The Amazon Deal is Shameful.

Politicians have turned their states into whores.

I opposed Georgia trying to woo Amazon and I am delighted Amazon went elsewhere. Last night, Georgia's officials released their deal and it would have been a $2 billion monstrosity of taxpayer largess and way too cute ideas like renaming a street after Alexa.

New York and Virginia were, instead, the losers who will burden their taxpayers with Amazon. The incentives include giving Amazon the right of notice about freedom of information act requests so Amazon can intervene in Virginia. In New York, the company will get a helipad.

The free market depends on a level, fair playing field. It does not work when governments redistribute taxpayer money to lure companies into states. Deals like this not only distort market forces, but they also keep states from overall reforming their business laws and regulatory structures by letting one company receive not just exceptions, but also taxpayer dollars.

Whether left, right, or center, we should all oppose these sorts of deals. Amazon is one of many. Too many states, from Georgia to New York, put existing local businesses at competitive disadvantages while redistributing local tax dollars to out of state businesses promising the moon.

The free market is not free when this happens and the government picking winners and losers does nothing more than whore out its taxpayers. Amazon did nothing wrong. It just went looking for a government prostitute. Unfortunately, too many politicians were willing to play the role.

Comments
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MasterBaker
MasterBaker

25,000 jobs @ $150,000 salary ... hmmmm, do the math.

Paul1719
Paul1719

So, Indianapolis wasn't "blessed" with Amazon's presence, despite the fact that we have better - and less crowded - roads, specifically Interstates, than either Northern Virginia and NYC? So, the fact that there's a major cargo hub (FedEx) right here at Indianapolis International Airport didn't matter, because reports are saying that little Jeffy Bezos doesn't like our lack of "diversity", probably ideological diversity, as I know he's not talking about racial/ethnic diversity? Good. After seeing what the "winners" gave away to become Jeffy's municipal whores, I'm delighted! NYC will be shelling out $48,000 per new job, and Northern Virginia over $30,000 per. Traffic in those areas is already impossible now it will be even more so. Homeowners will enjoy the increase in the valuations of their homes - until the massive property tax hikes needed to fund the infrastructure improvements, added police/fire services, and school system additions come due.

The bottom line: Offering bushel baskets of corporate welfare to already wealthy corporate barons and their companies is a game for losers. Congratulations, NYC and Northern Virginia; you "won", but in fact you lost, big time. Now, shut up and enjoy the added costs of living and lost quality of life; they are, after all, EXACTLY what you paid (and will continue to pay) for!

Dave_A
Dave_A

And for all that, Amazon has failed to move outside it's bubble.

In Seattle, they are located in a place that is all-but inaccessible unless you live in the same neighborhood as their office towers (South Lake Union) - parking is impossible to find, and it takes a good 30min to 1hr to drive the 3mi or so to the nearest freeway ramp during commute hours. Reasonably sized housing is of course, not available...

So what do they do? They go to the only place worse... New York.

Of course, if they want to keep the left-lean & the don't-trust-anyone-over-30 attitude, that's the way to do it - keep your best jobs in expensive renter-only cities with awful schools & expensive real-estate... Conservatives & people with kids (homeowners) need not apply...

FloridaMan
FloridaMan

Enjoy your city, state, county and gas taxes. Every time the union gets a raise, up goes to the toll on the bridge. Watch out for muggers.

DavidMKern
DavidMKern

The Amazon deal is only one example of taxpayer giveaways that encourage businesses to move from one state/region to another state/region. For example, the Pittsburgh area is one of many major cities that have used taxpayer money to build new stadiums and arenas in order to keep its professional sports team from moving to other cities that offer more lucrative taxpayer financed incentives.

However, businesses have a strong incentive to move to areas that offer tax advantages, which is why cities/states offer them. Similarly, many countries attract businesses by setting high tariff rates on imported products which provides an advantage over external competition. This causes businesses to migrate to these countries just like Amazon choose NY and VA because it provided them a financial benefit to do so.

One can argue that such incentives are always inherently negative. But making reliable economic generalizations is not straightforward. For example, lowering marginal income tax rates can actually produce more tax revenue by increasing the amount of economic activity. But a marginal tax rate approaching 0% will not necessarily optimize tax revenue.

I am not in favor of taxpayer subsidies that encourage businesses to move from one state to another. If one is seeking to optimize the economic prosperity of America, that is not a winning strategy. But the same argument does not apply to the issue of unequal tariffs between nations. For example, China’s financial prosperity has increased despite strong protectionist measures, which implies that prosperity does not necessarily follow low tariffs.

Although moving products back and forth in complex supply global supply chains may theoretically optimize global economic prosperity, the validity of that argument is also not clear. As an engineer, I would suggest that minimizing the distance that parts need to be transported will optimize global manufacturing efficiency, because shipping is like friction, and it adds nothing of value to the overall product.