Portrait of the Artist as Scalawag

The Daily Reckoning PRESENTS: Remember when the role of artists was to draw out the beautiful and noble from contemporary life? Well, times have changed – recently, so-called ‘rock star’ Pete Doherty announced he would charge $1,750 for paintings he created – out of his own blood. Bill Bonner explores…

PORTRAIT OF THE ARTIST AS A SCALAWAG

Today’s artist has a special status, somewhere between a grand dragon in the Ku Klux Klan and a circus carney for Barnum and Bailey. He is a rebel who gets invited to all the best parties. He is a bit-actor on the margins taken seriously by the rich and the powerful. He is an icon-buster, who peddles his own shoddy images for worship and glorification. And, he is a born genius, with no visible talent, except for self-promotion.

In short, he is a humbug.

Artists have always been critics of the times and conventions they lived in. When Dante drew his picture of Hell, he made sure to put into it all the leading citizens of his day. Shakespeare made almost all his Englishmen either pathetic or comic. The artist has his task cut out for him, for no time and no race is ever perfect. It is he who has to draw out the beautiful and noble from the dross and bilge of contemporary life.

But cometh the 20th century, and now the 21st – the artist has taken on a new role. He has greased himself into the job of Arbiter of Cool. He is the bouncer at the local hot spot who gets to tell the customers if they’re hip enough to enter or not.

The humbug has a whole platoon of partakers – museum curators, critics and most importantly, the art promoters. It is, after all, they who make the crucial decisions. They are in cahoots. One stumbles across some no-account brush-wielder and promotes him to his friends in the museums. The friends bring in the critics early, so that the shysters can then claim to have discovered the great one before he became great. And at the end of the assembly line, weak-minded collectors and greedy investors are lured into forking over enormous prices.

Meanwhile, the whole concatenation of grand larceny and petty indecency creates such a buzz that it convinces the rest of the world that it has a real talent on its hands. What else does the rest of the world have to go on? The artwork itself may be as empty and meaningless as a state of the union address, but it is hanging in an important gallery! Van Der Loon said it was “original” Some chump paid big money for it!

We marvel at the elegant symmetry of it all: Things with no value are bought by people with no sense. Money flows from weak hands to stronger ones. Make believe art flows from scalawags and hustlers to dimwits and social climbers. Life goes on.

Andy Warhol was not a great artist, but he was no fool. When he died, it was discovered that with his own money, he bought traditional, representational paintings – not post-modern blotches. He was a great promoter. His Portrait of Nelson A. Rockfeller #3 sold for $401, 750 just six years ago. Last week, it brought $1,136,000. Mark Rothko’s White, Orange, and Yellow, an amazingly dull painting, brought about $300,000 from some sad-sack investor 12 years ago. Last week, it was expected to go for as much as $3 million. Instead, a much greater fool came along and paid $4,160,000. And the big winner was a silly painting by Roy Lichtenstein entitled Sinking Sun, which brought $15,696,000 – about 150 times more than it sold for in 1974.

Why the high prices? A study published in the Feb. 10, 2006, issue of Science magazine, helps to explain it. The authors, Matthew J. Salganik and Peter Sheridan Dodds of Columbia University, and Duncan J. Watts of the Santa Fe Institute, looked at how people judged music on their own…compared to their reactions when they knew how popular the music was among their peers. The results were hardly surprising. People appreciated the songs in a fairly random way when they were left to their own devices, but as soon as they had “social influence” to guide them, they tended to focus on just one or two popular songs, while ignoring those that were judged by the group to be unpopular.

A few decades ago, a man who made some money would buy his way into a higher status society by getting Gainsborough to paint his wife or buying a Chippendale dining room set. Now, it is cool that counts, and a man desperate for social status has to hang framed trash on his walls. Or put pickled sheep on his mantelpiece.

In 1997, a show of contemporary art in London called “Sensation,” broke all records for attendance and bad taste. It was so lewd and repulsive the papers couldn’t stop talking about it, which, of course, only brought in bigger mobs of gawkers. But there were also howls of complaint, too. For, included was a giant painting of Myra Hindley composed from a child’s handprints. Americans may not recognize the name, but they will recognize the modus operandi. Hindley is infamous, and behind bars, for murdering children and recording their screams as she tortured them. Outraged viewers – including the parents of the murdered children – begged the Royal Academy not to exhibit the painting. When officials refused (they risked being un-cool!), protesters attacked the painting with eggs and ink. Thereafter, it had to be restored and protected by plastic. One of the mysteries of contemporary art is why anyone bothered to restore it; the painting was no less attractive, and no less shocking, after its amending by the protestors.

