The Economy and the Olympics
Although the Olympic flame was extinguished just a little more than seven months ago, already there are some who wonder whether the 2008 Summer Games in Beijing marked the end of the Olympics as we’ve come to know them.
“The economic climate has got to be taken into consideration; you just aren’t going to have the huge spectacle that Beijing was,” said Andrew Bacchus of United Kingdom Trade and Investment, one of the groups responsible for securing financing for the 2012 Games in London.
In these days of global financial uncertainty, it’s hard to envision any sports extravaganza approaching last summer’s — in its over-the-top theater or the estimated $45 billion that China shelled out.
It’s not necessarily the worst thing in the word if you believe that the Olympic Committee is mostly a rent-seeking organization. If you believe in substantial positive externalities generated by the Olympics, it’s not so good. I count myself as mostly being in the first group, although I don’t deny there is some degree of “publicness” associated with big-time sports. But if anything, the current economy is forcing people to remember that thing we economists talk about until we’re blue in the face: we face trade-offs all the time.