I completely disagree with the “race to the bottom” framing of the idea that cities shouldn’t compete to provide the best services for the commercial enterprises which reside there.
At the 50-75 year timeframe we are talking about at least hundreds of billions of dollars of economic value, if not trillions. The clustering effect of becoming Silicon Valley 2 cannot be overstated.
My personal opinion is cities should be talking about the Billions they will be committing to supporting infrastructure improvements rather than the billions in tax cuts. HQ2 needs a fuck ton of support systems, akin to building an Olympic City which never shuts down.
Of course city governments should be working hard to bring this kind of value creation and massive economic engine to their constituents. Of course Amazon should be asking tough questions of cities akin to “and what are you going to do to support me” before spending $5 billion building a new campus.
Personally I think the cities that only have tax incentives to offer will not come out the winner. Amazon cares a lot more about the surrounding infrastructure and ecosystem than a short term $1 Billion.
It’s completely irrational anti-capitalistic knee jerking to whine that cities shouldn’t be working hard to support HQ2 in their backyard. We are watching capitalism at its finest here folks - and market efficiency driving negotiation and competition is creating significantly better outcomes than the “fuck Amazon they don’t need handouts” crowd would arrive at.
If someone came to your town and said, I want to build a $20m community arts center with a theater, coworking space, parks, gardens, and playground — would you want your town to say “good luck with that” or would you want them to say “that’s amazing what do you need from us to make that happen?!” Just because Amazon happens to be for-profit, their presence in your city is an extraordinary asset and it makes perfect sense to entice them to come.
In fact, you can’t even consider building at anywhere near HQ2 scale without an intimate partnership with the host city which is, in one form or another, going to require somewhere on the order of dollar-for-dollar public investment to match the private investment. We’ve proven that this public/private partnership is basically the most effective growth engine we’ve got. I certainly hope my city would do everything possible to roll out the red carpet. It’s the most effective dollars they could possibly spend, because it’s effectively corporate matching of public funds.
> Just because Amazon happens to be for-profit, their presence in your city is an extraordinary asset
It's not though. You purposefully used examples of public or non-profit groups to make it sound like a benefit. But it's not. A more fair comparison would read:
It's like someone came to your town and I said, "I want to build a $20m McDonalds, Mobile Gas Station, WalMart and a Best Buy". I would hope your town says "good luck with that" and not "that's amazing, how should we corrupt the local market to make it easier for you to do that". Amazon is no different in any way except scale.
In a sane world, Amazon HQ2 would terrify cities, who will need to ensure they have extra taxes in place for Amazon, to ensure the city can handle the massive pollutions Amazon HQ2 will generate in the local housing markets, local economy, and local infrastructure.
> We’ve proven that this public/private partnership is basically the most effective growth engine we’ve got
Proven? Can you cite some examples? I've only seen "Public/private partnerships" used as a label to mask corruption and theft; as a way to socialize any losses but privatize any gains.
Amazon workers are highly paid, thus bringing the average income up, and contributing to taxes, strengthening the housing market, and much more. That's interesting that you call it pollution. High paying tech jobs are pollution? That doesn't compute to me.
Companies that compete for talent will be pissed, but for lots of others it's a huge win. The only way I see it as a "bad" thing is if you are in a small city that wants to remain small.
It's absolutely nothing like building a McDonalds.
> At the 50-75 year timeframe we are talking about at least hundreds of billions of dollars of economic value, if not trillions. The clustering effect of becoming Silicon Valley 2 cannot be overstated.
Back in 2004 when I was working at Microsoft, I remember sitting in a bar in downtown Redmond and tossing back some local brew IPAs. This guy sitting next to me was an older dude and longtime fisherman. He was going on and on about how in the 80's, the eastside (the collective suburbs i.e. Redmond, Bellevue, etc) was just farmland, and that Seattle's main industries were fishing and logging. He was both lamenting and boasting how Microsoft came in and transformed Seattle and surrounding area into the tech mecca it is today.
So you are right. All it takes is one anchor company to totally transform an entire city. Too bad they chose cities with established infrastructures and talent pools, and not a city like Milwaukee or San Antonio that would have had the same dramatic transformation as 80's Seattle.
