It Takes an Olympic Village

Speaker 2

I have not been watching it conspicuously, but it seems to pop up and enforce itself on me because it's splattered all over social media and advertising and just turning on the TV. We see all these commercials about the majesty of the games. Do you find yourself, even though you're not so invested in it, do you find yourself keeping up with the metal count? Again, only when it's been forced on me, it appears on news websites, it's the little ticker on the side. But really, you know, I don't really care one way or another about the metal count. Yeah. You know, I was just going to ask, I was going to say, you know, Phil, who are you rooting for? And it looks like nobody. looks like you're agnostic when it comes to the Winter Olympics. I am indeed agnostic. I think it's actually kind of silly that there's all this nationalism wrapped up in it, both for some of the historical reasons. We have records of countries, Russia in particular, that's gotten in a lot of trouble of doping their athletes, especially in the Soviet era, to show that they were the superior economy to the West. And no, they were just really feeding athletes drugs and cheating to some of the rah-rah.

Speaker 2

nationalism that we have today. it's a very similar type of a thing. It's trying to push politics through sports, which I would rather have my sports apolitical. Well, I just love the idea that you could put nationalism behind these outrageous sports that probably shouldn't even exist like the idea of like the luge, you know, where it's sort of, I'm just trying to imagine being a lugeist. I don't know what the word is, but kind of like carrying the whole weight of your country on your shoulders and people have no idea who you are. zooming by at 50 miles an hour on an icy track, which does, you know, it looks like a scary sport. I'm not sure I'd want to do that myself. My favorite one's from the Summer Olympics. They have the speed walking thing. yeah. And they do races, they have, they regulate on their foot has to be in contact with the ground the entire period or else they're disqualified or penalized or something. it's a really ridiculous sport. to look at. You kind of watch it for the humor more than the intensity of the competition, and yet there's national pride riding on that. I wonder has anyone ever been caught doping for speedwalking?

Speaker 2

walking? That's an interesting question. What is the PED that you would that you could take to make you what you'd have to look more ridiculous, right? Yeah. Yeah. Or they have the horse dressage. It's horse dancing. That's another of my favorite from the summer games. They basically get trained horses to do like dance moves and apparently goes way back into equestrian sport history. And it's this relic from centuries past when that was a much more prominent thing. And yet it's again determines national pride and Olympic prowess apparently. I just love the idea that there are all these events that you never have to think of. They never cross your mind. And then once every four years, you tune in and you could pretend to be an expert on it. Like you could talk about these games like the same way you would like, you know, sports that are going all year round. Exactly. Obscure Sports Quarterly is kind of like the, they put it up there on the screening room. wait, we do curling again. Yeah.

Speaker 1

Yeah, and unfortunately, we we lost. Yeah. And when I say we fill, mean, you and I, and our country are holding our heads in shame right now, because I think we we said men's curling we we lost to the Swedes. that they let us down. guess one thing that's kind of intrigued me, I've been watching the curling clips that have popped by and they have this thing, it's like a giant protractor that they put out in the middle of the target zone at the end to measure centimeters and millimeters to figure out who's closest when they award the points. So it's a really intense, serious looking judge that's going around there with this giant protractor looking thing. apparently pretty intense about it. Just to show you how intense we are, I made a very big error and our producer just let me know that it was not men's curling where the US lost to Sweden. It was mixed doubles. My sincere apologies to anyone who I harmed with that misinformation. I will try to do better for the next 20 minutes or so as we talk about the Olympics. So with that, I'm wondering, you know, is there an economic benefit? to a country that hosts the Olympics because there's always this big, you know, there's always this pomp and circumstance about, you know, which country gets to host the Olympics and are they is it are they making money off of it?

