February 15, 2019

Amazon Rebuffs NYC

We’ll be giving a talk on media bias at the Ethical Humanist Society of Chicago on February 24. Check it out if you’re in the area!

“Amazon abruptly dropped plans Thursday for a big new headquarters in New York that would have brought 25,000 jobs to the city, reversing course after politicians and activists objected to the nearly $3 billion in incentives promised… It said it plans to spread the technology jobs that were slated for New York to other offices around the U.S. and Canada, including Chicago, Toronto and Austin, Texas. It will also expand its existing New York offices.” AP News

See past issues

From the Left

The left is divided between those cheering Amazon’s exit and those lamenting a lost opportunity.

“There’s little correlation between cutting deals with big companies and improving a state’s employment or income picture… Big dollar tax breaks aren’t going to save [local] economies. They come with a real cost. The best way to compete is to invest in the attributes that make them attractive to employers — like education and infrastructure.”
New York Times

“Corporate subsidies, including the $3 billion package offered to Amazon, are often pernicious and usually pointless. Studies show that these sorts of measures ‘have no discernible impact on firm expansion, measured by job creation.’ Yet every year, local governments spend more than $90 billion to move headquarters and factories between states, a wasteful zero-sum exercise whose cost is more than the federal government spends on affordable housing, education, or infrastructure.”
The Atlantic

This ordeal is “in some ways symbolic of the troubled American economy at large, in which nominal good news (Dow 26,000!) is meaningless to an underclass increasingly without stakes (half the country has no money in the stock market)... the burden now lies on businesses and politicians to show why new jobs are good for people who won’t be hired for them… Forget the jobs mantra. New Yorkers want to know something more: What’s in it for me?
Slate

Supporters note that “the deal would've created $27.5 billion in tax revenue over the next 25 years. With the city and state receiving a roughly 50/50 split, that amounts to a 9-to-1 payout on the investment... So why was there such strong public hostility to Amazon’s plan[?]… nearly 80 percent of voters believed the city should have had more input in the process, which happened in secret and without input from local Queens politicians… This moment in history provides a unique opportunity for politicians to change the narrative… [and] enact economic development decisions with greater transparency and inclusivity.”
The Hill

“Critics dismiss the idea that Amazon would have helped grow [the] tax base, pointing to the subsidies it was scheduled to receive and falsely claiming those dollars could have otherwise been spent on schools and subways. But the bulk of those abatements weren’t cash handouts — they were discounts on the taxes Amazon would have paid in the future…

“The deal signed with the government also included important objectives like the hiring of residents from Queensbridge Houses, the nation’s largest public housing project. While progressives often rally for populations like those at Queensbridge, their job prospects rarely appear in their rallying cries… the NYCHA Tenants Association issued a scathing indictment of local politicians in the aftermath of the deal’s collapse.”
Buzzfeed News

“Politicians and activists had good reason to criticize the size of the tax breaks and the secrecy of the negotiations… [But] it seemed that few were interested in having a constructive conversation about how to improve the deal and make it work for the tech giant and the city.”
New York Times

Some argue that despite headlines, “Amazon’s about-face was not a temper tantrum. It was a calculated move to preserve, even enhance, the company’s leverage in trying to extort taxpayer-funded handouts for projects across the country. Amazon is sending the message that it will bend to no city or state government. If any locality tries to cut a better deal—or, god forbid, criticizes the company for its business practices—Amazon will walk away. Bezos is making the cynical, and probably accurate, bet that many desperate communities in America won’t dare to try.”
The New Republic

From the Right

The right blames the decision on New York’s hostility to business, and argues that unless this changes the city will have trouble attracting businesses.

From the Right

The right blames the decision on New York’s hostility to business, and argues that unless this changes the city will have trouble attracting businesses.