Amazon doesn't want to spend ten years trying to remake a city into something that might serve its needs. I can see why. It's a huge investment with a very uncertain return.
But, let's turn it around. Why would Amazon want to go to San Antonio, instead of a city like Atlanta?
I think some of it Amazon doesn't work outside a vacuum of other tech companies. It has to compete against San Francisco and other major tech hubs now so having a developed city is a selling point for Amazon HQ2.
> I completely disagree with the “race to the bottom” framing of the idea that cities shouldn’t compete to provide the best services for the commercial enterprises which reside there.
I think the idea is that cities definitely should compete to provide the best services for the commercial enterprises, but that those service should not include breaks on taxes or land giveaways. If building a new transit station, boosting spending on public schools that the Amazon engineers would want, and restructuring building and zoning codes to increase the housing supply will make your city more attractive to Amazon, by all means go ahead, since those should redound to everyone, regardless of whether they work for Amazon. But Amazon seems rich enough to me that they would be just fine even without tax breaks on construction materials or payroll taxes.
> I completely disagree with the “race to the bottom” framing of the idea that cities shouldn’t compete to provide the best services for the commercial enterprises which reside there.
Part of the problem here is the people negotiating don't really have much skin in the game. It's easy to negotiate with other people's money. There's virtually no recourse for their poor decisions. See: suburbia.
> At the 50-75 year timeframe we are talking about at least hundreds of billions of dollars of economic value, if not trillions
We're projecting what a theoretical second campus of a 23 year old company will be 50 and 75 years out? Please. Did we learn nothing from the nearly homogeneous business cities like Detroit and "coal country" today? Cities built around one industry or one company will fail.
> Of course city governments should be working hard to bring this kind of value creation and massive economic engine to their constituents
Amazon developed out of an existing city. Cities should invest their efforts to nurture their own businesses that one day may grow and provide jobs. Importing an existing business is a rather short-sighted proposition akin to a get rich quick scheme.
> Personally I think the cities that only have tax incentives to offer will not come out the winner. Amazon cares a lot more about the surrounding infrastructure and ecosystem than a short term $1 Billion.
Agreed. Amazon is going to go where they're going to go. Cities should stop clamoring over themselves to give bigger tax breaks to one of the biggest businesses on the planet.
> Of course Amazon should be asking tough questions of cities akin to “and what are you going to do to support me” before spending $5 billion building a new campus.
Nothing. We exist to support our tax-paying residents and local businesses, and so you will have to work with everyone that's already here if you want something in particular. You can probably expect a new bus line, an extension of the road, sewer, and water system, one new police station, one new firehouse, two new elementary schools, half a middle school, and a new wing of classrooms at the nearest high school. The quality of all that will depend on how much your company improves the local tax base, so don't get too stingy, or the local news will have no problem airing all the dirty laundry for Amazontown a couple years down the road. The zoning board will be busy changing colors on their map so that your people can eventually spend money on drive-through coffee and dog-walkers without having to go all the way downtown.
Amazon needs to come to the table with the attitude "We're going to increase your tax base by $X. What's your plan for spending it?" The ideal city just has to blow the dust off the growth plan they already have and write new names and dates in all the blanks.
Any city that says, "we're going to give you a tax discount" is basically saying "we would rather you send your money off to Wall Street than actually spend it to improve the community that you intend to join here."
I suppose a city could also offer a bureaucrat dedicated to expediting issues related to the new HQ, like building permits and inspections and NIMBY lawsuits, if they wanted to pay the cost of that person's salary as a donation to the city. I just never quite understood the concept of offering discounts to rich people.
> We’ve proven that this public/private partnership is basically the most effective growth engine we’ve got.
No one has proven this. There is plenty of evidence pointing to the opposite conclusion.
> It’s completely irrational anti-capitalistic knee jerking to whine that cities shouldn’t be working hard to support HQ2 in their backyard.
On the contrary, it is 100% rational for cities to want to get HQ2 and give away absolutely nothing, and possibly even get some concessions from Amazon itself.
