What's wrong with the Olympics? Part one - the economics

You’re going to see more and more hype in the next few weeks, as the world’s most political sporting event is held in London, and a vast wave of positive support will infiltrate the media, politicians and the event itself.

There is one good thing about the Olympics. It provides a showcase for the best in world athletics to compete and demonstrate the results of their hard work and training and be achievers. That is a good thing. The recurrence of this again and again, is a reason to smile. Opportunities to do this are special and remarkable.

Yet there is a lot wrong with it, so much I’m going to dedicate three articles about it.

• The first is on the economic cost
• The second is in the cost to individual freedom (and surrender to an authoritarian corporatist approach to sponsorship to fund the Games by "any means possible")
• And thirdly is a lesser important point, it is how the transport infrastructure in London has not been upgraded to cope, despite seven years of warning.

No business case

From an economic point of view, there was no “business case” for the British government to support the Olympics being held in London. It comes with a direct financial cost to British taxpayers including future taxpayers, a direct economic cost imposed on much of London, a subsidised platform for sponsorship and the self-aggrandisement and glory claimed by politicians.

The Olympics are political, they are a statement to the world by a country seeking to show off. I need not go through the list of recent hosts to demonstrate that. The previous Labour government bid for this event to try to show off, it didn’t do it for the economy.

£11 billion is the total cost of the infrastructure, hosting and the “regeneration” work undertaken related to the London Olympics. £2 billion is expected to be recovered from sponsorship, ticket sales and broadcasting rights, the rest is a transfer from taxpayers to contractors. Nearly £2 billion of the expenditure is in “regeneration”, code for government subsidised property development. The goal being to make Stratford (the main games site) into a desirable place to live and for businesses to locate (it now has three railway, two underground and two light railway lines serving it).  With the exception of Canary Wharf/Docklands, the evidence of government sponsored regeneration actually providing a catalyst to economic growth and jobs in the UK, is scant.

So financially, it will lose money.

What about the economy? Some economists would claim that this money will be returned in bucketloads because of the increased tourism and investment it will bring, except that this doesn’t bear close scrutiny.

I heard a story of someone in UK Treasury who told then Chancellor of the Exchequer Gordon Brown, that the Olympics would not create a net economic contribution to the UK economy. Gordon allegedly said “don’t worry, we wont win”.

London is already one of the most popular cities in the world for tourism. Indeed it bulges at the seams with tourists. There is evidence that the Olympics deter visitors who may otherwise have come. It brings athletes, who by and large, are not particularly high yielding tourists. It brings coaches, trainers, broadcasters and the like. It brings some spectators. However, it also scares off many others.

Moody’s produced a report saying it was unlikely that the Olympics will boost the UK’s economy. It claims the main sector to benefit will be hoteliers, with 90% occupancy estimated, although at this time of year London typically achieves 80% anyway. Given it was Diamond Jubilee year anyway it seems difficult to imagine that the extra numbers, if they turn up, will actually compensate for the for the taxpayer subsidy. In fact there is some anecdotal evidence that the numbers expected are NOT turning up. A quick look at Wotif.com for London in the next two weeks shows ample availability for hotel rooms with considerable discounts.


This is despite rather weak analysis from Lloyd's regarding the multiplier effect of spending, ignoring what people would have invested or spent the money on had they had it in their own pockets - (it isn't relevant that Lloyd's is a bank that was bailed out by the state and is now majority state owned).   Goldman Sachs says:

Goldman expects the Olympics will boost UK economic output in the third quarter of 2013 by around 0.3 - 0.4 ppt quarter-over-quarter (QoQ) (+1.2-1.6%qoq annualized), but this will be largely reversed in the fourth quarter.

Noting that the economic impacts of the Sydney Olympics were negative compared to the forecasts.

