NYC shells out billions to the Amazon beast

December 10, 2018

Aaron Petcoff and Danny Katch look at the numbers behind the deal to locate Amazon’s new headquarters adjacent to New York and Washington, D.C., and argue that we need to build the fight against this massive corporate giveaway.

WHEN NEW York Gov. Andrew Cuomo publicly offered to change his first name to “Amazon,” it sounded like a weird gag mocking the clumsy desperation of a mainstream politician seeking corporate goodwill.

But no, in the final days of the nationwide municipal groveling contest that Amazon inaugurated last year over which city would be graced with its second headquarters (HQ2), Cuomo actually told reporters he’d be fine with the name “Amazon Cuomo” if it meant landing those jobs.

As we all now know, the company ended up making the entirely predictable decision to select two locations, Queens and Northern Virginia, adjacent to the business and political capitals of the U.S.

The fact that Amazon’s decision was based on the unique advantages offered by New York City and Washington, D.C., makes even more outrageous the ransom of public giveaways it was able to demand — including $3 billion from New York alone in the form of tax breaks and other incentives.

Gov. Andrew Cuomo (center) and Mayor Bill de Blasio (right) appear with Amazon real estate executive John Schoettler
Gov. Andrew Cuomo (center) and Mayor Bill de Blasio (right) appear with Amazon real estate executive John Schoettler

Cuomo and New York City Mayor Bill de Blasio took a pause from their bitter and destructive rivalry to come together in defense of the Amazon deal as a victory for New York in its economic cage match against the other 49 states.

For these two supposedly liberal Democrats, handing over taxpayer money to Jeff Bezos — the actual richest person in history — whose company’s horrible treatment of warehouse workers and creepy collaboration with Immigration and Customs Enforcement (ICE) on facial recognition software is making it the new villain of 21st century capitalism — is simply part of progressive governance.

“Nothing in the Amazon transaction is new,” Cuomo wrote in an unusual “op-ed” on the governor’s website. “[T]ax incentives...are long-standing programs supported by both Democrats and Republicans in both the city and the state.”

According to Cuomo, only extremists on the right and left could find any fault with funneling government revenue to a billionaire. “The socialists argue that we gave a $1 billion grant to one of the richest men in the country,” he wrote, “and that we should have given that money to the poor and the needy.”

Um...yes. That’s precisely what socialists propose.

WHILE CUOMO stayed on brand as liberalism’s menacing bouncer determined to keep out any left-wing riffraff, de Blasio played his typical role of the arrogant NGO administrator who has no idea that he sounds like a complete tool.

Speaking about Amazon agreeing to hold job fairs and resume-building workshops in the nearby Queensbridge housing projects, the mayor gushed, “One of the biggest companies on earth next to the biggest public housing development in the United States — the synergy is going to be extraordinary.”

But the memorandum of understanding published by Amazon makes no mention of any local hiring mandate.

De Blasio also didn’t mention that among the collateral damage from this synergy are 1,500 affordable housing units that were to be built on the site given to Amazon — or the nearly 300 percent increase in searches for neighborhood real estate reported by StreetEasy.

Across the country, state governments spend up to $90 billion a year competing with each other to retain or attract businesses. As Derek Thompson notes in The Atlantic, that’s more than the federal government spends on housing, education or infrastructure.

New York spends over $8 billion annually on these business incentive packages, a major part of Cuomo’s economic policy since he took office in 2011. But while Cuomo’s New York spends the second-highest percentage of its economy on business incentives, a recent study concluded that these incentives “might tip the location of six percent of the firms given incentives; the other 94 percent is economic activity that would have occurred anyway.”

For example, tax breaks for the TV and film industry give away an incredible $42,000 for every job created — often for shows that would probably never leave New York. As Jospeh Spector of the Democrat & Chronicle asked, “does Saturday Night Live really need our money to stay in New York?”

But while Andrew Cuomo may be a particularly gullible mark for corporate con artists, the Amazon headquarters sweepstakes shows that he has major rivals in cities and states across the country.

Over 200 city and state governments across North America jumped into the bidding war over the course of 14 months. Montgomery County, Maryland, offered Amazon an astounding $8.5 billion in tax breaks. Atlanta offered billions, plus separate train cars for company employees. (No word on how the city’s Martin Luther King Center felt about the proposal for segregated seating on public transit.)

Many cities and regions offered Amazon even more incentives than New York and Virginia, but it turns out that the company may have cared less about tax breaks than they did about gathering the information that each region provided as part of its proposals about local infrastructure plans, demographics, zoning codes and more — priceless data for a company trying to take over vast swaths of the U.S. economy.

“I think they had this in mind from day one,” said urban theorist Richard Florida to CBS News. “This was about crowdsourcing data...This was never about an individual HQ2.”

ONE THING should be immediately made clear: nothing is yet set in stone. The only details that have been revealed are from Amazon’s own memorandum of understanding, which should not be confused with a binding contract.

Already, several modestly sized protests have taken place and more are being planned, along with a number of community forums. and the Democratic Socialists of America’s working group of tech workers have released a pledge asking that New York area tech workers boycott working for Amazon.

Newly elected left-wing Democrats like congressional Rep. Alexandria Ocasio-Cortez, state Sen. Julia Salazar and state Rep. Catalina Cruz have strongly opposed the deal, as have a number of other local officials who previously expressed support for New York City’s Amazon bid — a reflection of the degree of popular anger against such a blatant corporate giveaway.

While no unified set of demands have yet emerged, a number of clear themes have emerged from the protests and press conferences coming from the various communities and movements affected by this decision.

First, there should be no public givebacks to Amazon, period. In fact, Amazon already makes enormous profit from public resources and should make direct payments into funds for affordable housing, transit, health care and education. We should also demand that Amazon end all marketing and business with ICE, and the legal protections for Amazon’s workforce must be enforced.

It’s also important to fight for an end to the shady back-room deal-making by Cuomo and de Blasio, and fight for any new negotiations to take place in public view, with public input, and with the public’s democratic approval. This is especially important given the likelihood that some of the politicians, unions and community groups currently opposing the deal are primarily looking to negotiate a few concessions for their constituents and members before eventually coming on board.

THE FIGHT against Amazon’s expansion into New York City has the potential to be a powerful force that draws together various social justice movements, including housing and transit activism; immigrant rights; the growing movement of tech workers; and a slowly reinvigorating labor movement.

Already, it’s revealed how stunningly out of touch Democrats like Cuomo and de Blasio are with the class anger that shapes all of politics in 2018.

Only a few years ago, de Blasio won an upset mayoral victory with a campaign theme that New York was a “tale of two cities.” Today he can’t seem to understand why working-class New Yorkers who everyday have to descend into the hell of the city’s crumbling subway system are pissed that their tax dollars are being used to build Jeff Bezos a helipad.

Meanwhile, the typical Queens household earns under $60,000 in income, while the typical Queens rent requires a household income of $88,000 — and that’s before Amazon comes in. Over 60 percent of households in the Queensbridge Houses rely on food stamps.

So yes, Andrew Cuomo, socialists think we should take that money you’re trying to give to Amazon and give it to the New Yorkers for whom that money would actually make a world of difference — $3 billion comes out to over $1,000 for every adult and child living under the state’s miserably low poverty line.

We need to build a movement that forces every politician in New York to explain why they want to use desperately needed funds to instead aid and abet Jeff Bezos’s plan to take over the world.

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