“Sensation” was sensational. It gave a boost to contemporary “art” that was felt across the pond, when Mayor Giuliani threatened to withdraw funding from the Brooklyn Museum for hosting the show. But Giuliani eventually backed down. He didn’t want to risk being too “uncool” either – not when the U.S. Senate beckoned. The show went on…and the prices went on to rise.

Since then, “art” has gotten even more repulsive and ridiculous. Ex-stripper Stella Vine, promoted by Charles Saatchi, pandered to celebrity culture with a painting of Princess Diana with blood dripping from her lips. More recently, an artist invited to exhibit at a Swiss art center, proposed a bit of performance art – bulldozing down the center!

Even a jackass could see that this doctrine leads nowhere. “Artists” are already fornicating on stage. We wait for the day when they will be shooting each other, drenching the bodies in anti-freeze and putting them on display. Then, perhaps a bout of mass-murder, nun-raping and, even worse, cigarette smoking! Sooner or later, they will run smack into the residual decency of the public, if there is any left. And then, of course, their oeuvre will really soar in value!

Works of “art” have turned crude and hideous. The artists are divided between charlatans and cretins, and the promoters are Hell-bound perverts. But it is the buyers, the investors, and the collectors for whom nature reserves her hardest kick and her heartiest laugh.

Critics of contemporary art, on the other hand, are so indignant they can barely chuckle, worrying over how it undermines high taste and presses down on popular culture like a container full of Che T-shirts. Of course, they are right. The modern artist is no artist but a swindler who cannot do the job of distinguishing between the beautiful and the ugly – or the sordid and the noble. He cannot really draw out beauty, because he lacks the skill. Nor can he even criticize, because he lacks an aesthetic reference. All he can be is a provocateur, shocking the bourgeoisie.

The critics take the whole thing too seriously and miss the elegant comedy of it. No sooner do people get their hands on money, than nature comes up with absurd ways to take it from them. Who would have believed that any man declared compos mentis – able to drive a car or serve on a jury – would pay $95 million for one of Pablo Picasso’s oeuvres from his “I hate my girlfriend” period? Who would pay $598,000 for Elizabeth Peyton’s wretched painting of David Hockney? Who would pay $100,000 for Damien Hirst’s bottled fish? But didn’t Damien Hirst entitle one of his paintings, Kiss My F**king A**? What could be cooler than that? And isn’t the whole idea of art to break taboos? No one held a gun to the buyers’ heads. No court order required them to do it. They just did it, driven by some natural urge to part with their wealth.

And then what do you suppose happened? Even greater fools (where do they get these people?) came and paid even more. If a bull market can turn a moron into a genius, the art market deserves federal funding. It has done for the elite what the housing boom has done for the lumpen. They all think they deserve a Nobel Prize. What a delight for the art mongers! The buyers’ pockets are full, their heads are empty, and the coast is clear.

Recently, Chinese “artist” Zhou Tiehai decided to test the art establishment’s pretensions. At first, he tried various combinations of avant-garde collages. At one point, so to speak, he even stuck fellow “performance artists” with a needle…prefiguring his later jabs at the art community. When none of that took off, he must have asked himself what taboo could be left. Art itself, of course, the idea of the artist, busting through the icons of bourgeois society…liberating the masses from their subservience to the money gods and the sanctions of everyday convention. What better icon to hit with a sledgehammer? In short, Mr. Zhou decided to pull the art world’s leg.

What could be more commercial, more artistically shallow, more intellectually démodé and more culturally mal vue than that symbol of cigarette advertising – Joe Camel? Zhou hired some local hack artists (he saw no reason to get his own hands dirty) and drew out a few images – putting Joe Camel’s head into well-known, classic European paintings – and let his crew turn it into a work of art. Perfect, he thought, an icon of modern predatory commercialism grafted onto the work of a great master. They will see that I am mixing together the great and the crass. They will see that I am mocking the whole idea of icon-busting art.

“It’s really not that hard to create art,” he says.

Not the way Mr. Zhou does it. But in making fun of art, Mr. Zhou managed to put himself in the forefront of the taboo-bashing league of mediocre clowns who make up today’s art world. Instead of being shunned by the elite art collectors, critics and buyers whose legs he pulled, he was embraced by them.

Instead of slipping his paintings in their closets and admitting that they’d been had, they proudly put them on the wall…and paid as much as $100,000 for them.

