Hooray! No Jobs for New York

-edited

Progressives are cheering this weekend. They drove Amazon out of New York.

The New York Times reports In Amazon Fight, Progressives Showed What They Want: A New Economic Agenda.

The political opposition that prompted Amazon to walk away from building a corporate headquarters in New York City featured a touchstone of the progressives’ economic agenda: ending tax policies that unfairly reward and pamper the wealthy.

The clash has consequences far beyond New York, going to the heart of a national debate that is likely to dominate the 2020 presidential race: What is the best way to spread prosperity?

As Gov. Andrew M. Cuomo fumed that some of his fellow Democrats put “the state’s economic future” at risk, others inside and outside the party saw the scuttled project as evidence that the left doesn’t understand how to generate growth. In a tweet, Lloyd Blankfein, senior chairman of Goldman Sachs, lashed out at progressive Democrats, labeling them as both “anti-progress” and “anti-Democratic.”

Elizabeth Warren

Vs. Lloyd Blankfein

It's important to not let personalities get in the way of sound economics. I do not care at all for Blankfein or the handouts banks got in the Great Recession. But that is no excuse to embrace piss poor policy.

Andrew Cuomo New York Governor

Democrats Tear Themselves Apart

Please consider Democrats are Tearing Themselves Apart Over Amazon.

While the battle still rages and analysts study the entrails of Amazon’s decision-making, here’s a thought: What if both sides of the Dem battle are wrong?

The migration of jobs and families out of high-tax, high-cost states has been going on for years, but is becoming a stampede because of the new federal tax law and because of how Democrats are reacting to it.

Throw in the fact that some Democrat-controlled states, especially Illinois and New Jersey, already face huge problems with their civil- service pension funds and it’s obvious that the blue-state model is ­undergoing a major stress test.

Incredibly, the leaders of most are responding in self-defeating ways.

Cuomo and de Blasio forgot that Rep. Alexandria Ocasio-Cortez and her socialist ilk tend to see capitalism in any form as evil. Her side didn’t want Amazon to get taxpayer help and demanded instead that it be forced to contribute millions to schools and subways.

Cities from Seattle to New York are raising taxes, or trying to, imposing minimum wages of $15 an hour and requiring even small businesses to give workers expensive health and vacation benefits.

Simultaneously, many of those same cities are driving up their education and health costs by declaring themselves sanctuary cities for illegal immigrants — in direct reaction to Trump’s push for secure borders.

‘Green Deal’ Space Cadets

New York Post reader David Rabinovitz calls for caution. He says AOC's New Green Deal has chances.

People shouldn’t be so dismissive of the Green New Deal."

His rationale is perfect.

It can be successfully implemented when the Little Green Men come down from outer space.

Mike "Mish" Shedlock

Comments (32)
No. 1-21
mark0f0
mark0f0

Don't know if I'd call Amazon "one of the wealthiest on the planet". Their billions in assets can't produce meaningful profit. However, why are these businesses being subsidized? And why would Amazon want a location like NY when they could locate at a place for RTP for far less?

Sechel
Sechel

well i'm against these deals, but that needs to stop at the federal level, until then cities have to play ball and 25,000 jobs at $150,000 would have funded a lot services and infrastructure. the fact is what the city doesn't get from income taxes and business taxes comes from real estate taxes. a lot of the young progressives that fought the amazon deal don't look at the real estate tax angle, they're primarily renters.

tz1
tz1

What high taxes, high regulations, crony corrupt unions and city inspectors couldn't do...

I think Bezos simply came to his senses.

Hey, maybe he can move it to Chicago, Illinois!

Maybe they will get everything Trump has built to leave too.

thimk
thimk

all this is a tax credit , no cash outlay . the city would have picked up recurring cash tax revenues from other sources to compensate as @Sechel mentioned . Anyways I think amazon was looking for a way out,similar to Foxcon and AOC accommodated . This alt left stuff is a prayer answered for the repubs. what is Bezo's washington post saying now?

shamrock
shamrock

what if they divide the $3B in subsidies among 3,000 small businesses at $1M/per, would that help generate more than 25,000 jobs?

Sudo
Sudo

Could never understand why tax subsidies are not considered as income by IRS. I suspect if someone gave me 3 billion dollars in credit the IRS would be knocking on my door. Then again I do not understand big money culture.

killben
killben

The problem is the kind of capitalism (crony capitalism-entrenched since 2008) that we have now will only give rise to anti-capitalism. This will be in play till the capitalists change their ways of enriching themselves at the expense of common man or it ends up in a civil war.

While I do not agree with Warren or AOC, I am dead against the present capitalism too. If this is way you get change, so be it.

Carl_R
Carl_R

There are arguments for not giving Amazon $3b. There are also arguments for giving it to them, those being that they extra jobs, and the resulting increase in property values, would generate more than the $3b. Would it? I have no idea. The only thing is that what is done is done. Behind Amazon, I doubt many other companies will come looking, so, now they get to see how things go without any companies coming in and creating jobs.

BillSanDiego
BillSanDiego

Ocasio-Cortez says that New York could use the $3 billion to "hire out more teachers," whatever that means, and "fix our subways." She doesn't get that the $3 billion was not money that New York was giving to Amazon, but was in the form of tax payments that Amazon would not be required to make to New York.

Mish
Mish

Editor

"what if they divide the $3B in subsidies among 3,000 small businesses at $1M/per, would that help generate more than 25,000 jobs?"

How many would Take $1M close shop and retire? OK let's assume they have to spend it. How many would spend it wisely as opposed to giving their brother a job for $100,000. I think you can see where this is going.

