Police State Olympics and the Greatness of Nations

STOP THE GAMES RALLY
THURSDAY, APRIL 2nd at 5:00 PM
Federal Plaza
50 West Adams
Chicago, Illinois

My thanks to Charles Hugh Smith, author and owner of the exceptional blog, Of Two Minds, for his permission to publish his essay Police State Olympics and the Greatness of Nations, which I have copied here in its entirety, below.

As Mr. Smith so clearly elucidates, the greatness of nations, or cities, is not measured by fake "wealth" or by Disneyland-style spectacles underwritten by billions of dollars of borrowed money.

Chicago wasn't made great and beautiful by circuses and deficit spending for the benefit of tourists who stay for a few weeks and for the handful of politician's crony "entrepreneurs" who will get the bulk of whatever economic benefits result from the massive expenditures and disruption of the Olympics. This contest won't begin to replace the industry we have lost or the entrepreneurial talent that built it, but the additional taxes made necessary by our deficit spending, in tandem with our obstructionist city bureaucracies and regulatory strangulation, will turn us into another Detroit, and make this a place most unlikely to give birth to any enterprise but the sort that we see taking place on Howard Street and other blighted streets in the city.

POLICE STATE OLYMPICS AND THE GREATNESS OF NATIONS
by Charles Hugh Smith
August 8, 2008

The greatness of a nation is not measured by the height of its buildings or its steel output or its military might but by these three factors:

1. the rights and opportunities it extends all its citizens, especially the lowliest

2. the manner in which it absorbs and responds to the criticism of its citizenry and the world

3. the willingness and ability of its citizens to question and actively resist the propaganda of that nation's elites

As for steel output and the number of tanks and missiles, we have seen how much "strength" those sources of puffery and pride actually hold, for the Soviet Union was masterful in touting its steel output and in staging mass reviews of its military might.

The illusory nature of these traditional measures of national strength was starkly revealed by the sudden implosion of the USSR's politically inept and financially insolvent regime.

When individuals are unable to accept criticism or generate realistic self-criticism, we define their crippling limitations as neurotic. We all know how these people respond to criticism: they lash out and attack the person offering the critique. Unfortunately this strategy doesn't help them improve their performance or resolve their conflicts.

In a similar fashion, what renders the alcoholic so massively incapable of positive action is not his/her alcoholism per se but his/her denial of their problem.

I am of course discussing China and the U.S. Each is in massive denial about somewhat different sets of serious problems, and who gets to be counted as a "great nation" will depend on which nation's citizens most thoroughly contest, refute and resist their elite's propaganda.

It's no secret that China has a chip on its shoulder. The general cultural view is that China has always been a Great Power and it's about time that well-deserved crown is once again set on China's head. Any and all criticism or skepticism of China is considered a sour-grapes attempt to "keep China down." If you read even a few international message boards with Chinese posters, you soon find the responses to any criticism of China range from foaming-at-the-mouth rage to attacks on the U.S. for bullying, interference with other's sovereignty, racism, etc.--more or less parroting the Chinese media's Party Line of propaganda.

(As for racism--few in China seem to think "foreign devil" isn't a perfectly good slang term for a Westerner. How would that fly if the equivalent phrase was standard useage in the U.S. for Chinese people? You can bet the outcry would earthshaking, voluminous and bitter.)

In other words, the general Chinese view is that China is peaceful and benign and any criticism of China is unwarranted, unfair and a mean-spirited attempt to "hold China back."

In an individual, these responses would be considered neurotic and unhelpful to the individual's growth and ability to resolve inner conflicts. The same holds true for nations.

To those who can't bear any criticism of China: criticism, resentment, hatred and resistance go hand-in-hand with Great Power status. You can't have one without the other. To want to be a Great Power and be only loved and admired is like wanting to be famous and only be loved and admired--it is impossible. With high visibility comes criticism, and with power come restraints and limitations, not unlimited freedom. Embrace it or let go of aspirations to Greatness.

