I don’t really get the Olympics resistance stuff — the Games are coming and we may as well make the best of them. Admittedly I’ll be in Baja — traffic avoidance knows no bounds in our household. But I still think B.C. cannot be any better off by making the Olympics more disruptive than they already will be. And, as economists like to say, what is done is done. The costs are largely sunk. What we should do now is maximize the benefits of whatever the Games may offer.
Nonetheless, I do agree we owe it to ourselves and potential bidders on future Games to do a full accounting of the costs and benefits that these Games have entailed. In 2003, CCPA published a preliminary benefit-cost analysis of hosting the Games that I and others worked on. We concluded that the Games would entail a significant net cost to taxpayers — a net cost that could not be justified by the jobs or infrastructure that would be created. We also noted there could be significant environmental and social costs, despite the commitments and best intentions of Vanoc, in the rush to build the required facilities and meet budgetary constraints.
It wasn’t a startling conclusion, but it did stand in stark contrast to the position the provincial government was taking at that time. Of course, the province didn’t do any benefit-cost analysis then or since. To justify the Games the government relied on an economic impact study that grossly exaggerated the employment benefits that might be generated by the Games and failed even to acknowledge there would be net costs.
Looking back, our 2003 study was far too conservative. We knew there would be cost overruns for security and other requirements, but nowhere near the amount that has actually taken place. We suspected government Ministries, agencies, and crown corporations would divert resources to the Games, as would municipalities in MetroVancouver and elsewhere, but again not to the extent that has occurred. We anticipated the government might force TransLink to proceed with the Canada Line, but didn’t assume those costs (costs well in excess of the government’s own estimate of the line’s travel time and other transportation benefits) would necessarily be incurred, nor did we expect the unbelievably severe neighbourhood and local business impacts the construction entailed.
We thought that the net economic benefits of the jobs due to the Games — the employment of British Columbians who would otherwise be unemployed or underemployed — would be limited. Now it is clear that they in fact were. Through most of the construction period the Olympics just competed for workers, driving up construction costs for everyone building at that time. It was a windfall for some, but a cost for many others.
All in all, our negative outlook in 2003 was far too rosy. I think that is in the nature of these things. We tend to underestimate the costs and exaggerate the benefits of marquee events that many people clamour for.
So, when the snow settles (I was going to say dust but again, I am hoping for the best)– we do need a full accounting of what has taken place. We need to understand the full extent of the resources we have allocated to these Games in relation to whatever benefits they have offered. The government really should take the lead. There is no shame in making a mistake that many others would do as well — but there is no excuse for not trying to learn and help ourselves and others make better choices down the road.
stephen elliott-buckley // Oct 22, 2009 at 1:19 am
As much as I enjoy exploring the economics of decisions, looking at it all in a frame that ignores cash, but focusses on the human and social consequences, we find this a debacle
9% are very excited about the games while 71% are not very excited or not excited at all. While that balance may change as February approaches, ignoring economics for a minute and looking at the human suffering is really very important. While we can’t “measure” human suffering, we must always try to engage with it as humans.
I intend to protest on behalf of the suffering we’ve endured already and will endure until my children grow to adulthood and eventually pay off the games.
Kim Poirier // Oct 20, 2009 at 9:27 pm
I agree with Iglika, the objective cost/benefit analysis will be invaluble, but the protesting is about more than the olympics, it’s about the dishonesty, the shameless pork barreling, the arrogance in general from elected politicians. People are beginning to wake up to the corruption, and if we need a focal point to try to preserve our rights and feel engaged in the democratic process, that is valuble and important. Most of the province didn’t even get a vote!
Marvin Shaffer // Oct 22, 2009 at 8:39 am
Like Keith, I too find some of the excesses of the Olympics hard to take — especially in these difficult economic times. However, this is not a classic left-right issue, nor an issue that pits those concerned about social needs against sports-related commercial interests.
It was Obama who expended political capital in his failed attempt to get the summer Olympics awarded to Chicago. It was the leftist leaders in Brazil who fought for and celebrated their selection.
