
Cities don't have to offer huge subsidies to companies like Apple and Amazon - pmoriarty
https://www.theguardian.com/cities/2018/jul/03/cities-need-to-stop-selling-out-to-big-tech-companies-theres-a-better-way
======
olivermarks
Reminds me of US cities funding oligarch owned sport team new stadium fiascos
that occur every few years. Oligarch organization gets massive tax breaks and
subsidies then holds city to ransom threatening to move the team to another
city that is dangling incentives.

The premise is usually jobs, local pride and prestige...and it usually ends
really badly for the locals...

~~~
slg
You are missing part of the point of the article. Don't blame the tech company
or the sports owner for getting these concessions. Business owners are always
going to act in their own best interest. Individual people do the same thing.
Lots of people who live along the Washington/Oregon border make all their big
purchases in Oregon because of the lack of state sales tax. I don't see
anything morally wrong with doing that. They are just responding to economic
incentives. Instead blame the politicians for setting up this perverse game of
incentives in the first place. This article is trying to educate politicians
(and the general population) of a better way to accomplish the same goals.

~~~
losteric
Why does the blame always lie with "politicians"? That's unhelpfully
reductionist... we are a democracy. Businesses, private citizens, and
representives all come together to define our public policy.

Those "perverse" tax incentives were a reasonable compromise between voters
and businesses within a state. The perversion only exists at the interstate
level, so which politician is "at fault"? The Washington legislature,
responsible for all of Washington? Individual WA representatives, who get one
vote regardless of their constituent's distance from the border? Or is it on
the Oregon side?

If either state copied the other, there's no problem - but which one "wins",
and how do those changes get implemented?

~~~
slg
Politicians are the ones responsible for reaching the compromise between
citizens (and businesses are just a collection of citizens). If you do not
like the compromises reached, you should work harder to convince the
politicians to change their mind. Attacking the citizens you disagree with
gets nothing accomplished. That is how we got into this crazy polarized
political climate in which a solid third of this country thinks a different
third are either fascists or Marxists.

The politicians are ultimately accountable to their constituents. The people
of Walla Walla likely have different opinions on sales tax than the people of
Redmond. If the politicians don't represent those opinions then they should be
voted out. If they do represent those opinions, it is simply a numbers game
from there. If your side loses, that is just how democracy works. That applies
to every level of government from the local up through the federal. It applies
to individuals the same way it applies to businesses.

~~~
losteric
I am talking about complaints with the elections of other districts.

My representative fairly represents my district's sentiment. The policies we
want are blocked by neighboring district representatives - who also fairly
represent _their_ districts. The compromises tend to land squarely in between
the extremes. If we're not happy with the compromise, the answer is to try
moving the opposing side closer... which means convincing citizens of that
district to change their mind.

Citizen discourse is the core of effective democracies. Elections merely
represent public sentiment - peer to peer discussions are how we change the
status quo.

America's problem is we seem to have forgotten how to talk about politics.
Even your language reflects that... no suggestion of civil debate, just a
false dichotomy of surrendering to the numbers game or "attacking" other
citizens.

Insults are an attack, but genuinely _challenging_ beliefs is not an attack.
My neighbor and I may disagree, but we aren't enemies - we are both citizens
that want what's best for our family and friends. Talking politics is how we
figure out what that means. Those discussions between private citizens is the
decentralized process of moving a democracy forward.

~~~
slg
I generally agree with what you are saying here. The "attacking" comment in my
last post and the overall tone was more about the original comment that
spawned this thread that used accusations about oligarchs holding cities
ransom. I don't think that type of name calling is productive.

I also wasn't attempting to setup a dichotomy between surrendering or
attacking (although I can certainly see that implication after rereading my
comment, sorry about that). I would consider civil discourse part of the "work
harder to convince the politicians to change their mind" comment. You can
convince a politician by talking directly to them or by rallying other
citizens to your cause.

However the discussion was about "blame" and "fault". I think those are very
aggressive words to use against other citizens you disagree with. If we are
going to use those words, I think they should be focused towards politicians
who are accountable to your wishes. Your neighbor or the citizens in the next
district over are not accountable to you and therefore should not receive
blame for disagreeing with you.

------
bradstewart
The "second alternative" makes a lot of sense, but building a startup
ecosystem is a difficult, long-term play involving a ton of variables.

You need universities driving research and producing competent technical
graduates; you need to foster a entrepreneurial attitude and provide resources
(accelerators, mentors, office space, etc) to would-be companies; you need a
source of capital to fund these companies.

And then you wait for these companies to grow.

Courting a single, large entity is a lot simpler: they tell you what the want;
you give it to them; jobs. That's a much easier sell for politicians and local
governments. You'd need decades of cooperation between incoming and outgoing
politicians to build a successful startup ecosystem.