So anyway, welcome to the Police State Olympics: Beijing Olympics visitors to come under widespread surveillance
The government has installed about 300,000 cameras in Beijing and set up a network to spy on its citizens and foreigners.

"Everyone feels they're entering a police state, which by the way it is, duh," said Sharon Hom, executive director of New York-based Human Rights in China. "So they've got people reporting down to the lowest neighborhood level, which is not new, overlaid by state-of-the-art technology. It's the best of the old and the new."

Another technology that raises concern involves the new identity cards China is phasing in for its 1.3 billion citizens. The cards, developed with help from Plano, Texas-based China Information Security Technology, carry radio signal devices and a chip that records not only a person's height, weight and identification number, but also health records, work history, education, travel, religion, ethnicity, reproductive history, police record, medical insurance status and even his or her landlord's phone number.

The difference is that Western countries have better checks on police power, some human rights activists said, even as they expressed concern that the U.S. could soon be using technologies developed in China.

"Every country wants to avoid abuse of police power," said Xu Zhiyong, a lecturer at the Beijing University of Posts and Telecommunications. "It's getting better in China, but we still have a ways to go."

In Beijing, two taxi drivers who asked not to be identified while discussing confidential matters displayed a pair of black button-sized devices just to the left of their steering wheel linked to the vehicle's navigation system. They said the devices allow a central monitoring station to listen to anything inside the taxi.

One driver said that besides listening in on passengers, officials can hear any griping he might do about the Communist Party, which could result in punishment.

The cameras and microphones, of course, will undoubtedly stay on after the Olympics. The Olympics will come and go and you will still have your passport scanned when you rent an Internet cafe computer.

Meanwhile, anyone publicly connected to the issue of Darfur and China's role in defending the genocide-happy kleptocracy in Sudan is denied a visa. My own experience with the Great Firewall of China is that an architect friend's innocuous website was blocked because it contained some Chinese characters. That alone kept it from being seen within China.

Isn't it a bit of a stretch to dismiss any questions about China's role in Sudan as "trying to hold China back?" How about trying to hold back the relentless slaughter of civilians by government-sanctioned and supplied armed forces?

And please don't believe that attacking the U.S. involvement in Iraq somehow gives China a free pass to pursue its interest in Sudan without challenge. The proof is called substitution: are you willing to allow the U.S. a free hand anywhere in the world because China has the right to pursue its strategy in Sudan? It's either one or the other--you can't have it both ways.

The U.S. has its own stone walls of denial. As I read Bill Gross calling for a $1 trillion U.S. Federal deficit to fund various bailouts he reckons are needed (and all around good fun as well), and Obama and McCain calling for various programs which inevitably increase Federal spending and borrowing, I am reminded of a full-blown alcoholic staggering to the back of the refrigerator for another bottle of his "secret stash" that everyone in the house knows all too well.

Does any American publicly ask where this $1 trillion comes from, and how much it will cost our children and grandchildren to pay the interest on that sum for their entire lives? And if not, why not? Because like the full-blown alcoholic addicted to easy borrowing and ever-greater debt, we don't want to stop the debt orgy because it might crimp our spending fun.

After all, it's tremendously great fun to let others scrimp and save and then borrow all their accumulated capital for less than inflation (known as a negative rate of interest) and then give it away (if you're a politico) or just blow it on vacations, furniture, vehicles, cosmetic surgery, speculative condos and other toys (if you're a U.S. consumer who borrowed the equity from your house).

The truth is the U.S. elites have badly mismanaged the U.S. economy, and as a result it is more or less doomed without a citizenry which demands an end to borrowing, fraud and lies. Correspondent Cheryl A. recently pointed me to what looks like a very topical title: The Mismanagement of America, Inc.

I don't know what the author ascribes this abject managerial failure to, but certainly one factor is that pandering, giveaways, lies and fraud have all been richly rewarded by voters, who return those who pander the most and give away the most "free money" (i.e. borrowed from overseas investors) to office, while anyone who dares speak a whisper of the truth--that some sacrifices will be necessary-- is immediately sent packing for the crime of audaciously inconvenient truth-telling.

