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Brazil's Leaders Opt for Circuses Without Bread

June 26, 2013

By Steven Malanga

Rome in the 2nd Century AD was prosperous enough to provide its citizens with games to entertain them and with bread, in the form of what was known as a grain dole, to keep citizens contented and disengaged from politics.

Modern politicians have redefined the phrase "bread and circuses," first coined by the Roman writer Juvenal, by arguing that investing hundreds of millions, and even billions, of dollars attracting and staging mega-circuses like the Olympic Games and the World Cup will provide bread of another sort, a sort of Keynesianism-on-steroids bet on the economic benefits of government investing in sports. Brazilians have become the latest people disenchanted by the hollow promises of this modern equation, although they are showing their discontent far more vigorously than, for instance, disappointed Londoners did after last year’s Olympic Games.

Even while the average Brazilian struggles with high taxes, rising costs for basic services and government corruption, Brazil is pouring tens of billions of dollars into readying the country for the World Cup next year and the Summer Olympics in 2016. Assurances that this spending would boost Brazil into the first rank of countries and unleash opportunity for the average citizen have given way to disillusionment that’s so great that Brazilians even recently booed their national icon, Pele, when he suggested protesters were being unpatriotic.

This skepticism about the modern version of bread and circuses is growing. When New York City lost its bid to host the 2012 Summer Olympics, the biggest problem the city’s host committee faced turned out to be New Yorkers themselves, whom polls showed did not favor the games. That lack of enthusiasm was one reason the Olympic selection committee picked London, instead.

Londoners cheered at the time, in July of 2005, but the world was quite different by 2012. For one thing, the games wound up costing nearly $15 billion, or almost twice the projected $8 billion price tag. A mediocre world economy and tourist fears of price gouging in London kept the crowds away, so that the games contributed to a meager one percent increase in tourism-related national revenues. Meanwhile, London theaters, museums and other cultural attractions reported declines in business as the kinds of visitors who might patronize them went elsewhere.

All of this was predictable. The 1976 Montreal games almost bankrupted the city, which spent decades digging out of debt. The Athens games in 2004, which Greece wanted so desperately to host because they fell on the 100th anniversary of the modern Olympics, were sold to the people of the country as costing under $2 billion. The $16 billion actual cost helped thrust Greece into its present fiscal predicament.

Then there were the 2000 Sydney games, which had to be bailed out at the last moment by the government. As an Australian auditor general said after the steep budget overruns and disappointing ticket sales of the games, "The taxpayer, the taxpayer has ah, has paid for the privilege of paying for the Olympics."

Until now these failures haven’t mattered substantially to big sports events like the Olympics and World Cup because there’s always a city or country ready to step up, hoping that hosting an event of that nature will thrust the place into worldwide eminence at whatever the cost.

But the preemptive strike that Brazilians are staging now might make games organizers give pause before selecting any city that comes before them just because civic leaders proclaim they are willing to be squeezed dry. Recently the international soccer federation, FIFA, was forced to declare that it wasn’t considering canceling the games in Brazil, which meant that of course it must have considered canceling them. The Olympics, meanwhile, took pains to assure Brazilians that their games would add to the economy, a fact you can believe only by ignoring the past.

Maybe the organizers have already gotten the message. The next two World Cup tournaments are in Russia and Qatar, two countries not known for their tolerance of spontaneous citizen protests. The 2014 Winter Olympics, meanwhile, are in Sochi, Russia. Originally pegged at $12 billion, those games are now on track to be the most expensive ever, at an eye-popping $51 billion. Maybe we are heading toward an all-totalitarian lineup of big world sporting events in the coming decades. But first Brazil must get through the World Cup and then the $16 billion Summer Olympics in 2016.

Later this year, we’ll also find out who gets to host the 2020 Summer Olympic Games. One of the finalists, believe it or not, is Istanbul, Turkey. If you think the citizens of that city are upset now at how the national government has run roughshod over the democratic process to transform and overhaul Istanbul, wait till Turks get a look at the massive building effort that most Olympic Games require. I suspect things won’t even get that far, given Turkey’s spring of discontent. Even the Solons who run the Olympics can’t be willing to push their luck that far.

Of course, America being a democratic country, such arm-wringing of the citizenry is rarer here. Or maybe not.

The citizens of Miami-Dade, for instance, opposed subsidizing a stadium for the Marlins baseball team, polls showed. Local politicians went ahead anyway, financing a new park with $500 million in borrowed money that will cost the citizens some $2.4 billion to repay. Meanwhile, the Marlins are attracting fewer than 18,000 fans per game, illustrating how a last place team can produce empty seats just as easily in a new park as in an old one.

Miami citizens voted the politicians who engineered this deal out of office. But voters have discovered that changing administrations doesn’t wipe away obligations they’ve incurred in your name. It’s a harsh lesson that Brazilians, who have nearly $20 billion in commitments to two sports extravaganzas, are learning, too.

Original Source: http://www.realclearmarkets.com/articles/2013/06/26/brazils_leaders_opt_for_circuses_without_bread_100432.html

 

 
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