The [Friday] Papers
By Steve Rhodes
Scott Watkins, the author of the latest economic study showing that Mayor Richard M. Daley and Chicago 2016 are out-and-out lying about the projected benefits of hosting an Olympics here - just as they lied about the funding of the Games and refuse to put the effort under city council oversight or state Freedom of Information Act laws - appeared on Chicago Tonight last night and lowered the boom.
Phil Ponce started by asking Watkins the explain the discrepancy between his study and Chicago 2016s numbers, which project four times the economic benefit that Watkins projects.
Watkins could only guess because "we can't place all the numbers together looking at their study."
In other words, professionally trained economists couldn't figure out where Chicago 2016 was getting its numbers from. (Quotes are reasonably close; I was taking notes quickly.)
"Our best guess is they are measuring total economic activity, while we're looking at new economic activity," Watkins said.
In other words, Chicago 2016 is attributing every economic transaction that will take place in the summer of 2016 - and maybe from now until then and for years after - to hosting the Olympics.
As a professionally trained economist who is neither a numbskull nor a propagandist, Watkins only looked at economic activity that would be generated by the Olympics. After all, the point is to measure . . . just that.
"There's a lot of tourism every summer," Watkins said. "Their study looks at all tourism that occurs regardless of the Olympics. We look at just what the Olympics will bring."
Breathtaking, isn't it?
It gets better.
Ponce asked Watkins if the city's projections could be met under a best-case scenario.
Watkins: Not even close.
"If everything went perfectly, maybe five or six billion. But to get up to $20 billion . . .
"Our numbers are the equivalent of 12 Super Bowls. If you look at Chicago 2016's numbers and cut them in half it's 70 Super Bowls. To think you could cram 70 Super Bowls [of economic activity] in two weeks in the city of Chicago . . . "
Watkins didn't complete the thought, but it's obvious where he was going. To a word like absurd, ludicrous, crazy.
And that's cutting Chicago 2016's numbers in half. Keeping them whole projects the economic activity of 140 Super Bowls.
Watkins repeated a few familiar economic concepts that have been borne out by reality time and time again. First, a significant amount of activity will be crowded out by the Olympics. Conventions that would have come won't come; families that might have come won't come; certain business activities actually will not occur.
And a significant amount of economic activity that would have occurred anyway will just be redirected toward the Olympics. For example, money going to the Olympics through private donations and sponsorships is money that would have been spent anyway - on something else.
Ponce then showed a clip of Daley claiming that no Summer Olympics had lost money in 35 years, which is laughable on its face.
The Montreal Games of 1976 is the poster child for financial Olympic disaster, though London is giving them a run for their money. Because Moscow followed with a financial disaster of its own in 1980, Los Angeles turned out to be the only bidder for the 1984 Summer Games - part of the reason L.A. actually turned a profit. It wasn't just that Los Angeles raised so much private money, it was that they didn't spend a whole lot of money. Being the only bidder, they didn't have to outdo anyone to impress the IOC.
But Athens, Sydney, Barcelona . . . Daley is right only in the sense that the federal governments of each of these cities covered all of the Games' losses.
"Atlanta made money," Daley said. "Andy Young would tell you that . . . they revitalize . . . Salt Lake City, transportation and roads. They've all been successful."
Nothing could be further from the truth - as Daley used to acknowledge when he was against bidding for the Olympics.
Watkins pointed out that while Atlanta's economy has grown since hosting the Games, it only grew in line with other cities in the same time frame. "To say it was because of the Olympics is a stretch," he said.
Economists Robert Baade and Victor Matheson studied the Los Angeles and Atlanta Olympics and came to the same conclusion.
"Information gleaned from the Los Angeles (1984) and Atlanta (1996) Summer Olympic Games indicate that the event's actual economic impact was more modest than that projected by those
"Economic theory casts doubt on a substantial windfall for the host city from the Olympic Games," the study says.
"Those who championed public subsidies for the Atlanta Olympics contend that the impact of the Games endures. Our evidence, however, indicates that the Olympic legacy is likely to be small . . .
"Diverting scarce capital and other resources from more productive uses to the Olympics very likely translates into slower rates of economic growth than that which could be realized in the absence of hosting the Olympic Games. Our other scenarios for Atlanta indicate job gains during the Olympics, but long-term job losses."
And if you want to add one more study onto the pile I've written about this week (and since the bid was announced), try this one, which I missed at the time:
"Supporters of the Chicago 2016 Olympics bid claim the games would be a big economic boost - both in tourism during and after the actual games and through the construction and other preparations that would take place in the next seven years," Steve Chapman wrote last spring. "What they don't publicize is that most economists who have looked at such events say we shouldn't believe the hype. A new study published by the National Bureau of Economic Research reconfirms that conclusion."
The most tangible benefit of holding the Olympics - economists conclude - is political. See Beijing, et. al.
And that makes perfect sense. We all know how much Beijing resembles Chicago City Hall.
Daley's Fantasy World
The City's Olympic Land Bank
ACORN Chicago Officials Bailed
The Political Odds . . .
Dissing Kenny Williams
Fake Plastic Dirt Redux
The Blue & Orange Kool-Aid Report . . .
I Am A Security Guard
The Beachwood Tip Line: Now with a multiplier effect.
Posted on September 25, 2009
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