Amazon decision draws bipartisan condemnation

The wise pundit has weighed in

After a lengthy sweepstakes-like process, Amazon ended its race for HQ2, claiming its decisions weren’t swayed by the more than $3 billion in tax breaks and other sweeteners offered by New York and Virginia — because the deals were “relatively modest” compared to what else was put on the table.   “If you look at some of the proposals that were put forward by cities that released them publicly, you can find out very quickly that incentives did not drive this process for us,” Jay Carney of Amazon said Tuesday on CNBC. Those areas include Montgomery County in Maryland, which offered $8.5 billion, and Newark, New Jersey’s proposal of $7 billion.

The HQ2 decision has been slammed by politicos and pundits from both sides.  From NY Post:

Fox News host Tucker Carlson asked on his most recent show:  “Jeff Bezos, who is the world’s richest man, will receive more than $2 billion in subsidies from you, the taxpayer,” he said.  “Alexandria Ocasio-Cortez had this to say: ‘Amazon is a billion-dollar company. The idea it will receive hundreds of millions of dollars in tax rates at a time when a subway is crumbling in our communities need more investment, not less, is extremely concerning to residents here,’” Carlson continued.  “I hate to admit it, but Ocasio-Cortez has a very good point. It’s hard to argue with the internal logic, the richest man in the world [getting] taxpayer subsidies. How does that work?” the conservative firebrand added, referring to Amazon chief Jeff Bezos, who has a net worth that tops $150 billion, making him the richest man in America.

Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, also rebuked the massive tax breaks in a piece in the National Review and criticized fellow conservatives, some of whom mocked the 29-year-old Ocasio-Cortez for opposing the deal.  “I can’t believe I’m saying this, but Ocasio-Cortez is mostly correct on this matter, and her conservative critics are wrong. Handouts like this to Amazon and other prominent companies are appalling in their cronyism, pure and simple,” she wrote. [...]  She argued that Amazon was seeking locations with skilled workforces and quality educational options — and that tax breaks were largely an afterthought to those factors.  “In other words, Amazon would have likely made the same decision with or without subsidies. It also explains why no amount of subsidies can drag a company to a place that isn’t economically vibrant or that is in the middle of nowhere,” de Rugy wrote.  “But face it: Amazon was never going to move to, say, Opelika, Ala., or Marfa, Texas, no matter how gargantuan the promised tax breaks there.”

Bre Payton, a writer for the conservative website The Federalist, also slammed the deal.
“The democratic socialist from the Bronx is right to be outraged about the corporate welfare that threatens to price her constituents out of their own housing market,” she wrote Wednesday. 

Amazon announced Monday it had chosen Long Island City, Queens — where protesters gathered Wednesday to denounce the deal — and Arlington, Va., as the sites for a new split headquarters.  Ocasio-Cortez had said on Twitter that the people she represents have expressed “outrage” over the tax breaks, while arguing the cash could also go for student loan forgiveness.

Even the moniker "HQ2" is considered a sham, bait-and-switch, a PR stunt: Amazon never really intended to make such massive investment as the name implied, they just wanted to open a branch office.  One pundit even predicted back in January that Amazon would pick more than one winner.  Moreover, numerous cities are understood to have shared proprietary data about their areas and plans, in addition to offering tax incentives.  “A key concept for understanding how Amazon operates is leverage.  By running the search as a nationwide competition and receiving proposals from hundreds of cities, Amazon now has a database of information that gives it a further competitive advantage over rivals, as it’ll use this research to inform future expansion, and Amazon extracted the best deal through exercising its bargaining power over cities.” says Lina Khan of the Columbia Law School.

Why the outrage?  Because Amazon is set to reinforce economic system that is increasing inequality, monopoly power, and political polarization in one fell swoop.  The company could have easily chosen mid-sized urban areas with dynamic tech sectors, like say Pittsburgh, Raleigh, or Indianapolis.  Matt Yglesias of Vox explains further:

...while locating large pools of high-salary white collar positions in the New York and DC metro areas makes sense for Amazon, it doesn’t actually make that much sense for either greater New York City or greater Washington. Amazon’s presence will tend to exacerbate those cities’ crises of housing affordability and overburdened transportation infrastructure. And it makes no sense at all for the USA, which urgently needs more economic opportunity in dozens of other metro areas that have a different set of problems.  America needs to find a way to do better than this. Being the home to a very large share of the world’s most dynamic high tech companies is an incredible source of national strength, but in practical terms it does not benefit most Americans. With better policy it could.

Don't forget that the decision is very often not-so-subtly influenced by where the boss has a swanky new home and likes to spend time in.

Bezos' DC-area mansion