World Cup Runneth Over

Speaker 2

Phil Magnus the Economist. Till man.

Speaker 1

Tonight the US is joining the round of sixteen against Belgium. All of this is to say, ⁓ I hope this means something to you. Otherwise I feel like I'm just blabbering Phil. Does this mean anything to you?

Speaker 2

I I've never been a huge soccer fan, ⁓ although, you know, you root for the home team and the home team is the US right now. I do think that the spectacle aspect of it is interesting in the sense that ⁓ you know, it it gives people something to celebrate. It's a different sport that's on in the bars and it's a different ⁓ customer base that's coming out to see the games. But you also still have the same problems associated with ⁓ major sporting events that quite a bit of it draws on public support and subsidy and kind of these false claims that it's an economic booster.

Speaker 1

Well, something that that I found really interesting is, you know, you're talking about a world competition where there are a lot of rivalries, heated rivalries, unwell unlike the the show Heated Rivalry. ⁓ who knows? But you know, who knows what's happening behind the scenes? But a lot of rivalries, some of them, you know, centuries old. But there's one thing that I think is really bringing kind of the world together for this World Cup, and that is the United States. The fact that the United States is one of the hosts. We have the US hosting, Canada and Mexico.

Speaker 2

Right.

Speaker 1

Yeah, I don't hear anything about Canada. I don't hear anything about Mexico. All I hear and all I see are, you know, foreign tourists coming here and just falling in love and being amazed at this beautiful thing we call America. Well

Speaker 2

Well, i this is one of the funny things about it because right before all the World Cup stuff started, there was kind of this internet debate going on over whether Europe or the United States ⁓ was like more economically ⁓ abundant, was a better place to live, better quality of life. And ⁓ you know, people were pointing to statistics from the United States, we have a much higher GDP per capita than most European countries. Even our poorest states, like Mississippi, is almost always at the end of that list. ⁓ higher GDP per capita than major European nations that we think of as ⁓ kind of like our economic ⁓ peers in that sense. So people were pointing to the statistics and then you had some on the left like Paul Krugman jumped in and said, no, no, no, there are other metrics of lifestyle in the in Europe that clearly make it superior. They're also better on climate change and all these long term policy goals and stuff that they purportedly have. Yeah, here we have the World Cup and all these tourists are coming to the United States. And one of my favorite things about it is they're posting on their social media feeds in awe and amazement at ⁓ stopping at the Buckeys gas station because they've never seen anything like it. And I I think it's it's, you know, several people have made this point. It settled the debate pretty conclusively in favor of the United States. ⁓ that we have better stuff, more stuff, more abundant, it's cheaper. Generally lifestyle here has many, many advantages over ⁓ kind of this new European approach that was being touted in triumphant ways before this ⁓ sporting event broke out.

Speaker 1

A couple of years ago I did a little tour. My ⁓ chaperone, my ⁓ my driver, the producer who was putting the whole thing together, insisted that I go to a Bucky's. Yeah. And I was like, I'm not really interested. And he insisted that I go. And I think technically it might have been may have been kidnapping because it was his car that I was in. He did have a firearm on him. It was Texas, and he made sure that I went and I experienced Buckeys. And ⁓

Speaker 2

No no no.

Speaker 1

They're very big. They are humongous. The vibe that I'm getting is that every European who's experiencing Buckies is experiencing it in a voluntary state. You know, there was no ⁓ there was no kidnapping, no ransom note or anything like that. Getting back to the idea of the subsidies and and that sort of thing, is this World Cup a good financial decision, at least for the United States? Ha and can we even know that?

Speaker 2

Yeah. Right now. Well, I know several sports economists that are chomping at the bits to start getting data coming out of the World Cup and you know, they track things like how many hotel rooms are filled ⁓ in certain cities, ⁓ you know, is there a noticeable spike in consumption at ⁓ food venues and stuff around the stadium, things like that. ⁓ so there are all sorts of metrics and you can compare them against like what's the normal baseline. ⁓ and what this really does is it actually teases out that ⁓ the purported benefits of sporting events are not always uniformly positive. ⁓ there are other trade-offs that go into the mixture. And oftentimes on the net, if we look at past sporting events, so the Olympics is the classic one, ⁓ when a city invests in upgrading all its stadiums and ⁓ upgrading its infrastructure. specifically for the Olympics, it looks like a boom of economic activity right around that short period of a couple of weeks when ⁓ the event is taking place. And then six months later the stadiums are in disuse. ⁓ a year later, whatever they built for it is falling apart and they have like this you know this unused facility that's just kind of looming over there in a state of decrepit maintenance. ⁓ this has been a recurring theme for public investment and sporting events. You also see it on the ⁓ some of the longer term venues when ⁓ cities invest in building a stadium to attract a sports team there. And it ends up, you know, ⁓ for the lifetime of the stadium, you're spending hundreds of millions, if not billions of dollars of public resources to sustain this thing, really for kind of the vanity project of having a sports team. And it's always going, Well, look at all the jobs this is creating of ⁓ ⁓ both from the construction and then from the tourists that are supposedly going to come here, but they never consider the opportunity cost. ⁓ you know, what else could have taken place in the absence of this public investment? And ⁓ where does that investment get stretched out over decades and decades of publicly financed and service debt ⁓ vis-a vis this immediate expenditure of hey, you've got a new hockey team or a new baseball team for a couple of decades.

