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 takes Mueller’s letter and Barr’s testimony as confirmation that Barr is behaving more like Trump’s defense attorney than the U.S. Attorney General.

“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

Regarding the deployment of an aircraft carrier and bombers, many note that the US “has a long history of provoking, instigating, or launching wars based on dubious, flimsy, or manufactured threats… The most egregious case was the U.S. invasion of Iraq, in 2003, which was based on bad intelligence that Baghdad had active weapons-of-mass-destruction programs. The repercussions are still playing out sixteen years (and more than four thousand American deaths) later… The sense of foreboding is tangible.”
Robin Wright, The New Yorker

Trump's “goal, it seems, is to put so much pressure on Tehran that it has no choice but to completely change its behavior — but he could end up leading the countries to the brink of war in the process… Now is typically the time when cooler heads prevail, but it’s unclear if there are cooler heads around… It’s hard to overstate how avoidable this situation was.”
Alex Ward, Vox

“In theory, there’s no reason why a bad businessman can’t go on to become a good president. But a commander-in-chief whose signature legislative achievement expanded tax loopholes that he himself describes as grossly unfair is pretty much a bad president, by definition.”
Eric Levitz, New York Magazine

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

“The broader context here is North Korea's crop crisis. If Kim hasn't got sanctions relief by August's end, a painful winter is coming… Absent Kim's commitment to suspend all ballistic missile tests, the U.S. should not support the provision of food supplies to the North Korean people. A North Korean long-range nuclear strike capability poses an existential threat to American society… Trump must not allow North Korea's coming suffering to dictate his decisions. Supporting North Korea with food will both prolong North Koreans' suffering under Kim and directly undercut U.S. interests.”
Tom Rogan, Washington Examiner

Some argue, “It stands to reason that if Kim is willing to starve his own people, deprive his economy of any growth, and pour billions of dollars into missile tech, he will, at some point, develop weapons America and its allies mastered decades ago. And short of an invasion or a diplomatic agreement, under the present circumstances, there is very little we can do to stop him… Taking a hardline approach—what many call the ‘big deal’—or only granting sanctions relief after full denuclearization and the end of Kim’s missile programs is completely impractical and something North Korea would never agree to… only a step-by-step process of disarming Pyongyang, where each side gets a benefit for making a concession, will work.”
Harry J. Kazianis, The American Conservative

Others posit that “the reason Kim is developing missiles that can strike Seattle or LA is that 28,000 U.S. troops are in South Korea… If we cannot persuade Pyongyang to give up its nuclear weapons in return for a lifting of sanctions, perhaps we should pull U.S. forces off the peninsula and let China deal with the possible acquisition of their own nuclear weapons by Japan, South Korea, and Taiwan…

“After an exhausting two weeks [between North Korea, Iran, Venezuela, and others], one is tempted to ask: How many quarrels, clashes and conflicts can even a superpower manage at one time? And is it not the time for the United States, preoccupied with so many crises, to begin asking, ‘Why is this our problem?’”
Pat Buchanan, Townhall

Counterpoint: “after the War of 1812, President Madison… enacted the Tariff of 1816 to price British textiles out of competition, so Americans would build the new factories and capture the booming U.S. market. It worked. Tariffs [also] financed Mr. Lincoln’s War. The Tariff of 1890 bears the name of Ohio Congressman and future President William McKinley, who said that a foreign manufacturer ‘has no right or claim to equality with our own… He pays no taxes. He performs no civil duties’… [A tariff’s] purpose is not just to raise revenue but to make a nation economically independent of others, and to bring its citizens to rely upon each other rather than foreign entities.”
Patrick J. Buchanan, The American Conservative

A libertarian's take

“The scoop reflects poorly on Trump, who willfully misled the public for a decade in hopes of fraudulently representing himself as a man with a Midas touch. But he could not have succeeded without the assistance of many Americans, some mercenary, others over-credulous, who helped to spread the deceit and deception, generating countless newspaper articles, magazine stories, and TV segments that misinformed the public about the publicity hound’s record in business. New evidence of his staggering losses in that decade therefore provides an apt occasion to reflect on the media’s complicity in Trump’s brazen deceit and deception… Let [this] be a lesson for today’s tabloids, gossip columnists, over-credulous or mercenary journalists, and reality-television producers.”
Conor Friedersdorf, The Atlantic

On the bright side...

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

CNET

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