Date: February 20, 2019
What They’re Saying!
Amazon Backs Out Of New York HQ2 After Intense Scrutiny Reveals $3 Billion In Taxpayer Handouts Was A “Wasteful Zero-Sum Exercise”
“There is, of course, no such thing as a second headquarters — this was a marketing circus from the start.”
New York City Council Speaker Corey Johnson accused Amazon of engaging in “vulture capitalism” by attempting to take nearly $3 billion in New York taxpayer dollars for HQ2.
“I look forward to working with companies that understand that if you’re willing to engage with New Yorkers and work through challenging issues, New York City is the world’s best place to do business. I hope this is the start of a conversation about vulture capitalism and where our tax dollars are best spent. I know I’d choose mass transit over helipads any day.” (Twitter, Corey Johnson, 2.14.19)
State Senator Michael Gianaris described Amazon as “a petulant child” after local communities began demanding transparency into the proposed deal.
“Like a petulant child, Amazon insists on getting its way or takes its ball and leaves. The only thing that happened here is that a community that was going to be profoundly affected by their presence started asking questions.” (The New York Times, “Amazon Pulls Out of Planned New York City Headquarters,” J. David Goodman, 2.14.19)
Gianaris issued a cautionary tale for lawmakers nationwide as New York tried to avoid suffering the same fate as Seattle.
“Amazon needs to get ahold of what they mean to communities, and act responsibility. When they come in and take over a community like that, the community dies…If you’re going to come to a community, and you’re going to turn Long Island City into what’s happened in those towns in Seattle that I mentioned, you got to come correct and say, ‘I want to help this community thrive.’” (CNBC, Amazon ruins the communities it takes over, says NY state senator who opposed NYC deal, 2.15.19)
New York City Council member Jimmy Van Bramer applauded New York communities for coming together and standing up for “our values.”
“When our community fights together, anything is possible, even when we’re up against the biggest corporation in the world. I am proud that we fought for our values.” (Twitter, Jimmy Van Bramer, 2.14.19)
Amazon would not be “the kind of partner NYC needs” since it unwilling to be transparent throughout the HQ2 process according to New York City Council members.
“Amazon’s abrupt decision to pull out makes clear that what we’ve been saying has been true all along: Amazon is not interested in NYC’s version of the social compact. They want to make all the rules. That is not the kind of partner NYC needs.” (Twitter, Brad Lander, 2.19.18)
Advocates such as Make the Road and New York Communities for Change stood up and spoke truth to power on behalf of New York communities against Amazon.
“This victory is a clear demonstration of the power of workers and communities across Queens and New York who came together and are fighting for a city that works for us and not for billionaires like [Amazon CEO Jeff] Bezos.” (Vox, “Amazon won’t be building HQ2 in New York City after all,” Gaby del Valle, 2.14.19)
Congresswoman Alexandria Ocasio-Cortez was encouraged by how “dedicated, everyday New Yorkers” could come together to take on one of the richest companies in the world.
“Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world.” (Twitter, Alexandria Ocasio-Cortez, 2.14.19)
New York Times columnist Kara Swisher shined a light on the hypocrisy of Amazon’s HQ2 bidding process and “marketing circus.”
“There is, of course, no such thing as a second headquarters — this was a marketing circus from the start. But everyone bought into the narrative, especially the media, painting it as if it was going to be a much more transformative opportunity than it ever could be.” (The New York Times, “Amazon Isn’t Interested in Making the World a Better Place,” Kara Swisher, 2.15.19)
Amazon tried to hide its crony capitalism behind closed doors and failure to invest in communities.
“Expect blowback against Amazon, for what many will interpret as a hugely profitably company basically saying to the entire country, if you question our (secretly negotiated) taxpayer financed deals, we won’t invest in your communities.” (Twitter, Michael Barbaro, 2.14.19)
Its HQ2 defining priority was not interest in the local talent but “maximum tax concessions” it could squeeze from local lawmakers.
“The HQ2 “search” was always a thinly disguised attempt to extract maximum tax concessions for opening a satellite office. If you want proof of that: Amazon isn’t re-opening the HQ2 search, and it’s still hiring in NYC.” (Twitter, Nick Kolakowski, 2.14.19)
Meanwhile, Amazon managed to avoid paying federal income taxes as it sought billions of dollars in tax incentives for HQ2.
“Amazon won’t have to pay a cent in federal taxes for the second year in a row. But it needs NYC’s help?” (Twitter, Scott Galloway, 2.14.19)
And then Amazon lashed out when confronted with disapproval.
“Amazon wasn’t paying attention. And when finally confronted with disapproval, it lashed out. Like the popular but insecure kid who just learned that some classmates said unkind thing behind his back. Amazon spent more than a year, and countless dollars and hours, to determine the ideal location(s) to house tens of thousands of new employees. It was a strategic imperative. And now, suddenly, it’s not?” (Axios, “Amazon isn’t exempt from public anger toward big tech,” Dan Primack, 2.19.19)
The result was Amazon’s “own hubris and miscalculations” driving its New York City defeat.
“Amazon.com Inc. isn’t an unstoppable beast after all. It was beaten in New York City by its own hubris and miscalculations.” (Bloomberg, “Amazon’s Winning Streak Ends in New York,” Sira Ovide, 2.14.19)
Amazon ignored an opportunity to shows that it actually cares about communities it develops in with HQ2.
“It could have been different. But it would have required Amazon doing something it has never been very good at: seeing a loophole or advantage, but deciding it was worth it to figure out a better way.” (Recode, “Amazon’s grave HQ2 mistake: The political landscape changed but the company’s playbook didn’t,” Jason Del Rey, 2.15.19)
Local lawmakers are now being warned against engaging in backroom dealing to give taxpayer dollars away to companies like Amazon in the future.
“Amazon’s messy departure from New York is a victory for the other side. It should remind politicians elsewhere that their private blandishments may later turn into public controversy. It should also remind politicians that they can say no.” (The New York Times, “New York Did Us All a Favor by Standing Up to Amazon,” David Leonhardt, 2.17.19)
Tax giveaways like the $3 billion promised for Amazon’s HQ2 in New York City “wasteful zero-sum exercise.”
The larger truth is that corporate subsidies, including the $3 billion package offered to Amazon, are often pernicious and usually pointless. Studies show that these sorts of measures “have no discernible impact on firm expansion, measured by job creation.” Yet every year, local governments spend more than $90 billion to move headquarters and factories between states, a wasteful zero-sum exercise whose cost is more than the federal government spends on affordable housing, education, or infrastructure.” (The Atlantic, “Amazon Got Exactly What It Deserved—And So Did New York,” Derek Thompson, 2.14.19)
Communities must prevent Amazon from taking advantage of corporate welfare in the future and demand transparency on these backroom deals.
“Amazon’s outsized power is looking less and less like smart business and more and more like oppressive politics — one company bullying us all. And the spotlight the deal brought to the company wasn’t good for it overall.” (NBC Think, “Amazon pulling out of New York is a victory for New Yorkers. Now Congress should examine its monopolistic actions,” Zephyr Teachout, 2.15.19)
ABOUT THE FREE & FAIR MARKETS INITIATIVE
The Free & Fair Markets Initiative (FFMI) is a non-profit coalition of businesses, consumer advocacy groups, workers and community activists committed to scrutinizing and highlighting emerging market trends that are stifling competition and innovation, influencing federal and local government spending, putting consumer data in harm’s way and limiting consumer choice. For a list of members, please visit https://freeandfairmarketsinitiative.org/about-us/members/. For more information on the Free & Fair Markets Initiative, please visit https://freeandfairmarketsinitiative.org.