lay off employees; 69 percent will defer new hires and 45 percent plan to cancel or postpone programs within the next year.

Of the 18 organizations with budgets less than $100,000, 67 percent have reduced their budgets or plan to do so—some up to as much as 75 percent. The majority of these organizations are based in Manhattan (56 percent), 17 percent are in Brooklyn, 11 percent are in Staten Island, 11 percent are in Queens and 6 percent are in The Bronx. Of those organizations outside Manhattan, 75 percent have reduced their budgets or plan to do so; 50 percent plan to lay off employees as well as defer new
hires.

Eighty-one percent of the 32 organizations with budgets between $100,000 and $1 million report that they have reduced their budgets or plan to do so. One fourth of them plan to lay off employees and 69 percent plan to defer new hires within the next year. Forty-one percent plan to cancel or postpone programming and 47 percent plan to postpone moves or capital improvements. Sixty-three percent of these organizations are located in Manhattan, 16 percent are in Staten Island, 9 percent are in Brooklyn, 6 percent are in The Bronx and 6 percent are in Queens.

Seventy-nine percent of organizations with budgets between $1 million and $10 million plan to cut their budgets up to 30 percent over the next year. Among these organizations planning to cut their budgets, 67 percent are in Manhattan, 15 percent are in The Bronx, 11 percent are in Brooklyn and 7 percent are in Staten Island. Fifty-six percent of organizations within this budget range plan to lay off employees and 27 percent plan to defer new hires within the next year. Forty-one percent plan to postpone or cancel programming within the year.

Organizations with budgets over $10 million were similarly affected, with 80 percent indicating that they have reduced their budget or plan to do so—some up to 53 percent. Of the 15 largest organizations, 53 percent plan to lay off employees and another 80 percent plan to defer new hires within the year. Although 53 percent plan to cancel or postpone programming within the year, all of the organizations within this budget range intend to proceed with their planned fundraising schedule. Of the organizations planning moves or capital improvements, 36 percent anticipate postponing their plans. Sixty percent of the largest organizations are located in Manhattan; The Bronx, Brooklyn and Queens each account for 13 percent.

My question: What does the president of Alliance for the Arts, Randall Bourscheidt (who I am told does not hate me, though he's never contacted me as I was told he would), propose that the community do about the situation? Is it really as simple as saying to the mayor or the governor, "Look how you're hurting us!" and will the usual sob stories really fly this time? Isn't this really a fiscal impact question? In my new essay published in the Fox Forum, Do We Need a Secretary of the Arts?, I deal with this issue at the federal level from what I think might be an out-of-the-box point of view. I'm quite certain Mr. Bourscheidt will think me spiritually possessed by some kind of scary Jacksonian Democrat zeal if and when he should read my essay, but surely, as terrific as all of this information is (and it is), isn't it true that we need new ideas to move us forward? Why aren't we asking him and his colleagues, where are the new models? When will our esteemed and understandably respected arts advocates going to do more than blithely aggregate, publish and analyze data, or sit on committees that present recommendations to the president but provide an equal or greater amount of time formulating, articulating and, indeed, demonstrating new ways of dealing with these horrendous and cyclical issues? Isn't that what they're paid to do?

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Another Theater Going Under? Kentucky Rep Says, Er, Maybe

So dispiriting to come across this story in the Louisville Courier-Journal. Kentucky Repertory Theatre, formerly known as Horse Cave Theatre, is in its 33rd season and used to operating in the black. Due to confluence to events, including last year's $4 a gallon gas, the venue is now facing a mammoth six-figure deficit. Here's some copy from the story -- please make note of the statistic on economic impact. Again and again, and I'm going to keep saying it, this is what people should be talking about. You let a theatre die, you kill its surroundings and you damage the economy. Period.

Anyway:

If the theater closed, it would be a tremendous loss educationally and culturally, he said. Area students would no longer be able to see live theater locally or participate in Kentucky Repertory's in-school workshops.