They have to have another headquarters, and there are less than twenty cities that make any degree of sense for them to move to. I would bet that there are only two or three serious contenders, and the only way they're not going to go with whatever first choice they have currently would be a truly enormous handout. The whole bidding war going on here is, in my opinion, to try to get a sweeter deal from whoever they've already picked.
You make great points. There is a concern that not all of the incentives will be in terms of infrastructure improvements. Look at Wisconsin's deal with Foxconn - they're literally paying Foxconn money and giving them a license to pollute wetlands and waterways in exchange for 13,000 jobs.
And it will be amazing if there are actually 13,000 jobs. These things have a magical way of never materializing. The jobs turn out to be temp construction or count jobs created in the "economic impact" of having the company there. It's very rare for these deals to come out with the city on top or even equal.
> If someone came to your town and said, I want to build a $20m community arts center with a theater, coworking space, parks, gardens, and playground — would you want your town to say “good luck with that” or would you want them to say “that’s amazing what do you need from us to make that happen?!”
This sounds very similar to the Garden Bridge project in London. It was eventually canned because it was going to take huge amounts of public funds and provide not a lot of benefit.
> It’s completely irrational anti-capitalistic knee jerking to whine that cities shouldn’t be working hard to support HQ2 in their backyard. We are watching capitalism at its finest here folks - and market efficiency driving negotiation and competition is creating significantly better outcomes than the “fuck Amazon they don’t need handouts” crowd would arrive at.
When the incentives cross the line from tax breaks to free stuff, it's capitalism, all right - crony capitalism. Not the type I and other libertarians care to see.
Never thought I'd see the day where I'd be nodding along to a Keith Ellison tweet.
They're arguing that the states are giving away money. Not that they aren't providing services.
And nobody thinks Amazon moving to their town will create a silicon valley 2. Plenty of cities host huge employers. They don't become magnets for that industry. They just get fat tax breaks.
Many cities actually get worse with these giant companies throwing their weight around. Under Armor is single handedly reshaping southeast Baltimore, which of course is not only upsetting neighborhoods but pushing people out, not to mention small businesses replaced by national chains.
Finally Amazon has hundreds of billions. They do not need a handout from a poor city.
They're arguing that the states are giving away money.
What money are they giving away? If Amazon never comes, then there is no Amazon taxes and thus no tax breaks.
Right now those towns are starting out at zero. If they are smart, they structure the incentives to make sure they are net positive. If they screw that up, well that's on them.
>At the 50-75 year timeframe we are talking about at least hundreds of billions of dollars of economic value, if not trillions. The clustering effect of becoming Silicon Valley 2 cannot be overstated.
What are you talking about? Put those numbers back where they came from - your ass.
>Personally I think the cities that only have tax incentives to offer will not come out the winner. Amazon cares a lot more about the surrounding infrastructure and ecosystem than a short term $1 Billion.
Agree but that's not the point. Amazon isn't really considering twenty cities, they're considering maybe three but they really want these cities to think they're on even ground so they can extract as much tax breaks as possible from one of the cities they would choose regardless. It's about maximum short-term extraction from their existing long-term choice.
>It’s completely irrational anti-capitalistic knee jerking to whine that cities shouldn’t be working hard to support HQ2 in their backyard. We are watching capitalism at its finest here folks
Let's not use 'irrational' this way, it's perfectly rational to be against this but...
You're right, this is exemplar of capitalism, it's also why I lot of people are turning their noses up at it. HQ2 really illustrates we've moved from seeing markets as a tool which are sometimes useful and sometimes not to being a market society which sees markets as the outsourcing of morality. No ideas have to be considered, the market will decide (and it's always right), it's a strange faith.
>and market efficiency driving negotiation and competition is creating significantly better outcomes than the “fuck Amazon they don’t need handouts” crowd would arrive at.
What is that outcome? That Amazon locates where it would have located regardless but with enough tax concessions that it's benefit to the community is substantially reduced? That Amazon's size allows it to pit cities against each other to lower costs, achieving economies of scale that upstarts just won't be able to match and further entrenching it? That Amazon shareholders get a nice dividend next year, funded directly from the concessions that Toronto or Atlanta gives them?
