Paris 2024: Does hosting the Olympics boost the economy?

    It appears that the demand for hosting the Summer Olympic and Paralympic Games has declined. I was curious if this new trend is related to the economic impact of this biennial global event. 

    The article explains that the Olympic and Paralympic Games are likely to have a negative economic impact on France. One reason is the expensive, specialized infrastructure needed to host the games. This infrastructure will either need to be repurposed afterwards or maintained for far less use. Both of these options add more expenses on top of the original cost of the infrastructure. Another reason is the lack of significant monetary support from the International Olympic Committee (IOC). The IOC has sole rights to broadcasting regulations for the games but does not share any revenue from broadcasting deals with the host country. Additionally, the games may be negative for the economy of France because of the negative impact on citizens, including workers. The Paris 2024 Organizing Committee claims that it will bring more jobs and activity to Paris, however, this statement is misleading. Many jobs that will be involved in the Olympic Games already exist, such as hotel staff, and wages will likely remain the same during the games. Many of the businesses that will benefit from the tourism activity brought to Paris by the games are internationally owned such as car rentals or hotels, so France is not benefiting. Additionally, many workers for the games are volunteers from the host country, so French citizens are actually losing money by volunteering as they must lodge near the site, take off work, and more. The disruption of daily life caused by the Olympics will likely also hurt the economy. Metro ticket prices will nearly double for the week of the games and citizens have already been advised to work from home during the games. Furthermore, even if the games do not negatively impact France's economy, many of the tourists arriving in Paris for the Olympic games are simply replacing other tourists who would have come due to Paris's status as the most visited capital city. Essentially, at best, the games will have a negligible effect on France's economy, which does not appear to be worth the toll put on France's citizens and infrastructure. 

https://www.euronews.com/business/2024/01/31/paris-2024-does-hosting-the-olympics-boost-the-economy

The False Promise of Friendshoring

 Link: https://www.economist.com/finance-and-economics/2024/01/25/the-false-promise-of-friendshoring

This article published by the Economist details the effects and shifts seen in the geopolitical world in terms of economics. The changes are related to both geopolitical forces and geographic ones. The term friendshoring refers to the growing trade practice where countries’ networks are focused on connecting mainly with political and economic allies. 

The rise of friendshoring is an attempt to reduce geopolitical dangers but it also increases other supply-chain risks such as limiting the amount of trading partners and isn’t realistic for a lot of countries. When trade occurs between ideological rivals it is often out of necessity or when countries find themselves in the middle of the geopolitical spectrum they disregard the practice altogether. Furthermore, China can’t engage with friendshoring due to there not being enough big economies in the same geopolitical orbit.

The problem with friendshoring, if it continues to rise (which is unlikely) it would limit trade between countries that align themselves freely or non-American in terms of the scale. This is due in part to China embracing them willingly as trade partners.

Gas Prices and the hope for the continued decrease.

     The crazy incline in inflation that was seen by the US during the aftermath of COVID-19 was a very hard thing to deal with. The place where most people probably saw inflation the worst was in the gas prices. In June of 2022, gas was at an all-time high reaching over $5 a gallon, but we have seen a complete 180 when it comes to inflation and the now dropping of gas prices. The experts say that gas should continue getting cheaper and cheaper because of the weather patterns giving us an increasingly warmer winter thus cutting the demand for heat. Now, the national average for gas prices at the moment is sitting around $3.13, with over half the country having an average of under $3 a gallon. The experts believe that even the national average may soon drop under $3 as well.  As an everyday driver, I am ecstatic about this, especially being a young adult with minimal income. Cheaper gas will cut down the majority of the spending in my life, allowing me to put money towards other things/activities.

https://www.usatoday.com/story/money/economy/2023/12/12/why-are-gas-prices-going-down/71898654007/ 

Economists Against the Draft

    Reading about this subject was really interesting especially because of everything that is happening in the world right now. The main question that popped up was whether or not women should be in the draft. This eventually led into a conversation about the draft in general because it essentially removes people from their previously more profitable work positions. This impact would be even greater if the draft included women because they are more heavily involved in the workforce now more than ever. If men and women were required to enter combat, this would drastically decrease America’s workforce, and overall productivity for the country. This idea was what economists used to convince Nixon to end the draft in 1973, saying that the “market for soldiers should work like any other labor market.” As of right now, the registration system is still in effect, in order to serve as a backup plan. Women are not required to register because of a decree made by The Supreme Court in 1981 to abide by the military's decision on letting women into combat positions. However, times have changed and the military now allows women to be in combat, so if there was need for change it is possible that women will be required to register for the draft. I was interested in the effects of having women required to register for the draft, and in doing more research I found that as of 2013 they removed the military’s ban on women serving in combat. In World War II nearly 350,000 American women served in uniform, but they only took up non-combat roles in order to free up more men to fight. Even in 1994, the government changed some rules in order to allow women to serve in all positions in the military except for direct combat roles. I was unaware of the fact that women were not allowed in combat until recently, and I find the effects that a draft has on the economy to be really interesting.

Economists Against The Draft

Americans Unhappy with the Economy

 The US economy is doing well in many statistical aspects, yet majority of Americans say they unhappy with the current state of our economy. Unemployment is at a five decade low, wages are now outpacing inflation, GDP is expanding, and the stock market made a rebound from the terrible year it had prior. So why are Americans still unhappy? According to the article there are 3 underlying reason that the categories listed above don't show. The first is the financial distress that many Americans are still under due to the setbacks of the pandemic. Basic essentials are still 25% higher on average than before the pandemics, which has caused more and more credit card debt, which has put many Americans under distress. The second is Americans are struggling to pay their bills. This has much to due with the same reasons listed before, which is mainly people are still struggling to recover from hits during the pandemic. Finally, housing is unaffordable. The average household income needed to pay for a house has gone up drastically, and is a major factor for why many Americans, (especially those in the housing market) are unhappy with the economy.

Here's why Americans are so unhappy with the economy ...CBS Newshttps://www.cbsnews.com › MoneyWatch

China's Market Challenges

China's financial market is undergoing a challenging phase. Investors are re-evaluating their expectations regarding the Chinese government's intervention in the market. The country faces a complex scenario with regulatory pressures on the financial sector and a lack of significant governmental stimulus, leading to a cautious investment atmosphere. There is a sense of rethinking the investment strategies in China, considering the long-term restructuring of its property sector and the need for more selective investments in various sectors. This sentiment is reflected in the shifting focus of investors from China to other emerging or established markets​.

link to article