~~~
baybal2
>The "second alternative" makes a lot of sense, but building a startup
ecosystem is a difficult, long-term play involving a ton of variables.

The "startup ecosystem" in the way SV denizens know it is terrible economy-
wise. ROI - microscopic, human costs - humongous, employment impact - small,
success rates - 0.2%.

Compare it, say, with a factory cluster: annual average ROI - ~8.75% (averaged
over last 12 years, Chinese data) capital costs - sane, capital recovery -
certain 60%-70%, success rate after 3 years - 60%-70%, employment impact -
undisputedly apparent, human costs - you don't have to stake 5 years of your
life on the latest fad.

People who advocate for copying that, advocate for copying a clearly failing
model.

~~~
nostrademons
By the numbers, Silicon Valley does a lot better than those. Annual average
ROI for Google over the last 10 years has been 21%; for Facebook, 86%; for
AirBnB, almost 170%. Initial capital costs in each of these cases were nearly
zero. Employment impact: tens of thousands of new millionaires created.

The human costs of factories are not nil either. Beijing is a polluted
wasteland where if you wipe your nose it comes away black. Silicon Valley is
still dealing with the toxic wastes from the _last_ generation of industrial
powerhouses, the semiconductor companies that dumped toxic waste straight into
the ground. I would far rather waste 5 years of my life on the latest software
fad than have 30 years of my life shaved off by cancer.

Don't romanticize the past. The average professional in Silicon Valley enjoys
a standard of living much, much higher than the average factory worker in
Shenzhen, or in Cleveland for that matter.

~~~
ddebernardy
There were a few pets.com along the way in SV. For every successful startup,
there's a graveyard full of failed ones.

~~~
nostrademons
Sure, but the same applies to factories. I'd seriously question the OP's
numbers of a certain 60-70% capital recovery rate for factories. Maybe in
Shenzhen where you have tax policy, exchange rates, and labor costs all in
your favor. All you have to do is drive through the Midwest to see examples of
factories that didn't survive either, though.

~~~
baybal2
>I'd seriously question the OP's numbers of a certain 60-70% capital recovery
rate for factories.

Well, first you have to buy a building properly fitted for a factory.
Industrial plant property has never ever went down in price in South China.
You can't legally run a factory business out of a garage anymore in China.

A factory with a top notch equipment today, will just be switching product
tiers as it ages, without going down much in value. A factory, is not just its
manufacturing machinery. It is also a well fit assembly line team, cherry
picked team leads, on-site engineering, and shop floor knowhow.

And for everything else, a company being liquidated is usually sold as a whole
to another entrepreneur. Who needs to pull apart a well oiled machine, which
is an assembly line team, just to have to reassemble it later? Cases when the
factory business being liquidated is sold above its book value, are not so
infrequent.

A no-name shoe factory going bust is either result of a market force action,
or the owner being reckless/dumb. It does not mean that the whole idea of a
shoe as a product is a failure. It just means that the next owner, must be
more financially conservative or needs to switch to fancier kind of shoes to
stay afloat. Value-wise - there is not much change in tangible and intangible
assets.

~~~
nostrademons
Like ddebernardy said, the factories in the Midwest were doing fine until they
weren't. The same will likely happen in China. Just because industrial plant
property has never ever went down in price there doesn't mean it never will.

I grew up in New England, birthplace of the industrial revolution in America,
and we had our manufacturing crisis just as the Midwest was ascending. The
factories in Boston, Waltham, and Malden aren't factories any more; they're
tech companies. The ones in Lowell are museums. The owners went bankrupt and
packed up and then left the mess behind for decades before it was cleaned up.
I was just at the Boott Cotton Mills Museum the day before I posted the
original comment. It still has machinery from c. 1910 in it. Nobody wanted to
buy it; it sat, derelict and rotting, for 60 years until the factory was
turned into a National Park and restored with federal money.

------
niftich
_" A regional government asks: which industry sectors are we already
comparatively good at?"_

Nothing. Most regions that don't already tilt toward a particular specialty
dominated by a few large employers aren't specifically good at anything. This
isn't a slight: it's just reality. The employment and talent base in most
areas tilt toward retail (overwhelmingly consisting of national chains, and
dominated by the likes of Walmart), human services (healthcare, education),
and government. Small businesses then cover a wide gamut of services required
for daily life, but don't stand out.

There are very regions whose competency comes from a convergence of
independent actors, and most of these seem to focus on healthcare research
intertwined with healthcare delivery, because the products, talents, and
facilities aren't readily transplanted elsewhere: the article's example of NC
Triangle, central Maryland, Cleveland, Grand Rapids. Rochester, MN would get
an honorary mention, but it's dominated by a single actor -- the Mayo Clinic.

So what's everyone else to do? South Carolina began an ambitious plan that
culminated in landing BMW in the 1990s, and now the state is a major center of
automotive manufacturing and related businesses. For them, the gamble, even
with generous incentives, paid off. This is the same kind of thinking behind
northern Nevada's (and Arizona's) chasing of manufacturing and high-tech
looking to flee from California. Rural areas chasing datacenters might seem a
bit puzzling, but they support a comparable number of local jobs, while having
fewer externalities than trucking distribution centers -- another typical
rural development opportunity. On the other hand, the scope of the subsidies
in the Foxconn plant and the nature of the behavior of Wisconsin officials are
unjustifiable: it shows desperation, ruthlessness, and a disregard for local
residents and local economic realities. Most cases are not that egregious.

A jurisdiction landing a large-footprint warehouse-like building, like a
datacenter or a distribution center, or even a Walmart, offers a short-term
boost of jobs in construction, and then a steady, if low, number of jobs in
years to follow. It also vests national or international corporations to the
local plant: these sorts of sites are unlikely to close or move. A few million
dollar subsidy is comparable in cost to grading and paving roads for a new
subdivision, or installing water and sewer service. To cities and counties
competing for the long term, this is often seen as an investment in the future
of the area.