Economic impacts of the Sydney Olympics

The effect is more serious than that when you consider that London hardly has any spare capacity in its transport infrastructure to cope with the deluge of people for major events. The result is that thousands of businesses are telling staff to take leave or to work from home during the Olympics. The reason being that significant parts of the public transport and road networks will be close to gridlock. Business trips are being deferred because of anticipated queues at immigration entering Heathrow. With business likely to be deferred over this period, and those undertaking business facing real increases in cost due to overcrowding on roads and public transport, it’s notable none of this was taken into account in the glowing self-justifying “business case” for the Olympics from the previous government.

The so-called “legacy” is also grossly exaggerated. The Olympic stadium is likely to be offered to a football team (yet to be selected) to be used at a price less than the cost it took to build it, effectively destroying some taxpayers’ wealth. The regeneration of the Stratford area will be seen in property values, but this remains a fraction of the total cost to taxpayers.

Unfortunately, what’s insidious is that it is completely politically incorrect for the media to talk about this now – in the run up to the Olympics. Any major newspaper publishing articles about it would be seen as churlish and spoiling something great. No major politician dare say that which millions of people are saying – how can a country with public debt expected to reach 92% of GDP, which is overspending to the tune of 8.3% of GDP, with a PM who talks about a decade of austerity, justify pouring billions of pounds into a two week celebratory event.

Yes most people will watch some of it, and enjoy that. However, they would’ve done so anyway. Yes, there will be a sense of national pride (except from some Scots and Ulster nationalists) about the event, and some London pride as well, but didn’t the Diamond Jubilee provide that too? Wouldn’t there have been pride if the British Olympic team competed and won elsewhere?

So I’m not celebrating. My money has gone into this event (more than the average, given my income). I am betting the net GDP effect, in the long term, will be negative, as it has taken money out of taxpayers’ hands. People who would otherwise have invested or spent it better, and will have deterred almost as many visitors as it will have attracted. It will have imposed significant costs on London businesses unrelated to the games, by almost gridlocking the transport network.

In short, a colossal waste of taxpayers’ money.  It is a massive vanity project, and who really believes it will result in more than a short term boost to participation in athletics? Wishful thinking.

The Olympics should be left to profligate semi-authoritarian developing countries, willing to squander their national wealth on showing off, or by seriously commercially minded bids from cities that can demonstrate they can make money out of it, financially, without taking from taxpayers.

Let’s stop pretending the Olympics is an investment, it’s a legacy from a profligate, image obsessed former Labour Government, that is a commitment now. All that can be hoped for is that it goes off without a hitch, shows London in a positive light and that the property developed can be sold for the best possible price – and a lesson learnt to never ever do this again.

Identity politics lays down a path of Orwellian thought control

In the UK at the moment, one of the main news items is the criminal trial of Chelsea football club captain John Terry for allegedly making a racist comment to footballer Anton Ferdinand.

Terry isn't exactly a great thinker, and given that one of his contract conditions is not behave in such a manner, he certainly deserved to be reprimanded if guilty and be subject to whatever punishment is appropriate in that context.

However, now he faces criminal charges, essentially for hurting someone else's feelings.

In New Zealand, Dr Cat Pause (yes, imagine the university thesis on the psychology behind that name) not only embraces this, but wants a similar approach to be taken to discrimination on the basis of mass.  She is a taxpayer funded university lecturer at Massey (yes, agriculture clearly isn't enough), and her belief in criminalising make fun of obesity, in opposing businesses selling diets, exercise and in her hatred of the fashion industry.  She even hates the airline industry for not having wide enough seats for the obese.

She is hosting a conference on "fatism" and of course she has been the subject of the obvious jokes from Whaleoil.  It is easy to poke fun at someone with an amusing name who is seeking to normalise a condition that health professionals regard as dangerous and a key contributor to a vast range of chronic diseases, particularly a condition that is largely a matter of personal choice.  

However, I'm not laughing that much, because the wedge that has opened up the chance for taxpayers to fund discussion, debate and study into this perspective was created many years ago.  It's the embrace of identity politics, and its neo-Marxist, ultra-collectivised, power stereotyping that pigeon holes absolutely everyone into categories, whilst claiming it is actually about empowering people.

