Interesting read on Amazon's hunt for HQ2 location & gov't incentives

[LittleLebowski]

https://www.chicagobusiness.com/technology/behind-amazons-hq2-circus-jeff-bezos-was-jealous-elon-musk


When Elon Musk secured $1.3 billion from Nevada in 2014 to open a gigantic battery plant, Jeff Bezos noticed. In meetings, the Amazon.com Inc. chief expressed envy for how Musk had pitted five Western states against one another in a bidding war for thousands of manufacturing jobs; he wondered why Amazon was okay with accepting comparatively trifling incentives. It was a theme Bezos returned to often, according to four people privy to his thinking. Then in 2017, an Amazon executive sent around a congratulatory email lauding his team for landing $40 million in government incentives to build a $1.5 billion air hub near Cincinnati. The paltry sum irked Bezos, the people say, and made him even more determined to try something new.

[RevolverRob]

It's fucking hubris like this - from Bezos and Musk - that is ultimately going to bring about the ruination of capitalism in this country. You can't read those things and think that Bezos or Musk or their businesses really needed the money. Nor will the tax payer ever recoup the investment. And eventually people get tired of picking up the bill for the guys with more money than they can spend and suddenly, dudes like Bernie Sanders start to look good.

I'm not saying it's right to want to take it back from those guys - but seriously - 1.2 billion for Elon Musk's fly-by-night car company that will probably be defunct in 5-years. 760 million for Bezos to add 25,000 jobs to Virginia.

25,000 jobs is a drop in the bucket in a country with 325 million people. And how many of those jobs are NEW vs. transfers?

[BehindBlueI's]

I predict this thread will go quite a bit differently then the universal income thread. It's fine when billionaires suck at the public teat. Job creators and all that. Maybe a nice sportsball team, too. Workers and unions are the ones that ruined this country, remember, not the billionaires sucking an ever increasing share as worker's wages stagnate or retreat. Anyone who thinks otherwise is just a filthy socialist.

[blues]

I predict this thread will go quite a bit differently then the universal income thread. It's fine when billionaires suck at the public teat. Job creators and all that. Maybe a nice sportsball team, too. Workers and unions are the ones that ruined this country, remember, not the billionaires sucking an ever increasing share as worker's wages stagnate or retreat. Anyone who thinks otherwise is just a filthy socialist.

No one cares about the facts anymore (if they ever did). It's all about selling the narrative. Why ruin a good narrative with facts?

:rolleyes:

[RevolverRob]

I predict this thread will go quite a bit differently then the universal income thread. It's fine when billionaires suck at the public teat. Job creators and all that. Maybe a nice sportsball team, too. Workers and unions are the ones that ruined this country, remember, not the billionaires sucking an ever increasing share as worker's wages stagnate or retreat. Anyone who thinks otherwise is just a filthy socialist.

Fuck all of them. It's been going downhill since the Whitney invented the cotton gin. Yeoman farmers and what-not.

Billionaires, corrupt unions, and politicians can all go eat a bag of razorblade and glass encrusted dicks.

___

Anyone notice that Bezos and Amazon, already the wealthiest entity on the planet, got 760 million bucks in tax incentives right out of the tax-payer pockets of Virginians. And then magically, ~12 months later, there are new gun control laws attempting to be rammed through the legislature, on the back of a new governor who was elected with beaucoup out-of-state money? Right about the time people realized they got ass-rammed by the richest fucker out there?

Who are the people most likely to oppose gun control and pay taxes? It's fucking white wash on the hand-rails of the Titanic, folks. Nothing to see here, just do your job and shut up.

[BillSWPA]

The problem with government incentives is that it gives some businesses unfair advantages that other businesses don't get.

The landlord for my office runs a small gift shop in the same business which, in some respects, competes with Amazon. He employs people. He purchases goods that are made by other businesses that also employ people. He will never get such an incentive.

Years ago, Pittsburgh offered incentives for big department stores to move in. The small stores that had no such incentives were put out of business. Then the big department stores, despite all the incentives, decided they were not making enough money per square foot, and pulled out.

Incentives provided to some businesses but not others is not the way to create jobs. Instead, providing incentives to only certain businesses effectively picks the winners and losers in what is supposed to be a free market system. If a given region wants to create jobs, creating incentives that apply across the board is the only truly effective and truly fair way to do so.

[Dog Guy]

Here in Nevada, the Tesla announcement started a cascade of other companies also moving to the the same industrial park. Many were tech companies, but many of the jobs were warehouse or widget assembly positions with a relatively small percentage of high paying engineering type positions. This caused an avalanche of population growth, much of it from California (about 50,000 Californians in the last few years). The head of the Economic Development Authority of Western Nevada stated soon after the Tesla announcement that we'd need two Carson City's worth of new dwelling units in the Reno-Fernley area to fill the need. Now we have sky high rents, housing prices through the roof, an overwhelmed road net, and too many workers who can't afford places to live. Naturally, the recent transplants have turned the Reno area very blue voting, so the solution to all of the above is California style proposals regarding rent control, homelessness "solutions", and so on. Plus a Reno-Vegas blue voting block that gives &*$#-all about the rural counties or Nevada's historical culture but full control of the legislature. The CA dems recently sent the Nevada legislative leadership (all Democrats) a package of gun control bills that they expect Nevada to pass during the next legislative session. So yeah, the corporate welfare has social implications far beyond the simple narrative of bringing in jobs.