>If someone came to your town and said, I want to build a $20m community arts center with a theater, coworking space, parks, gardens, and playground — would you want your town to say “good luck with that” or would you want them to say “that’s amazing what do you need from us to make that happen?!”
If someone came to your town and said, I want to build a $20m sports stadium — would you want your town to say “good luck with that” or would you want them to say “that’s amazing what do you need from us to make that happen?!” Just because Amazon happens to be for-profit, their presence in your city is an extraordinary asset and it makes perfect sense to entice them to come.
Giving a bunch of concessions to Amazon isn't going to benefit the average Atlantan. Lots more people but without the corresponding taxes to keep public services up. Just like stadiums, this isn't a company working to benefit the surrounding community in the best way possible like some PR might tell you, it's Amazon trying to save as much money as possible, nothing else. Benefits to the surrounding community is a side-effect, a leakage and Amazon has every incentive to plug that leak wherever possible, here it happens to be taxes.
>In fact, you can’t even consider building at anywhere near HQ2 scale without an intimate partnership with the host city which is, in one form or another, going to require somewhere on the order of dollar-for-dollar public investment to match the private investment.
This is just sick, it's corporate welfare. If I'm paying for Amazon, then I want part of the profit.
>We’ve proven that this public/private partnership is basically the most effective growth engine we’ve got.
It's also a significant contributor to our inequality problem. Growth at all costs isn't the answer so neither is making Amazon's costs public but allowing it's profit to remain private.
There’s a technical term for PPP - Public Private Partnership which isn’t exactly what’s happening with HQ2 but the effects are similar. In other words, even though HQ2 isn’t literally a train station, a campus that size functions in many ways like public infrastructure.
Because the cities are rivals in a competition for Amazon's HQ, not colleagues who all stand to benefit from a collective bargain. In this case, there will be one winner so the incentive to cooperate is greatly diminished.
But the chosen city would win even more if they were to cooperate. Sure, the cooperation would quickly break down but that is why the federal government should decide on such benefits (basically to ensure companies stay within the country, if that is deemed beneficial) rather than local government. It’s for me mindbaffling how anyone believes HQ2 would bring back billions of USD - even if you include secondary and tertiary effects
Right, but there is always going to be the incentive to defect; if 19 of the cities agree to cooperate, the 20th can just offer slightly more and win the contract.
>But the chosen city would win even more if they were to cooperate.
Right and the 19 losers are cooperating why again?
>Sure, the cooperation would quickly break down
Good job undercutting and highlighting the faults in your own argument. If you can figure it out in two sentences I think there's probably a few people directly involved who this is obvious to. So since cooperation isn't viable in your own estimation, might as well try to win.
>but that is why the federal government should decide on such benefits
Unfortunately that proposition doesn't appeal to everyone, so good luck there.
(suggested) competing cities form a non-aggression pact
That's been suggested before at the state level. But it runs into a Constitutional limitation. Interstate compacts have to be approved by Congress. Article I, Section 10: "No State shall, without the Consent of Congress ... enter into any Agreement or Compact with another State." US cities are legally parts of states, not standalone entities.
Trying to get an anti-business deal like that through the current Congress would not work.
I commend the position of Toronto's mayor John Tory who said (I am paraphrasing here): "no tax breaks, if you come - come based on our merits as a city alone".
Toronto is not likely to get Amazon for various reason (political climate being probably more important than tax breaks)
To clarify, you mean the current US political climate?
In all honesty, unless Amazon was going to go to Mississauga or Markham or something like that, I'd rather not have them. We need more jobs in the burbs, not more pressures on the inadequate Toronto infrastructure.
Sauga and Markham are outside of Toronto municipality and - strictly speaking - are already not on the list. From the shortlist, they do not look like something Amazon is shooting for. They are in Seattle proper, not Kent or Everett.
Yes, I mean US political climate. Ontario Provincial govt created the commission headed by Ed Clark and issued a bunch of statements[1], but I had the impression that above city level they are like whatever.
> Toronto is not likely to get Amazon for various reason
Which is the reason this competition happens. The top few candidate cities could all call truce and trust that they'll come out ahead over many iterations, but cities that expect they're not in the running without perks will never win the collective bargaining game. So they put up money, and the original strongest players respond to secure their positions, and the race begins.
