I think it depends on the scale..
of course monumental things like architecture, sculpture, huge murals, large performances, etc will fall into decline because these things require $$$ and in many respects are public works projects.
much of the "art" of the western tradition are in fact these things, and this is why during economic problems people fear the "arts" will fall into decline..
however, smaller scale art.. street art.. and the art of individuals such as writing, painting, and music will definitely thrive in this increasingly humanistic environment. This kind of art depends upon sincerity and authenticity, thinks which impoverished conditions tend to foster. Further poverty creates an audience for this kind of art.
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