The class war is now in the open

In response to Amazon withdrawing its offer to have its second headquarters in New York City following protests by local activists in the borough of Queens, a billboard appeared in Times Square blaming Alexandria Ocasio-Cortez. She immediately sent out a couple of tweets in response.

It is interesting that she says that billionaire Robert Mercer is the person funding the ad, hiding behind the name Job Creators Network. Mercer and his daughter Rebekah are backers of all manner of extreme right-wing organizations. He was also one of the financial backers of the Leave movement in the UK Brexit referendum that led to the vote to leave the EU that has plunged that country into turmoil. He seems to have hidden that role fairly well because I learned about it only from the film Brexit.

It looks like Ocasio-Cortez has managed to bring class warfare, which had always been waged stealthily by the oligarchy against the rest of us, out into the open. By publicly going after someone who is not afraid to fight back, the oligarchy is elevating her profile and the issues she stands for, most of which have wide public support already. But that demonization also raises the danger to her personally from right-wing extremists like the Nazi sympathizing Coast Guard lieutenant who reportedly planned to kill her and many others.

Amihai Glazer, a professor of economics at the University of California, Irvine, writes approvingly of the decision to fight Amazon, saying that research of past deals shows that the companies almost never follow through and deliver the promised benefits.

Amazon’s decision to walk away from its plan to build a new headquarters in Queens stunned city and state officials, who had promised US$3 billion in incentives in exchange for some 25,000 jobs. They had never questioned whether the promised jobs and economic stimulus would actually appear.

In my own research as an economist studying corporate welfare, I have found and reviewed much evidence on the effectiveness of tax and other incentives. My conclusion: Incentives just don’t work.

It is striking that Amazon, in announcing its cancellation of the New York headquarters, didn’t signal it was reopening the bidding process for one of its new headquarters.

Nowhere did it say that it would still hire the 25,000 workers it had said it would in New York City, though it still plans to create that many jobs in Virginia.

While Amazon said it pulled out because of political opposition, another reason may be that the lure of the subsidies blinded Amazon to economic realities and that it’s second-guessing its investment. In which case, perhaps Amazon should count its blessings as well.

Glazer recommends that other cities follow suit and turn down such deals.

The so-called ‘job creators’ don’t give a damn about creating jobs or the public good. Their only goal is to make money for themselves and they will squeeze the public for as much as they can get and will give as little as they can get away with, while lying brazenly all the way to the bank.


  1. Jenora Feuer says

    Toronto was one of the early bidders on the Amazon HQ2 shop-around; we also dropped out early because we weren’t willing to play the game of paying Amazon to show up and distort the entire local economy, and we weren’t able to convince enough others to stop playing that game and compete on merit instead. And honestly, most of the people I’ve heard talking about it say that this was the right decision for Toronto.

  2. Trickster Goddess says

    $3B divided by 25,000 jobs = $120,000 per job paid to Amazon.

    Warehouse workers being paid $15 per hour x 40 hours per week x 52 weeks = $31,200 per year.

    So Amazon basically gets free labour for 4 years. What do the taxpayers get out of it?

  3. DonDueed says

    A few years ago, Boston gave General Electric some big incentives to move its headquarters here. GE was going to build a large new main office building and bring in a lot of its administrative people.

    Almost as soon as the deal was done, GE began downsizing itself, selling off some of its businesses, and suffering stock losses. It also began trimming the plans for its new headquarters. Now instead of a new building, it’s just going to renovate some existing structures, and it will have far fewer employees in Boston.

    Fortunately, the incentive deals offered by the city and state included requirements that GE had to meet. The new headquarters plans don’t meet those requirements, so GE is going to pay back $85 million of those incentives.

    The bottom line is that when a locality decides to offer incentives to a company like Amazon or GE, they need to build in guarantees as Boston did. Then if the deal goes sour they’re not left holding the bag.

  4. jrkrideau says

    @ 2 Trickster Goddess
    What do the taxpayers get out of it?

    More potholes and higher housing costs?

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