That's right. I actually have a pet theory that Toronto has already been chosen, but all this shortlisting thing is a theatre and removing almost all Canadian cities in the first round is for plausible deniability of the preference for Canada. I know, I know...
LOL Toronto is vying for this nickname too. I cannot know why Amazon decided against it for the shortlist, but I suspect that cost of living and housing situation that is even worse than Toronto and lack of the geographic diversity played the role.
Collective bargaining is probably the wrong metaphor. This is the principle-agent problem.
The citizens would be better off if the elected officials worked to make their city the best possible place to do business for all companies on an even playing field. The city would then attract plenty of good companies simply on its merits.
The elected officials instead benefit from granting favors, being able to brag about how they brought in a big name like Amazon, and getting Jeff Bezos on their personal speed dial.
This is also why collective bargaining will not happen here. The interests of the elected officials are not at all aligned. They're competing for a scarce resource, and they themselves largely do not bear the costs of trying to acquire it.
Here's an idea: don't let states make targeted tax breaks to race to the bottom. That seems to work in the EU. Apple paid 1% in Ireland and simply had to pay up the difference to the normal tax rate.
Somehow it always ends up there, like that's a "legal no go". I.e. "that would have to go through the supreme court" or "that's the constitution". I realize it's hard to change some things (like how is Gerrymandering for political views allowed?) but is it that hard that it's meaningless to attempt? Doesn't that mean (in the case of the Gerrymandering example) that US democracy is fundamentally broken AND can't be repaired?
Congress could do it just by imposing a 100% tax on income attributable to an agreement providing an abatement of generally-applicable state or local taxes.
What is being suggested here is a cartel. Yes, if one city didn't agree to signing up for the non-aggression agreement at all, they may stand to win, but if everyone agrees on non-aggression, then whomever the eventual winner is wins the deal for much cheaper. Of course, in practice, defining what constitutes aggression and tax cuts would be quite difficult, but in theory players competing in a winner takes all market could still work.
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At the 50-75 year timeframe we are talking about at least hundreds of billions of dollars of economic value, if not trillions. The clustering effect of becoming Silicon Valley 2 cannot be overstated.
My personal opinion is cities should be talking about the Billions they will be committing to supporting infrastructure improvements rather than the billions in tax cuts. HQ2 needs a fuck ton of support systems, akin to building an Olympic City which never shuts down.
Of course city governments should be working hard to bring this kind of value creation and massive economic engine to their constituents. Of course Amazon should be asking tough questions of cities akin to “and what are you going to do to support me” before spending $5 billion building a new campus.
Personally I think the cities that only have tax incentives to offer will not come out the winner. Amazon cares a lot more about the surrounding infrastructure and ecosystem than a short term $1 Billion.
It’s completely irrational anti-capitalistic knee jerking to whine that cities shouldn’t be working hard to support HQ2 in their backyard. We are watching capitalism at its finest here folks - and market efficiency driving negotiation and competition is creating significantly better outcomes than the “fuck Amazon they don’t need handouts” crowd would arrive at.
If someone came to your town and said, I want to build a $20m community arts center with a theater, coworking space, parks, gardens, and playground — would you want your town to say “good luck with that” or would you want them to say “that’s amazing what do you need from us to make that happen?!” Just because Amazon happens to be for-profit, their presence in your city is an extraordinary asset and it makes perfect sense to entice them to come.
In fact, you can’t even consider building at anywhere near HQ2 scale without an intimate partnership with the host city which is, in one form or another, going to require somewhere on the order of dollar-for-dollar public investment to match the private investment. We’ve proven that this public/private partnership is basically the most effective growth engine we’ve got. I certainly hope my city would do everything possible to roll out the red carpet. It’s the most effective dollars they could possibly spend, because it’s effectively corporate matching of public funds.
It's not though. You purposefully used examples of public or non-profit groups to make it sound like a benefit. But it's not. A more fair comparison would read:
It's like someone came to your town and I said, "I want to build a $20m McDonalds, Mobile Gas Station, WalMart and a Best Buy". I would hope your town says "good luck with that" and not "that's amazing, how should we corrupt the local market to make it easier for you to do that". Amazon is no different in any way except scale.