~~~
opportune
This is a really good point. However, I think we really should be making a
distinction between skilled and unskilled labor. The reason wealthy nexuses of
comparative advantage emerge is generally due to _skilled labor_. You get a
network effect from having that labor after which you may no longer need to
offer incentives. The Bay Area is a great place to start a tech company
because of all the tech workers/investors/incubators, NYC for hedge funds and
IB, Chicago for trading, DC for nonprofits, etc. And generally other areas can
experience a similar phenomenon owing to natural resources.

However, I think an area makes a mistake in investing (via subsidies/tax
breaks/whatever) in unskilled labor when it’s not tied to their natural
resources. The difference is simple: you don’t gain the network effect from
unskilled labor because, well, it’s unskilled. A distribution center doesn’t
really make it better for a call center to pop up in the same area.

That said, all large business will cause at least somewhat of an incentive to
build other large businesses by it due to infrastructure.

------
twblalock
A lot of cities are making shortsighted deals to attract companies and sports
teams, and that's bad.

On the other hand, if companies (and individuals) were not able to shop around
for the tax regimes they prefer, there would be nothing to prevent
extortionate taxation -- companies and people wouldn't be able to avoid it by
going somewhere else, and governments would be able to do whatever they
wanted.

On balance, I prefer competition in the regulatory and taxation space over the
alternative. It limits the ability of governments to use taxation as a weapon
or a form of expropriation. I'd rather live in a world where governments need
to attract investment rather than coerce it.

Some might say that such competition would result in a race to the bottom, but
we already have that competition and taxes are still quite high in many places
-- a race to the bottom would have happened by now if it was going to happen.

~~~
ErikVandeWater
> taxes are still quite high in many places

Taxes for corporations are not very high at all. Fortune 500 companies
routinely pay a less than 0 income tax at the federal level[0], and state
level income taxes max out at 12% [1].

The race to the bottom has happened for the big businesses that have leverage.
Just not for the little guy.

[0] [https://www.investopedia.com/news/how-
fortune-500-companies-...](https://www.investopedia.com/news/how-
fortune-500-companies-avoid-paying-income-tax/) [1]
[https://taxfoundation.org/state-corporate-income-tax-
rates-b...](https://taxfoundation.org/state-corporate-income-tax-rates-
brackets-2018/)

~~~
twblalock
> Taxes for corporations are not very high at all. Fortune 500 companies
> routinely pay a less than 0 income tax at the federal level[0], and state
> level income taxes max out at 12% [1].

The way you quoted that Investopedia article is a bit misleading -- it says it
identified 18 companies in the Fortune 500 that paid zero tax, and that 258
companies paid an average of 21.2%.

18 out of 500 companies paying zero tax is a pretty low bar for saying that
paying zero tax is routine.