But contemporary art is still going up in price. Vox populi, vox dei. Collectors and investors are making money, but pity them anyway. The “art” may be worth a fortune, but they have to live with it. No amount of money could be worth that.

Bill Bonner
The Daily Reckoning
May 19, 2006

Editor’s Note: Bill Bonner is the founder and editor of The Daily Reckoning. He is also the author, with Addison Wiggin, of The Wall Street Journal best seller Financial Reckoning Day: Surviving the Soft Depression of the 21st Century (John Wiley & Sons).

In Bonner and Wiggin’s follow-up book, Empire of Debt: The Rise of an Epic Financial Crisis, they wield their sardonic brand of humor to expose the nation for what it really is – an empire built on delusions. Daily Reckoning readers can buy their copy of Empire of Debt at a discount – just click on the link below:

“Now Perhaps Someone Will Listen!”

“High prices beget low prices,” said our old friend Rick Rule, speaking in St. Michaels earlier this week. “High risk begets low risk. High confidence begets low confidence. High stability begets low stability.”

Nothing is born under the sun that doesn’t die in the shade – including bubbles, booms and bull markets. We read in today’s news that the “Housing Boom has Gone Bust.”

What begat this particular bust was, of course, the boom that preceded it. Boom begets demand, which begets supply, which begets glut, which begets bust. Before you know it, the whole misbegotten property market is falling apart.

That seems to be what is happening in some parts of America now, according to Canada’s National Post.

A few months ago, “pre-construction” was a powerful compound word. The prefix was pure magic – at least in South Florida. It tipped you off that buyers didn’t really want to own another condominium apartment. They didn’t even want to see it under construction, and they certainly didn’t want to pay for it. What they wanted was something without a roof or a mortgage that they could unload to someone without a dollar or a clue.

That is what you get at bubble peaks. During the great tech stock bubble, too, the wildest profits were made in the weirdest investments – the dot.com equivalents of un-built condos – Internet companies with no revenues, no business plans and not a prayer of success.

But that is just the great glory of our free-market system; it allows people to make fools of themselves and lose their money on their very own with a flourish. (See the essay below for a current example.)

Thus, it is that in the south of the balmy state of Florida, the party is coming to an end. Gone is the razzle when a new development is launched. Gone are the acrobats, the clowns, and the bubbly. Gone are the lines of people waiting to buy pre-construction or post-construction. Gone, too, are the sales. According to the National Post, buyers are walking away from $80,000 deposits rather than close on new apartments.

As many as 29% of the people who took out a mortgage last year have zero equity in their houses, reports the Wall Street Journal. And there are 3.5 million units waiting to be sold – 30% more than a year ago. Delinquency rates are “soaring,” says the Journal.

Sic transit gloria bubbli.

More news from our currency counselor…

————–

Chuck Butler, reporting from the EverBank world currency trading desk:

“So, what’s it gonna be, boy? Your choices are: The strong inflation number from Wednesday, or the awful weekly jobless claims and the fall of leading indicators on Thursday?”

For the rest of this story, and for more market insights, see today’s issue of The Daily Pfennig

————–

And more thoughts from Bill Bonner and various others…

*** “Not surprisingly, insider buying has picked up as the market has shed over 500 points since last Thursday,” reports James Boric.

“Just this past Wednesday, my Small-Cap Insider System alerted me to a tiny $200 million company that makes medical devices. On the surface, this company looks uglier than a Baltimore-city ghetto at two in the morning. Until now, it has burnt cash to fund its R&D developments. And earnings weren’t even in this company’s vocabulary. But now it looks ready to turn the corner and start generating reoccurring revenues from several of its FDA approved devices.

“It just sighed an exclusive distribution agreement with GE Healthcare. And four insiders, including the CEO, put several hundred thousand dollars into this seemingly overlooked and beaten down stock. They obviously believe very strongly in its future.

“I recommended it at $4.33 a share this week. Even with the broad markets getting killed this week, this little company is up 5%. Gotta love that. And before it’s all said and done, I think this could easily be a $6 or $8 stock.

*** “In Gold We Trust,” begins an op-ed in yesterday’s Wall Street Journal.

“If none of the usual suspects is responsible for gold’s sharp rise, what is? We believe it represents an equally sharp decline in the confidence of investors – large and small – in the likelihood that Washington will pay back its mounting obligations in un-depreciated money. Throughout history, and especially in wartime, governments have escaped from fiscal over-commitments by letting their currencies depreciate. Ambitious spending initiatives, threats of international conflict, and even Washington’s political unpopularity all contribute in the fear that this is happening again now.”

