Of course they do, but if they care about the value and one of the props holding up that value is undercut how could that not drive down the prices? And at some point such falling prices would generate a rush for the exits as the prices collapsed completely. Again, I am not saying that eliminating the NEA would all by itself cure the problems of the art world, but I think it would be a great start.
But that lack of aesthetic quality is all the more reason why its value is founded elsewhere, such as the support of modernist institutions such as the NEA, universities, and so on.
But marketing of what to whom? If they have to market their art to the people who are supposedly enjoying it then they will need to produce something that people will genuinely want to experience rather than something that will convince some grant committee or academic writing in a journal that they are doing something worth spending money on.
Sure, so let's at least stop the bleeding by stopping the "seed funding" of that stuff happening in the university art programs, NEA grants, funding for "performance art" spaces, modernist journals, and so on. Without such things propping up artists good and bad, the ones that will tend to survive and thrive will be those offering genuine aesthetic value over those with political connections and academic credentials.
You are right that opposing modernism creates a backlash against us "philistines" but I think that's something we need to live with because if we don't do anything that will annoy them they win by default.
--Brian