Here's the quote from the article:

> The Institute on Taxation and Economic Policy (ITEP), in a recent study,
> found that over the eight-year period from 2008 to 2015, 258 profitable
> Fortune 500 companies paid an average effective federal income tax rate of
> 21.2%. Over that same period, exactly 18 companies, including General
> Electric, International Paper, Priceline.com and PG&E Corp., avoided paying
> a single penny of federal income tax.

~~~
civilitty
You're being no less misleading than he is.

> 258 _profitable_ Fortune 500 companies paid an average effective federal
> income tax rate of 21.2%

So of the _Fortune 500_ , 242 companies are unprofitable. Seriously? That
ignores all the companies using legislation they helped craft to give
themselves tax credits and the accounting tricks they use to bring their
profits to "zero." Hell, the list itself is pathologically biased towards
those businesses.

Seems the rest of the country has figured out Hollywood accounting.

~~~
twblalock
It sounds like your problem is with the article, not with me. I did not
misrepresent what the article said.

~~~
ErikVandeWater
As a general rule, and this applies to me too, if the article is misleading
and you quote the article, that misleading aspect of it should be noted in
your comment. At least on Hacker News.

------
BooneJS
Wisconsin even gave Foxconn concessions they didn’t ask for, mainly around
environmental impact.

[https://urbanmilwaukee.com/2018/07/02/the-state-of-
politics-...](https://urbanmilwaukee.com/2018/07/02/the-state-of-politics-
foxconn-deal-has-divided-the-state/)

~~~
garmaine
Is “concessions they didn’t ask for” weird? That seems like normal bidding in
a competitive market.

~~~
ebikelaw
Yes, it's weird. It's just a right wing anti-environmental tactic. In order to
permanently circumvent some environmental protection they don't like (clean
air, clean water, endangered species) they make a deal with some private
entity and then years down the road they throw up their hands and say "there's
nothing we can do about it because of this contract." Because contracts are
enshrined in Article I of the Constitution, they have a strong case. It's
really bad that people can be held in perpetuity to the terms of a contract
made by a single bad mayor or governor, but that's American jurisprudence for
you.

~~~
djrogers
It is blatantly false to claim that a mayor can circumvent the EPA or any
state level environmental agency by simply signig a contract. That's not how
anything works...

~~~
ebikelaw
It's quite demonstrably true that contracts have been used to constrain
government action over and over again in US history. See for example
Reclamation water contracts in the west vs. all manner of conservation laws.

~~~
djrogers
The reclamation water contracts are not an example of a mayor circumventing
existing federal or state environmental regulations - they are a completely
different thing. I'm not even sure where you'd draw the parallel other than it
contains the words 'environment' and 'contract'.

------
bluedino
This has nothing to do with tech - cities offer huge subsidies to pretty much
any company in an attempt to get them to stay or hire more people.

We are a small factory and we've been offered a 10 year moratorium if we build
a new HQ across the street from our current offices.

~~~
extralego
Right. It’s a symptom of a much more serious problem:

Consolidation of capital which is only available to society on speculative
grounds which demand returns at a rate unsustainable without exponential
expansion of the western economy.

As a result, almost all of our society’s wealth is caught up in last ditch
effort expansion schemes.

Startups were actually a decent band-aid in terms of continuing the madness
but because they don’t effectively break the capital free from the
consolidating parties, but merely stir it a bit, they wind up adding to the
cesspool of desperate investments.

Rich people are freaking out right now because they can’t find ways to profit
off the society without contributing to it.

~~~
geezerjay
> Consolidation of capital which is only available to society on speculative
> grounds

Don't you notice that society is behind the decisions on how they invest their
savings? You make it sound like it's a haves vs have nots situation where the
have nots don't have any personal savings nor are they investing any cash on
their own.

~~~
extralego
For one, that is exactly the case. An overwhelming majority of people in
America are in debt, and have no savings.

(In the case this isn't obvious: if you have no savings, you have no choice of
where to invest your savings.)

~~~
hueving
Everyone in the middle class who has no savings has chosen to invest in
something else: instant gratification of cell phones, TVs, expensive cars,
large houses, etc.

~~~
dlp211
The middle class pays more for needs and less for wants then it did 40, 50, 60
years ago.

~~~
ghostbrainalpha
Take a look at the chart in this article from HumanProgress.Org

[https://humanprogress.org/article.php?p=597](https://humanprogress.org/article.php?p=597)

Your statement is only true if you move a significant number of items like
"Dishwasher" from want to need.

