The inspiration for my blogs is the four mile walk that I take around the reservoir in Central Park here in NYC. When I think about politics, which I try not to do as a rule, I usually do not want to write about them. Herewith, nonetheless, is my contribution to the political races to date.

What I find interesting about the race for president is how the candidates perceive the electorate. For example, Romney and Clinton seem to want to be all things to all people. Giuliani, on the other hand, has cast himself in a Bushian mould of decisiveness. Edwards is working for the people and Obama seems a little lost. The NY Times doesn’t seem to cover the rest of the field that closely and I hate to admit to it, but they are my primary news source.

How the candidates get elected is a very different thing, as our current president has proven, from how he/she leads. Indeed, that is what we really need, a leader. The camouflage of running in the primaries makes it very difficult to know if we have a leader. I would fault the current OOO (Oval Office Occupant) for his leadership abilities, not so much in being able to stir us into action, but more for the choices he has made on which paths to take the USA down. Our nation needs more than he can supply.

Ultimately, the electorate panders to itself in a big way. Hard choices have nothing to do with less or more taxes. Hard choices have to do with deciding to work for the future, not just for today. Toyota has worked for the future since it was founded and is now the world’s leading seller of cars. We need to think about things in a fundamental way that might upset temporary profits but prove profitable in the long run. It is a lot to ask, but it is the right question.


Thinking about it, I don’t think I want a leader as president of the USA. I want a manager, someone who will focus on education, infrastructure and health. If those aspects of the country are solid, the country will be able to weather a great deal. If not, this country will lurch into being an also ran in world affairs.

The article that I cited yesterday, “The Secrets of the Auction Houses”, quotes several econmists talking about the secrecy in the bidding process at auction. This secrecy can lead to the manipulation of bids, according to the article. One economist, George Akerlof, said that capitalism is great at making things that people want, but if they don’t know what they want or what to pay for something, institutions will develop to take advantage of them.

Isn’t this the essence of capitalism? Create excitement and sell something for as much as you can, viz. the Apple IPhone. That is what auctions do these days. I can have an item in my gallery for less than it may sell for in auction. Who cares? The buyer doesn’t because he hasn’t done his research and if he finds out that he paid too much, what can he do about it? (Ignorance in this case is bliss.) And then he can always claim that his is bigger…., I mean better.

In essence, there is no bad capitalism. If someone pays too much for something, they may take a loss when they go to sell the item. Then again, if there is enough hype when they go to sell, they may even make a profit. Is there a problem with this modus operandi? Of course there is, but reality says that there is a sucker born every day and that isn’t the fault of either hype or capitalism.

An interesting article in the online Wall Street Journal by Daniel Grant entitled, “The Secrets of the Auction Houses” refers to the Nobel Laureate (2001) economist George Akerlof as calling the art business “bad capitalism”. What he points out is that the urge to buy, the bread and butter of the arts and antiques business, supercedes the rationale of supply and demand, the basis for capitalism. The sobriquet, bad capitalism”, is his name for this phenomenon where people pay more than what an item is worth.

And what a phenomenon it is! As I have noted many times, my admiration for Damian Hirst increases with every artwork he sells. His art befuddles me, but he is a master marketer. So too is Sothebys, as witnessed by numerous sales from the JFK detritus on down to the most recent Ariane Dandois sale which, to put it mildly, needed all the hype it could get as the goods were garnering very little dealer support. (Ms. Dandois’ reputation as a great antiquaire was rather like the stage set for her sale at Sothebys. It was a beautiful sale.)

I have had a number of businessmen clients who have felt that the auction houses are a sure fire way of knowing that you are paying a fair price simply because you have an underbidder. Similarly, dealers have been roasted for buying things in salerooms and taking them to a show and asking double or treble for the item. Dealers can be so dumb, that is true, but they can be said to be quite knowlegeable from time to time. Truth be told, save for in ultra-hyped sales, I would say that ninety-five percent of all items sold over estimate were sold to dealers. That is what I would call the knowledge affect and it bears no relationship to the sure fire investment theory of having an underbidder.

I look at all this, and I could write on this subject for some time, sort of like I look at the stock market. Why didn’t anybody tell me about Microsoft 25 years ago? Who should I lambaste for this failing? Similarly, when I look at the $50,000 my grandfather put into trust for me and my siblings in 1924 and see the princely sum today of $273,000, I have to say that the world just doesn’t seem to know that “bad capitalism” isn’t just in the art business.