American have rewarded fantasies like "we can cut taxes and borrow more with no consequences" by re-electing the cretins and criminals who espoused this Disneyland idea. Is it any wonder that every election for public office devolves into a contest over who can give away more borrowed money or money that is budgeted out of future revenues, i.e. entitlements to be paid by our grandchildren?

Frequent contributor Albert T. recently made this cogent observation about the American sense of entitled conceit:

Obama or McCain won't make a single difference to me; one will tie us to be wage slaves to the healthcare industry and the other to the military industrial complex. But does it really matter? The carrot (dream) is too far from the horses' (labor) mouth for it to care anymore and carry the burden. The public is becoming winded with crisis after crisis; when do we get a nice three months vacation on the floridian Riviera just like the French, ahem?

There will be a catalyst sooner or later that will shift metrics and psychology of the day from consumption, or conservation, to some third unknown. It could be pride since we are mass programmed to think that "I matter." For the past decade or so every generation has been drilled and ingrained with confidence of self through tv, school, etc... this mass conceit could backfire in so many ways. You could just see someone on the horizon with his hand in the air screaming "we deserve this!" and the crowd carrying a rallying cry. How pissed could a few generations of ingrained conceit be?

I fear that the Chinese are similarly ingrained with a sense of entitlement which is highly vulnerable to disruptions by reality: the sense that China "deserves" Great Power status regardless of its impact on the planet, and perhaps even more perniciously, a sense that China "deserves" endless growth in the 8% to 10% per year level for the foreseeable future.

As I have often written here: it's not poverty or hardship or sacrifice which makes people boil over with rage and resentment, it's the dissonance between their extremely elevated expectations and the modest results offered by reality.

Who has an out-of-touch-with-reality, grandiose sense of entitlement? Americans, hands-down. There can't be a budget crisis, public workers whine; there's money somewhere--go borrow it! But having suffered a decade of bogus "prosperity" which is now in full collapse and a foreign war which has caused thousands of casualties and a trillion dollars in extra borrowing, Americans don't have high expectations; they just hope to squeak by and keep their house and job. I believe it is the Chinese who feel Great Expectations, and the deflation of those expectations in a global credit-crunch recession could well be shattering.

At this point, it's an open question as to whether either China's citizens or American citizens have the greatness to stand up and demand real solutions to killing pollution, government mismanagement of the economy, unfunded entitlements, foreign entanglements, elite's corruption and fraud, Peak Oil, police-state surveillance and repression, circumvention of civil rights, a flawed healthcare system and the many other critical issues facing both nations' hundreds of millions of residents.

Fantasizing Growth: The 2016 Olympics

Used to be a woman living here in Rogers Park who you might remember if you live in the vicinity of the block bounded by Pratt, Sheridan, Farwell, and Lakewood.

She was an older lady somewhere in her sixties; an extremely small, delicate,thin white woman with reddish hair, who was usually dressed in shabby clothes and who I saw often at the 7-11 at Pratt & Sheridan. She was an immensely likeable woman, always friendly, and baked absolutely delectable sweets, which she offered to people who she talked to. She lived in the small, decrepit blond brick apartment building on Farwell close to Lakewood, right next to the alley.

Well, I had always assumed she was poor, based on her appearance and place of residence, and was really surprised when, on our last meeting a couple of years ago, she told me she was moving out of the neighborhood to Skokie, because she'd bought a house there. Wow, I thought, this lady has the wherewithal to buy a house? I immediately assumed that there was a sleazy mortgage broker mixed up in the deal somewhere, for she told me the house cost about $350,000, so I asked her what kind of financing she got.

"I didn't get any," she replied in a factual manner. "I paid cash."

