November 15, 2018

Amazon’s HQ2

The holidays are just around the corner. Now’s a GREAT time to forward us to friends and family, and not let politics ruin Thanksgiving dinner!

Washington Post

“Amazon.com Inc picked America’s financial and political capitals for massive new offices on Tuesday, branching out from its home base in Seattle with plans to create more than 25,000 jobs in both New York City and an area just outside Washington, D.C.

Reuters



Both the left and the right are criticizing the large subsidies NYC and Arlington have offered Amazon:

“We rarely agree with socialist Congresswoman-elect Alexandria Ocasio-Cortez, but she’s right to call billions of dollars in taxpayer subsidies for Amazon ‘extremely concerning.’ These handouts to one of the richest companies in the history of the world, with an essentially zero cost of capital, [are] crony capitalism at its worst.”

Wall Street Journal

“[New York City] has what the company wants, talent. Why pay them $1.5 billion to come?... It’s distressing that a mayor and governor who can’t come together for the sake of the subways or public housing somehow managed to find common ground by doing an end run around the City Council and steamrollering the land-use process.”

New York Times

Amazon would have likely made the same decision with or without subsidies... New York, with the money that’s now going to Amazon, could have paid for three years of road maintenance or have reduced the corporate income tax rates by 5.42 percent, which would benefit ordinary companies without political favor. Virginia could have reduced the corporate income tax by 45.16 percent and maintained the roads for four years with that money.”

National Review

“‘Businesses do not come to New York state without government incentives,’ Cuomo argued this summer. But that’s not true: Just last week, Google announced it would expand its New York City footprint to make room for up to 12,000 additional workers—no subsidy required. A 2013 report prepared for Cuomo’s own Tax Reform and Fairness Commission criticized the state’s policies, noting that there was ‘no conclusive evidence from research studies conducted since the mid-1950s to show that business tax incentives have an impact on net economic gains.’”

Slate


Both sides are also condemning corporate subsidies in general:

Amazon is a for-profit company. It can fund its facilities through its profits or anticipated profits manifested in loans or investments from private lenderschoosing to finance Amazon. Public funds, on the other hand, should be for public goods... That a corporate headquarters might have positive spillovers into the surrounding community is not a reason to subsidize it... Subsidy deals like the Amazon ones are indefensible morally and suspect economically.”

Washington Examiner

“Each year, local governments spend nearly $100 billion to move headquarters and factories between states. It’s a wasteful exercise that requires a national solution... First, Congress could pass a national law banning this sort of corporate bribery... Second, Congress could make corporate subsidies less valuable by threatening to tax state or local incentives as a special kind of income... Finally, the federal government could actively discourage the culture of corporate subsidies by yelling, screaming, and penny-pinching.”

The Atlantic

Other opinions below.

See past issues

From the Left

The left is critical of Trump’s negotiating tactics, and argues that this deal will not solve the underlying problems with the immigration system.

“New York’s Amazon deal will be a lasting monument to Andrew Cuomo’s economic incompetence...

“There was the time the state spent $90 million to build an LED lightbulb factory for a company that decided it didn’t need the facility just as the facility was being completed. There was the $15 million soundstage Cuomo hoped would convince Hollywood studios to start shooting movies near Syracuse; it sat largely empty, and the project was eventually ‘transferred’ to county officials for $1. There was Startup New York, the tax-incentive program that only created 408 jobs in its first two years at a cost of $53 million, leading officials to change its name out of shame.”

Slate

Minority views:

“As recently as the 1990s, companies were fleeing the urban cores of major metro areas in favor of the suburbs. Now, like a reversing tide, companies are flooding back into cities... Amazon's decision refutes the argument that low taxes and light regulations are the primary ways to create and attract good jobs... Innovative, hyper-growth companies are not looking for low-tax, low-regulation states so much as places that can either create or attract skilled work forces.”

USA Today

“Fundamentally, cities need business activity to grow. Businesses create the wealth that then gets spread throughout the populace — through taxation and spending, through stimulation of local economic activity, and through the wages they pay to their employees. Those mechanisms all need to be improved, but the solution to economic inequality is not to crush business activity or push it out of town. Instead of killing the goose, political leaders should focus on finding better ways of redistributing the eggs.”

Bloomberg

Many argue that “despite relentless Republican attacks, the benefits provided [by the ACA] -- guaranteed insurance and coverage of pre-existing conditions -- are now seen by many as a benefit to which they're entitled. Moving to Medicare for those who want it is a logical next step toward a single-payer option, one that maintains choice for millions of Americans… 56% of Americans say they support full Medicare for All… [but] when voters are presented with the full details of the Sanders and Warren plans, support falls dramatically… I believe it's critical for Democrats to maintain their advantage on health care going into 2020, and the best way to do that is to reject Medicare for All and embrace Medicare for those who want it.”
Joe Lockhart, CNN

The political calendar and Trump's approach could give grounds for optimism. Kim, who has presided over a limited form of economic development inside North Korea, is under pressure to deliver improvements in the lives of his people… So he has an incentive to try to seek economic benefits or aid from the United States and wants punishing economic sanctions lifted — a potential opening for US negotiators… Kim must realize that his chances of basking in this kind of legitimacy with a US President other than Trump are slim. So if he fears Trump could lose in 2020, he may reason the time may be ripe for a deal. And Trump wants nothing more than a big diplomatic breakthrough months before the election.”
Stephen Collinson, CNN

