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Open Letter from New York State Budget Director Robert Mujica Regarding Amazon (ny.gov)
214 points by agreen on Feb 23, 2019 | hide | past | favorite | 217 comments

I suspect I'll never get why the notion of giving a tax handout to a company that's one of the most valuable in the world shouldn't be a non-starter.

> Incredibly, I have heard city and state elected officials who were opponents of the project claim that Amazon was getting $3 billion in government subsidies that could have been better spent on housing or transportation. This is either a blatant untruth or fundamental ignorance of basic math by a group of elected officials. The city and state 'gave' Amazon nothing. Amazon was to build their headquarters with union jobs and pay the city and state $27 billion in revenues. The city, through existing as-of-right tax credits, and the state through Excelsior Tax credits - a program approved by the same legislators railing against it - would provide up to $3 billion in tax relief, IF Amazon created the 25,000-40,000 jobs and thus generated $27 billion in revenue. You don't need to be the State's Budget Director to know that a nine to one return on your investment is a winner.

Actually, you do. Amazon already created jobs in NYC, without any handouts needed. Google recently announced they'd create more jobs, and they didn't expect a handout to do so. By the above logic, a 9:1 return for Amazon jobs is a good deal. What about the Google jobs? Do those count as infinite return?

If so, more infinite returns, and less 9:1 returns, please.

Or is there something else at work here?

You are addressing the quote:

> You don't need to be the State's Budget Director to know that a nine to one return on your investment is a winner.

I think you are here making a moral argument of sorts. Why is it morally better to get 100% of nothing than to participate in a project with incentives that give you 9 times return plus create 24-40k jobs? I simply don't see a viable argument that this was morally right, and wonder what argument you have that the facts we know support this proposition.

So far the opponents have not provided a "morally better" alternative to provide Queens with 25-40k jobs, unionized secure jobs for vast amounts of families, and a tax base necessary to invest in Queens that has received very little investment in decades. They have "hopes and dreams", but destroy the only path we had to get there.

Due to this we can't improve the offerings of progressive government services for the people living in Queens. Real kids, families, elderly and youth seeking opportunity is affected by this. These facts seems to show conclusively that this what the activists achieved was morally wrong.

> Why is it morally better to get 100% of nothing than to participate in a project with incentives that give you 9 times return plus create 24-40k jobs?

Because people who rail against deals like this take zero responsibility for any of the consequences. It's all of the fun moral policing and none of the downside. It's great to be an activist.

In fairness, the real reason, at least in NYC...

is that they never end up in a situation where they get 100% of nothing. Google and Amazon have thousands of jobs in NYC, and they will move thousand more there in the future. For these people in NYC, they don't know the consequences of not having loads of places to work. For them, it really is a situation of "Heads we win! Tails we win slightly less!".

Well if Amazon could not find 25k employee in the given time they would not receive the 3 billions in tax relief

> Well if Amazon could not find 25k employee in the given time they would not receive the 3 billions in tax relief

The problem of the deal wasn't the mechanics, it was how it was sold to the public. A competition putting cities against cities, negotiated without any public input, a large tax break to one of the richest companies in the world, choosing already popular cities rather than really investing in a newer one. Amazon could have definitely closed this deal if they pitched it properly.

Maybe, but as it is pointed out many times here and in the open letter this was basically a replay of Brexit. another commenter said that his mom believed the city would give amazon 3 billions up front. the public approved of the deal, the only demographic to disapprove was the internet.

70% of local residents approved of the deal. that is a lot.

I'm skeptical of any polling for the issue, mostly because polls have huge issues with data collecting and getting a representative sample, particularly on things like local issues.

Depending on

* how the question was framed ("Do you think the second headquarters of Amazon will be a positive?" vs. "Do you think the deal with Amazon will be positive?" vs. "Do you think tax breaks for Amazon are good?")