Clothing, Food, Appliances are all now significantly cheaper comparability.
Housing is a serious issue that has not followed the progress made in other
areas, but there is hope for the future even in that area.

~~~
dredmorbius
Know your source:

 _HumanProgress.org is a project of the Cato Institute with major support from
the John Templeton Foundation and the Searle Freedom Trust, as well as
additional funding from the Brinson Foundation and the Dian Graves Owen
Foundation._

[https://humanprogress.org/about](https://humanprogress.org/about)

I suspected as much.

[https://www.sourcewatch.org/index.php/Cato_Institute](https://www.sourcewatch.org/index.php/Cato_Institute)

[https://www.sourcewatch.org/index.php/John_Templeton_Foundat...](https://www.sourcewatch.org/index.php/John_Templeton_Foundation)

[https://www.sourcewatch.org/index.php/Searle_Freedom_Trust](https://www.sourcewatch.org/index.php/Searle_Freedom_Trust)

[https://en.m.wikipedia.org/wiki/Gary_P._Brinson](https://en.m.wikipedia.org/wiki/Gary_P._Brinson)

DGOF are dark money with virtually no footprint:

[http://dian-graves-owen-foundation.idilogic.aidpage.com](http://dian-graves-
owen-foundation.idilogic.aidpage.com)

~~~
ghostbrainalpha
I understand we all want to be wary about our sources, but a lot of what
HumanProgress puts out is fairly simple and focused on the numbers.

If you say this is how much a loaf of bread cost in 1965, and this is how much
the average McDonalds worker was paid in 1965... then you do the same analysis
for 2018, I think you have a interesting statement that could be shielded from
politics.

Obviously if you are making bigger statements about quality of life, what is a
WANT, and what is a NEED, then things get complicated and bias comes in.

~~~
dredmorbius
The article starts out with multiple ideological and highly cherry-picking
claims. That's what sent me looking for information on the source.

It conflates mean measures of GDP with the far more valid median, or better,
the quality of life of the least among us, the standard chosen by such eminant
socialists as Adam Smith and John Stuart Mill.

Its gadget-based definitions of wealth fly in the face of fundamental
necessities: food, water, shelter, medicine. Again you'll find this argument
dismissed in Smith. I've taken my own whack at it, Maslow's smartphone:

[https://old.reddit.com/r/dredmorbius/comments/2vwfb6/maslows...](https://old.reddit.com/r/dredmorbius/comments/2vwfb6/maslows_smartphone_the_role_of_technology_in/)

See also Maslow's swimming pool:

 _Yes, we 've got a swimming pool. But that won't feed my children." The BBC's
Malcolm Brabant, quoting a doctor's wife in "The Human Toll of Greek
Austerity", describing the impacts of Greece's austerity measures...._

[https://old.reddit.com/r/dredmorbius/comments/3ey7d1/maslows...](https://old.reddit.com/r/dredmorbius/comments/3ey7d1/maslows_swimming_pool_greek_austerity/)

The most illuminating recasting of wealth and poverty I've seen in decades
comes from a non-economist, Yonatan Zunger, who proposes the financial-shock
wealth test:

 _What is the largest unexpected financial shock you could sustain without the
cost of that to you suddenly becoming ten times the original cost or more?
That number isn’t something easy to calculate; it depends on whether you have
a family that can help you out, on your income, on whether that shock involves
losing your job (and thus your health insurance, if you live in the US), on
whether you have access to any other sources of security (including public
assistance)._

[https://shift.newco.co/your-financial-shock-
wealth-4845e6dc1...](https://shift.newco.co/your-financial-shock-
wealth-4845e6dc1d2f)

The other side of this connects to the financial instability of _income_. How
variable is same, and to what extent does _expected perturbation_ of income
(job loss, illness, shorted wages, etc.) put a household in threat of
eviction, foreclosure, etc.

None of which are addressed by your source.

Its framing of the question is such that its response isn't even wrong. It's
utterly irrelevant.

~~~
ghostbrainalpha
This is a great response, normally I don't complain about downvotes, but I
honestly don't understand what could be wrong with your response to me.

I made a simple statement, that was at least partially wrong, you replied with
a ton of information so I could see another side to the issue. Your comment
should be what Hacker News is about.

------
crazygringo
I seriously think about if it would be better if there were federal law, or
even a constitutional amendment, which prohibited any city or state anywhere
in the US from giving favorable treatment (tax or otherwise) to any business,
sports team, stadium, or anything else.

All it produces a race to the bottom where businesses win and people lose. And
it distorts the free market into an uneven playing field, creating situations
which are a win to individual business but where the change/move is a net loss
for the economy overall.

I don't understand why this isn't more of a hot-button issue. Everyone should
care about this.

~~~
defertoreptar
>All it produces a race to the bottom where businesses win and people lose.

If only businesses win, then why do cities want the business to come to them
in the first place?

~~~
caust1c
There are some small economic kickbacks for local economies, but realistically
I would guess that it's probably small-scale bribery.