Amazon gave NY a detailed plan. NY needed to decide, not AOC, whether the plan provided a net benefit or not. It is possible the plan was not a good one. I really do not know, but it is not for idiots like AOC to decide.

Tengen
Tengen

I find it awfully hard to get worked up about this story one way or the other. So a barely-profitable massive retailer that sells mostly cheap junk to cash-strapped, debt-laden consumers decided not to relocate to NY, the land of Wall St shysters who have made NY wealthy through excessive financialization at the expense of the rest of the country. That's worth a big shrug.

Maybe I'm getting cranky as I settle further into middle age, but I'm becoming more and more enamored with the idea that something should be built to last. Amazon is too big and only possible in a crony-capitalist society. It's run by an ultra-elite oligarch with a permanently crazed look on his face who apparently leads an idiotic personal life. NY is the heart of the big ponzi and people like AOC and Trump are only possible in a society more driven by vengeance than the idea of building a better future. None of this is remotely sustainable.

I reckon in another few decades nobody will care whether AMZN moved to NY or not, we'll be digging out of rubble by then, assuming the blood lust is finally over and we can spend more than a few moments in each others' company without experiencing powerful homicidal urges.

Six000mileyear
Six000mileyear

Or Amazon concluded business over the past couple of months is slowing down too fast to justify new headquarters.

DFWRealEstate
DFWRealEstate

MIsh, You can mock AOC if you want, but she has tapped into the social angst that is ripping the country apart. The social contract is broken and parasites like Amazon are a huge part of the problem. Are there flaws in many of the progressive movement policies? Absolutely. But the core of the outrage is the realization that the economy simply isn't working for most Americans and they realize their grip on "the dream" is slipping away with wealth inequality at record levels. Bezos was an easy target, overplaying his hand at every turn. Why? because he could, because local officials were/are willing to worship at his feet for some additional development stimulus and satisfy his unfettered greed. I look at the reaction of the real estate faction to this deal, both before and after, and it sums up the situation quite well. You had a host of predatory capitalists chomping at the bit to pounce on this deal, looking for an angle to profit from it, even if it meant eventually displacing thousands of New Yorkers. If you've lost Blankfein and Cuomo, you know you've done something right. Sure there was development "opportunity" at stake, but for whom? Cui bono?, certainly not your average New Yorker struggling to maintain a decent standard of living in a rent-controlled apartment.

ReadyKilowatt
ReadyKilowatt

Too bad these politicians have bought into MMT. I guess when you have an economist tell you what you want to hear instead of what you need to hear, you'll believe anything.

I just finished up "The Myth of Capitalism" by Jonathan Tepper. Highly recommended. He points out that the current must-read economics book amongst the elites is Thomas Piketty's "Capital in the Twenty-First Century." I haven't read it yet (700+ pages, and Tepper points out that no one else has either), but I'll bet it reads like Keynes' General Theory, so most only get through the first few chapters and call it good. Tepper tears Piketty apart, at least in summary, pointing out that all the MMT ideas have already been proven wrong, but because it is a big thick book that tells politicians to spend more money it gains credence.

everything
everything

Drama story, everyone picked it up, and slung it all around. Jobs is jobs, the fact that states compete with corporate hand outs says two things, race to the bottom, and corporations own America, no longer capitalist, but oligarchy. And, yes now AOC is getting hammered by the press, but we knew she would for trying to expose Americans to what America really has become. Just like all the rest, someone will come along and put a big enough chunk of money in her back pocket to shut her up. Power corrupts, and 75% of her campaign money came from individual donations

LawrenceBird
LawrenceBird
  1. Google has 7K people in NY with plans expand their buildout to 14K. Apparently they did not ask or need subsidies.
  2. AMZN (or Bezos?) is pretty thin skinned if they could not take the short term heat over the tax abatements.
  3. That AMZN caved so quickly and is not planning on doing the HQ2 in another city makes you wonder not just about the entire process but its goals as well.
  4. Most jobs are not created by the large companies yet it is only the biggest that ever get the sweetheart deals. Time to stop give aways or lower taxes for all of them.
abend237-04
abend237-04

New York and Illinois have the French disease: Over time, their politicians have insensibly drifted into a false narrative that governments tax corporations; they don't. They merely use corporations to collect taxes from businesses' customers.

They felt Amazon owed them more taxes, AKA, Amazon customers.

Carl_R
Carl_R

In later news, apparently some think they can take the $3b in tax breaks that were to go to Amazon and spend them now. Unfortunately, per Bil de Blasio, the Amazon deal was going to cost $3b, but was expected to bring in $28b in extra tax revenue. If correct, then, NY now has $25b LESS to spend, not $3b more.

Webej
Webej

Free market advocates should see the dilemma here. Big corporations have been doing jurisdiction arbitrage for decades (the jurisdiction that offers the most tax incentives and infrastructure spending clinches the deal). This often turns into a party like winning the Olympic venue -- promise economic growth but saddle the tax-payers with all kinds of costs. Even worse, it benefits the already too large at the cost of other competition, and, hence works anti-competitively. It is a zero-sum game benefitting select corporations at the expense of everyone else, but it is hard to do anything about it.

Casual_Observer
Casual_Observer

I was told real estate investors tried to front run this deal and are now stuck with loans and not appreciating real estate. I was never sure why Amazon chose NY or any other cold climate. Theyve primarily been operating out of warmer higher productivity climates. I thought geographically they would have been better off choosing place in the southeast.

HenryBowman
HenryBowman

Who cares? Nobody needs jobs. AOC promised us that soon the government will give everybody everything for free. Just sit back, wait, and do nothing... but don't forgot to vote Democrat!