* how informed the voter was required to be; people are notoriously uninformed and uninterested about anything that isn't a presidential election

* how residents were contacted (was it a landline poll? mail? survey on the street? online? because these all have different populations to be accounted for)

* who counts as a valid resident for the survey? someone who lives in Buffalo? someone who lives in Westchester? someone who lives in Manhattan? someone who lives in Flushing? etc.

Polls predicted that AOC would lose her race, and that clearly didn't happen.

Yup. To get attention the activists want their shocking stories told, and to get eyeballs and ad revenue the media wants shocking stories to tell.

See my more general response along these lines in


> and a tax base necessary to invest in Queens that has received very little investment in decades.

In what alternate universe is this? Queens is hardly Camden or Detroit. The neighborhood in question has 40+ story office and residential towers sprouting up like weeds. Queens is at a record low employment rate ever since this started getting tracked at the county level: https://fred.stlouisfed.org/series/NYQUEE1URN. And there are similar statistics for the metro area. It is unclear to me that New York City needs to throw any tax credits for jobs when we are running probably very close to full employment.

This is about diversifying the economy away from real estate and wall street. It is also about bringing high-paying jobs to Queens, and encourage the kind of investment that brings.

From what I understand developers started building in anticipation of Amazon coming there, and that investment is now in question.

The area has been built up with skyscrapers over the past decade, well before HQ2 had even been announced. Development in New York is not so quick that you could shovel a project through in the four months after the announcement.

New York's economy is plenty diverse. There's real estate and Wall Street, sure, but there's also legal services, advertising, media, health, education (NYC has the largest student population in the country), hospitality, tourism, etc. This is no one company town like Gary.

I wouldn't describe LIC (or any part of Queens) as being "built up with skyscrapers" personally. I'd say there are a handful of tall apartment buildings.

So you are saying Queens is in a great place and we do not need to create much more opportunity there?

There's certainly no need to beg for it.

It’s not begging to take 9 out of every ten tax dollars to attract an opportunity.

LIC does not have many commercial tenants, and none on the scale of Amazon.

It would be a good thing to not concentrate all jobs in Manhattan.

Also, if you walk around LIC, it's not as developed as you might think, sure there are huge buildings, but they're next to empty lots & industrial spaces. It's largely a desirable area because of it's proximity to Manhattan, not really anything intrinsic about the neighborhood.

All of our transportation is Manhattan-centric. That's why all the jobs are in Manhattan.

Putting jobs in LIC will still force workers from the non-Queens sections of the metro area to go into Manhattan and then back out to Queens. Even the LIRR can't really serve LIC, because it's impossible to build a station that serves waterfront LIC that is on the way to Penn.

The Amazon proposal explicitly came with half a billion in funding for transportation in Queens.

And it's also ignoring the fact that a lot of people already live in Queens, and that LIC specifically is connected to Brooklyn via the G.

It's not an ideal situation, but it's a chicken & egg problem, there's no reason to build commuter transit there without employers and employers don't want to be there without that transit, so the Amazon deal would have done a good amount to break that stalemate.

Amazon jobs aren’t unionized, nor secure.

it was required as part of the grant

If google creates jobs in long island city, they would get the same handout though. Any company locating there does: it's a program NY state and NYC made to encourage development outside of Manhattan.

So in other words, you're suggesting that the handout was baked in from the get go because the HQ was in Queens, and Amazon being Amazon had nothing to do with it?

If that's the case, the media have done a terrible job reporting this.

you're suggesting that the handout was baked in from the get go because the HQ was in Queens, and Amazon being Amazon had nothing to do with it?

Mostly, yes. About $2.5 billion of the tax benefits were "as of right", meaning they're available to any company that fulfills certain requirements. There was also a separate Amazon-specific $500 million grant to assist with construction. More details at http://www.gothamgazette.com/state/8110-a-closer-look-at-the...

If that's the case, the media have done a terrible job reporting this.

Shocking, isn't it?