I almost choked. She paid cash, I thought numbly, and suddenly I felt overwhelmed with shame for my own carelessness, extravagance, and wastefulness; in general, for my misspent life. This woman had simply done what I and most other Americans just can't find it in themselves to do, which is stop spending and put money away and forget about what other people think of you and your old clothes and decrepit furniture.

Actually, Rogers Park has a lot of residents like this, but you don't know who they are because they tend to hide. Not only do they not walk around bragging about their means and position, but they often look very unfashionable, to say the least. And they don't give a damn what we think of their appearance, because they have enough money socked away that they don't need to worry about what anyone thinks of them, but instead, would rather no one noticed them at all.

Now, I have people in my personal circle of acquaintances of another sort, people who have made over $200,000 a year for years past and still don't have a dime saved, can't afford to retire, and have tens of thousands of dollars of credit card debt, oftentimes delinquent. They live in large houses and pricey condos in prime neighborhoods,wear Rolex watches and Bruno Magli shoes,and always have lavish cars and boats, as well as every electronic gadget ever invented, but they are swimming in so much debt that all that needs to happen is for their commissions to slump for a month, and they're buried- and you'd better believe those commissions are slumping these days.

And sometimes they don't even need a drop in their incomes- a number of years back, I prospected a United Airlines captain who was then pulling about $250,000 a year, and he told me he wouldn't be doing any investing because he and his wife were doing a Chapter 7, on over $343,000 worth of unsecured debt. That's debt over and above the house and car loans, which are secured (sort of), for things like Disneyland and jewelry and furniture and clothes and gameboxes and whetever else you can think of to shoot this kind of money on over a short span of time.

You can't help but dwell on these two very different types of people and how the second sort has set the tone in our culture for the past 60 years and has helped sink this country into a world of trouble, especially when you consider our national commitment of over $7 Trillion in all towards bailing out the financial and housing industries, and Daley's obsession with winning the bid for the Olympics and the rapidly escalating taxes in Chicago, and increasing costs of doing business here. Has anyone told this guy that we are in the deepest economic pit since the 30s and that there's more to a city than monuments and sports venues?

We can now see that our local leaders, along with municipal authorities everywhere else, bought eagerly into the Ponzi mentality of the past decade, and were clearly basing their projections of future tax revenues on double-digit yearly increases in home values and on a economy that would surely keep expanding forever. Now that a massive shift has occurred, it is clear that revenues not only won't meet the projections that were used to justify lavish projects, but will fall substantially short and will also continue to drop as we enter a period of unavoidable economic contraction. That contraction won't be halted by printing trillions of more dollars, as Obama and Geithner are doing now- the additional government debt, in a time of falling incomes, will not only prolong the misery, it will endanger us all the more as the U.S. Treasury lurches toward insolvency. The yearly deficit is now $1.75 Trillion, over half the budget of $3 Trillion, for an overhang of public debt larger than has ever existed in any country in history, and which, judging by history, is unsustainable. And it is already affecting us, for the deterioration in our currency is driving oil prices back into the $50/barrel range, before the driving season even begins. If you think that we are not in danger of defaulting on our soveriegn debt, read history, and read about what happens to the economies and the citizens of countries that go into default. Read about Weimer Germany and Argentina, read about the whellbarrows of money to buy bread and the millions of people booted out of the middle class and plunged into desperate poverty as a result of their leaders' economic ignorance and financial malfeasance.

The 2016 Olympics is only one of the many Vanity projects Daley has his heart set on and is determined to ram down our throats at whatever the cost, which he and his people are being less than forthright about. There is also the Block 37 El Superstation Boondogle; at the latest writing, the station has lurched way over budget and sucked up over $300 Million, and is now stalled and left to rot in its incomplete state. This is money that could have been used to rebuild the decrepit Red Line and could also have gone toward expanding the system with service we really need, such as a circular connecting rail line, and lines that run east and west on the city's congested north side, to relieve the horrendous congestion on Belmont, Fullerton, and Chicago Avenues, so that life without a car might be possible at some point for the unaffluent denizens of the city's outer neighborhoods.

