TOKYO — The
Tokyo Olympics have weathered a historic postponement, an
unprecedented ban on overseas fans and persistent domestic opposition, but with
one month to go, the finish line is finally in sight.
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The journey to Tokyo 2020 has involved a long list of complications that
sometimes threatened to make it the first modern Olympics cancelled in
peacetime.
Now, just four weeks remain until the opening ceremony on July 23, and while
the mood is far from jubilant, organizers might just have cause to celebrate.
The first Olympic teams are already in Japan, along with key officials and
some overseas media. And polls suggest long-standing public opposition to the
Games may be weakening as D-day approaches.
"We are in the full delivery phase,"
International Olympic Committee chief Thomas Bach said on Monday.
"Athletes are beginning to arrive in Tokyo, ready to make their Olympic
dreams become a reality."
It has been an uphill battle since the unprecedented decision to postpone
the Games in March 2020, as the scale of the pandemic started to emerge.
Back then, there was cause to hope the pandemic might be over before the
opening ceremony came around.
But a global coronavirus surge and the rise of more infectious variants put
paid to those dreams and fuelled rising opposition in Japan.
No cheering,
high-fives
Officials pressed ahead, contending with delayed qualifiers and test events
and launching a mammoth effort to draft virus rules they say will keep the
event safe.
In March they announced the Games would be the first to bar overseas
spectators, a decision that Tokyo 2020 chief and former Olympian Seiko
Hashimoto called "unavoidable".
On Monday, organizers set a maximum of 10,000 domestic fans per venue, but
warned events could move behind closed doors if infections surge.
Even with some spectators in the stands, there's no doubt this year's Games
will be a pale imitation of Olympics past.
Cheering will be banned, and athletes can't hug or high-five.
They must wear masks except when eating, sleeping or competing, and can only
move between the Olympic Village and their venues. They face warnings, fines or
being kicked out of the Games for breaking the rules.
Hurdles ahead
The Tokyo Olympics faced setbacks as far back as 2015, when the main
stadium's revamp was sent back to the drawing board because it was too
expensive.
In 2019, the head of Japan's Olympic committee stepped down over a French
investigation probing $2.3 million in payments made before and after Tokyo's
nomination. He denied any wrongdoing.
As the Games finally approach, the IOC says more than 80 percent of those in
the Village will be vaccinated, but competitors will still be tested daily.
In a taste of the challenges ahead, a coach from Uganda's Olympic team
tested positive on arrival in Japan on Saturday, despite the delegation being
vaccinated and testing negative before travel.
On Tuesday, the team's other eight members were put into quarantine until
July 3, a local official told AFP.
The relentless preparations may have taken their toll on Tokyo Governor
Yuriko Koike, who will take the rest of the week off to recover from
exhaustion, her office said Tuesday.
The Olympic delay and virus security have added at least 294 billion yen ($2.6
billion) to an already hefty budget of 1.64 trillion yen ($14.9 billion), which
could make Tokyo among the most expensive Summer Games ever.
But despite the coronavirus and the hefty expense, there are signs public
opposition is softening, with recent surveys finding 50 percent or more favor
the Games going ahead over cancellation.
Japan's Prime Minister Yoshihide Suga, who faces his first election just
after the Games, will be hoping for a success that can boost his political
career.
His government has faced pressure over its coronavirus response, though
Japan has seen a smaller outbreak than many nations, with around 14,500 deaths
despite avoiding harsh lockdowns.
The country vaccine rollout started slowly, though the pace is now increasing,
with around seven percent of the population fully inoculated.Remember when everyone was panicking about inflation,
warning ominously about 1970s-type stagflation? OK, many people are still
saying such things, some because that’s what they always say, some because
that’s what they say when there’s a US Democratic president, some because
they’re extrapolating from the big price increases that took place in the first
five months of this year.
But for those paying closer attention to the flow of new
information, inflation panic is, you know, so last week.
Seriously, both recent data and recent statements from the
US Federal Reserve have, well, deflated the case for a sustained outbreak of
inflation. For that case has always depended on asserting that the Fed is
either intellectually or morally deficient (or both). That is, to panic over
inflation, you had to believe either that the Fed’s model of how inflation
works is all wrong or that the Fed would lack the political courage to cool off
the economy if it were to become dangerously overheated.
Both beliefs have now lost most of whatever credibility they
may have had.
Let’s start with the theory of inflation.
Since the 1970s, and especially since a seminal 1975 paper
by Robert Gordon, many economists have tried to distinguish between transitory
fluctuations in the inflation rate driven by temporary factors and an
underlying “core” inflation rate that is much more stable — but also hard to
bring down if it gets uncomfortably high. The idea is that policy should
largely ignore transitory inflation, which is easy come, easy go, and only
worry if core inflation looks as if it’s getting too high (or too low).
Since 2004, the Fed has routinely published an estimate of
core inflation that it derives by excluding changes in food and energy prices,
which are notoriously volatile, and has used that measure to fend off demands
that it tighten monetary policy in the face of inflation it considers temporary
— notably in 2010-11, when prices of oil and other commodities were rising and
US Republicans were accusing the Fed of risking “currency debasement.”
The Fed was, of course, right: Inflation soon subsided. And
the distinction between transitory and underlying inflation — a distinction
that, judging from my inbox, generates an extraordinary amount of hatred from
some Wall Street types — has, in fact, been a huge practical success, helping
the Fed to keep calm and carry on in the face of both inflation and deflation
scares.
The Fed has been arguing that recent price rises are
similarly transitory. True, they’re not coming from food and energy so much as
from pandemic-related disruptions that caused surging prices of used cars,
lumber and other nontraditional sources of inflation. But the Fed’s view has
been that this episode, like the inflation blip of 2010-11, will soon be over.
And it’s now looking as if the Fed was right. Lumber prices
have plunged in recent weeks. Prices of industrial metals such as copper are
coming down. Prices of used cars are still very high, but their surge has
stalled and they may have peaked. Core inflation wins again.
What about the alternative inflation story? It goes like
this: The Biden administration’s American Rescue Plan has pumped a huge amount
of purchasing power into the economy, while affluent households, who built up
large savings during the pandemic, are now ready to go on a spending spree. As
a result, critics warn, there will be a classic case of too much money chasing
too few goods, leading to a big rise not just in volatile prices but in
underlying inflation.
To buy into this story, however, you have to claim not just
that the coming boom will be truly huge — even bigger than most private
forecasters expect — but also that the Fed, which is fully capable of reining
in a runaway boom, will stand idly by while inflation gets out of hand.
Last week, however, statements from the Fed’s open-market
committee — the group that sets monetary policy — made such claims less
plausible.
Reading such statements is often an exercise in Kremlinology
— the Fed didn’t announce any actual policy changes, so it’s all about trying
to identify changes in tone that give clues about the future. But Fed watchers
considered the new releases hawkish, signaling increased willingness to step on
the brakes if the US economy really is exceeding its speed limit.
For what it’s worth, I don’t think tapping the brakes will
actually be required. But by suggesting that it will act if necessary, the Fed
has largely undercut whatever case there was for worrying about a return to the
1970s.
So what was all that about? Monetary doomsayers have been
wrong again and again since the early 1980s, when Milton Friedman kept
predicting an inflation resurgence that never arrived. Why the eagerness to
party like it’s 1979?
To be fair, government support for the economy is much
stronger now than it was during the Obama years, so it makes more sense to
worry about inflation this time around. But the vehemence of the inflation
rhetoric has been wildly disproportionate to the actual risks — and those risks
now seem even smaller than they did a few weeks ago.
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