So then what was the point of the heavily publicized hq2 search? If, in the end, Amazon chose a deal that was available to everyone, then what did they negotiate?

Other cities could attempt to beat NYC's standing offer.

>the media have done a terrible job reporting this.

I believe that they've reported it the way that they wanted to. The media knows that outrage sells, and when the public is already suspicious of rich tech companies, there's no reason to accurately report the facts.

Here's a personal anecdote. My mom thought that Amazon was outright being given $3 billion to come to NYC, and said that it was unfair that they were getting the money before they hired anybody. She didn't even know that the tax credits were performance based until I told her.

$500mm was specific to Amazon in terms of a land grant and property rights.

That site is currently a plastic factory next to a Superfund site and the infamous Queensbridge projects though. It's likely the cit/state would make the same concessions to anyone that could place clean high income jobs in the area.

Yup, that's exactly it. As others mentioned, $2.5 billion of the three billion were credits any company can access. $500 million was related to the site amazon chose, a dilapidated area which the state wanted to encourage development of.

(I mean the specific HQ site within LIC)

> If that's the case, the media have done a terrible job reporting this.

From the media, you expected something else?

For a more general explanation, see my post in this thread at


So what was the deal Amazon negotiated, and why does the public opinion matter on what ultimately is just a land purchase?

as far as i understand, amazon negotiated with other cities to see if they could get a better deal than with new york

> If google creates jobs in long island city, they would get the same handout though.

Nops [1][2].

[1] http://nymag.com/intelligencer/2018/12/google-to-invest-usd1...

[2] https://www.wsj.com/articles/google-plans-large-new-york-cit...

You didn't read your articles very well. Google is investing in new york. The tax credits were for companies in a specific part of new york, in this case long island city.

Google is not in long island city or in an area eligible for these particular credits.

Your first link references Google buying a building in Manhattan, which is not Long Island City, and so that doesn't apply.

Not sure about your second link because it's behind a paywall.

> I'll never get why the notion of giving a tax handout to a company that's one of the most valuable in the world shouldn't be a non-starter.

Not sure whether the moral of the story here isn't simply that a triple negative should be a non-starter

> What about the Google jobs? Do those count as infinite return? If so, more infinite returns, and less 9:1 returns, please.

I could give you one cent tomorrow in exchange for nothing, you will have an infinite return in a day. Or I can given you $2 tomorrow in exchange for $1 today, a relatively modest 100% return in a day.

End of the day you either gained one dollar or one cent. The dollar buys you more thing. That's the difference between a handful of Google jobs and tens of thousands of Amazon jobs.

Could you repeat the one cent thing? Maybe a few times but it will also take a few more "days", and probably won't reach one hundred repetition any time soon. This is a shallow and/or low-throughput well, only so much water can be drawn from it.

Not missing anything really. Sure it creates jobs, but honestly with how much we're paying for it, we're better off literally giving this money directly to people's bank accounts. It'll go further.

NY is not hurting for jobs. NY has so many jobs, in fact it doesn't have enough housing for the number of workers here. That's the real problem.

This was different than organic job growth because of the number of jobs at stake:

> Amazon chose New York and Virginia after a year-long national competition with 234 cities and states vying for the 25,000-40,000 jobs. For a sense of scale, the next largest economic development project the state has completed was for approximately 1,000 jobs

What's the goal of tax policy? There's a) achieving the appearance of fairness, and b) maximizing revenue for your constituents. The two goals are not always aligned.

If you care more about fairness, then sure, the tax law is the tax law and you should hold the line no matter what. Personally I'd rather maximize revenue, especially here where the knock effects on the economy were pro-growth.

> Personally I'd rather maximize revenue, especially here where the knock effects on the economy were pro-growth.

Agreed, not to mention the blow this strikes against the state's willingness to be "open for business" as the NY State Budget Director pointed out.

Being fair would mean accepting Amazon was going to get the statutory incentives.