The conference Pause is leading demonstrates this:

Fat bodies politic: Neoliberalism, biopower, and the ‘obesity epidemic’ by Jackie Wykes

This paper will argue that the discursive construction of the ‘obesity epidemic’ mobilises neoliberal concepts of risk and responsibility to produce fat people as failed subjects across various sites of power, including capitalist production, profitability, and reproductive (hetero)sexuality.

In other words, "fatists" blames capitalism for creating a subjective "myth" around obesity as showing people as failures as productive individuals and as being fit to breed.   The existence of plenty of successful overweight people, men and women, is blanked out, because it doesn't fit the story being manufactured.   

Then there is this paper:

The role of diagnosis in marginalising corpulence by Annemarie Jutel

In this presentation, using overweight as a heuristic, I will describe the social model of diagnosis and how it assists us to understand contemporary attitudes to health, illness and disease.  At the same time I will explain how the ascendance of diagnosis and the paradigm of evidence based practice have forced the emergence of overweight as a disease category.

In other words because evidence is used to inform medicine, being overweight is seen as a disease.  Now I think it isn't a disease, because it can't be caught and it doesn't spontaneously emerge, but it is a "state of being".  People aren't born that way (unlike race and sex).  However, is it seriously being argued that medicine should not be evidence based?

It is easy to go on, but Cat Pause claims she is "promoting the idea that fat people deserve the same rights and dignity as non-fat people".

Yet there is no objective assessment of not having the same rights.  The rights she appears to want are demands upon the persons and property of others to make special provision for obese people.  Of course she has a precedent in this, in the "disabled rights" movement demanding accessibility and people to be made to pay for their private property to be accessible to people they don't know.  She claims airlines kick fat people off planes, and then demands that economy class have wider seats (although she pays for premium classes herself - which is the same point with better food anyway).

Of course she goes further.  She wants to criminalise "fat hatred"  Why?   "fat phobia, or fat stigma, or fat hatred, is harmful. It stigmatises fat people, which is harmful for both physical and mental health. It also affects non-fat people – making many of them terrified of becoming fat. Being shamed, or bullied, is never good for anyone"

It's Orwellian thought control, she wants it to be wrong for people to think it is wrong to be overweight, wrong to seek to change their bodies, wrong to sell goods or services to facilitate that.  She wants to criminalise people being hurt by what others say. 

 

Yet people don't have a right to not be insulted or hurt.  It is a fact of life.  A person throwing an insult because of how you look isn't nice, and isn't fun, but is it a matter for the criminal law?

Should the state be there to protect people from stigma, hatred, fear or shame?  

What is next?  The obvious next characteristic to pursue is hair colour.  Red headed people are probably sick of being called gingas, or being thought of as angry.  Blondes are probably sick of being presume to be ditsy, stupid or even slutty.  Should short and tall people demand "rights"?  How about people who wear glasses being thought of as being smart or geeky?  How about commenting about what people wear?

Those of us who embrace individualism and the treatment of people as individuals have no problem with the moral dimension of being open to who people are, what they think and what they do, but it does not mean surrendering the personal right to not have to surrender to what others want to claim from you.

If you own a business, should you not have the right to decide who you trade with, who you buy and sell from and who you employ?  Indeed, similarly as a consumer you should also be able to assert the right to buy from whomever you wish, and refuse to trade with those you don't wish to. 

Moreover, you do have a right to not like people.  There is a right to not be polite, to not be considerate and accommodating.  That doesn't mean using force or fraud, but it does mean you can blank out people, ignore them and yes, laugh at them. 

Sterilising expression and discourse by criminalising it is disturbing.  

It can be seen in the thin line between actions that insult Islam and Muslims who claim they are being "discriminated against" because they have beliefs that I, and billions of others, regard as peculiar or even evil.

It can be seen in the way that some people can throw around racist insults, promote racist policies without shame because the identity politics touters claim people of some races "can't be racist" - even Members of Parliament can be "oppressed".

Meanwhile, hatred of wealth creation, entrepreneurs and Christians is all allowed.

