Amazon deal collapses and guess whom Amazon blames?


After much ballyhoo and getting cities all across the US to compete to offer incentives to locate their second headquarters in their region, Amazon finally chose New York City. The city and state had offered massive amounts of tax benefits to this company that has made its founder Jeff Bezos one of the wealthiest people in the world. But the local community was not pleased because the incentives offered to Amazon would come from money that would have gone to fund schools and other services and they organized protests.

The main frustration for opponents of Amazon’s project was the $3 billion that the company had been awarded in state and city incentives — a cost that opponents said would have been paid for by New York residents. Many also feared that the move would lead to gentrification and higher housing prices.

Following Amazon’s announcement, Ocasio-Cortez, who represents a district adjacent to the project, commended “dedicated, everyday New Yorkers & their neighbors” for defeating “Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world.”

Amazon pulled out of the deal and it is interesting that they fingered those local protests and Alexandria Ocasio-Cortez in particular for their decision. She has become the lightning rod for right-wing criticisms but by doing so, they are only raising her profile nationwide. It is possible that Amazon did this as a warning sign to other communities that they had better shut up and not criticize them if they wanted the company to come there.

In fact, Amazon is one of the biggest tax avoiders, paying exactly zero in federal taxes despite making $11. 2 billion billions in profits last year,. Actually, it is even worse because Amazon claimed a tax rebate of $129 million last year, so its claim that its presence would benefit the public good rings hollow. Natasha Lennard describes how the protests were successful.

The plan’s thwarting offers a lesson in the possibility of forceful collective struggle against seemingly unbeatable Goliaths. It also proves the need for left-wing politicians and organizers to challenge and replace conservative, capitalist Democrats if we are to wrest control of neighborhoods, cities, and public resources away from corporate interests and towards the good of existing communities.

“Let’s be clear who deserves the credit for this victory against Amazon — the working people of NYC who refused to let another company reap billions in corporate welfare at the expense of the City’s social welfare,” wrote New York City Council Member Carlos Menchaca, a longtime opponent to the Amazon deal, on Twitter.

It is true that recent polls showed support for the project, especially among African-American and Latinx residents. But such polls do not account for the fact that Amazon’s promises to bring 25,000-plus “good” jobs and vast investment are poison pills. If Amazon’s original HQ in Seattle is anything to go by, the idea that those non-unionized, predominantly six-figure jobs would go to local working-class people is laughable. Meanwhile, HQ2 threatened to drive up already soaring property and retail prices in the area. And, as Ocasio-Cortez noted in response to criticism, “we were subsidizing those jobs” — with the $3 billion in tax breaks and other kickbacks for Amazon, a company that will pay nothing in federal taxes on $11.2 billion of profits made last year.

Matt Stoller, an economist with the Open Markets Institute and critic of Amazon’s market control, noted how disingenuous it was for the company to claim such popularity. “If the question were framed differently the deal would be a lot less popular,” he wrote on Twitter. “For instance, ‘Would you personally pay $375 for each member of your family to Jeff Bezos so he would bring Amazon jobs to New York City?’” — referring to the fact that $3 billion of public money amounts to approximately $375 per New York City resident. Stoller added that while, of course, tax incentives don’t work that way, his alternative framing is no more misleading that the polling Amazon touted as proof of popularity: “Saying ‘would you accept great jobs in return for vague-sounding state and city incentives of up to $3 billion’ is going to get a high approval. ‘would you pay $375 to a billionaire for traffic jams and higher rent’ is not. This was not a popular deal.”

Amazon had promised what all these big companies and sports teams do when they squeeze local communities to fund them, saying that they would create lots of jobs and material benefits that often do not materialize in anywhere near the scale promised. The billionaire owners of sports teams also indulge in this kind of extortion, getting cities to dole out tax incentives and build shiny new stadiums, even when the old ones are serviceable, as the price to keep teams from moving.

Let’s hope this strengthens local communities to resist the bribery and extortion efforts of other big companies.

Comments

  1. Allison says

    There were signs from the very beginning that this deal was not going to go over with the people in the streets, especially (but not exclusively) with the people in Queens. However, the governor (Cuomo) and the mayor (Di Blasio) just figured they could handle it the way things have always been done in the “Empire State”: the Big Bosses huddle in secret and present a fait accompli which nobody else has enough clout to do anything about.

    What changed is that Cuomo no longer has control of the State Senate. Last election, the caucus of Republicans-in-Democrat-clothing (a.k.a. IDC) got voted out, and there’s a majority in the Senate that is not beholden to Cuomo. Cuomo is seen as high-handed and secretive, which has eaten into his popularity, especially Downstate (=NYC area.) So the Senate Majority Leader (my Senator!) could put a vocal opponent of the deal onto a committee which had to unanimously approve it.

    Also, while the high cost of the Amazon deal and the disruption and destruction of the neighborhoods around the proposed HQ were a factor in the opposition to it, I think the fact that Amazon is known for its sweatshop working conditions and as being anti-union added to the outrage.

  2. lanir says

    I hadn’t been following this too closely but from what I understand of corporations like that, they don’t leave behind money. Whatever they tell the news outlets or even themselves, their coworkers and their families, no amount of public protest was going to keep them from making money. I mean seriously, how many of us can imagine going to our bosses and saying “This looked like a mess and I just didn’t want to deal with it” when the boss knows full well the company stands to make quite a bit of money on the deal? Those “incentives” are just free money with no guarantees.

    The only way corporations leave money behind is when they think there’s more money elsewhere. Or possibly when the boss screws up and invests in their own authority (expensive power plays and so forth, like being anti-union). Not sure which of those is happening here or if I’ve missed another possibility but every quote the article used from Amazon management sounded like obvoius lies to me.

  3. says

    Some joyous facts: Amazon expected this to land as a horrible rebuke, to make the people of NYC sad at what they lost. Instead, people of NYC are -rightfully- claiming this as a victory. Eat shit, B-sauce.