The London Olympics Are Looking Like A Financial And Organizational DisasterReported by Business Insider on Thursday, 10 May 2012 (on May 10, 2012)
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 As part of my London trip, I attended a university track and field event at the Olympic Park . On the northeastern outskirts of London, this is a former industrial wasteland that has been transformed with $15 billion into a consumer/spectator wasteland (enough to fund three or four Shanghai Disney resorts). Paths between venues are on a vast inhuman scale, with hardly any art or sculpture to break up the long walks.
Athlete housing is visible from the park and it strongly resembles the Cabrini-Green housing project. Supposedly the apartments will be turned over to local residents (who tend to be low-income immigrants from Muslim countries; this is the same area that was supposed to be home to the largest mosque in Europe) after the Olympics.
It is tough to understand how this is all going to work for spectators. With the stadium literally only about one percent full, there were long queues for coffee and snacks. It took about 10 minutes to get through an airport-style security process with complete X-ray and metal detector screening. An average of about 100,000 people per day show up at the world’s busiest airports, but they tend to arrive in a reasonably randomly distributed manner. The stadium alone holds 80,000 people and they will be arriving in tight blocks.
The English are going generally crazy spending money for security (story putting the total cost of the event at $17.6 billion). There are surface-to-air missiles being mounted on rooftops. In case the British military needs to invade its own country, while I was there they sailed their navy’s largest ship, a 22,000 ton amphibious assault vessel, up the Thames (story). If nothing else, billions spent on security has to be considered a subtraction from a nation’s wealth.
Ordinary London residents are expected to suffer miserably during the Olympics as well. The Tube is full of posters telling people to expect queues of up to one hour in length to get onto the subway system at the busier stations. They also suggest walking or riding a bicycle. Presumably much of what visitors spend in London during the Olympics will be offset by locals fleeing to Spain.
Is this all worth it? I can’t figure out what the economic effect of the games is supposed to be, even in the best case. Tickets are about $160 per person per event. Presumably most of the spectators will be from the U.K. Even if they sold enough to break even would that be a gain for the country? How is it different than growing GDP by breaking windows and re-glazing them? A person who spends $600 to take his or her family to an Olympic event has a happy memory, presumably, but is not any more ready to be productive than a person who takes $600 in cash out to the backyard and sets it on fire. If a vibrant sports culture and a lot of interested spectators could help a country grow, wouldn’t Nigeria be rich? The Greeks are passionate enough about soccer to set their stadiums on fire (story) but that doesn’t seem to be helping them pay their debts or grow their economy.
If mass spectator sports are not helpful to an economy or to a people, why do governments keep pouring tax dollars into them? In a 2009 blog posting, I wrote that it was might be because a politician can use taxpayer funds to build his or her career. In the case of London 2012, however, it does not seem as though the politicians who committed the taxpayer funds to host the event are still in power.
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