Our police department is steeply underfunded and undermanned, what consideration might be sufficient to kill our Olympic bid in any case, especially if considered alongside our decrepit and inadeqaute public transportation.

It's sad, scary, and somehow unbelievable, that one of the nation's richest and most successful cities should have so much difficulty meeting its basic needs and paying its bills, and it's so typically American that we could be in such a difficulty and still be arranging to lay out tens of billions of dollars we really don't begin to have for vanity projects whose costs to the public will result in profits only for a few crony "entrepreneurs", while disrupting the lives of tens of thousands of people and running up at least $20 billion in costs to the public, if not much more, if the $44 Billion Bejing games are any indication. Anyone who thinks that costs will be capped at $2 Billion or less, and will be paid mostly by private donors, is naive and credulous in the extreme.

But Americans as a whole tend to be extremely credulous and naive, which is why we are in the mess we are in to begin with. We have had it so sweet and easy for so long that we tend to think that we have a God-given entitlement to things like 20% a year appreciation on our houses, and that there's no bottom to the well of public money. Life for the past 60 years for Western countries in general and the U.S. in particular has been one long debt-and-oil fueled bacchanalia; an incredible feast of technological advances , material surplus, and easy credit; and it has gulled us into incredible complacency while humoring us in our fantasies of perpetual world dominance and our overweaning sense of entitlement.

Well, pinning our future on "growth" triggered by the expenditure of billions of borrowed dollars on glitzy projects with high glamor quotients but limited scope and utility, isn't any wiser for a city, or a country, than it does for an individual citizen who's already losing his job and in up to his eyeballs in debt, to borrow twice his yearly income to buy a Mercedes on the premise that driving an impressive auto will help him score more clients or get a better job. The Olympics is a costly and disruptive indulgence for which the usual justifications, trotted out for every public gift of hundreds of millions of dollars to privately owned sports venues, will no longer serve, and so are numerous other projects that Daley has on his plate; and our numerous bailouts of failing industries and escalating public spending sufficient to double the federal deficit will most likely only produce results on a national level comparable with what a major debt-spending binge does to an individual who's already on the ropes financially.

Nix the 2016 Olympics

Is the City of Chicago broke enough without committing $2 billion or more to another idiotic and disruptive exercise in empty symbolism and monument- building?

If New York City doesn't want the Olympics, should we consider whether we really want it?

And just exactly what will the city gain from hosting this 8-week extravaganza with the attendant security risk, and the disruption and displacement of thousands of residents from the area around Washington Park?

The cost alone ought to make boosters pause. Chicago is in poor case to front the projected $2 billion the event will cost, which would mean a pretty steep net loss to the city, for revenues from ticket sales are projected to be about $750 Million.

However, the estimated cost is most likely a very conservative estimate of the actual costs involved. The experience of other cities hosting the event is very instructive. Tessa Jowell, the minister in charge of the London 2012 Olympic Games, has admitted that it was "a mistake, in light of the current recession", to have bid for the games, and that costs are far exceeding original estimates. The cost has, according to Jowell, risen almost four-fold, to 9.35 Billion pounds, or approximately $20 Billion. Bejing fared much worse with its 2008 games, which not only cost more than $40 Billion, but occasioned a massive diversion of water from the provinces, causing widespread crop failures in water-short,poverty-stricken rural provinces.

The London games will not take place for another four years, yet the costs continue to mount, and during the worst ecomomic downturn in 75 years. Given our mayor's penchant for monument-building projects that virtually always overrun their costs estimates and siphon much-needed funds from lifeline services such as our underfunded and steeply undermanned police department, and decrepit public transit and essential water, sewer, and road infrastructure, we can pretty well figure that the expenditures on the Olympics will cause steeper shortfalls, with potentially disastrous results, in our necessary municipal services and structures. We need urgently to consider whether an open-ended financial commitment to this immense vanity project is in order given our current economic situation, especially since it so closely parallels the debacle of 1929 and ensuing Great Depression. Falling personal incomes, failing businesses, and mass layoffs will probably continue for quite some time, and we will be severely challenged to meet minimal public needs from falling tax revenues. All public expenditures will have to be carefully weighed, and whatever is not essential to maintain our muncipal services at a level that assures the safety and basic well-being of its citizens and businesses, will have to be tabled.