That or local governments are just really bad at math. Do they really think a
business starting in their community is going to give back more than the
billions in breaks they're giving?

~~~
TangoTrotFox
Remember government is really just a collection of individuals. You can't
discount the basic human motivations in things like this. Competing is fun,
competing and winning is much more fun. Getting a big company/sport/etc to
sign on to your city means you beat everybody else they were negotiating with,
and those were all big players. That's a big win.

It also helps build your legacy. The guy who brings "The SportsTeamers" to a
city is going to be remembered for exactly that, not the net economic effect.
And yeah that does no doubt open the door to 'consulting positions' after
leaving office though I do not think that's a primary driver in the deals,
just icing.

------
tracer4201
"The second alternative takes this same approach and applies it to very young
companies and to emerging technologies with more speculative prospects."

Aside from maybe being young, isn't this what tech companies are generally
doing?... working on new ideas, not focusing on a single vertical and have
multiple lines of somewhat experimental businesses?

Instead of arbitrary tax breaks, it sounds like some cities ought to mandate
the benefactors create at least some n number of jobs with a total comp of $x
for employees living within the same town, city, county or whatever
municipality.

~~~
abhiminator
>benefactors create at least some n number of jobs with a total comp of $x for
employees living within the same town, city, county or whatever municipality.

Directives like the ones to create more jobs in order to reach an arbitrary
target set by the bureaucrats in the government adds needless pressure and
thus might stifle the potential and resources for innovation and
experimentation in an organization, especially for a startup.

~~~
michaelt
Isn't the most popular justification for giving bungs to attract/retain
employers that it "creates jobs"?

If you're going to pay someone to do something, it makes sense to agree the
details of what you're paying them to do - that seems like common sense to me.

Otherwise you might spend $$$$ thinking you're attracting a software
development centre with 200 employees on low-six-figure salaries, but instead
get a data centre with 20 employees on mid-five-figure salaries.

~~~
abhiminator
I get the gist of your argument, but my point was when government interferes
with the hiring process in the pretext of helping the local population (like
setting an arbitrary number of job to create in exchange for tax-breaks, for
example), it starts to have a strangulating effect on the performance of the
private organization.

~~~
s73v3r_
Then that organization doesn't need the tax break. If you're not going to be
able to bring something of value to the area, then my tax dollars should not
be subsidizing you beyond what anyone else gets.

------
peterwwillis
My big question is, who are these representatives signing these deals, and how
are they not held accountable by voters? What voters actually want to give
away hundreds of millions of their tax dollars to the richest corporations?

~~~
bdcravens
That gets to the underlying issue with all politics today: who is the real
constituent? The voter, or the donor?

~~~
peterwwillis
Voters _should_ be able to control their reps, via votes. If they can't, then
the representative democracy is flawed and needs new legislation to fix it -
and that case should be brought to the people, so they know how to vote to fix
it.

~~~
chucksmash
> Voters should be able to control their reps, via votes. If they can't, then
> the representative democracy is flawed and needs new legislation to fix it

The ballot box is a very low resolution feedback tool and an election cycle is
a very long iteration cycle.

Imagine you only had performance reviews every two years and the feedback from
your boss was either "you're not as good as the next best choice, so you're
fired" or "you're not fired right now."

Voter willpower is diffuse (different people care about different things at
different times) and only infrequently expressed. Special interest willpower
can be much more acutely and frequently applied. It's hard to see how you can
correct the imbalance between these two things given the current system and
the inertia of incumbents who benefit from it.

~~~
peterwwillis
You're right, it is hard. Here's one idea they could try, which I just pulled
out of my ass over 10 minutes, so it may be very stupid.

Term-defined performance goals. Before elections begin, each citizen can
define a list of priorities, metrics, and multipliers of expected performance.
These are used in a function to calculate a number that determines whether an
elected official is performing according to the standards of the citizens.

These "expectations" are collected, anonymized, and split up into groups of
similar expectations. A candidate for office can select to align themselves to
a specific group of expectations, or define their own and run on that as a
platform. Either way they're going to have to live up to that set of
expectations. Citizens vote for the candidate they feel best represents those
expectations. At this point we're just "hoping" they come through on their
promises; there's no guarantees.

Once a candidate wins and begins their term, their performance is continually
reviewed by the function. If a candidate's performance during their term drops
below 50%, a performance review can be ordered, and more specific short term
goals can be drawn up to see if they can rise to meet them. If their
performance drops below 25%, a suggestion is automatically flagged to inform
citizens they should vote this rep out at the next election cycle.

The end results should be that citizens can more effectively inform
representatives of what they want, they can track the progress of these
representatives, and stay informed so that at the next election cycle they
aren't just re-voting for the incumbent even if the incumbent didn't live up
to expectations. In addition, a citizen no longer needs to vote according to a
party; they simply define their personal expectations for government, and
"parties" may naturally form according to real issues, rather than rhetoric,
tradition, etc.