Speaker 2

Well, they always claim that they are. This is one of the major things that they sell to the public to invest in the infrastructure to bring the Olympics to your city. And, you know, every couple of years we go through this routine of cities submit bids and then their country picks them to be the representative example. Then they all go to an international committee that awards a bid. It looks like it's supposed to be like this honorific system, but really you find out behind the scenes there are a of deals being cut. And some of those deals include making your city more appealing to the International Olympics Committee, the decision makers, by investing taxpayer resources in building stadiums and building venues and curling arenas and dressage tracks and whatever they do the speed walking on, special courses for that. know, most famously, they even put in a sewage cleaner system in the Seine River in Paris. in the summer Olympics, the last time around, so they could do these swimming events in the river in Paris. They had to get all the muck and sewage and garbage out of there to make it just sanitary enough to do the event. it's multi-millions, if not billions of dollars in public infrastructure that often goes into these projects. And the claim is that, you know, if a city hosts the Olympics, they attract all these tourists that show up for about two weeks. They get international acclaim. There's a lot of money that comes in from all the different teams that are sending their athletes there. And supposedly it's a win for everybody. But this is like a cost benefit analysis where you're only doing the benefits and you're ignoring the costs. And oftentimes the costs are not realized immediately in that two week period when the Olympics is going on. They're spread out years or even decades afterwards because the city or the host country had to take out bonds to build the stadium. And that means, you know, like 30 years from now, your taxpayers are saddled with paying for the speed walking stadium or whatever else they built. And we have a long history of city after city that has gone into extreme debt just to build the infrastructure to make their bid appealing. And then many, many years later, they face a budget crisis.

Speaker 2

because there's no real use for these stadiums after the Olympics are over. They become decrepit and they start falling to pieces. It looks like a war zone afterward. You have like an abandoned bobsled track that's been rusting since the 1980s, this happened in Sarajevo after they'd hosted the Winter Olympics. You have abandoned stadiums in China and in Brazil, some of the recent Summer Olympics venues that were purpose constructed for those two weeks. And now it's like an empty swimming pool that has algae growing in it or a an empty soccer stadium that's falling apart because there's no longer a sports team that plays there. It's sort of like the broken dreams of every Olympian who doesn't medal. It's really sad. I've seen pictures, I believe it was from Sochi in Russia where they had, I remember they had the Olympics there and for some reason I think it was, they were going through kind of like a warm spell. they did the Winter Olympics and it. just things weren't going right. Right. a lot of it. But yeah, to see like those abandoned those abandoned structures. And you know, in a way you see those structures and you're like, couldn't they just do it there again? Like, couldn't they? Is it possible to build like, I don't know, an Olympic world? just have it on rotation, kind like the Super Bowl schedule. know, this year it's in Cleveland, this year it's in San Francisco.

Speaker 2

but do that on a world schedule. But no, it's part of it's the one-up-smanship to make the bids to the International Olympic Committee, the deciding figures, you have to show that your city is not simply using its old football and soccer and baseball stadiums. It's actually investing in something new to make the bid more appealing. And what's really going on here is the cities are transferring the costs onto future taxpayers and the taxpaying public in general to get a very short-term benefit of about two weeks in the spotlight for this international sports event. So the payoff and the return for it is actually deep, deep in the red, just by the act of hosting it. mean, almost every single city that hosts the Olympics goes into massive debt, but... They get short-term political appeal because everyone gets to rally around the nationalist feeling or the honor of hosting the games. And this is actually a relatively new invention that tended to emerge in the Olympic scene really after World War II. Cause you know, you go back to the early Olympics and they're just kind of picking a city and it's like the contest is held at the local universities sports field. they're not. all-star world-class facilities. It's the place that on the weekend they're playing soccer on or they're playing football on or, you know, repurposing existing stadiums. Now it's like you have to build a brand new purpose-built stadium just to host the event and it's supposed to become a monument, like a national Olympic stadium, but a lot of the events in the Olympics because of these obscure sports, they don't have a regular returning customer base. So it's not like six months from now, dressage season starts again and all the people are coming to watch the horse dancing.

Speaker 1

You've brought up dressage quite a bit. think you might be a pretty big fan of it. That was my favorite event in the Summer Olympics, just watching the horse dancing. You know, guess even if you have like, say, you know, five cities, you know, kind of switching off the Olympics, I mean, it's still just, they're each going to do it once every 20 years, right? why is it that the Olympics are held every four years? at absolute most.

