Amazon's Billion-Dollar Shakedown of America's Cities
Employees at Amazon's headquarters in Seattle. (Elaine Thompson / AP)
If one required reminding of the Democratic Party's complete capitulation to
corporate interests, to say nothing of the country's as a whole, he or she
need only have listened to New York City Mayor Bill de Blasio's address on
Tuesday. "One of the biggest companies on earth next to the biggest public
housing development in the United States," he told reporters during a joint
press conference with Gov. Andrew Cuomo. "The synergy is going to be
extraordinary."
The company in question is Amazon, which confirmed earlier that morning that
Long Island City, Queens, will become the site of its second headquarters (a
third headquarters will be located in northern Virginia). The announcement
ends a 13-month pageant that saw 238 cities and their elected officials
prostrate themselves to CEO Jeff Bezos, only for the multibillionaire to
move his company into two of the wealthiest metropolises in the country (New
York and Washington, D.C.) and likely displace countless working people. And
for this privilege, the state of New York will reward Amazon with more than
$1.5 billion in incentives, while the city provides property-tax abatements
for the next 25 years-this as it faces public transportation and
affordable-housing crises. Amazon, meanwhile, stands to save upward of $1
billion over the next decade.
As Derek Thompson argues in The Atlantic, moves like these are not merely
outrageous. They should be outlawed.
"Every year, American cities and states spend up to $90 billion in tax
breaks and cash grants to urge companies to move among states," he writes.
"That's more than the federal government spends on housing, education, or
infrastructure. And since cities and states can't print money or run steep
deficits, these deals take scarce resources from everything local
governments would otherwise pay for, such as schools, roads, police, and
prisons."
Maddeningly, this corporate welfare seldom results in the kind of economic
stimulus promised. Thompson points to the $3 billion in subsidies that Gov.
Scott Walker used to attract Foxconn to Wisconsin-an investment that was
supposed to generate 13,000 manufacturing jobs in Racine. Instead, the
Taiwanese multinational has hired a fraction of that number, automating most
of its assembly work. Thompson continues: "Even when the incentives aren't
redundant, and even when companies do hold up their end of the bargain, it's
still ludicrous for Americans to collectively pay tens of billions of
dollars for huge corporations to relocate within the United States."
So what is the solution? If these corporate behemoths are loyal only to
their shareholders, what is to prevent this same travesty from repeating
itself in cities across the country? For Splinter's Hamilton Nolan, the
answer is simple: federal regulation.
"The only way for public-you and me and every other taxpayer and city and
state government who all have much more pressing things to spend money on
than bribes to Fortune 500 companies-to win this game is not to play," he
writes. "Nobody can play. The way to accomplish this is simple: We need a
federal law banning these sorts of subsidies. Without a federal law, there
will always be an incentive for one desperate city or state to start the
bidding wars. By banning this insulting robbery of the public till outright,
business will continue building, and investing, and locating, and
relocating. They do all those things in order to make more money. Companies
create jobs because they need work done in order to make money. They are not
charitable activities. They do not need a bribe. They are playing on the
desperation of desperate places in order to rip us all off. That should not
be legal."
Jacob Sugarman
Jacob Sugarman is the acting managing editor at Truthdig. He is a graduate
of the Arthur L. Carter Institute of Journalism whose writing has appeared
in Salon, AlterNet and Tablet, among other.
Jacob Sugarman