In a sane world, Amazon HQ2 would terrify cities, who will need to ensure they have extra taxes in place for Amazon, to ensure the city can handle the massive pollutions Amazon HQ2 will generate in the local housing markets, local economy, and local infrastructure.
> We’ve proven that this public/private partnership is basically the most effective growth engine we’ve got
Proven? Can you cite some examples? I've only seen "Public/private partnerships" used as a label to mask corruption and theft; as a way to socialize any losses but privatize any gains.
I couldn't have said it better.
Companies that compete for talent will be pissed, but for lots of others it's a huge win. The only way I see it as a "bad" thing is if you are in a small city that wants to remain small.
It's absolutely nothing like building a McDonalds.
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Back in 2004 when I was working at Microsoft, I remember sitting in a bar in downtown Redmond and tossing back some local brew IPAs. This guy sitting next to me was an older dude and longtime fisherman. He was going on and on about how in the 80's, the eastside (the collective suburbs i.e. Redmond, Bellevue, etc) was just farmland, and that Seattle's main industries were fishing and logging. He was both lamenting and boasting how Microsoft came in and transformed Seattle and surrounding area into the tech mecca it is today.
So you are right. All it takes is one anchor company to totally transform an entire city. Too bad they chose cities with established infrastructures and talent pools, and not a city like Milwaukee or San Antonio that would have had the same dramatic transformation as 80's Seattle.
But, let's turn it around. Why would Amazon want to go to San Antonio, instead of a city like Atlanta?
I think the idea is that cities definitely should compete to provide the best services for the commercial enterprises, but that those service should not include breaks on taxes or land giveaways. If building a new transit station, boosting spending on public schools that the Amazon engineers would want, and restructuring building and zoning codes to increase the housing supply will make your city more attractive to Amazon, by all means go ahead, since those should redound to everyone, regardless of whether they work for Amazon. But Amazon seems rich enough to me that they would be just fine even without tax breaks on construction materials or payroll taxes.
Part of the problem here is the people negotiating don't really have much skin in the game. It's easy to negotiate with other people's money. There's virtually no recourse for their poor decisions. See: suburbia.
> At the 50-75 year timeframe we are talking about at least hundreds of billions of dollars of economic value, if not trillions
We're projecting what a theoretical second campus of a 23 year old company will be 50 and 75 years out? Please. Did we learn nothing from the nearly homogeneous business cities like Detroit and "coal country" today? Cities built around one industry or one company will fail.
> Of course city governments should be working hard to bring this kind of value creation and massive economic engine to their constituents
Amazon developed out of an existing city. Cities should invest their efforts to nurture their own businesses that one day may grow and provide jobs. Importing an existing business is a rather short-sighted proposition akin to a get rich quick scheme.
> Personally I think the cities that only have tax incentives to offer will not come out the winner. Amazon cares a lot more about the surrounding infrastructure and ecosystem than a short term $1 Billion.
Agreed. Amazon is going to go where they're going to go. Cities should stop clamoring over themselves to give bigger tax breaks to one of the biggest businesses on the planet.
Nothing. We exist to support our tax-paying residents and local businesses, and so you will have to work with everyone that's already here if you want something in particular. You can probably expect a new bus line, an extension of the road, sewer, and water system, one new police station, one new firehouse, two new elementary schools, half a middle school, and a new wing of classrooms at the nearest high school. The quality of all that will depend on how much your company improves the local tax base, so don't get too stingy, or the local news will have no problem airing all the dirty laundry for Amazontown a couple years down the road. The zoning board will be busy changing colors on their map so that your people can eventually spend money on drive-through coffee and dog-walkers without having to go all the way downtown.
Amazon needs to come to the table with the attitude "We're going to increase your tax base by $X. What's your plan for spending it?" The ideal city just has to blow the dust off the growth plan they already have and write new names and dates in all the blanks.
Any city that says, "we're going to give you a tax discount" is basically saying "we would rather you send your money off to Wall Street than actually spend it to improve the community that you intend to join here."
