Thursday, February 11, 2010

"Olympic Village: Athletes Impressed, Taxpayers Angry"

That title alone is all you need to read to understand the nature of the state, but here are the particulars:
Paid for, thank you very much, by the taxpayers of Vancouver. More than any other project in recent Olympic history, the $1 billion residential complex represents the risks that urban governments face when trying to host one of the world's biggest parties. The city planned to invest about $47 million in the project back in 2006. However, cost overruns and the recession forced Vancouver to step in and bail out the private developers who were charged with financing the project. The city avoided the humiliation of welcoming the world with a half-built Olympic Village, but at a great price: in early 2009, new Vancouver mayor Gregor Robertson declared that taxpayers were "on the hook" for the $1 billion project. "What ended up happening was that the city became a bank for private-sector development," says Mark Cutler, director of Olympic Village Development for the Vancouver Organizing Committee, the body that is operating the complex during the Games. (See what becomes of Olympic stadiums.)
"Bank"? A real bank doesn't want to lend if it thinks it won't get repaid. However, taxpayers as a "bank" fits with the denouement of the movie "The Night Stalker": toward the end, Kolchak finds a victim that the vampire was keeping alive. "His own private blood bank."

Pay very close attention: this is how the state invariably works. It doesn't want to kill you, at least not until you can be replaced. Remember what St. Frédéric taught us: "The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else."

When Salt Lake City began a second Olympics bid in the late 1980s, the contemptible Norm Bangerter, Utah's governor at the time, had no problem turning state taxpayers into human collateral. It was then that I learned that modern Olympics bids mean that developers get an implicit guarantee from politicians that taxpayers will pick up the tab for "cost overruns." What I didn't understand then is that when the state makes you pay for something against your will, you are most certainly human collateral: it isn't just your property being taken (or being promised by someone else to yet someone else), it's your very life being stolen, because you will never get back those moments you spent to acquire that property.

Those who don't understand that morality, or refuse to see it, should still be able to see the practical question: what possible motive do the organizers, developers and other Olympic affiliates have, then, to keep costs under control?

Robert Barney, director of the International Centre for Olympic Studies at the University of Western Ontario, has flatly said, "There has never been an Olympic Games that has made a profit...including federal allotments, municipal allotments, provincial or state allotments, it's always been that a debt has to be paid somewhere." His co-director, Kevin Walmsley, has said, "The Olympic Games are not a profit generator and never have been. What is always consistent is, there are always cost overruns." The facts prove them correct. Forget the lies that politicians, Olympics officials and developers feed us. Their accounting methods in the private sector would land people in jail for fraud.

I commented last October over at Alarming News:
Olympics are corporate welfare. Any infrastructure won't be built based on what actually people want and need, but on politics. If it's done in a free market, then businesses and "organizers" would be putting up their own money, and nobody would be forced into it. The reality, though, is that taxpayers are always implicitly put on the hook for any "cost overruns." They'll share in the debt, but not the profits.

Poor Rio. I hate to say "Better it happen to them than us," but how else can you put it?

Jamie, I've known enough to oppose Olympics since I was 12 years old, when I lived in Salt Lake City during the start of its ill-fated quest. No modern Olympics has ever made a profit, once all costs are taken into account. Check here:

MONTREAL, 1976: Debt: >1 billion (globe and mail;
LAKE PLACID, 1980: Debt: $11 million
CALGARY, 1988: Debt: $910 million
BARCELONA, 1992: Debt: US$1.4 billion
SYDNEY, 2000: Games billed as self-financing by politicians were a $2.3-billion loss (Auditor General New South Wales Report on Sydney (2000) Olympics)
The same link notes that:
Officially, Atlanta made US$10 million, but that excludes the US$1 billion taxpayers spent on infrastructure.

Utah tax revenues post-Olympics have fallen so far short of predictions that the state is facing a US$155 million shortfall, has slashed spending, dipped into emergency funding, and may have to order more employee layoffs.,1249,400008943,00.html
It's a very simple point of logic: if hosting an Olympics is such a great moneymaker for developers and city businesses alike, then why are taxpayers needed to guarantee it?

Bastiat wouldn't need to know anything else about our modern world to tell us the simple answer. He would reply, "Developers already know from past Olympics that they can't do it without taxpayers, whether to guarantee the debt or to pay for infrastructure. Do you not see it also?" The developers are just a modern form of protectionist, whom Bastiat described as petitioning to the government, "Thus, since everyone else uses the law for his own profit, we also would like to use the law for our own profit. We demand from the law the right to relief, which is the poor man's plunder."

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Blogger Underground Carpenter said...

Hi Perry,
Good post. I always wondered about who bore the costs of the Olympics.


Friday, February 12, 2010 2:57:00 PM  

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