Speaker 2

Yeah, I think it goes back to the, so they started in the late 1800s, the guy that revived them, it was the modern Olympic games. And they took inspiration from ancient Greece. And this was supposed to be when all the city states basically dropped all their swords and quit battling and going to war with each other. And then they had a big sports competition. So it's, it's kind of part connected to that. And then when we got the modern Olympics in the late 1800s, they set it on what eventually became a four-year schedule. used to be the summer and winter Olympics were in the same year, but they were like, that's a little bit Olympic overkill. So they started spreading them out. So they alternate the summer Olympics or every four years from the next summer Olympics, but in between there's a winter Olympics. So there's a two-year gap. where you gotta have a you gotta have a war in between right? You have a winter Olympics, fight a war, do the summer, you know. Yeah, yeah. they, know, there's kind of an ugly history there. The 1936 games was the infamous one in Berlin where you had Hitler in the stands reviewing everybody. kind of had a political come up, it's there because the Americans came and Jesse Owens, the famous African-American track athlete, wins all the races and embarrasses Hitler's claims of the Aryan supermen. But it was also a big propaganda coup. The German government issued films for this thing. And then it was supposed to go to Tokyo in 1940, but the war broke out. And we know which side Japan was on in that war. they...

Speaker 2

really delayed the games and kind of an interesting history and how this intersects with the politics of it all. It is interesting to be talking about it now because it's sort of like we've almost forgotten just how much of the political history is there. We're talking about post-World War II, Cold War, and now it's sort of like if you don't have... like a hot war, you know, going so the United States and the Soviet Union, you're able to, you know, you have these proxy wars and all that, but you but you're able to battle it out in this in the sports arena, which I get, you know, I think looking back, I'm like, Okay, I'll take that. Get out. And we saw this in the Cold War. The famous one was the Miracle on Ice, I it was the 1980 Olympics. It's where you have the United States versus the Soviet Union in the hockey finals. And of course it's playing out as these two great rival world powers are fighting a cold war. They're not throwing bombs at each other yet, but they have all these little proxy political battles. And then they get to the finals and the hockey match. And it's like the hockey game determines

Speaker 2

which is the superior society. So it's kind of interesting. It's a diversion. It doesn't really answer the question, but there's like political acclaim, yay freedom, we beat the commies. And you know, hey, I'm happy that happened, but you very much see the national pride of the current political event wrapped up in what's going on in the Olympic stadium. Again, we saw that in Milan and Italy just over the weekend in the opening ceremony. JD Vance shows up and he's not very popular either in the United States or worldwide, especially not worldwide. And we've all seen the video clips. They're zooming in on him. And then when his face comes on the Jumbotron, the stadium starts booing him. because its political events are definitely wrapped into this. I think the lesson here for me on that is politicians should stay away from sports dating. Unless they're competing unless they're competing look if vice president Vance or any other Republican or Democrat, you know elected to office wants to get on the skeleton Get on the bobsled team, you know, put put your best foot forward. I'm with you on that. Yeah I mean, have Nancy Pelosi in the speed walking competition against, you put some Republican senators or something up against her.

Speaker 1

talking about like the 1980 Olympics and that game the the miracle on ice is truly incredible. And part of the story, but that's interesting is that that wasn't even the finals. So after the US beat the Soviet Union, they had to play Finland in the finals. And I believe I forget which period it was, but but they were down. And their coach, you know, had to remind the Americans like, if you lose this, this is basically you're taking this to your to your death to your grave. It's like, you know, wake up, you have to win this. beat the Soviet Union, now Finland. If you know your history, Finland is one of the few countries in the world that beat the Soviet Union in a war. In the middle of World War II, they basically repulsed a Soviet invasion. There's been a number of really great documentaries made about the Soviets who were able to finally go and play in the National Hockey League in the US. Fetisov is one of the great defensemen who and the Detroit Red Wings had a lot of Russians on their team. And when you hear the players themselves talk about competing with one another, I don't see a lot of the bluster, a lot of the politics there. think a lot of them are really when they talk about it, they talk about it very much as the love of the game. And I forget which Soviet player talked about the end of the miracle game, you know, looking over at, you know, these young college kids from the US celebrating and saying that he wishes that he could feel like them. Right, right. Understanding he knows how great the Soviet hockey team was to be able to feel what it feels like to be an amateur and to have beaten the greatest team in the world.

