“Amazon on Thursday canceled its plans to build an expansive corporate campus in New York City after facing an unexpectedly fierce backlash from lawmakers, progressive activists and union leaders, who contended that a tech giant did not deserve nearly $3 billion in government incentives.” – The New York Times, February 14
That was the story. How did it get to that point?
We start with Amazon’s 14-month-long search for a second headquarters, which we were led to believe had the honest objective of building it from the ground up. In November that company announced that it had not chosen the likes of Baltimore, Little Rock, or Salt Lake City, but gone with perhaps the most obvious location, from which it extracted an agreement for $3,000,000,000 in subsidies and tax savings. That fetched the remarkable amount of resistance, ostensibly about the money but under the surface as much or more about Amazon’s strength, the strange concern that the 25,000 new or brought-in jobs with average annual compensation said to be $145,000 were not unionized, the bad side of gentrification, and the catchall concern of “income inequality.” Then Amazon suddenly backed out, saying that “a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward.”
Many were in favor of the project. They included both Governor Andrew Cuomo and Mayor Bill de Blasio, most owners of nearby Long Island City, Queens businesses of all sizes, nearby public housing residents hoping the area’s jobs situation would improve, many others around the city and state, and the Times Editorial Board, which, despite having decried the deal in a November 14th piece, called Amazon’s withdrawal an “embarrassment to the city” and “an opportunity lost,” and said that as a result the city could get “a reputation for the smugness of its politicians and their hostility to business.” De Blasio was particularly loud and colorful in showing his anger at the cancellation, saying that day that “you have to be tough to make it in New York City,” and writing a piece, published two days later also in the Times, including the unchosen solution of “if you don’t like a small but vocal group of New Yorkers questioning your company’s intentions or integrity, prove them wrong,” calling Amazon’s move a “capricious decision to take its ball and go home,” saying that “they didn’t want to be in a city where they had to engage critics at all,” and that “a project that could’ve opened a path to the middle class for thousands of families was scuttled by a few very powerful people sitting in a boardroom in Seattle.” Amazon has now stated that they will not build this second head office anywhere, but will instead enhance their existing and planned locations.
So, who won and who lost? The largest winner was Alexandria Ocasio-Cortez, a U.S. representative not even of that district, who spearheaded the opposition and took center stage in what, when combined with the proposed Green New Deal and Senator Bernie Sanders’ presidential bid and quick fundraising, has been a sudden burst of activity from the leftmost part of the Democratic Party. Local community activists in general and specifically, who now know what they can do, also benefited.
From there, though, almost everybody lost. Amazon, who seemed arrogant anyway in choosing New York after its seemingly-necessary-only-to-milk-it search, now also comes off as petulant, spoiled, and oversensitive. As put by Doug Herendeen, show host for WRTA Radio in Altoona, Pennsylvania, they may now be replacing Walmart as the large company people on the left most love to hate, which is quite an achievement, especially for a firm, per Kevin Roose, with a “bedrock” principle “that being loved by customers is all that matters.” Cuomo, de Blasio, and New York City, who now all seem like impotent bystanders, also lost heavily. The people of Long Island City, Queens, the city, and New York state, since per de Blasio will not have their employment, infrastructure, or cost of living issues helped by the withdrawal, were defeated as well.
Where will we go from here? There will be fewer large subsidy offers for a while, but I doubt they will go away permanently, as the appeal of bringing in good jobs is just too strong. The Sanders/Ocasio-Cortez Democrat wing will continue getting attention, and will garner more votes in next year’s presidential primaries than we would have thought a month ago. And Amazon, though reviled now by many more, will keep cruising along – a cherry on the top of this debacle was the news four days later, per Niall McCarthy in Forbes, that “Amazon Paid $0 In Federal Income Taxes Last Year.” That on $11.2 billion net profit, and the difference between the “statutory” 21% corporate levy rate and the $129 million “tax rebate” they received, actually giving them a negative levy, is $2.48 billion in Amazon’s favor. Whether they get the last laugh, though, is very much unknown.