> I suspect I'll never get why the notion of giving a tax handout to a company that's one of the most valuable in the world shouldn't be a non-starter.

I mean, it's pretty straightforward. When you set your basic taxes high enough, it no longer makes sense for some people to do business in your jurisdiction rather than another, so in order to convince those businesses to do business in your jurisdiction (and still generate revenue), you must reduce the effective tax burden on that business.

If you do not reduce the effective tax burden, they will leave (which is what you see).

The fact that some other businesses are willing to have some offices in your jurisdiction at full price is neither here nor there.

Use empathy to predict the behaviour of people under your system, and use accounting to get the figures; it is not difficult to see why tax incentives make sense in a place like NY. If you don't want to see your state and local government pander to individual companies, then lower the cost of doing business for everyone in the state.

Tax rates seem to be a want bonus compared to their actual needs anyway. If it was really as big a factor as pundits claim we would see a lot of jobs in unincorporated areas - yet instead they are in places where populations and infastructure are. Essentially it is a reverse of why there is a sticky price point of items disconnected from actual price - it is what the market will bare.

If the fundamentals of an area are good the appropriate response to people demanding concessions leaving is "don't let the door hit you on the way out".

> Tax rates seem to be a want bonus compared to their actual needs anyway.

All else being equal, companies should really be doing what is right for themselves. If it's more costly to be in your community, then your shallow assumptions about their "actual needs" do not, and should not, factor in.

Doesn't the fact that Amazon did in fact leave kind of prove you wrong?

I cant see why hq2 location cannot be based on bidding.

Tax breaks are part of negotiation. Math is clear.

Well the laws should be applied equally to everyone, including tax laws. That's a pretty simple principle. If you're going to make an exception, you need to reassure people that rule of law is still a thing and you're not just letting a company buy a different set of laws for themselves, which is kinda what this looks like.

I get the rule of law aspect, but law leaves room for negotiation for this, otherwise someone woyld have sued the city, no?

> Well the laws should be applied equally to everyone, including tax laws.

Do you feel this way about all laws, including drug laws regarding possession and mandatory minimums?

Yeah, hopefully the next time an $800B company developing cutting edge software/tech wants to locate in an economically stressed area stakeholders do better job reassuring people the rule of law still applies.

The math isn't clear at all. Amazon is putting countless other businesses, who employ countless hundreds of thousands, out of business. That's just the nature of capitalism and efficiency, but when they demand special treatment to do so..that's just perverse.

For centuries businesses come and go. I am sure at every level of government incentives happen. Tax break is an incentive. Other businesses could get expedited approvals or permits, some might get licenses etc.

Part of american way of doing business, really.

I was replying specifically to the meaningless statement that "Math is clear". Replying that the math is unclear doesn't really clarify it or demonstrate your point.

The economy has economic activity. That activity is taxed at various levels. When a leader, taking a huge slice of the activity, demands special treatment to take even more of the economic pie, the math is clearly bad.

If you want to somehow ban the concept nationally, fine, but otherwise if a city/state doesn't play the incentive game they will probably just lose out to others that will.

NYC, San Francisco, and a few other areas have absolutely no need for incentives. They're very robust, energized areas, and don't need to beg for employers to come there and leverage the dynamics and workforce. Amazon's ridiculous dog and pony show -- which wasted outrageous amount of public time and money -- was absolutely dystopian: Company that already is one of the largest in the world, with an enormous competitive advantage, demands even more competitive advantage. And let's be real -- Amazon mostly deals in what are zero sum markets. That I bought a camera and some cookies from Amazon just stopped me from buying it from someone else.

Further it's worth looking at LA and the NFL. The NFL takes advantage of governments -- usually desperate governments -- to build their stadiums for them, and when LA didn't play ball the NFL went sulking out of town. Eventually they went back, paying for the stadium and all ancillary costs, out of their own pockets, with zero incentives. Because in the end it simply makes sense.