[mmc45414]

I live in Dayton, OH, a place where many people settled when their car broke down on the way to Detroit. There were just shitloads of high paying (many unskilled) jobs here, if you got in you could stay and plan to hate it the rest of your life. There was also much entrepreneurship, many business catered to the big businesses as suppliers, if you had a Bridgeport in your garage you could be a GM supplier. Then it got less and less efficient and the customers got more and more demanding. This was while foreign automotive companies started setting up in rural areas like Kentucky and Tennessee, and things tanked. Fortunately Honda settled in a rural area near here, and there is a big USAF base (employing 30k) or it coulda been worse.

And the core city suffered greatly, these companies could lower their tax burdens simply by building up in nearby suburbs. And the city just kept figuring they could raise more revenue by maintaining the burden on those companies that had become increasingly mobile. Throw in a school system with federally mandated desegregation policies and residents moved out too, lowering city income tax revenue. And since everybody wanted to buy houses elsewhere, property values went down and reduced property tax revenue.

My point is this shit is not new, and I lived through it. Now most all of these big employers are gone, and when the community endeavors to attract new employers people bitch about the "concessions" offered to attract them, when it really is just parity. But the concessions are viewed as compared to the tax levels of the prior heyday. Georgia out sold us and now NCR is gone, probably the last of the really major employers to completely leave. Turns out you can plop down a car factory in the middle of nowhere and taxes will be low because they always have been.

It is easy to hate on companies that are obviously flush right now (and I think Musk is a douche nozzle), but they are in the position to pick where they want to land, and it is competitive. And I have watched the result of being on the wrong end if the competition. Now we are mostly a college town full of hospitals instead of the manufacturing mecca of old, though the university has a research institute that is pulling some high tech back into town.

[RevolverRob]

Once upon a time -

The great and exceedingly rich industrialists which ran our country were also philanthropic individuals. Carnegie turned Pittsburgh into a city that was envied around the world at the turn of the 20th Century. Marshall Field gave a million dollars in 1892 to help found the museum I'm sitting in right now. Montgomery Ward spent millions of dollars regularly suing the city of Chicago, to prevent the development of green spaces and parks, because those spaces belonged to the people. Rockefeller founded universities and spent the equivalent of a billion dollars building hospitals and training doctors. Ford paid employees twice the going wage to make sure they had financial stability. Samuel Colt built a factory with a gymnasium and gave his employees extra time off once a week to spend with their families.

Such things do not happen today.

Jeff Bezos cares about Jeff Bezos and his fucking ego. To him, 760 million bucks of Virginian tax payer money was owed to him, because he is Amazon. Three of the richest people in the United State call Arkansas home, yet Arkansas ranks among the lowest in healthcare, education, and economic mobility. That is something that would literally make Henry Ford rollover in his grave. He may have been an anti-Semitic d-bag, but he wanted his workers to be able to buy his own products. Wal-Mart employees can barely pay their own rent.

We cannot tolerate, nor should we tolerate, the robbing of tax-payers to pay Bezos, because we, the consumers, already paid Jeff Bezos. And fuck him if he thinks he can demand money from us.

FYI - Historically speaking, a period of great economic and population expansion pays its dues somewhere. Today, we're riding the downwave of the single largest population boom in our history. It was bound to happen. At the end of the day, it means many places will be shells of what they once were, while new places prosper. Such is the way of history. Baby boomers are beginning to decline and die and as they do a transformation will occur in our society. In fact it's already happening, we're finally seeing population-growth flatline. That spells good things for us economically in the future. Without new territory or natural resources to exploit, we can only maintain our economy and expect minimal growth. So if we want things to be better for everyone, populations need to stay flat or decline slightly.

[Borderland]

It's fucking hubris like this - from Bezos and Musk - that is ultimately going to bring about the ruination of capitalism in this country. You can't read those things and think that Bezos or Musk or their businesses really needed the money. Nor will the tax payer ever recoup the investment. And eventually people get tired of picking up the bill for the guys with more money than they can spend and suddenly, dudes like Bernie Sanders start to look good.

I'm not saying it's right to want to take it back from those guys - but seriously - 1.2 billion for Elon Musk's fly-by-night car company that will probably be defunct in 5-years. 760 million for Bezos to add 25,000 jobs to Virginia.

25,000 jobs is a drop in the bucket in a country with 325 million people. And how many of those jobs are NEW vs. transfers?

I've been saying that for awhile now. When I hear things like Bernie can't possibly win I have to think back about how popular he was during the 2016 campaign. DNC had to shut that guy down. If it hadn't been for his own party tripping him up he may have won the election. He certainly had the support.

