With the exception of the Black Death, nothing can ruin a city like the Olympics. So I hope my British friends will forgive me when I say: sorry, chaps, but better you than us.

For a while there, the Big Apple was nursing a bit of an inferiority complex about the Big Smoke. At the top of the boom, every artist and writer in New York seemed to be moving to London (myself included). Mike Bloomberg, our eternal mayor, started spending more time at his apartment in Cadogan Square, glumly enduring double-decker bus rides for photo ops and begging your highly professional banks to come do more business in our town.

"If Paris was the capital of the 19th century and New York of the 20th, London is shaping up to be the capital of the 21st."

So said a New York magazine cover story in 2007, a few months before it all came crashing down.

And thus, your predictably miserable Olympics, featuring Dubai-style laborers' slums and more troops than you have in Afghanistan, look from here like the final act of a decade-long duel, the perfect complement to the best-of-British Libor scandal.

But there is no pleasure to be taken here in the London debacle. In New York, we can only think: there but for the grace of God – and the corrupt monopoly known as the International Olympic Committee – go we.

If we'd been a bit less lucky, the New York Olympics – I shudder even to write it – would be opening next week on the Hudson River. There would be archers in Brooklyn and triathletes in Central Park, though whether we'd have London-style snipers and anti-aircraft missiles on Fifth Avenue remains unknown. The city's three or four fans of rhythmic gymnastics must be devastated.

The New York bid started percolating after the United States's surprisingly successful hosting of the 1994 World Cup, when a young private equity millionaire named Dan Doctoroff took it upon himself to bring the Games to the city. Citizen Bloomberg, who adores grand projects with little oversight, quickly became one of Doctoroff's most ardent supporters. Soon after 9/11, he was Mayor Bloomberg, and guess who he appointed as his deputy? (The slipping between public and private sector has become a hallmark of this administration: Doctoroff is now president of … Bloomberg LP.)

Though they tried to do it with a modicum of taste, 9/11 was never far from the surface of the New York bid. It was our trump card, our chance to become the sentimental favorite. Bloomberg and Doctoroff would regale the Olympic nomenklatura – who had lately been exposed for taking bribes to award the Winter Games to Salt Lake City – with tales of New York's "resilience". Doctoroff even had the gall to suggest that surviving a terrorist attack was a demonstration of the Olympic spirit. Our bid was not ashamed, four years later, to include in its pitch an image of a child's drawing of the Twin Towers, captioned, "The sky was so blue."

Did I mention that the whole thing might have been illegal?

Negotiations with the IOC took place entirely via the mayor's office and the bid; our city council, which is supposed to approve spending, was cut out. Legislators who asked for Olympic memoranda were stonewalled. The excuse, by now classic in New York, was that the bid was a private undertaking, and taxpayers would only have to stump up cash in the "unlikely" event the Games went over budget. (Londoners can tell us just how unlikely.) New York would have hosted the most corporate Olympics anyone had ever seen. Bloomberg ensured the IOC that 95% – really, 95% – of the city's taxis, buses and subways would have been papered with Olympic sponsor advertising (pdf). The city as 8-million-strong McDonald's campaign!

Seven years later, when our economy has wobbled but our mayor is somehow still standing, it's clear even to those in thrall to the gods of sport and real estate that losing the Games was a great mercy. The sensible parts of the NYC 2012 bid have been implemented anyway, such as the extension of the 7 subway line, ferry service along the East River, and the re-zoning of a neglected industrial site along the Hudson. The elevated park known as the High Line was slated for demolition before the 2012 bid; it's since become Manhattan's most successful urban redevelopment in decades.

At the same time, New York has dodged the white elephants that, as Athenians and Beijingers know, start crumbling days after the closing ceremony. Manhattan was spared a giant $2bn stadium on the west side, though Brooklyn was not so lucky, and the big facility for badminton and judo lives on only in dreams. New Yorkers are free to buy Pepsi instead of Coke anywhere they please – though soon, if the mayor has his way, only in 16-ounce cups.

Now, as the American press looks pitifully on London for its insufficient transportation system or absurd brand-exclusivity police, I can only look and say: don't laugh, it could have been us. It's not easy to watch London, a city I love tremendously, brought low by the Olympic gentry, the carnivorous corporations, and the timid governments that obey their commands. (If even the Chinese Communist party couldn't stand up to them, what chance did Britain have?) But the one good thing that could result from these desperate Games would be to wake everyone up to the economic, social and urban devastation that these spectacles cause.

And yet, people are starting to talk about New York 2024. You'd think we'd learn.