Not only is the theater important as a cultural arts center, it's also a major economic force in the town of 2,500, as well as for Hart County and the region.

The theater draws 30,000 people a year. The theater itself employs eight people, but the staff grows to as many as 50 people during its repertory season. The professional actors, directors and designers who come to Horse Cave spend money locally. In all, the theater's impact on the community is estimated at $10 million.

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Remember the Death of Media?

And now, back to everyone's favorite subject. Here is some sad news for those who still think we should just look at the positive side of everything:

Gannett to Book Huge Write-Down

LAT to cut 70 more in newsroom, 300 overall

Conde Knocks Down Domino; Things Aren't OK!

No, things aren't OK.

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So the GOP Wants Obama to Succeed?

I watched John Boehner, minority leader of the House, on Meet the Press this morning and began experiencing last night's lovely dinner in honor of our friends' 20th anniversary rising back up through my esophagus and begin choking me with its well-digested foulness. The guy says he's all for helping the new president succeed, but, as is his wont as the supposedly loyal opposition, he notes how he and his cackling caucus have "problems" with the stimulus package as presented. What he means -- since GOP-ers tend to corrode good policies in code -- is that the GOP will do anything it can to derail the efforts of the new administration, and if that means the American people have to starve, suffer, or, God help us, die, that's just ducky with them.

Here's a headline from the Washington Times: McCain, Boehner oppose Obama stimulus plan. Big surprise. More pointedly, though, here is Boehner, looking gloomy and hardly statesmanlike, sending the American people gleefully into the economic gallows because all he knows is wrong:



To quantify what I mean -- that is, what's really at stake here -- look at this headline from a recent analysis posted by the Economic Policy Institute:

Without adequate public spending, a catastrophic recession for some

Let's burrow down and put some numbers on what the EPI means:

This analysis sketches a picture of how much worse we can expect things to get—both for the nation as a whole and for groups of Americans that are already suffering depression-level unemployment—unless the new administration and Congress act quickly with a recovery package that is big enough and well-targeted enough to counteract these trends. The authors recommend government spending on the order of $600 billion per year for the next two years to head off the otherwise inevitable catastrophe. Their analysis notes that without timely and adequate government intervention:

Overall unemployment, after peaking at about 10.2% in mid-2010, could still be as high as 7.6% four years from now.

Underemployment could reach 17.9% overall in 2010 (18.8% for women), affecting over 27 million workers.

More than one out of every three working Americans would experience unemployment or underemployment at some point during the year 2010.

Nearly one in five African Americans in the labor force would be unemployed (18.2%). More than half of all black teens would be jobless.

Hispanic unemployment would reach 13.1% overall, and more than one-third among teens.

Unemployment would reach a record high of 5.1% among the college-educated, 1.2 points above the previous high of 3.9% in the depths of the 1980s recession.

All families would experience wage declines because of weakened labor market conditions and reduced hours and wages. On average, middle-income families would earn about $4,700 less per year in 2010 than in 2007 (a loss of 7.7%) Low-income families would lose an average of 9.8%, or nearly $1,600, per year.

According to this story, even Rush Limbaugh agrees that it's better not to create hundreds of thousands of new jobs so the GOP can retake power. At least the pill-popping, wife-swapping treasonous liar is being truthful about it.

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Happy New Year -- The Media Economy Is Still Tanking

It's snowing outside, the doctor says my heart is fine (after a minor scare) and the news in the media world remains as awful as imaginable. Here are some headlines -- not, by the way, for you to get depressed over, but continue, unfortunately, to reinforce the idea that some believe that if only we look at the positive side of all things, all things will be ok. The glass, I assert, is only one-quarter full, and that's scary. For example:

New York Mag to Writers: You’re Keeping Your Jobs, Getting a Pay Cut

The Fall of the Almost-Rich (Gawker's version of the above-referenced story)

Gannett to Furlough Workers for Week
(Here are the first three graphs:

The Gannett Company, the nation’s largest newspaper publisher, said on Wednesday that it would force thousands of its employees to take a week off without pay in an effort to avoid layoffs.