Speaker 1

you know, it's something that must have been just indescribable. Yeah. You have this whole history in sports of people fleeing from unfree societies to play in the professional sports league in the United States. Historically, when we're this beacon of freedom, especially happened in hockey in particular, it's a popular sport in Eastern Europe and in Russia during the Soviet years and the Eastern Bloc. You had players starting in the 1970s, they make the jump over to North America. to play in professional hockey leagues here just because it's a freer society. There's actually some opportunity. You're not in the rigid state-determined government program to suss out whether you make it to the national team to defend the Soviet pride or the Eastern Pox pride in the game. It's actually something of a competitive mechanism with the players being able to have some determination in their contracts. And a lot of people don't they don't realize just how you know what how much of an iron fist, for example, like the Soviet Union had over their team over their players. Wayne Gretzky tells a story about hosting some of the players when they came to Canada to play and basically having to sneak them beer basement because they have their their their company by KGB guys. Now just imagine that just imagine professional athletes. being followed around by FBI agents and cops and et cetera, not for their protection, but to make sure they don't do anything that goes against the revolution or whatever.

Speaker 2

or prevent them from defecting to this new free society that they come in here. It's like your national champion, your sports figure that's supposed to represent Soviet greatness, arrives in Canada and suddenly decides he doesn't like Soviet greatness all that much anymore. He wants to stay. You've got a political problem back home. So the fact that the government of something like the Soviet Union, or you see this in China today, uses these athletes as political pawns to project themselves in the world scene, It comes with that real danger to themselves because the athletes themselves have some agency in this. They don't always want to be the political pawn. Sometimes they just want a better life. And with these matchups, the US versus the Soviet Union, is that sort of thing just of a bygone era? Do we have that anymore? There are instances, I know, on the world stage where, for example, if Israel is playing, you'll have some commotion or boycotts or even sometimes walkouts, refusal to play. But other than that, there are major large countries where I see that happen. Yeah, you don't have the...

Speaker 2

dual great power struggle that you've had of some past Olympics. So the United States versus the Soviet Union, which was the stable thing for most of the Cold War, or you have particular Olympics like Nazi Germany versus the free world countries. Everyone knew that something bad was coming, they feared a war was on the horizon. Certainly the political situation was bad. So the Olympics become a backdrop to that. I don't think there's anything of that nature right now. Although you do hear some of the rhetoric around, know, China invests a lot in its national team to try to become the new superpower. So you see some concern about that emerging in the future. You know, unless there's particular conflicts, I don't know if they have Olympic dogsletting yet, where you have a rivalry between the US and Greenland breaking out because of Trump's designs or something like that. We're gonna be doping so many dogs. It's gonna be insane. you know, let's it's a lot of fun, I think, to talk about, you know, the scandals, the of the Olympics, the, you know, bribery and bad actors and that sort of thing. What are some that that that come to mind? Because something that I found was there was obviously, I think the the World Cup is coming up, that's going to be in the United States. And there's You know, I've heard quite a few people saying that they were going, they weren't willing to travel to the United States because of the problems with our domestic policy. Right. when I look at other places that I was in the World Cup, I'm like, wait a minute, were we just in Qatar? Qatar? Not too long ago? It seems like quite a few kind of authoritarian regimes are able to have their cake and eat it too. Bribery has become a major problem in Olympics. the United States went through this, the Salt Lake City games, when they hosted the Winter Olympics a couple decades ago. There was a big bribery scandal where public officials were caught basically paying off members of the Olympic committee in roundabout ways to secure that as the city. And famously, Mitt Romney, he raised his political profile by stepping in there as the guy that was tasked with cleaning all of this up.

Speaker 1

man. So there's a long history of this, you see it in other countries as well with much less robust legal regimes. So a lot of the bribery, seem to get away with it. Other international sporting events like the World Cup, any of these major international sporting organizations, there's almost always a bribery scandal somewhere in their recent history. And I think what this reflects is the graft and corruption that's invited by the games. If you're basically saying, you know, in order to give the games to me, I'm going to invest all this money in infrastructure and hire a bunch of people and award public sector contracts to build stadiums and roads and improve the transport and all the different things that you need in the city, there are a lot of opportunities in there for corrupt people to get a friendly favorable deal from the local government in exchange for, know, I'm going to give you a bid on the new stadium contract, but I'm going to have cost overruns by 50 % and I'm going to pocket the money, that sort of thing. It's just a classic rent seeking trap. with public works and in a very acute scale because it's a purpose driven thing. And because you're on the world scene, all the political incentives align. It's like, well, if you're going to do the Olympic games or you're going to do this major sport event, you have to do it right. You have to make it all magisterial on TV and fit for public consumption. And that comes with like a spare no expense mentality, which