“New York can’t build real, sustainable growth with one-off deals with big players: It needs an environment that’s at least less hostile to business… companies keep getting hit: a $15 minimum wage; mandatory family and sick leave; rules on how much notice you have to give in scheduling shifts and what you can ask in job interviews, and on and on and on… New York puts too many burdens on everyone looking to do business here. Until that changes, every potential new job is at risk.”
New York Post

“It’s a testament to New York’s toxic business environment that even $3 billion in subsidies wasn’t enough to keep the company in town… The city has the country’s second-highest income tax, and Mr. de Blasio last month proposed that all private employers be required to provide workers two weeks of paid vacation each year. That’s on top of paid family leave. Animus toward business represses the organic investment and job growth that make a dynamic economy.”
Wall Street Journal

“We should pay close attention to Amazon's decision here, because it reflects the fact that the most successful companies in America have never had more mobile capital… if left-wing politicians treat these companies as borderline criminals, they'll take their business, jobs, and investment elsewhere.”
Washington Examiner

The loss of Amazon only saves New York about $325 million in cash grants that had been destined for Amazon. The rest of the incentive package comprised of tax savings that Amazon will not realize, money it would not have had to pay, had it set up shop and paid roughly $10 billion in taxes over the next two decades.”
Washington Examiner

“It’s hard to see how depriving as many as 40,000 workers and their families of salaries averaging more than $150,000 per year will save them from ‘corporate greed’ and ‘worker exploitation.’... Amazon’s cancellation of its plans to come to New York is a loss not only for those like Ocasio-Cortez who want to redistribute wealth, but also for those who want to grow wealth and expand the economic pie for hundreds of thousands, if not millions, of Americans.”
Fox News

“Ocasio-Cortez has some arguments with which to defend herself. She can argue that crony capitalism is bad and that government shouldn’t give tax breaks to corporations. She can argue that gentrification would have happened, driving the poor from their homes, or that Amazon has poor labor practices. These are fine things to think about in the abstract, but on the ground in Queens there will now be 25,000 fewer jobs than there were going to be…

Critics say these are all professional jobs that wouldn’t uplift the working class. This is an absurd claim. There would have been janitors, building managers, secretaries, and bookkeepers. There would have been food service and new jobs at local restaurants. Maybe there would even have been more opportunities for bartenders with political ambitions.”
The Federalist

Some suggest that “the sense underlying all of it is more basic and territorial [rather than economic]: You do not bring a household-name corporate villain, especially one led by the world’s richest plutocrat, onto our turf in 2019. If the growing popularity of progressivism means anything, it means Jeff farking Bezos’s company doesn’t get to set up shop in the capital of blue America. That attitude explains why Ocasio-Cortez has seemed bizarrely upbeat today about the prospect of 25,000 jobs evaporating… It was a turf battle and her side won. They showed their strength. Who cares about jobs?”
Hot Air

President Trump should be happy. As much as Warren is articulate, obviously intelligent, and energetically supported by Democrats, she would also be far easier to defeat than Joe Biden… Considering Trump's economy, the president is well placed to defeat Warren.”
Tom Rogan, Washington Examiner

A libertarian's take

“The fans who avidly followed the men’s tournament certainly weren’t doing anything wrong. And it’s hard to argue that each of them had a moral obligation to be exactly as interested in women’s soccer. Even if we could stop them from watching the men more than the women, should we?…

“It’s tempting to answer that the fan choices aren’t innocent, they’re sexist. But since we can’t peek into their hearts, to say that definitively, we’d have to assume that men’s greater speed, strength and endurance definitely make nodifference to the sport’s quality. Fair enough, but then why do fans prefer to watch Megan Rapinoe play instead of the sedentary elderly who could presumably use some exercise? Alternatively, maybe pay should be equalized precisely because biology is unfair. But that seems to be an argument for curbing the pay of all top-level athletes, who have to hit the genetic lottery just to get on the field. It might be easier to focus on the distributions across society at large, rather than every individual industry, especially when fundamental biology is in play.”
Megan McArdle, Washington Post

On the bright side...

Telephone scam artist picked the wrong target — former FBI and CIA director William Webster.
NBC News

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