~~~
s73v3r_
That sounds insanely difficult to implement, potentially gameable by elected
officials, and really difficult to do in a place that, say, is split somewhat
evenly between Democrats and Republicans.

------
pnathan
I would like to see Tacoma, WA take this route. There's a lot of cheap housing
there, and it's close enough to Seattle to be able to reasonably haul in some
of the software engineers that might be a bit more financially constrained.

I could easily see an Startup Center coworking space being put together which
links accelerators(plural), local universities, the city, and relevant
infrastructure to allow a _huge_ working space for very cheap rent until
success comes together.

~~~
ahelwer
Tacoma would also have to do some serious PR about its smell, a phenomenon so
established it has its own Wikipedia article:
[https://en.m.wikipedia.org/wiki/Aroma_of_Tacoma](https://en.m.wikipedia.org/wiki/Aroma_of_Tacoma)

~~~
markkanof
This is real, but the severity seems way over blown. My brother lives in
Tacoma and we visit him frequently. I have heard about this aroma, but have
never actually experienced it during any of our visits.

~~~
bytematic
That sounds perfect! PR just like that will work, I like the personal touch.

------
TAForObvReasons
Surprised the article didn't compare the situation to sports teams'
incentives. There's a similar problem in that space, where the teams try to
extract benefits from the municipalities.

~~~
walterbell
Do the same lawyers handle negotiations with cities?

------
aoner
There is a 3rd alternative. All big cities make a pact to cooperate and never
give tax deductions etc. I think this is one of the ideas of the fearless
cities movement :
[http://fearlesscities.com/en/book](http://fearlesscities.com/en/book)

This is one of the ways cities can create supra national entities that can
become a counterweight against multinationals.

------
cozzyd
I wonder how many high-level employees will choose to commute to Foxconn by
Amtrak from downtown Chicago or Glenview.

~~~
weberc2
Why would they? Who would pay the insane realestate and tax prices plus an
hours-long commute? Sure there’s more to do in Chicago, but you’re not doing
anything during the week if you’re working ten hours and commuting 3. Better
off to live in Wisconsin and visit Chicago on the weekends.

~~~
bilbo0s
"...Who would pay the insane realestate and tax prices..."

Are you talking about the insane property taxes in Wisconsin? Or the insane
property taxes in Illinois?

Also, unless you live south of Chicago or something, there really is no way I
can see it taking you 3 hours to get to Racine even by car. It definitely
won't take 3 hours from the north suburbs. And again, that's assuming all the
FIB's use their cars. (And even a FIB is smart enough to use the train.)

~~~
weberc2
Chicago residents pay Illinois property taxes, which are quite high. I also
didn’t claim it took 3 hours, I said the total time commuting was about 3
hours. In other words, about 1.5 hours each way.

~~~
dredmorbius
Those high Illinois property taxes are a stealth blessing in keeping property
values low, and affordable.

~~~
weberc2
Property values in Chicago are anything but low; I don't think high property
taxes are doing much to drive them down either.

~~~
dredmorbius
Relative to what?

It's the 3rd largest city in the US. How do land prices compare to NYC, LA,
Houston, or SF (ranked 13th).

~~~
weberc2
Relative to the surrounding area, clearly. No one commutes daily to downtown
Chicago from NYC/LA/SF/etc.

------
ThomPete
Strong startup ecosystems are evolutionary but normally have a revolutionary
beginning.

SV isn't the most important venture market in the world because it's in
California it's because it was central to a technological revolution which
created alumni of expertise from taxation and legislation to access to talent
to knowledge to people who focus on building companies, academia supporting
building and access to money (accumulated from the success of the revolution)

You need something to kickstart that somewhere else, something that SV doesn't
see and then be right there while the market grows. It's not obvious what that
would be, maybe China because they are less affected by ethical considerations
which can give them an advantage.

It's hard to see it happening in any significant shape and form.

------
segmondy
Individuals are already bad enough playing game theory games let alone cities.
Mayors are trying to get elected next election, to brag and say, "I brought in
XYZ company and THEY WILL provide N jobs" is a great line. They don't care
about the outcome.

------
partiallypro
Let's also apply this to major sports franchises.

------
crb002
Apple brazenly bribed the Waukee IA city council with $100m to abate $170m in
property tax; screwing the school district/county/state. The Governor's right
hand man then got an Apple gig for doing the bribe.

If you or I bribed our city council $1000 to abate $1700 we would be in jail.
For Tim Cook it is "tax efficiency".