Long Island City is not Manhattan. They do benefit from giving incentives as they are not a robust, energized area. Thus the plastic factory/ superfund site with no jobs.

Long Island City is directly opposite Manhattan (and to reply to the other comment, is most certainly a part of NYC), is extremely lucrative property, and much of it has sat unused largely because property owners have been trying to rezone as residential (where it is worth hundreds of millions an acre). NYC is extremely robust. NYC doesn't need Amazon, and never needed Amazon. And contrary to the claims in the linked letter (a spittle laden diatribe of someone mad that they didn't get their way), there was opposition right at the very outset. Significant opposition. Opposition that Long Island City doesn't want to be Manhattan, for instance.

If I understand you, what you are describing is gentrification.

> Opposition that Long Island City doesn't want to be Manhattan, for instance.

Being converted in a residential area for rich people does not look better.

> there was opposition right at the very outset. Significant opposition.

Considering the level of misinformation and how politically entrenched it was this means less than usual.

> NYC, San Francisco, and a few other areas have absolutely no need for incentives.

I see you are not familiar at all where Amazon HQ2 was going to go. (Not NYC.)

A brave attempt at pedantry given that Long Island City is most certainly a part of NYC.

>I suspect I'll never get why the notion of giving a tax handout to a company that's one of the most valuable in the world shouldn't be a non-starter.

Every company that would have built in Long Island city is eligible for the same tax credit program. Using the word “handout” is propaganda designed to make you think the government wasn’t still taking in more than was credited. Amazon did not get this without bringing in tens of billions more tax revenue.

>so, more infinite returns, and less 9:1 returns, please.

>Or is there something else at work here?

Yeah, those infinite returns don’t exist. Nobody else is building in LIC with that scale so there is no comparable thing providing “infinite returns”. Even if there was a company doing so, it would be eligible for the same tax credits. Amazon wasn’t getting an Amazon-specific handout.

Even if all companies weren’t getting it, I sure as hell would want 25,000 jobs that bring 70% of normal tax revenue for 10 years instead of adding a trickle of jobs at normal tax revenue that doesn’t even reach 25k jobs in 10 years.

Quote of the Day:

"The seventy percent of New Yorkers who supported Amazon and now vent their anger also bear responsibility and must learn that the silent majority should not be silent because they can lose to the vocal minority and self-interested politicians."

Another favorite:

> You don't need to be the State's Budget Director to know that a nine to one return on your investment is a winner.

The politicians as well as activists involved in this train-crash showed what the consequence is of electing and pandering to people that think it is possible to be factually wrong while morally right.

You can't be morally right while lying, and lack of interest/humility in search for truths relevant to important responsibilities you are taking on is no excuse. Living with someone that believes in that is not a good life, and being governed by such people is even worse.

> You don't need to be the State's Budget Director to know that a nine to one return on your investment is a winner.

Yes, after all, Amazon did clearly state that they'd gladly pay us Tuesday for a hamburger today.

No, the tax breaks were only given if they generated the tax revenue and jobs.

I'm glad we're waking up to this fact.

It's not enough to hold a belief... in our system, action is required. I think this is why young people are so frequently screwed by political decisions and policy - we are, uncoincidentally, the age group that votes least often.

Voting alone is not enough. In some parts of the world, like Australia, voting is mandatory and as a result lot of people just vote randomly.

A good education in civics and history is necessary, as is a belief in the political system and a desire to make a difference in the world through political action. Finally, a strong and independent media that does a lot of deep investigative journalism and does a good job of providing context and background on important issues instead of catering to the lowest common denominator is key, as without it people are much more easily manipulated and mislead.

As a politics major from an Australian university, and as someone who now lives in Norway. You’re about 50% right.

Yes in Australia mandatory voting has some people who “donkey vote” or as you call it “vote randomly” that percentage is almost all the 18-22 range. It’s not till they have to sit through a full one or two election cycles before they start to give a shit.