If you look at corporate America and the wealth that only resides in the boardrooms and in stockholders accounts, then look at where most working people are (average family income around 60K) I'm surprised the unwashed masses haven't already revolted. Evidently it's possible to have everything you need as long as you have a job and can max out your credit which only puts more money in the corporate coffers. The four largest banks in the US have 1-2 trillion dollars in assets each. Chase alone has 2.5 trillion. To put that into perspective during FY2019, the federal government spent $4.45 trillion.

I'm not advocating socialism but the mountain looks mighty high if you're at the bottom.

[AKDoug]

My only worry, as the majority shareholder or outright 100% shareholder in three corporations, is that us little guys are going to get swept up in any type of "reform". Many of the same right offs and tax incentives big corporations use are available to the smallest corporations as well. If those are removed and our bottom line is increased, we will have no other recourse other than raising prices.

[BillSWPA]

I understand the need to compete for the companies that bring the jobs. What I completely fail to understand is why cities and states cannot compete with across the board tax cuts that benefit everyone instead of giving tax cuts to big businesses while the smaller competition for these big companies gets stuck with the bill for subsidizing their bigger competition.



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[txdpd]

It's funny how things work on the webs.

When AOC allegedly killed HQ2, Bezos was being lauded as some sort of job creating superhero on this forum. HQ2 was one of the greatest thefts of information ever pulled off, but it wasn't theft because local and state governments gave everything away. If Amazon/Bezos was ever serious about HQ2 it would have been built.

There's very little evidence that massive tax incentives work out for the better of tax payers, and despite that it's very hard to get people to look past the "job creation" mantra.

[Joe in PNG]

If there's a system, people will game it.

And as a cure for the excesses of our system, Socialism & Bernie are far, far worse. For one, you'll still have people gaming the system for their own unfair advantage... but you're now stuck in a 7 hour line for toilet paper, and you can be arrested for complaining about the state of affairs.

It is what it is- sloppy, inefficient, but isn't that pretty much anything involving people?

[Borderland]

My only worry, as the majority shareholder or outright 100% shareholder in three corporations, is that us little guys are going to get swept up in any type of "reform". Many of the same right offs and tax incentives big corporations use are available to the smallest corporations as well. If those are removed and our bottom line is increased, we will have no other recourse other than raising prices.

I don't think you'll lose your write offs. Small business is the backbone of this country.

Every corp passes the increased overhead on to the consumer, large or small, no matter.

Lets say Buttigieg gets elected and he pushes a $15 min. wage. If congress enacts it that gets passed on across the board to the consumer. COLA's are real price escalators in union contracts. AK isn't a RTW state IIRC. Everyone just rolls with it. You are a lot like we are here in WA. Most everyone in the US (except the New England and left coast) can't imagine how our high prices and economy works, but it does.

[RevolverRob]

If there's a system, people will game it.

And as a cure for the excesses of our system, Socialism & Bernie are far, far worse. For one, you'll still have people gaming the system for their own unfair advantage... but you're now stuck in a 7 hour line for toilet paper, and you can be arrested for complaining about the state of affairs.

It is what it is- sloppy, inefficient, but isn't that pretty much anything involving people?

I concur on all counts.

But I think there is a fine line between, “Making your place attractive to new business.” And “giving kickbacks to the company to wet your beak.”

I never though Amazon was serious about HQ2, ever. And if you read between the lines in the article in the OP, there is an underlying message.

It wasn’t that Amazon wasn’t wanted - it’s that they grossly misunderstood whose backs they needed to scratch and funds they needed to slush. One does not simply cut out the machine in machine politics. The fact that de Blasio and Cuomo thought they could and then got fucked over in return - is a statement to the effect.

Catch the little bits, “He was mad that he was cut out of the decision making for his own district” - translation - nobody offered him his cut. “They were surprised when Amazon pushed back against the idea of worker organization.” - translation - somebody didn’t get the memo that scabs aren’t welcome.

All Bezos cared about was satisfying his ego and giving the finger to Elon Musk. Instead, he was, rather politely, shown the door and told, “This is New York, you can’t come here and tell us what to do. Fuck off.”

I also thought it was funny how much credit AOC took for the Amazon thing. She had fuck all to do with it. She’ll do well as a national politician. Lies, bullshit, and always ready to grab a microphone and talk into it.

[BillSWPA]

What many politicians fail to understand is what it means to be pro-business verses pro-only-really-big-business. They are absolutely not the same.

My state recently gave huge tax credits for a decade or more to a large company to build a manufacturing plant nearby. The supposed benefit was the temporary construction jobs, permanent jobs at the facility, and all the small businesses that were supposedly going to sprout up to supply various needs of this plant. The plant is still being built, so some of the benefits have not been realized, but so far the only affect on business has been that a number have been put out of business when their landlords wanted to sell the properties they occupied and gave them very short notice to leave. Those people who used to own those businesses - all of which had employees - still have to pay the taxes to move the roads around to support this large company and its tax breaks.

[Joe in PNG]

One could make the point that this kind of nonsense is a result of the same kind of thumb-on-scale, pick-a-winner policies that a lot of people are wanting put into place to use as a fix.