Olympic Medals and Economic Health

The state of a nation’s economy seem to have a tight correlationship with the score of Olympic medals acquired.

As New York University’s William Easterly points out: (charts from Mr. Easterly too)

“what determines Olympic medals?” The answer is income per capita and population, or in other words total GDP.

But such correlationship may not be perfect.

Mr. Easterly notes of the outliers and of the lessons:

The big underachievers are (in order of underachievement) India, Mexico, Indonesia, Turkey, Saudi Arabia.

The big overachievers are Belarus, Ukraine, Kazakhstan, Romania, Iran, , and Jamaica.

The lessons seem to be:

(1) World Bank national development strategies in key emerging markets have failed miserably in the Olympics sector.

(2) a history of Communism may not have been so awesome for development and liberty, but it’s still amazing for Olympic medals.

(3) Islamist ideology is a mixed medal producer (Saudi Arabia no, Iran yes).

(4) if nothing else works, just run really fast.

Interesting.

Will Swimming Bring Olympic Medals for the Philippines?

Overheard at a conversation: “The Philippines has a chance to win Olympic medals from swimming”

While I am not a supporter of Olympics, I occasionally do patronize the competition (when there is nothing to do).

Does the Philippines have a chance on swimming? I doubt so.

Why? Because like basketball, swimming is a sport which favors height.

To give examples of the recent Olympic Gold medalists:

US Michael Phelps 1.93 meters, 6 feet 4 inches

US Ryan Lochte 1.8 m, 6’2

China’s Sun Yang 1.98 m, 6’6

China’s controversial female Ye Shiwen 1.72 m, 5’8

US Missy Franklin 1.85 m, 6’1

Reason?

From BBC Sports Academy:

Because of the standing start, taller swimmers can often cover a greater distance before they've even entered the pool, meaning less work to do once they're in. This is particularly important in sprint events.

They can also cover a greater distance per stroke, and turn and finish with an outstretched hand.

From the New York Times:

Tall swimmers also have another advantage: because swimmers are horizontal in the water, their long bodies give them an automatic edge. “It’s the difference between long canoes and short canoes,” Dr. Joyner said.

But height may not be everything as other physical traits also contributes, this would be dependent on the swimming stroke, particularly for breaststroke and butterfly and even in women's freestyle and backstroke events.

Again BBC.

Key characteristics
Whatever your stroke, there are certain characteristics that make the body better suited to swimming:

• Wide shoulders
• Slim hips
• Large hands and feet
• Large arm girth
• High arm span to height ratio

The average height of Filipinos is 5’4 for male and 4’11 for female (disabled-world.com). I doubt if Filipinos have the other stated key physical features required for swimming to compensate for the height deficiency.

Nevertheless, Filipinos have been enthralled with basketball, even if there barely has been a chance to get international awards, because basketball has long been a political sport.

As an aside, here is a trivia or a graphic detailing the trail to Michael Phelps’ record 18 medals. (Zero Hedge)

In tennis: British Andy Murray vindicates Wimbledon loss by whipping record world champ ‘aging’ Roger Federer for gold (Washington Post).

Even in the Olympics, Central Planning Fails

Why do Olympic games suffer from financial losses? Because Olympic planners think that they have it all worked out.

From the Telegraph,

-Large areas of empty seats seen in stadia for the second day running

-London 2012 chairman Lord Coe reveals students and teachers are also being called in at the last minute

-Every tout arrested had tickets sent to foreign VIPS

-Organisers Locog have begun an investigation into the ticketing fiasco

To the chagrin of political authorities, to cover on the scores of empty seats, students and soldiers had to be bussed in.

This is a familiar scene in the Philippines which we call the “hakot crowd”

Again from the same Telegraph article,

Last night, Team GB cyclist Geraint Thomas said: ‘It’s quite sad, seeing all the empty seats.’

Lord Coe revealed yesterday how troops, students and teachers were being drafted in to help end the embarrassing spectacle of empty seats at Olympic venues.

By discriminating against the markets, authorities had these coming to them after all

Professor Christopher Westley at the Mises Blog rightly points out,

The Olympics are essentially mercantile events in which planning takes place outside of market forces so as to achieve outcomes preferred not by consumers but by states. (Peter Hitchens argues here that this trend started with the 1936 Olympics in Berlin when Hitler and Goebbels transformed them into “grandiose and torch-lit” spectacles.) Regardless, the events in London are demonstrating once again what an LSE economist in the 1930s said about economics–that its “curious task” was “to demonstrate to men how little they know about what they imagine they can design.” Why did Sebastian Coe and his team think they could effect a better outcome than what would result from the price system? These are practical men, but even Keynes might admit that they are probably slaves of some defunct and incorrect economist.

So at the end of the day, financial losses extrapolates to the debasement of medallions for winners or may even lead to higher taxes for the unfortunate London residents whom has hosted such grand boondoggle.

Even Olympic Medals have been “Debased”

While I am a fan of sports, I am not a fan of the Olympics.

Olympics, for me, represents the politicization of sports premised on feel good nationalism, which are largely financed by massive expenditures of taxpayer money.

The economics of Olympics suggests that the popular games, except for some instances (e.g. LA Olympics), have incurred losses for the hosts. At worst, financial losses extrapolated to higher taxes.