Speaker 2

you know, if I'm a friend of a politician or maybe a corrupt local official or a corrupt official in the governing body of the sport, and they're basically saying, we're opening up the checkbook to give you whatever you want, then I start asking for some money. You know, we have the winter games. We have the summer games. I wonder which one is the bigger moneymaker. I would imagine it would be the summer summer. I feel like there are a more eyes on that. And with that, I wonder if you're seeing if you'd be seeing more of that grift. interesting like, yeah, comparison because you have the summer games, you actually get some pretty mainstream sports, so basketball, for example, and you have legitimate all-star basketball players that go into the Olympics. Everyone remembers the dream team of the United States in the 1990s when you had, it basically looked like the all-star team of the NBA and it just goes out and clobbers everybody. But it's like, hey, you can watch these future Hall of Famer players. on an Olympic team, that's kind of cool. So that's a huge draw. But it also turns out that a lot of these sports, I'd even say the vast majority of sports on the Olympic scene are money losers. That's also why they stick the obscure sports running at like 3 a.m. on NBC as a rerun. And they try to put the, so it's always the solo figure skating is the one that everyone likes to watch in the Winter Olympics. So they always put that in prime time. And then like 3 a.m. is like the qualifying round for curling or something.

Speaker 1

And it seems like a lot of the those obscure sports seem like a financial drain on the athletes too, right? Because if you think about the amount of time and training and everything that you need to do in order to be a competitive Olympic athlete, and then you're doing it for a sport where maybe all that you have in front of you is possibly a medal and not like big sponsorships and that sort of thing. amateur history of the game and this was all tied to the notion of the integrity of the sport. When they set this out in the 1890s, that you only allow amateurs in there and they've relaxed those rules somewhat. know, it's similar to the NCAA problem for US college athletes. These are big money-making events to some people on certain levels. And then at other levels, the athletes are not actually getting paid for what they're doing, even though it's on like prime time. national television for the championship game. So International Olympics, a lot of it is not every country has heavy resources invested in their particular sports. So there are long records of this, of medalists selling their medals because they don't have a source of income anymore. And even though it's like they won the gold medal, but they'll put it up for auction after the game just to actually get something out of it or when they go into retirement. More recently, there have been some scandals of, you know, prospective athletes on Olympic teams that did some things on certain websites that aren't exactly PG-13 to make money on the side. And they actually got expelled under the moral codes by their country's Olympic committee. But they always go into the news and they point out, well, wait a minute, no one's paying me to do this. I had to make money some. Just think about me. I'm nobody's paying me to do it and I'm not an Olympic athlete, know, so all those scandals I had to do it to feed myself and my family if it seems like the financial loss is for everyone except for the TV networks, right?

Speaker 2

Yeah, or the local politicians even more so. The politicians that got bribes in their pockets or cut a sweetheart deal with a construction company. And again, so it's a loser for a lot of the athletes that they aren't really making much money on it. They get fame and glory if they win, but that is also very transitory. It's a loser for the local economy because they're stuck paying off bonds for 30 years for the... dressage stadium that no one will ever use again. But who wins? Well, the local politicians that cut the deal, their cousin who owns the construction company that built the stadium who got that money and left and it really doesn't matter if the stadium is never used again because the money's been paid out. And then the international governing body, the corrupt official that took money under the table or something in exchange for awarding it to that city. So it's a classic case of rent-seeking politicians and politically connected people making off with loads of money and saddling the public and the taxpayers with that in terms of debt. And at insult to injury, I heard that a lot of those gold medals aren't even gold. They aren't even gold. Well, yeah, they keep having this thing. Apparently it's been a problem this year is like the athletes, they received their medal and then they're like waving it around or something at the bar afterward. And then it breaks because it's got some cheap plastic type stuff on the inside. It's like coinage. Coinage has been devalued. They took precious metal out of it and put zinc and copper on the inside of it. And it's no longer really worth anything. Olympic medals, turns out, hey, they're plastic on the inside.

Speaker 1

And in a way, aren't we all plastic on this side? Phil, thank you so much for talking to me about. you

Speaker 1

the Olympics, which you have no desire to watch, but it was very fun to hear your thoughts on it. We hope all of you enjoyed our discussion of the Olympics and we hope you're enjoying watching the Olympics as well. And if you're out there, tell everybody about happy hour econ. We consistently come in at least bronze, I think when it comes to what we're producing and we will see you next week.