
The Battle for Amazon HQ2 Was a Con - tzury
https://medium.com/s/no-mercy-no-malice/no-mercy-no-malice-hq2-and-3-82bf3c776f9c
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RodgerTheGreat
In full hindsight, the sheer efficiency of the HQ2 gambit is striking.

It was obvious from the beginning that framing it as a "competition" between a
short list of cities was a ploy to make gullible politicians bid against one
another while Amazon waited to see who could offer the most enticing deal.

What is perhaps less obvious is that now everyone who participated has shown
their hand: Amazon knows exactly what concessions each city can afford. With
their HQ2s "selected", Amazon can now offer far less glamorous satellite
offices or warehouses to those cities and drive a murderously hard bargain
doing so.

In one fell swoop: a free media circus, leverage on every location they might
want to move into in the future, and heaps of public funds, in exchange for
opening the offices Bezos already knew he wanted.

~~~
candiodari
Why would you ever enter a negotiation if you don't know what you want ?
You're most likely to injure yourself. So sure, Bezos' didn't make mistake #1
people make in negotiations. Google "bafta", "negotiation maximum pain", and
start there for what you need to know before you buy as much as a loaf of
bread. And yes, I have in fact managed to negotiate down the price of bread in
a Supermarket. I would suggest you try too, just to show yourself that it's
possible.

Amazon only grew because of the interstate commerce Sales tax exception.
Essentially Amazon grew only because states couldn't tax it. Only the Federal
government got money from them. Amazon is a creation of the Federal government
(using a rule, ironically, Democrats and even Bernie Sanders voted FOR, not
against. The Federal government really wanted to create an Amazon like
company, and so they provided this advantage, and Bezos crushed it. That's
what happened. Amazon is not a bookstore, it isn't even a store or warehouse
or technology firm, it's a effectively a government hedge fund)

Look at Bezos' background. Is he a librarian ? A book seller ? He's a wall
street investor (started as an engineer actually, but he was working quite the
time as a speculator by the time he founded Amazon). He's a financial
engineer, would perhaps be the best description. He will innovate, but he
realizes that his innovations are about taxes, prices, trading and moving
opportunities around. They're very much not about products, books, hosting,
... or any of that.

So last year the Federal govenrnment took away his tax advantage over his
competitors (at least Walmart). So you can bet your bottom dollar that 12 out
of every 24 waking hours of Bezos' time were spent figuring out how to get
that back. This seems to have been one answer (I seriously doubt he has only
one trick going).

~~~
SomeHacker44
Hard response to up or downvote. It started out upvote worthy and ended up
downvote ranty, so I am just commenting here of my dilemma instead.

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notatoad
>Did Bezos think no one would notice?

the obvious answer to this here is that no, they expected people would notice.
but they made the call that there wouldn't be any consequences. and they were
probably correct.

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Apocryphon
"Of more than 400 metros in the US, five account for over 20% of the growth.
And, you guessed it, two of those five are DC and NYC."

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ikeboy
I see lots of people claiming this, but haven't seen anyone that can point to
their articles published before the announcement predicting it.

~~~
sundaeofshock
Do a google search for “articles predicting DC and nyc would win amazon” and
you’ll get results going back at least to September 2017. Folks had NYC and DC
at least in the final four, if not outright winners. A sample:

[https://money.cnn.com/2018/01/19/technology/business/amazon-...](https://money.cnn.com/2018/01/19/technology/business/amazon-
hq2-reax/index.html)

[https://amp.businessinsider.com/amazon-hq2-will-be-new-
york-...](https://amp.businessinsider.com/amazon-hq2-will-be-new-york-or-dc-
scott-galloway-predicts-2018-2)

~~~
fipple
That’s not really evidence, as there are articles like this for many
combinations of two cities.

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sneak
I mean, yes, it probably was. But this article offers precisely zero to
substantiate that opinion beyond our own private speculations of same.

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sys_64738
Whether it is or isn't, does it matter? 50K jobs will still be created
according to the news.

~~~
sundaeofshock
I think you are missing the point. Those 50k jobs were going to en up in NYC
and DC no matter what. The “competition” was used to get those two metro areas
to offer buckets of money to a company that does not need said dollars. That
money could have been put to much better use.

It was sleazy AF.

~~~
ikeboy
If one of the cities had refused to offer incentives, even if the article's
premise is correct I think Amazon would have gone with the other only.

~~~
sundaeofshock
And that would have been fine. NY could get much more bang for their buck then
giving it to Amazon by — for example — investing it in the subway system.

~~~
ikeboy
I don't they could get anywhere close to a 10X return on investment that way

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coralreef
_Ends up Blaze was just playing the field to extract resources, and use the
grift to extract every penny from the studio he knew he would ultimately pick?
We’d assume that Blaze lacks character._

Huh? Since when is initiating a bidding war immoral or lacking in character?

A party might come up with an attractive offer you never considered or thought
possible. And even if you knew you wouldn't take their offers, it is rational
and logical to get the best deal you can with something that is expensive and
one-off like this.

~~~
adjkant
When all of your profits come at the expense of the local residents who don't
get a vote on the matter, I think it's a lot stronger case for immorality. A
moral business has limits at which it drives for profit. I'm not sure where I
stand on it myself, but the bidding war itself is not the moral problem, it's
the context of the bidding war. I certainly don't view Amazon positively for
doing it. At its core, this is Amazon profiting at the cost of American
citizens. If every corporation did this, America would take quite a big hit. I
would love to see the practice of making such a bidding war become illegal.

~~~
moreira
"who don't get a vote on the matter" -> They elected the representatives that
they trust to make these decisions; that's representational democracy, the
cornerstone of most of the world's countries.

To change it, you as a citizen need to demand better of your politicians.

Amazon's not the problem; they're just doing what's best for their
shareholders, which is the whole point of a corporation. It's the government
that needs to be held accountable for this situation; they're the ones going
along with the bidding war - your suggestion of such a bidding war being made
illegal is definitely a start.

~~~
adjkant
In today's America, demanding politicians only goes so far and I would say its
one of many broken parts of our system. You can say that I "as a citizen"
should do X but the reality is that citizens have lost control of their
government and have for some time now. I personally believe that
representational democracy is very flawed and would love to see a return to
more direct democracy.

Amazon isn't the source of the problem but a company that exploits the
problems of others for their gain is not a not moral company in my book. And
of course there is a spectrum here as it's impossible for law to match morals,
but for a company in such a large and good position to do this without need is
a notable action from a moral perspective. So no, Amazon is not the problem,
but given that no one has really quite done this at this scale, they basically
created the problem in the first place and Amazon deserves scrutiny and blame
for that 100%.

~~~
coralreef
Petitioning local governments for incentives to build factories/business
related enterprises has been around for a while. Pretty much every major
sports team ownership group goes for subsidized stadium construction.

~~~
Apocryphon
And all of those processes have been widely criticized for being bad deals
that hurt taxpayers. Just because Amazon is playing a long-established game
doesn't mean that game isn't crooked, and that they shouldn't be criticized
for indulging in such a farce, especially when they have the wealth and
resources to do otherwise.