As such my generation has seen the bullshit that’s been handed to us, we won’t stand for it. It is generational because of the two major parties, their “young” version hasn’t had anyone transition from the young party to the major party for members of GenX. It’s only now when the boomers are retiring are we starting to see some younger blood. Why? Cause those that didn’t give a shit, now care and it’s a huge wave of people.

Politics are so much more left here in Norway, because people are educated and give a shit. The fucking Christian Right party just came up with the policy to decriminalise all drugs because putting people in jail and fining them wasn’t working. So why not try to help them with counsellors instead. No fines, no jail time... just help if they want it.

What’s Australia doing? Well we just voted to dump a bunch of shit in the middle of the Great Barrier Reef because it’s inconvinent for the super rich assholes to ship their exports around it. Got to make a way through it for the ships.

That shit won’t last with my generation.

believing in a system where you have to be vigilant 24/7 is very counterproductive.

The fact that our system was corrupted to the point of requiring it is not a point to elate! it is a point to contempt.

> the age group that votes least often.

That's a very disingenuous argument that you yourself refuted in the first paragraph...If it doesn't matter only voting, does voting alone matters? At which point is political participation enough participation? voting, attending every single local and federal meeting? at which point will it suffice? Should everyone drop their profession and become professional politicians just to have a modicum of voice in the system?

As long as we allow absurd amounts of money in politics, nobody will have a voice. no matter how much you vote or post online.

When you are filling your taxes, after writing the "owned amount" in box 22 or your 1040, say it out loud "it is OK i am paying 40% of my income, because amazon deserves to pay zero since they did participate in politics, unlike me".

>because amazon deserves to pay zero since they did participate in politics, unlike me

Stop repeating this meme. Amazon paid no income tax because of carried losses, which has absolutely nothing to do with its involvement in politics and carrying losses is available to every business (including sole proprietorships).

Anything amazon loses they lose on purpose. Most of us don’t have the opp to structure our tax liability like this.

We are pawns to lose in a game between Alpha Go and the IRS.

Amazon makes money: I suspect you would say "they make too much money!" Amazon loses money: you say "they lose on purpose!" What position would you be happy with? Your position reminds me of arguments I used to have with religious zealots in my family - when people have a religious or moral objection to something (large businesses in this case), then whatever the offending party does is 'sinful' in some way and must therefore be criticized, whether it makes logical sense or not

The fact that my argument reminds you of something doesn’t make the analogy true. But I appreciate the rhetorical device of calling me a religious zealot. Well done!

Amazon is wildly profitable, if they ever have a loss, it is manufactured. An accounting trick. When they start having real unavoidable losses, we can talk again.

"Amazon loses money" but Bezos is getting richer. Does not compute.

It's clearly paper losses.

the context is the ny deal and I extrapolated a little too be more realistic representative. do the exercise with your state tax, if it will help you not think this is a meme.

Democracy works best when checks and balances prevent tyranny of the majority.


I take-away two quotes from that letter:

1) "They are like the dog that caught the car"

2) "that 'to be a progressive, there must be progress.'"

Lately (the last couple of decades) I believe that politicians should shut up, and that technocrats should take over. Especially "progressive" politicians, they are the ones that make me hold my wallet tighter in my pocket. I am just tired of cheap words and no actions.

Note: I am 100% pro-democracy and pro-elections, without interference by ANYONE, and that includes any three-letter-agencies of this world (KGB, CIA, xyz) meddling anyone's elections.

I don't live anywhere near NY, I understand the frustration of the people who feared that the local economy would be disrupted/changed dramatically. A cousin of mine keeps saying "it's better to share a bowl of honey than having a bowl of poop all to yourself". I think that those who forced Amazon to flee will enjoy their bowl of poop, no matter how they will try to spin it.