Well, counter the boosters, the games will boost tourism and enrich city businesses. My first response to that, is: at whose cost? Will the taxpayers at large be soaked once more to provide profits to a few business concerns? Are the taxpayers not being soaked enough through the city's 165 or so TIF districts in order to provide lavish profits to a few crony businesses?

However, it appears, from the experience of Atlanta, that the event can result in a net loss of tourism and revenues to tourist-related businesses. A 2003 study by Coates and Humphrey concluded that "building new sports facilities and attracting new professional sports teams did not raise income per capita or total employment in any US city." In his excellent article, Estimating the Costs and Benefits of the Olympic Games:What Can Bejing Expect From Its 2008 Games?, Jeffrey Owens describes the disappointing economic results of the 1996 Atlanta, Georgia games:

In reality, data and anecdotal evidence strongly suggest the Olympics had a significant crowding out effect on the rest of the tourism industry. Table 3 shows convention attendance in Atlanta, which had been increasing steadily over the previous ten years, fell ten percent from 1995 to 1996. hotel occupancy rates fell from 72.9% in 1995 to 68% in 1996 despite the Olympics. Macroeconomic indicators in Georgia and Fulton County show no discernible break in the pattern of per capita income growth or unemployment rates (State of Utah 2000). Due to the disruption caused by the Olympics, hotels and restaurants that would be expected to benefit from increased tourist traffic were actually hurt. "In other parts of town, many hotels and restaurants reported significantly lower than normal sales volume during the Games. Even shops and resorts in areas up to 150 miles away reported slower than normal business during the summer of 1996" (French and Disher 1997, p. 390).

Mr. Owen goes on to remark:

Along with crowding out on the demand side, local businesses and workers must also deal with temporary entry on the supply side. Although the Atlanta economic impact report makes no mention of entry by either workers or firms, the Atlanta experience serves as an example of how entry can bring into question if area residents actually benefit from growth in the tourism sector. The Centennial Olympic Park in downtown Atlanta served as the focal point for entry of corporations who sponsored the Games. To some extent the Olympics in Atlanta were self-contained. Entry of corporations and workers from outside the Atlanta area made the Olympics an economy unto themselves. Much of the income would go to firms and workers who are not permanent residents of the local economy.

Lastly, consider the terrorism risk. Chicago got lucky in the 911 attack. The 911 terrorists had a much bigger day planned than what they were able to accomplish, for the Sears Tower was on their list of targets, and only the immediate closure of all airports in the country saved this city. Security will have to be a major obsession at the games, given Atlanta's experience, and the known threat that exists at this time. The Games have been so politicized and are so laden with symbolic value that they are a very appetizing target for terrorists.

Whether considered in the light of its cost to the taxpayers, the security risk involved, the disruption of the lives of thousands of residents in the affected area and their inevitable displacement, or the negative return on investment that most cities hosting the games have experienced, the Olympic Games are a costly and unjustifiable vanity.

Notes:

Because of the lenght of the URL links to articles quoted here, I didn't link them in the article but am posting the links below.

The title of this post links to a series of articles examining the Chicago 2016 Olympic bid, by Daniel Honigman. Dan's website is http://danielhonigman.com. He has posted an entire series of articles discussing the costs and benefits of the 2016 Chicago Games.

Jeffrey Owens, Estimating the Cost and Benefit of Hosting Olympic Games: What Can Bejing Expect From Its 2008 Games? is at http://findarticles.com/p/articles/mi_qa4127/is_200510/ai_n15705690/pg_1?tag=artBody;col1