There is a widespread view, across the political spectrum, that there are great benefits to hosting the Olympics. That view won’t be challenged by anger and protest. Disrupting the Olympics will only further divide people — the frustrations of some will be replaced by the frustrations of many others.
Better to channel anger over Olympics excesses into something more productive — something people on both sides of this issue can consider and debate.
Iglika Ivanova // Oct 20, 2009 at 10:20 am
Marvin, I am 100% on board with the idea of dispassionate analysis after the Games are over. The outstanding question is whether or not this is the only thing we can do to minimize the abuses of power (spending and otherwise) that seem to be associated with the Olympics.
I fully agree that protest and resistance will not recover the money that’s already been spent. In fact, I think that the Olympic Resistance movement needs a new name. The way it currently stands does not really give outsiders a very clear idea of what it is exactly that they’ve got a problem with, and it makes them sound like they’re against sporting competitions. As far as I can see it, there are three big issues with the way the Olympics have been handled in BC:
1. Massive cost overruns (compared with what was originally announced and voted on);
2. Failure to meet the social obligations they signed up to in the Bid;
3. Attack on civil liberties at the request of the IOC to an extent that should be inconceivable in a country that purports to subscribe to a Charter of Rights.
The name of the movement should describe what they’re protesting, which in my view is a mix of provincial government mismanagement and IOC’s disrespect for civil liberties.
One of the biggest problems I have with the Olympics is this idea that it’s somehow OK to turn a city into a police state in the name of a sporting event. This may be related to the fact that I grew up on the other side of the Iron Curtain, which made me very very wary of police states.
While protest will not recover any of the cost overruns, they can be useful in pressuring the government to make progress on points 2 and 3 on my list above.
Terri // Oct 20, 2009 at 8:10 am
I agree with Keith, the contrast is too dramatic. And the ease with which these numbers are just floating out there: $30 MILLION. People should be absolutely outraged!
Keith Reynolds // Oct 19, 2009 at 7:36 pm
Sadly, the contrast is just too dramatic. I grant you they need to make sure their crew doesn’t bail half way through the Olympics, but $30 million in retention bonuses? At a time when they are cutting literacy, children’s programs and mental health spending? It’s just wrong.
Iglika Ivanova // Oct 19, 2009 at 2:50 pm
I too am an economist, but I disagree with your sunk cost argument. You’re letting decision makers off the hook for their mistake by saying: “The cost is sunk so now you just have to accept that we spent a whole lot of money for our party and there’s little left for things like social housing and other social priorities.”
What happens to accountability? When you aare a policy maker and you make poor choices, somebody needs to stand up there and call you on it. You can’t excuse poor decision-making by arguing that it’s too bad because it’s a sunk cost.
I don’t agree with some of the direct action approaches the Olympic resisters are condoning, but I think they’ve got a point. And the point is to juxtapose the lavishness and frivolity of Olympic spending with the fact that we’ve got so many social problems that the money could have been better spent on. And I think I’m not the only one who’s getting their point.
Think about it – if those guys were just a bunch of people who get a kick out of being wet blankets and disrupting our party for no reason, why bother restricting them? It would very quickly become obvious that they just have too much time on their hands and nobody would take them seriously. It’s only when what they’re saying actually rings true and makes us come to terms with contradictions that make us uncomfortable about ourselves and our choices that they become a threat that requires municipal by-laws and police intervention to curtail.
I think that as a society, we’ve got to wake up and stop lying to ourselves. We cannot keep believing that we’re building a legacy and taking care of our children and grandchildren while we continue to be perfectly content to leave the most vulnerable among us, including many children, out in the cold because we spent the money partying.
Marvin Shaffer // Oct 19, 2009 at 4:30 pm
The fact is, most of the Olympics costs are sunk, and protests and resistance won’t recover any of them. They will only add to the costs and possibly diminish the benefits.
The issue is how best to bring some accountability to what was done, and direction for what we and others should do in the future.
I didn’t want to suggest we let the government off the hook or drop the accountability issue. I think we should do a full, but dispassionate analysis of the costs and benefits to demonstrate as objectively as we can whether there are better social investments we can make.
My own view is that that is likely to be more persuasive than protests, especially if the protests do not have broad based public support.