Regarding the Cadillac tax, “high-premium employer-based plans raise the cost of health care for everyone by encouraging the overconsumption of expensive services. This means that even Medicare and Medicaid face higher prices. Quite aside from its benefits for the health-care market, the Cadillac tax would also have the effect of expanding the tax base and making the tax code more efficient. It would raise revenues by about $15 billion a year… Rather than killing or delaying the Cadillac tax, Democrats should be trying to make it operational. The tax would raise revenue, lower costs, increase the efficiency of the tax code and give the Obamacare individual market its best chance at success.”
Karl W. Smith, Bloomberg

“The two issues with which he is most often associated, support for a balanced budget and opposition to free trade, put him at odds with both of our major political parties. An old-fashioned, soft-spoken Southerner, he nevertheless held views on so-called ‘social issues’ that would be to the left of the mainstream of the Republican Party, both then and now. He was a fervent supporter of the Vietnam POW/MIA movement in the late '80s and early '90s, but he was not in any sense a hawk. Never mind 2003. Perot opposed the first war in Iraq in 1990… Perot's death should be mourned by all Americans who regret the fact that it is no longer possible to make reasoned, non-ideological arguments about questions of public import, and by the devolution of our political life into mindless partisan squabbling.”
Matthew Walther, The Week

From the Right

From the Right

“Mr. Cuomo taxes New Yorkers at confiscatory levels, giving himself more money to spend. Then he turns around and takes credit for sparing powerful interests from those taxes. In New York they call this a racket, and with good reason.”

Wall Street Journal

“Under the guise of a multi-billion dollar development contest, Amazon successfully convinced the mayors and governors of 238 North American cities and regions to voluntarily surrender a treasure trove of information ranging from future infrastructure projects to land use patterns and everything else in between—all without being charged a dime...

“Armed with this detailed data, Amazon will not only have a competitive advantage over its rivals in retail and cloud computing, it will also have a serious upper hand at the negotiating table with state and local governments, as it will know precisely how much taxpayer money it will be able to extract from public funds.”

American Conservative

Minority view:

[Amazon’s] gravitational pull might be large enough to justify the cities’ investment... The arrival or emergence of dynamic tech firms can create a powerful entrepreneurial ecosystem that enables a clustering of new firms. This not only attracts knowledge workers but also generates spillover jobs for everyone from lawyers to construction workers to lower-paid service employees...

“New York City and Washington are hardly left-behind cities. But the arrival of Amazon should formidably strengthen their already strong tech sectors... [and] could help recession-proof both regions. And even if Washington follows through with threats to regulate big tech, Amazon should remain a pretty reliable employer in New York and Virginia for years to come.”

American Enterprise Institute

Regarding his candidacy overall, “There’s a lot of conventional wisdom in Washington that the early front-runner always loses. And that’s true except when it isn’t… in 1999, George W. Bush dominated the polls and, except for a brief scare from Senator John McCain in the New Hampshire primary, essentially cruised to victory. A key part of Bush’s early success, not just in polls but in fundraising, stemmed from the fact that he was promising a Bush restoration…

“He was offering a referendum on the incumbent president and the scandals and partisanship that defined the end of his administration. He vowed to restore ‘honor and dignity to the Oval Office’ and to be a ‘uniter not a divider.’ The very different context notwithstanding, this is pretty much Biden’s campaign message. The ideological, activist, and Twitter-obsessed base of the Democratic party may not like Biden’s pitch. But it sure looks like rank-and-file Democrats do.”
Jonah Goldberg, National Review

“Not only did [Trump] attack the ‘squad,’ he managed to do it in a way in which no other prominent Democrat can continue to criticize them publicly, lest they be perceived as echoing the president’s contention that they should go back where they came from. At the exact moment the accusations and counter-accusations were set to do lasting damage, Trump just had to jump in and give them an attack that would unify them all. It often seems like Trump would rather have a bad news cycle that focuses on him than a beneficial news cycle that focuses on someone else… Everyone around the president can read a poll and knows that his rage-tweeting is a liability; it is perhaps the biggest liability in a presidency that, with prosperity and a perception of peace, ought to be comfortably cruising to reelection.”
Jim Geraghty, National Review

“If Joe Biden can win his way through the primaries, he’s almost lab-engineered to beat Trump. He doesn’t cause Republican panic, he has the potential to connect with white working-class voters in a way that Hillary couldn’t in 2016, and he has a potential to connect better with black voters than Hillary did… if Biden emerges from [this] crucible, Trump will face a very different challenge than he faced in 2016.”
David French, National Review

“NBC and MSNBC embraced Sen. Elizabeth Warren of Massachusetts in the first debate of Democratic presidential candidates Wednesday night, treating her like the star of the show. The debate led off with Warren, who had a huge popularity advantage from the start… NBC anchor Savannah Guthrie started it off sounding more like Warren’s press secretary. ‘You have many plans – free college, free child care, government health care, cancelation of student debt, new taxes, new regulations, the breakup of major corporations,’ Guthrie said, before teeing up an economy question. Guthrie even used Warren’s plan to break up tech companies as the foundation for a question for Sen. Cory Booker of New Jersey… the round-robin final comments also ended with Warren, as Maddow asked her for the ‘final, final statement.’ That let NBC bookend the entire debate with Warren and Warren.”
Dan Gainor, Fox News

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...

Drunk online shopper wakes up to live pig, peacock and giant salamander.

CNET

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