Gannett, which owns 85 daily newspapers across the United States including its flagship USA Today, said it could not say exactly how many people would be required to take time off, or how much money the company would save. But it said it would require unpaid leave for most of its 31,000 employees in this country.

Also on Wednesday, USA Today notified its staff of a one-year pay freeze for all employees.

American Express Publishing Lays Off 33
Job Cuts Part of Parent Company's Effort to Reduce Head Count 10%

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Goldman Sachs Sees Real Estate "Mega Crash"?

Courtesy of my friend and colleague James Marino, who is pointing point via Facebook note to a Silicon Alley Insider story, which actually took its cue from Curbed post, it seems the formerly behemothic, now subdued not-so-investment-bank has issued a report on the New York City real estate market. And the news, like seemingly all news these days, is just this side of suicide-inducing. Click on the Curbed hyperlink if you want to read the whole thing, but highlights are (and I quote):

Goldman: "New York apartment prices are very high relative to the observable fundamentals. Using three alternative yardsticks—price/rent, price/income, and affordability—we find that prices would need to decline by 35%-44% to return to the valuation levels seen in the 1995-1999 period, before the start of the recent boom."
Translation: Think 15% down is bad? There's another 30% to go. Wheee!

Goldman: "Under the (admittedly unrealistic) assumption that prices decline by the same percentage in each market segment, this type of drop would imply that a 1-bedroom condo whose price currently averages roughly $800,000 would decline to $480,000; a 2-bedroom condo would decline from $1.7 million to $1 million; and a 3-bedroom condo would decline from $3 million to $1.8 million."
Translation: Look! We can do math!

Goldman: "It is instructive to consider the potential implications of a return of relative Manhattan incomes toward the national norm prevailing before the Wall Street boom of the past two decades, either because of pay cuts in the financial industry or because of a possible out-migration of affluent individuals. From 1969 to 1986, Manhattan per-capita income averaged 2 times the national average, with no clear trend. Over the next two decades, however, it grew to 3 times the national average. If incomes fell back to the pre-1986 level of 2 times the national average—and if national per capita income remained unchanged—prices would need to fall as much as 58% to return to the 1995-1999 price/income ratio.
Translation: 58%, people. Commence serious heavy breathing... now.

Of course, it's the comments that are most hilariously awful of all, like the first one on Curbed: "Eh. I still can't afford anything even with a 58% drop. How about 70%? Then we're talking!"

Apples on the streetcorner time, people. Fasten your ratty seat belts in your choking Model T.

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Want to Quantify How Bad the Media Layoffs Are?

While some people are still living in a dreamland in which positivity is some sort of pseudo-salve, media and, and in particular, arts journalism, which so few people ever write about anyway, really is dying. Or at least hemorraging. But those are generalities, right?

Well, courtesy of The Hollywood Reporter, here is a story that quantifies the numbers:

Corporate America last year laid off the highest number of employees since 2003, while the media industry pink-slipped people at the highest rate since 2001.

Employers announced more than 1.22 million job cuts in 2008, up 59% from the previous year, thanks to an accelerating of cost cutting in the back half, according to global outplacement consultancy Challenger, Gray & Christmas. In 2003, more than 1.23 million had been fired. The 2008 hike was driven by the financial sector, which shed 260,110 jobs, the third-highest total for a single industry since Challenger started tracking data in 1993.

Layoffs in the media industry, which includes film and TV companies, amounted to 28,083 last year, the highest since 43,420 staffers were let go in 2001 following the bursting of the dot-com bubble.

Of course, I guess The Hollywood Reporter would know about this personally, having laid off so many people last year. You can read about that here and here.

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The Economy is Even Screwing Over...the Porn Industry

Gotta love Larry Flynt and, oy, Joe Francis.

They say the porn industry needs a $5 billion bailout.

Let the puns commence.

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