*** Yesterday, gold dropped to $680. Should you buy now? Or wait for further correction?

There is no good answer. Yesterday, also, the Dow lost another 70 points. The stock market seems to have topped out for this cycle. Your best strategy is simple – continue executing the Trade of the Decade that we have been following since 2001 – buy gold on dips; sell stocks on rallies. Sometimes you’ll get the timing right. Most often you won’t, but at least you’ll be tracking the major trends, rather than fighting them.

“Bull markets and bear markets follow one another as surely as a person in- and exhales,” adds our old friend Doug Casey. “And, as with breathing, the longer you hold your breath, the more urgent and powerful the subsequent intake. Commodities in general, but precious metals in particular, went through a deep bear market that lasted an entire generation. Gold fell from over $800 in 1980 to $256 in 2001; silver from $50 to $4. These are fantastically deep and prolonged bear markets. But they were even worse than they seemed because the dollar was losing about two-thirds of its value at the same time. For Americans to keep track of value, over time, with dollars is as idiotic as for an Argentine to try to do that with pesos.

“The financial crisis of the late 1970s drove the metals to those highs. We’re now looking at another crisis, one that will dwarf the turmoil of the 1970s and likely bring on a depression worse than the 1930s. With so much trouble just ahead, there’s good reason to believe that the metals will exceed their old highs – which, in today’s dollars, means gold over $2,000. Let me reiterate what I’ve said for years: This time, gold isn’t just going through the roof. It’s going to the moon.

“Generally there are three stages to a bull market. The first is stealth, when prices go up but nobody cares or even notices. With commodities, that happened from about 2000 to 2003. Next is the ‘Wall of Worry’ stage. People see that prices are rising, but expect them to fall back to the bear market levels they’d gotten used to. People come up with all kinds of reasons why they’re overpriced. They are confused by the new reality, and many ‘old hands’ and commodity producers take the opportunity to sell, since they haven’t seen good prices for years. This is the stage of the market we’re now in. Finally, there is the mania stage, when broad masses of the public get involved. It’s where the big profits – but also the big risks – are. Personally, I’m more comfortable buying when everyone says you’re an idiot for doing so, or at least when they’re skeptical. When we’re all hearing about what a great investment gold is, I’ll be looking for other opportunities. But my guess is that we won’t really be there for another year. And when it arrives, the mania should last for some time, as it did most recently with the Internet stocks.

“While I was expecting to see a big surge – and went on record with that expectation on March 22 when gold was trading at $550 – there’s little doubt that gold and silver may be getting ahead of themselves for the short term. A market trend, even an unstoppable one – which is how I view the current metals bull market – is still going to periodically correct.

“Get used to it.

“That is especially true if you’re an investor in the mining shares, which is absolutely, without question, the right way to play this market. Buy on dips (historically, we see buying opportunities in the summer months) and don’t be chased out of the market by volatility.

“When this thing does finally come to an end, the better-managed gold and silver stocks will be trading for many multiples of what they trade for today.

“This trend is your friend…get comfortable with it.”

*** And another trend: “Iraqis fleeing the ‘slaughter farm,'” says a headline in today’s International Herald Tribune. “Deaths run like water,” says the opening sentence. Things have gotten so bad that the Iraqis are leaving – moving to Syria or Jordan or any country that will take them. Almost two million new passports were issued in the last 10 months, says the paper.

The critics are all over the president, whining, complaining, whimpering with indignation. But what did they expect? You can’t make an omelet without breaking some eggs. And you can’t make a new world order without cracking a few hundred thousand heads. The administration has more important things to worry about than the fate of a tribe of hopeless towel-heads; it has to stick to its program – of wrecking a great empire!

Meanwhile, War On Terror Inc. is eyeing another $2 billion in contracts for stiffening security on America’s southern border.

*** The poor Brits flounder in absurdity along with their American cousins. The front page of today’s Times tells us that the prison service paid one inmate $5 million in compensation who tried to kill himself. He wouldn’t have tried if he hadn’t been in pokey, the man must have claimed. The prison service now spends $40 million a year for legal services. It’s getting its money’s worth.

*** Yesterday, we noticed that the level of “low” culture in America was sinking. In today’s essay we add that even if you lived in a slum and watched reality shows all day on TV, you would have to stoop pretty low to reach the level of “high” culture.