I suppose a city could also offer a bureaucrat dedicated to expediting issues related to the new HQ, like building permits and inspections and NIMBY lawsuits, if they wanted to pay the cost of that person's salary as a donation to the city. I just never quite understood the concept of offering discounts to rich people.
No one has proven this. There is plenty of evidence pointing to the opposite conclusion.
> It’s completely irrational anti-capitalistic knee jerking to whine that cities shouldn’t be working hard to support HQ2 in their backyard.
On the contrary, it is 100% rational for cities to want to get HQ2 and give away absolutely nothing, and possibly even get some concessions from Amazon itself.
They have to have another headquarters, and there are less than twenty cities that make any degree of sense for them to move to. I would bet that there are only two or three serious contenders, and the only way they're not going to go with whatever first choice they have currently would be a truly enormous handout. The whole bidding war going on here is, in my opinion, to try to get a sweeter deal from whoever they've already picked.
It's possible that Amazon will be a drain on a region.
The cost of housing goes up for everyone.
The best and the brightest of the region get sucked back to HQ1
The startup ecosystem in the region gets drained to work at/for Amazon
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Take games workshop in nottingham there is now a large number of spinoff games and mini companies formed by ex GW alumni
This sounds very similar to the Garden Bridge project in London. It was eventually canned because it was going to take huge amounts of public funds and provide not a lot of benefit.
When the incentives cross the line from tax breaks to free stuff, it's capitalism, all right - crony capitalism. Not the type I and other libertarians care to see.
Never thought I'd see the day where I'd be nodding along to a Keith Ellison tweet.
They're arguing that the states are giving away money. Not that they aren't providing services.
And nobody thinks Amazon moving to their town will create a silicon valley 2. Plenty of cities host huge employers. They don't become magnets for that industry. They just get fat tax breaks.
Many cities actually get worse with these giant companies throwing their weight around. Under Armor is single handedly reshaping southeast Baltimore, which of course is not only upsetting neighborhoods but pushing people out, not to mention small businesses replaced by national chains.
Finally Amazon has hundreds of billions. They do not need a handout from a poor city.
What money are they giving away? If Amazon never comes, then there is no Amazon taxes and thus no tax breaks.
Right now those towns are starting out at zero. If they are smart, they structure the incentives to make sure they are net positive. If they screw that up, well that's on them.
It's completely capitalist loyalty to business above community to dismiss every concern about selling the farm to Amazon as "whining".
Doing things better and cheaper is the reason why our standard of living keeps increasing.
I for one would love to live in a city that said "we need to do more with the money we currently have."
Dead Comment
What are you talking about? Put those numbers back where they came from - your ass.
>Personally I think the cities that only have tax incentives to offer will not come out the winner. Amazon cares a lot more about the surrounding infrastructure and ecosystem than a short term $1 Billion.
Agree but that's not the point. Amazon isn't really considering twenty cities, they're considering maybe three but they really want these cities to think they're on even ground so they can extract as much tax breaks as possible from one of the cities they would choose regardless. It's about maximum short-term extraction from their existing long-term choice.
>It’s completely irrational anti-capitalistic knee jerking to whine that cities shouldn’t be working hard to support HQ2 in their backyard. We are watching capitalism at its finest here folks
Let's not use 'irrational' this way, it's perfectly rational to be against this but...
You're right, this is exemplar of capitalism, it's also why I lot of people are turning their noses up at it. HQ2 really illustrates we've moved from seeing markets as a tool which are sometimes useful and sometimes not to being a market society which sees markets as the outsourcing of morality. No ideas have to be considered, the market will decide (and it's always right), it's a strange faith.
>and market efficiency driving negotiation and competition is creating significantly better outcomes than the “fuck Amazon they don’t need handouts” crowd would arrive at.
What is that outcome? That Amazon locates where it would have located regardless but with enough tax concessions that it's benefit to the community is substantially reduced? That Amazon's size allows it to pit cities against each other to lower costs, achieving economies of scale that upstarts just won't be able to match and further entrenching it? That Amazon shareholders get a nice dividend next year, funded directly from the concessions that Toronto or Atlanta gives them?