Human rights legislation banning discrimination should itself be struck off the books.  The proper response to racist and sexist activity by businesses is to boycott and shame them.  Indeed, if the fat women (and it is women) have a problem with how others treat them, then they can boycott, protest and the like.  That is entirely appropriate and the only way to really change behaviour, and to isolate those who are bigoted, rude or simply intolerant.

However, they and others should not claim a right to be treated a certain way by law by private businesses or individuals.  For those who do are as intolerant as those they seek to bully and force to treat them the way they demand.

In a free society we all have freedom of thought and freedom of expression, and that includes the right to say things other people don't like and to act on that basis as private individuals.  

Dr. Cat Pause and her gang of reality evading subjectivist post-modernists can create all of the fictional fantasy conspiracies, can proclaim victimhood and demand that people be forced to accommodate their demands, but for all of that they shouldn't be allowed to make people do what they want.

Her philosophy portrays itself as being about acceptance and tolerance, where it is about hatred and intolerance.  It is about reality denial and a grand claim upon the minds, mouths, pens, keyboards and deeds of everyone else.

It takes the right to be an individual and to live you life as you see fit, and morphs it into an artificially constructed "identity" with "oppression", "victimhood", an "interpretation of history" and as a result endless demands for taxpayers to be forced to pay for her studies and to investigate accommodating this self styled identity group, at the same time as taxpayers are being cajoled to deal with obesity as a key factor contributing to multiple chronic diseases (with children who are obese being a specific concern).

If it continues to get government support, then I propose that someone invent a "blonde studies" course and start doctoring up some post modernist snakeoil that would be easy for any half smart person to manufacture.   Then the "dim witted", "low IQ" and "not very smart" can claim the same, how they are insulted by being expected to know stuff.

The rest of us will be getting on with our lives.

Farewell Wim

I'm saddened today at the news I read this morning, having just come back from Rome, that Wim Verhoeven has passed away.

Peter Cresswell and Lindsay Perigo, and various commenters have said most of what I wanted to say, but I wanted to pay my respects in the best way I can from this distance.

I knew Wim as a stalwart of Libertarianz in Wellington for the whole time I was a member living there, and as others have said he was a kind, gentle, softly spoken, well mannered and generous gentleman.  He wrote submissions on bills, wrote letters to the editor of the Dominion Post (and predecessor newspapers).  He gave generously, including sharing his home for meetings and gave me lifts a couple of times.  I remember fondly his intelligent conversation, how keenly he liked to talk about a range of topics, current events, politics and philosophy, and how for all of his gentle mannerisms and kindness, he had a firm grasp on his beliefs, ideas and conviction in the value of individual freedom and opposition to government getting in the way of people living their lives as they see fit.

His profile is on the Libertarianz website, as he was a list candidate in the 2005 and 2008 general elections.

I know Wellington Libz will help give him a good send off (details on Not PC's website) and my deep condolences for Terry, the rest of his family and loved ones.

Buying something from the government is stealing?

Yes, this is Idiot Savant's latest flash of inspiration.

He describes anyone buying shares from the government in SOEs as buying "stolen assets".

Fascinating.

For he does not think of taxes - money taken by force by government - as stolen, regardless of whether or not it is to buy any assets.

Yet he thinks of the government, having bought assets by taxes, selling them, as "stealing".

You see he calls SOEs "public assets", "owned" by everyone.  Yet you are no more able to exercise the rights of ownership over a dam, road, school or hospital owned by the state than you are a privately owned one.   

However, he regards it as "public ownership" because the public, through its elected representatives (MPs), can "exercise control".  Let's just stick with that for now.

Using the electoral system he broadly supports, National got elected on a platform of part-privatisation. It is supported by parties which have either included or consented to that part of its manifesto.

So voters effectively chose a Parliament that has, through its elected representatives, chosen to "exercise control" on behalf of the public.

It's just he doesn't like it, because he voted for the Greens.  Yet he claims to support democracy.

He says "these goods were stolen from us by the government".  Well funnily enough they were, in the form of taxes.  In which case would he support selling them and giving everyone some money in return for the sale?  Of course not.