Professor David Henderson notes of the Canadian experience,

That view is understandable because losing money has been the norm. When the Olympics were held in Montreal in 1976, for example, the loss amounted to $2 billion, which was $700 per Montreal resident. And remember that that was in 1976 dollars. That loss resulted in a special tax on tobacco because, you know, smokers are such fans of the Olympics.

And proof of the politicization of sports via the Olympics can be further seen through the medallions for the winners—where the content of the London 2012 medals has been materially debased or devalued.

Image from BBC.

The Zero Hedge points out (bold original)

As every Olympic athlete knows, size matters. The London 2012 medals are the largest ever in terms of both weight and diameter - almost double the medals from Beijing. However, just as equally well-known is that quality beats quantity and that is where the current global austerity, coin-clipping, devaluation-fest begins. The 2012 gold is 92.5 percent silver, 6.16 copper and... 1.34 percent gold, with IOC rules specifying that it must contain 550 grams of high-quality silver and a whopping 6 grams of gold. The resulting medallion is worth about $500. For the silver medal, the gold is replaced with more copper, for a $260 bill of materials. The bronze medal is 97 percent copper, 2.5 percent zinc and 0.5 percent tin. Valued at about $3, you might be able to trade one for a bag of chips in Olympic park if you skip the fish.

The devaluation of the Olympic medals just exhibits the natural or deep-seated impulse of governments to inflate, as well as, to break their own established rules or standards—sports or no sports.

On Manny Pacquiao’s Boxing Career

This morning, much of the Philippines will be in a standstill as World Boxing champion local idol Manny Pacquiao goes back into the ring.

As a former boxing enthusiast (during my teenage days), I’d say that Manny Pacquiao is past his prime and will likely succumb to a younger player than he is, perhaps as days go by.

I’m not predicting that he will lose this or today’s match. But I am saying that the chances of continued victories will likely diminish if he persists to fight. This will be pronounced especially when he gets to fight younger boxers. It’s simply called the law of diminishing returns brought about by ageing.(unless technology comes to Mr. Pacquiao's rescue)

As a physical contact sport, age and mental condition are what fundamentally matters. Others like physical conditioning, ring technique and tactics are subordinate to this.

Unknown to many, most of Manny Pacquiao’s great victories came against pugilists older than he is (Marco Antonio Barrera, Juan Manuel Marquez, Oscar de La Hoya, Joshua Clottey, Shane Mosley) or at his age level (Ricky Hatton and Antonio Margarito). Only Miguel Cotto has proven to be the younger player whom Pacquiao recently beat.

In addition, the typical retirement age of many boxing legends is at the mid-30s.

The unbeaten Rocky Marciano made a comeback and retired by age 36. The great Muhammad Ali, my favorite hang up his gloves by age 39, but this came amidst back-to-back losses and the emergence of his Parkinson’s disease.

In short, based on the track record of great boxing legends, Pacquiao’s window of boxing greatness has been narrowing.

And there is always the psychological factor. Mike Tyson has been a great of example of a champion consumed by psychology particularly of hubris.

Mr. Pacquiao’s record as politician has not been smooth either. Corruption has been attributed to him, a recent dispute with the local tax agency the BIR shows that he is not an ally of the incumbent administration, and lastly, “God told me to retire”, for me, is a sign of admission of the actual state of his physical condition and of mental stress, where religion becomes his escape mechanism, or as means to endear himself with voters.

In reality, contrary to the popular opinion, it would not be Floyd Mayweather Jr., who will likely beat him, who again is older than Pacquiao and who is more mentality stressed than he is and will likely lose to Pacquiao, but some younger foe.

Of course reality bites, Mr. Pacquiao’s fame, fortune and political career have all been tied up with his boxing career. Once Mr. Pacquiao retires this privilege will erode overtime, as with all of the local celebrity sporting forebears.

So he may push his boxing career to the limits or take unnecessary risks in order to struggle to preserve this privilege.

[UPDATED to ADD: 28 years old Tim Bradley split decisions 33 years old Manny Pacquiao]

Sports Globalization: NBA Goes Emerging Markets!

Last January, the widely followed US National Basketball Association (NBA) formed its overseas arm, NBA China, to expand its basketball league to cover at China.

This from NBA, ``Five strategic partners will invest $253 million to acquire 11% of the company in preferred equity. The strategic partners are an elite group of exceptionally prominent and successful entities: ESPN, a division of The Walt Disney Company, Bank of China Group Investment, Legend Holdings Limited, Li Ka Shing Foundation and China Merchants Investments.”

We further read that the NBA plans to develop teams of professional players from about 10 cities in the coming years and help install more than 800,000 basketball goals throughout China, making the popular game even more accessible!

It doesn’t end here. NBA now plans to stretch its exposure to India!

From Steve Kyler of hoopsworld.com (highlight mine), ``[NBA Commissioner] David Stern also dropped hints that China may be the first stop of the NBA in Asia, but said he and his staff did meet with officials from India, where the NBA recently held a Basketball Without Borders stop. Stern pointed to India as an area where the NBA sees tremendous interest in basketball, and is open to exploring opportunities for the NBA to help develop the game in India. Europe may be stealing a few middle tier NBA players, but it seems the NBA is more focused on exploiting the billion fan markets of Asia.”

The Moral of NBA’s actions: FOLLOW the MONEY!