~~~
seanmcdirmid
Apple gave $100 million directly to city council members and no one batted an
eyelid? Or did they give $100 million to the city? Those two things are very
different accusations.

~~~
TAForObvReasons
[https://www.desmoinesregister.com/story/money/business/2017/...](https://www.desmoinesregister.com/story/money/business/2017/08/24/apple-
puts-faith-waukee-100-million-pledge/596775001/)

> Apple Inc. pledged up to $100 million to Waukee under a multi-decade
> partnership announced Thursday during a visit from Apple CEO Tim Cook.

> Waukee, in turn, will provide Apple with $194 million in tax abatement and
> infrastructure improvements.

> Apple's $100 million investment in Waukee likely will be paid out over
> decades and go toward things like street and sidewalk projects and quality-
> of-life amenities like libraries and parks, Cook said.

There are more details in the article, but it seems like the city is forgoing
tax revenue with the understanding that Apple will be investing in the
community.

~~~
jandrese
And if they don't follow through then, uh, is there any sort of enforcement on
this? I've heard this story before. 20 years down the road the few people who
remember the deal and try to find numbers on it discover that the company did
almost nothing to hold up their end of the bargain once it was out of the
spotlight.

------
frgtpsswrdlame
These are long-term strategies and they're not very exciting which is why
politicians don't engage in them. My mid-sized Midwestern city also has a
contingent (which in my estimation is a vocal minority but I could be wrong)
of people who want to be like the metropolises - NYC, LA, Chicago - and they
seem to have a strong influence on local politicians which drives those
politicians to engage in these give-aways to prominent companies.

It also seems articles like these are really talking around the issue when the
answer is right in front of us. Let's just ban cities and states from handing
out these tax-breaks.

~~~
zazen
> Let's just ban

It's rarely that simple. I don't know exactly how local government works in
the USA, but I presume the federal government can't just summarily revoke
powers from cities and states?

~~~
DannyBee
No it can't.

This person has not read the part of the US constitution that says "The powers
not delegated to the United States by the Constitution, nor prohibited by it
to the States, are reserved to the States respectively, or to the people."

~~~
tomdell
Politician mind: You've just got to find some passage of the Constitution that
can be construed as somehow giving the federal government that power, though -
or push an amendment through.

~~~
jldugger
Federal politicans don't care about other state's problems; and certainly
don't typically want to restrict their own state legislature's powers. You're
better off going the Uniform States Code route, as demonstrated by UCC.
Publish a recommended law, then lobby state governments to adopt it. Maybe
using a 'when 30 other states also ratify it' language similar to the NPVIC
[https://en.wikipedia.org/wiki/National_Popular_Vote_Intersta...](https://en.wikipedia.org/wiki/National_Popular_Vote_Interstate_Compact)

The chief problem here is convincing states that cities poaching their
neighbor's businesses is harmful.

------
sheeshkebab
All these big tech companies need to be broken up - they are all monopolies
that hacked around monopoly laws.

No single socially irresponsible corporate entity (these corporations are only
responsible to their shareholders, by law) should be able to exert this much
influence over social and business environment.

------
ggg9990
This is like telling women they don’t need to shave their armpits or men they
don’t need to shave their face to find a date. Sure, it shouldn’t be needed,
but when everyone else is doing it, it sure makes it a lot harder to find a
date if you’re the only one who doesn’t.

------
wpdev_63
The banks profit the most when property prices go to these astronomical
prices. People need to remember that they're are mostly paying interest each
month.

If taxes rises then property prices decrease in value and more money goes to
public services. That in theory anyways.

------
azinman2
Perhaps cities do this to raise their stature, trying to solve a chicken-and-
egg problem to bootstrap new industries. It’ll attract talent, training,
infrastructure, etc.

It’s a risky strategy, but that can’t be ignored.

------
ksec
How about the simple procedure that we have been using and somehow "forgot" in
the past one or two decades; built a new city?

~~~
bilbo0s
That's a pretty "Jedi Handwave-y" solution.

There is an enormous amount of effort required to "just" create a new city.

~~~
jamestimmins
There's an interesting book called A History of Future Cities that discusses
this exact subject by looking at St. Petersburg, Bombay (Mumbai), Shanghai,
and Dubai.

[https://www.amazon.com/History-Future-Cities-Daniel-
Brook/dp...](https://www.amazon.com/History-Future-Cities-Daniel-
Brook/dp/0393348865)

------
purplezooey
Stop putting so many right wing people in office is a good start. Megadeals
are able to be made because these people do not value, understand, or advocate
for essental government services that cost money. The constituents of these
cities are the losing party.

------
zavi
Cities can do whatever they want.