Speaker 1

And also, I mean, the fact that, you know, we're about to celebrate two hundred and fifty years. Well, one thing that that I'm kind of disappointed with is the lack of very big events. And I really wish that, you know, more Americans would have stepped up and like put on bigger concerts and and stuff like that. I just feel like maybe there isn't a a price point you can put on just kind of the joy that I've seen with surrounding the World Cup. I kind of want that joy to also infest the July 4th, yeah. Exactly, the the celebration. Maybe I'm just not looking the right place.

Speaker 2

Right. But ⁓ see the the pictures of the Giant America State Fair thing on the National Mall in Washington, DC, and it's it's thus far it's been fairly empty. Not many people showing up for it. ⁓ some of it's kinda campy. It has ⁓ ⁓ like these mock-ups of Trump's triumphal arch that ⁓ are done in cardboard and plywood. and some of them are reportedly falling apart. So yeah, you see some of that. It's kind of underwhelming. The caveat being there, the July fourth itself is a much more narrow event. You got this World Cup thing that goes on for a couple of weeks, whereas the celebration, the fireworks has one evening. ⁓ so maybe we'll see something big.

Speaker 1

And we have to be on the lookout because who knows what the British have up their sleeve. You know, it's been two hundred and fifty years. They had a little another practice run in eighteen twelve and and anything could happen. So

Speaker 2

They burned down the White House in in the War of eighteen twelve. A few military blunders there. They left the Capitol undefended and then ⁓ the Brits tried to to move in. But ⁓ yeah.

Speaker 1

So if you see something, say something. If you see something odd, like a ⁓ an Englishman leaving a tip, then you know to call the authorities because something's afoot. You know, there are details about the United States that I you know, maybe it's kind of like a a fish in water, where I'm I'm the fish in the water and I just don't, you know, really recognize how different we are and how you know how special we are. And if you look at some of the details coming out of, you know, the World Cup celebrations, there was there was an article about The TSA warning travelers not to pack ranch dressing in their in their carry-on. And I I know a lot of people like ranch. I mean, it's off ⁓ if you order buffalo wings in a lot of establishments, you get a choice between ranch and ⁓ blue cheese. Yeah, I'm a blue cheese guy. I'll go, I'll go blue cheese with my wings, but I I really didn't know that ranch wasn't something you could find outside of the borders of the US.

Speaker 2

It's a scarce commodity overseas and you know, so they're like packing that up and ⁓ and taking it abroad. I I guess Americans can do the same thing in return. Maybe we buy tea from the British or something, ⁓ and pack it into our suitcases. But yeah, TSA doesn't like the liquids. ⁓ I can say, you know, just traveling around Europe, yeah, ranch dressing and ranch flavored things are far less common. They they they have some otter ⁓ dipping sauces and things that they have over there. ⁓ I found the Europeans they like to put mayonnaise on everything, ⁓ including things that you wouldn't think of ⁓ suitable for mayonnaise. But ⁓ yeah, they get here and it's like, ⁓ ranch dressing, it's on every grocery store counter. Let's carry it back

Speaker 1

You know, perhaps we'll change things too, in ranch we trust. You know, when you look at ⁓ all the controversies over USAID and Doge, it's like, man, this whole time maybe we we could have ⁓ improved the the well being of the world if we were just shipping ranch around the world. Yeah. I wonder if that's just gonna open up markets too. I mean, are the is big ranch just really excited over this ⁓ over this idea?

Speaker 2

America's great export to the world. ⁓ This is our moment. But ⁓ you know, at the same time we have a trade war ongoing with ⁓ many parts of the world so ⁓ over tariffs and other economic policies. So ⁓ I don't know. There there there's the question do we get retaliatory tariffs from Europe on ⁓ on range dressing? Well

Speaker 1

If anything, that headline will be hilarious. Yes. You know, more to the the cultural exchanges. Who knew that, you know, free ice and free refills of soda I hit through these dozen times. And friendliness too. Apparently, you know, Europeans are like, ⁓ my goodness, the the Americans are are a friendly people. Yeah.

