Written by Hamilton Nolan via Splinter News
So, after leading America’s desperate cities around by the nose for a year, an $800 billion company has at last selected the winners of the contest to have the right to shower it with taxpayer subsidies. If only there was a way to prevent this sort of thing from ever happening again…
Amazon’s HQ2 spectacle, featuring civic leaders across the country happily debasing themselves—personally, politically, and economically— in a futile quest to attract the beneficence of Jeff Bezos, is just the most extreme example of a corporate con job that goes on all the time. Big companies can force cities and states to compete in a zero-sum game of offering them tax breaks and other incentives in order to locate or relocate facilities. This entire process, from the point of view of the public good, is insane. If nobody offered any bribes from the public treasure to private corporations, what would happen? Nothing. They would still build their facilities. They have to! They’re in business! All of this is nothing but a transfer of wealth from public to private coffers. To companies, this is just free money. Billions of dollars from heaven. It is in their interests to make as many places compete as possible. So they do. And we pay. And they win, and we lose.
The problem is that as soon as one place offers a company tax breaks, everywhere has to. They can hold up the first offer and say, “Well? Beat this or fuck off.” Once the game has started, everyone is forced to play. And even though one place “wins” some jobs, in aggregate this game is always a net loss for the public: The jobs would have gone somewhere anyhow. All that changed was we had to pay a company a bribe for them. In New York City, Amazon says it will invest $2.5 billion (in its own facilities! This is not a donation to the city!) and it will “receive performance-based direct incentives of $1.525 billion.” It’s a fucking scam! (Though not quite as big a scam as the Wisconsin Foxconn plant, which reminds me, adios Scott Walker.)
The only way for public—you and me and every other taxpayer and city and state government who all have much more pressing things to spend money on than bribes to Fortune 500 companies—to win this game is not to play. Nobody can play. The way to accomplish this is simple: We need a federal law banning these sorts of subsidies. Without a federal law, there will always be an incentive for one desperate city or state to start the bidding wars. By banning this insulting robbery of the public till outright, business will continue building, and investing, and locating, and relocating. They do all those things in order to make more money. Companies create jobs because they need work done in order to make money. They are not charitable activities. They do not need a bribe. They are playing on the desperation of desperate places in order to rip us all off. That should not be legal.
Some of those very desperate places may object: If we do not offer bribes, how will we ever win any businesses? The answer is that what tends to cause businesses to choose certain locations in a functional, mature economy is not public bribes, but actual, you know, reasons. Cities and states can take the money that they would have paid directly to companies and invest it in education, and infrastructure, and health care, and the arts—all of the things that ultimately make places attractive to businesses. With this sort of investment, business development is a secondary result, after the public good. This is how our government should be operating. Not the other way around. Furthermore, because the economic capabilities of different regions vary widely, the federal government, which collects revenue from everyone, should—I know this is a mind-blowing revolutionary idea—itself be investing in underdeveloped regions that are less able to invest in themselves!!!! Yes!!! Redistribution from the haves to the have nots as an investment in broad-based economic development for the public good!!! Wild!! Could that possibly be a better idea than “every broke ass city shut down the libraries in order to pay a zillion dollars to the richest companies on earth?” Only one to find out I guess!!!
Amazon making the mayor of Kansas City humiliate himself by writing 1,000 Amazon reviews only to award their business to the two richest cities on the East Coast so the richest guy on earth can conveniently commute from his mega-castle really drives home this point better than anything we could ever dream up. Well done, you evil fucks.
Federal law. Otherwise this keeps on happening.