Instead he suggests "opponents of asset sales should boycott stolen assets".  I couldn't care less if they don't buy shares, and feel free to boycott buying their goods and services.  Don't forget all of the other companies privatised before, such as Air New Zealand (still 22% private), Telecom, Bank of New Zealand, State Insurance, former THC hotels, Intercity Coachlines.

However, you should also boycott EVERYTHING sold by the state.  The shops that now own former post offices and railway stations, the ex. Air NZ planes sold offshore, any closed schools, in fact any land at all that the state once owned.  After all, selling assets is "stealing".  Presumably buying state assets is "gifting".

This amusing view of property rights concludes with a sure fire approach to send New Zealand's sharemarket, property market and currency down to Zimbabwean levels "they should support calls for those assets to be forcibly renationalised at less than the sale price. Asset-thieves should not be allowed to profit from their crime."

That's right, the Soviet Union is back.  Buying shares offered for sale by a democratically elected government is a "crime".  Some belief in elected democracy he has.  No belief in property rights at all.  No interest, care or thought of what that does to both foreigners and New Zealanders seeking to invest their savings.  From big foreign companies to retirees, students or small business people, if they buy shares they are criminals - because they don't embrace his venal Marxist view of the role of the state.  After all, people from many backgrounds and income levels will buy shares, but to him they are all kulaks, the sellouts, the class and nation traitors.

I look forward to the Greens embracing this policy for the next election, for as somewhat socialistic many New Zealanders are, the idea the state can take back property you bought from it by force with a penalty, will frighten the bejesus of most.

He can live in his solipsistic south Pacific USSR if he likes, but all the aspiring successful wealthy people he despises wont be there paying taxes, opening businesses and employing people with him.

Labour's part privatisation would have been ok, but not National's

Meanwhile, the Labour Party can't reconcile its opposition to part privatisation of SOEs with its own attempt to part privatise Air New Zealand to its biggest foreign competitor.  Apparently because it was once renationalised, this is ok.  However, almost all SOEs are the result of previous nationalisations, and by that measure the Nats selling part of Kiwirail to whoever wanted it, would be fine.

It all started with Sue Moroney insinuating that John Key visiting Australia is all about a sales pitch for the partial privatisation of SOEs, as seen by this Twitter from Sue Moroney

Sue Moroney ‏@suemoroney -Really interesting that the trolling Nats won't deny that John Key is over in Aus flogging off our assets.

Sue Moroney ‏@suemoroney - John Key is in Australia flogging our assets off to them. Dumped Oz PM John Howard says its a great idea. #whatAsuprise!

Of course Labour had no problem with that in its last term, when it sought to sell 22.5% of its renationalised Air New Zealand to the airline's biggest competitor - Qantas.   

I said:

libertyscott ‏@libertyscott @suemoroney Yet Dr Cullen positively favoured selling 20% of Air New Zealand to Qantas, what's changed?

She said:

Sue Moroney ‏@suemoroney @libertyscott Labour bought AirNZ back - that's the difference. It was privatised and we got 80% of it back. Nats selling what we own.

Hold on, but when the state buys something doesn't that mean "we own it"??  

So I confronted that and made the point again.  Labour was ok with selling part of a state asset to a foreign company (and indeed competitor).

libertyscott ‏@libertyscott @suemoroney Wrong you got 86.5% back and sought to sell 22.5% to Qantas, its main competitor. Cullen press release here http://www.beehive.govt.nz/release/govt-approves-air-nz-qantas-proposal-proceeding-commerce-commission

She said:

Sue Moroney ‏@suemoroney @libertyscott So you see the difference now?

 I said:

libertyscott ‏@libertyscott @suemoroney You'd support National selling down 22.5% of Air NZ to a foreign competing airline? But not power companies or a coal mining co?

No response.  The contradictions of the Labour Party remain astonishing.  At least the Greens have always had a one way view of state ownership - the more the state owns = good, the less it owns = bad.