Speaker 2

I tell you. Yeah, they're like, ⁓ the yeah, the it's kind of dispelled some of the stereotype that's come about from ⁓ you know, I mean the United States doesn't always have the best reputation, particularly in its foreign policy with the world. ⁓ it kind of has a a a gung-ho cowboy attitude and it's perceived as a s if the United States throws its weight around and just kind of does whatever it wants. That's a r reflection of the politicians, much s more so than the people. And yes, when you have tourism coming over here, you get more of the direct cultural exchange. And ⁓ people are saying, hey, these Americans are nice. This is a really nice place to visit. ⁓ there are things that we are discovering here that we didn't know exist. And the same thing happens when we go abroad to other countries. ⁓ it's a much better and more direct cultural exchange than what you pick up through social media watching from afar. I was just in Europe ⁓ a couple days ago and ⁓ again you see upfront in personal interactions with human beings that you wouldn't otherwise have and it it does have a uniting effect kind of a binding effect that ⁓ hey there's a a broader sense of humanity here. A lot of that comes from the economic exchanges, the fact that we are trading and purchasing and participating in each other's economies. You know.

Speaker 1

little down to to hear that you know Scotland has been knocked out of the ⁓ of the World Cup because I think one of the really fun things about that was the basically the Scots went to Boston and kind of like took over like a block and took over a bar and it was all definitely a drink fest and a lot of you know song and cheer and they have to go back and it's like ⁓ you're the people we want here.

Speaker 2

Yeah, yeah, it's ⁓ I who knew that soccer hooligan culture had kind of this in endearing characteristic to it. And ⁓ I you know, I was over in the UK when all the Scottish ⁓ festivities were happening in Boston. So ⁓ they were reporting on it from the news. It's like, hey, we've moved part of our culture over to the United States and and you had you know taking over bars. They had this tradition where ⁓ they celebrate sports victories by going around putting traffic cones as hats on ⁓ public statues, and and then then this started happening all over Boston, apparently. So I thought so the John Adams and the George Washington statues from ⁓ the the Freedom Trail suddenly have a traffic cone hat on them. And and it's like, ⁓ this is like a part of soccer culture where they've celebrated their victories. And and there's something fun and frivolous and endearing about that.

Speaker 1

And it's such an easy origin story. We all know how exactly that happened. Some guy was drunk, he saw a traffic cone, he picked it up, he put it on a statue, and boom, it that it it takes off. ⁓ and I and I I definitely prefer that. I I prefer putting traffic cones on statues as opposed to pulling down statues.

Speaker 2

Exactly. It it's just the the right level of ⁓ of not being overly serious. And it's something that I think a lot of people can appreciate.

Speaker 1

And ⁓ this goes out to all of our listeners out there, you know, if you guys could come up with, you know, what were your favorite moments of ⁓ cultural exchange at the World Cup, I'd love to hear it. ⁓ one of my favorites was definitely watching ⁓ like Japanese tourists try Texas barbecue for the first time. As your first ever bite a Texas barbecue.

Speaker 2

What do you think? A man.

Speaker 1

Hey, that's a shortcut. One remark I had heard too was ⁓ good luck going back to beans and toast after trying some smoked brisket. Now that wasn't for the Japanese, but just for

Speaker 2

That ⁓ delightful British cuisine that's ⁓ known for its saltiness and blandness. ⁓ you add spice of the southwest into it and people like, wait, there's a whole new flavor palette here.

Speaker 1

So do you think like an event like this can change habits internationally? Like can we can we kind of make the world more American? ⁓

Speaker 2

I I think it's a good way of being like economic cultural ambassadors to the rest of the world. This is the the the true economic value. It's not this public expenditure to attract tourists to go to stadiums and stuff like that. I think that's frivolous and wasteful nonsense. But the fact that ⁓ you have people visiting the United States, it kind of takes the edge off and reminds them that there's more to this country than it's politics. ⁓ reminds people that ⁓ you know, economic exchanges bring ⁓ disparate human beings who otherwise don't know each other into closer contact and ⁓ like a a broader communion than than would be the case ⁓ of just yelling at each other on the internet. ⁓ the fact that I have something of value to offer. I have this neat food that you otherwise wouldn't be able to access. I can sell you ranch dressing and now you and I have a bond over food. that otherwise wouldn't exist. ⁓ it speaks to the ecumenicism of the market itself.

Speaker 1

I think there is something to be said about how perceptions are created, you know, because like we were talking about, international news carries, you know, unfavorable opinion of Americans, but travelers are seeing something very different. You know, the the internet says we are divided, but in everyday life things seem pretty normal and pretty joyful. And once you remove the gatekeepers or goalkeepers and see things for yourself, your perspective is going to change. And one European perspective that is changing is that of air conditioning. Air conditioning is amazing and Europeans are learning it firsthand thanks to the United States. And we will discuss all of that next week on Happy Hour Econ.