>If someone came to your town and said, I want to build a $20m community arts center with a theater, coworking space, parks, gardens, and playground — would you want your town to say “good luck with that” or would you want them to say “that’s amazing what do you need from us to make that happen?!”
If someone came to your town and said, I want to build a $20m sports stadium — would you want your town to say “good luck with that” or would you want them to say “that’s amazing what do you need from us to make that happen?!” Just because Amazon happens to be for-profit, their presence in your city is an extraordinary asset and it makes perfect sense to entice them to come.
Giving a bunch of concessions to Amazon isn't going to benefit the average Atlantan. Lots more people but without the corresponding taxes to keep public services up. Just like stadiums, this isn't a company working to benefit the surrounding community in the best way possible like some PR might tell you, it's Amazon trying to save as much money as possible, nothing else. Benefits to the surrounding community is a side-effect, a leakage and Amazon has every incentive to plug that leak wherever possible, here it happens to be taxes.
>In fact, you can’t even consider building at anywhere near HQ2 scale without an intimate partnership with the host city which is, in one form or another, going to require somewhere on the order of dollar-for-dollar public investment to match the private investment.
This is just sick, it's corporate welfare. If I'm paying for Amazon, then I want part of the profit.
>We’ve proven that this public/private partnership is basically the most effective growth engine we’ve got.
It's also a significant contributor to our inequality problem. Growth at all costs isn't the answer so neither is making Amazon's costs public but allowing it's profit to remain private.
Whoa. That kind of thing will get you banned here, as you're surely aware. Please post civilly and substantively, or not at all.
https://news.ycombinator.com/newsguidelines.html
I believe you and would like to learn more. Do you have some sources I can look into?
Maybe a good place to start;
https://pppknowledgelab.org/guide/sections/83-what-is-the-pp...
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Right and the 19 losers are cooperating why again?
>Sure, the cooperation would quickly break down
Good job undercutting and highlighting the faults in your own argument. If you can figure it out in two sentences I think there's probably a few people directly involved who this is obvious to. So since cooperation isn't viable in your own estimation, might as well try to win.
>but that is why the federal government should decide on such benefits
Unfortunately that proposition doesn't appeal to everyone, so good luck there.
Dead Comment
That's been suggested before at the state level. But it runs into a Constitutional limitation. Interstate compacts have to be approved by Congress. Article I, Section 10: "No State shall, without the Consent of Congress ... enter into any Agreement or Compact with another State." US cities are legally parts of states, not standalone entities.
Trying to get an anti-business deal like that through the current Congress would not work.
A city is a municipality.
Toronto is not likely to get Amazon for various reason (political climate being probably more important than tax breaks)
In all honesty, unless Amazon was going to go to Mississauga or Markham or something like that, I'd rather not have them. We need more jobs in the burbs, not more pressures on the inadequate Toronto infrastructure.
Yes, I mean US political climate. Ontario Provincial govt created the commission headed by Ed Clark and issued a bunch of statements[1], but I had the impression that above city level they are like whatever.
[1] https://news.ontario.ca/opo/en/2018/01/statement-from-premie...
Which is the reason this competition happens. The top few candidate cities could all call truce and trust that they'll come out ahead over many iterations, but cities that expect they're not in the running without perks will never win the collective bargaining game. So they put up money, and the original strongest players respond to secure their positions, and the race begins.
A city like Seattle would be comfortable for existing employees. It would do nothing to attract talent that dislikes that political climate.
The citizens would be better off if the elected officials worked to make their city the best possible place to do business for all companies on an even playing field. The city would then attract plenty of good companies simply on its merits.
The elected officials instead benefit from granting favors, being able to brag about how they brought in a big name like Amazon, and getting Jeff Bezos on their personal speed dial.
This is also why collective bargaining will not happen here. The interests of the elected officials are not at all aligned. They're competing for a scarce resource, and they themselves largely do not bear the costs of trying to acquire it.
This reminds me of how NFL operates at extracting huge concessions and expenses from cities for the privilege of having their team stay in town.
The idea of a "collective bargain" in a "winner takes all" situation doesn't make sense.