CHICAGO
It was one of the most bizarre squanderings of presidential power and prestige in memory.

In a last minute decision, President Obama flew off to Copenhagen, Denmark, on October 1 to lobby for his adopted hometown of Chicago’s 2016 Olympic bid. Only a few days before he had lamented that he wouldn’t be able to go because of his urgent commitment to fight for his health care bill. Then suddenly he reversed course and made a frenzied flight to appear before the International Olympic Committee as Pitchman in Chief for Chicago.

It ended badly. Chicago didn’t even make it past the first round of voting, garnering only 18 of the 94 votes cast on the first ballot. The president was stung by criticism that he was taking time out of his schedule to flack for the Olympics even though at this critical juncture he had had only one telephone conversation with General Stanley McChrystal, the commander of U.S. forces in Afghanistan. So Obama hastily convened a 25-minute meeting with General McChrystal on board Air Force One on the tarmac of the airport in Copenhagen.

Flying home from Copenhagen he then received word that the U.S. unemployment rate had risen to 9.8 percent, highlighting once again just how off-target the president’s Olympic aim had been.

It wasn’t even as if the Olympics had been popular in Chicago. The last Chicago Tribune poll taken just before the IOC meeting found only 47 percent of residents backing the city’s bid in the wake of Mayor Richard Daley’s decision to put taxpayers on the hook for any cost overruns. Liberal columnist Margaret Carlson noted that the Chicago citizenry was understandably wary because it had seen this movie before: “So many cities have wooed a national team to town, issued bonds to pay for a stadium and watched as wealthy patrons on expense accounts scooped up the skyboxes for clients.”

But the fact that Mayor Daley wanted the Olympics was all that mattered. He had staked his legacy on snagging the games. The 67-year-old mayor has dominated the city for the past two decades, but recent scandals and financial strains have dented his prestige. His approval rating tumbled into the 30s this summer as more scandals involving city contracting came to light. “The mayor’s ability to continue to run the city as he sees fit could hinge in great part on whether the Olympics bid succeeds,” reported the Chicago Tribune.

That’s why Chicago sources tell me Mayor Daley pulled out all the stops to mobilize Team Obama to save the city’s bid. He was aided in his appeals by the fact that the White House is now stuffed with top aides who are Daley loyalists, ranging from Valerie Jarrett to David Axelrod to Rahm Emanuel.

“Obama’s sudden decision to go to Copenhagen showed the staggering importance of the games to the Daley machine,” one influential Chicago lawyer told me. “It also demonstrates that for all of Mr. Obama’s protestations that he is independent of the Daley machine, there is a leash that runs from the 5th floor of City Hall to the Oval Office.”

Indeed, one of the back-stories behind the Olympics bid is the extent to which the Daley machine was counting on the games to enable Chicago to clear out “undesirable” neighborhoods on the city’s South Side and allow developers to extend the city’s fabled Gold Coast southward — all in the name of urban renewal. Developers and other politically connected entities were salivating at the prospect of huge public works projects being commissioned — all with a price tag that would read, “Cost Plus Corruption.”

That helps explain why the mayor was able to assemble such a large crowd on the day of the Olympics decision in front of the Richard J. Daley Center, conveniently located on Richard J. Daley Plaza in downtown Chicago. The pep rally was filled with city workers given time off to attend. They were joined by employees of compliant companies that do business with the city of Chicago. Many of the attendees were decked out in orange “Chicago 2016” T-shirts distributed in advance by Daley’s minions.

Pro-Olympics banners were flying, and supportive signs and posters, many skillfully produced to look homemade, were handed out from rented trucks.

Music was blaring, speeches by Oprah Winfrey, Obama, and Daley filled giant video monitors, and the cheerleaders were working overtime. The crowd was pumped, convinced the Olympics was coming to Chicago.

It all came to a crashing halt at 10:30 that morning when word spread that Chicago hadn’t even mustered enough strength to go to a second ballot. Some in the crowd were disappointed in the way many people are when a local sports franchise loses. But others — used to seeing the Daley machine get its way — were angry. A friend of mine was in Daley Plaza, and collected some of their comments:

“I don’t believe it. President Obama told them to give the Olympics to Chicago.”

“Mayor Daley is going to be really mad.”

“They had to have been bribed. Maybe we didn’t pay enough.”

But the savvier Daley minions were scared rather than angry. The Daley machine was counting on the Olympics not only to justify an enormous amount of public spending over the next decade, but also to deflect serious inquiries into the waste and corruption of the past.

Mayor Daley is now vulnerable without the bread-and-circuses aspect of the Olympics to hide the reality of what his machine has done. Taxes are crippling (the city has the highest sales tax in the nation); capital assets from the Chicago Skyway Toll Bridge to the parking meters on every street in the city have been sold to meet operating expenses; schools and public transit services are visibly crumbling; local government has never seemed less helpful and more hostile to the citizenry.

Hizzoner was able to put off an accounting for all of this first by helping to elect his good friend Barack Obama as president and then by dangling the illusion of Olympic Gold in front of city residents. But now, in an instant, the bubble has burst.

State and county elections will be held in November 2010, bringing the possibility that an anti-Daley governor and Cook County executive could be elected. Elections for Chicago’ mayor and city council follow swiftly in early 2011. Far from being a disaster for the city of Chicago, its loss of the Olympic Games could be the opening act in a pitchfork populist drama that will see the Daley machine challenged as it has never been before.