I think it's sad that the vocal minority was able to alter this decision. As the letter mentions, the project would have brought $27b in revenue to the state. This magnitude of revenue is material considering the fact that the state only collected $76b in taxes in the last reported fiscal year.

I think there's reason to debate whether large corps should be able to hold an auction like this, but given the place we find ourselves in today, there's no question this would have been a huge win for NY.

The $27B is a present value sum of future cash flows, not an annual revenue.

The 3b wasn't an annual figure either.

Thanks, corrected. Even so, still a ton of revenue.

Not a ton of revenue if you are have expenditures for required new infrastructure, such as road and public transport, to accommodate offices.

> there's no question this would have been a huge win for NY.

But a loss for the US as a whole, assuming the HQ still gets built, but without special tax exemptions.

The overwhelming majority of the tax deals were/are available to other employers in the state as well. IIRC, only the land/building deal was specific and a version of that is likely to be available to whomever decides to build on the site.

Empire State Development was to award Amazon a cash grant of $325 million from taxpayers. This is corporate welfare and a kind of corruption. Congress should ban all government subsidies that are one-off and negotiated in secret with individual companies. There's an equal protection under the law issue.

As an attorney, I’m curious as to how you think a constitutional equal protection issue is at stake here. I’m unaware of any case law that would suggest so.

Here's an article by a graduate of GW law arguing it could be an equal protection issue: https://taxprof.typepad.com/files/65st0033.pdf

I didn't actually read it, so I'm not sure how sound his argument is. Even if plausible, it's obviously just an article by a recent law grad and not actually the clear controlling law today.

I'm curious why Congress has chosen not to regulate (or ban) the grant of tax incentives to companies as enticements for development; this seems to easily fall under the interstate commerce clause. All states lose out when they compete against each other in this way.

States can’t expressly discriminate against foreign (i.e., out of state) businesses, but it’s never been held that they can’t subsidize local businesses. Whether the latter amounts to the same thing as the former is an interesting academic question, but the law doesn’t yet say so.

There was actually a case where the court of appeals held these types of tax breaks to violate the commerce clause, but in 2006, the Supreme Court dismissed the case on a procedural issue (that the taxpayers did not have standing). See the below article for more.


This entire deal was incredibly poorly timed. While the national Amazon roadshow was raging on, the truth behind another high-tech government deal was being exposed. Foxconn received massive benefits from Wisconsin on the promise of manufacturing jobs, and they were equivocating right around the time of the announcement that NY might be on the shortlist.

Even if other companies were eligible for most of the deal, the fact that even a small part of it might have been specific to Amazon meant that the Foxconn story and fallout became a relevant part of the discussion

Actually no, because other locations would have given tax incentives, too. In fact, LIC wasn't even one of the highest ones by that metric. For example, Newark was offering $7bn:


It's also important to realize that the majority of that $3bn would have come from pre-existing programs open to any company moving to LIC.

How so? It's all state and local tax credits, not federal. How the state of NY runs its finances has no bearing on the US as a whole. It will of course be a benefit to wherever those jobs end up, but that's it.

They will just get the exemptions from the next highest bidder in the list.

$27B over 25 years. So the loss of revenue is a little more than one billion a year.

And even that seems high. From the proposal, “Amazon will have an annual payroll of $3.75 billion. …There’s been nothing like it in history,”

Payroll tax for amazon is about ten percent: https://www.payroll-taxes.com/state-tax/new-york

So, wouldn’t that mean the revenue loss is just 300M a year. And given they are forgiving 3B of that, the revenue over 25 years ends up being 4.5B over 25 years, which is even less.

Here are the assumptions built into that $27B number, which was generated by proponents of the deal: https://www.democratandchronicle.com/story/news/politics/alb...

Finally, there are 20M people in New York. So 1.2B of amazon revenue per year (high end) equates to $60 a person at the end of the day.

> I think there's reason to debate whether large corps should be able to hold an auction like this

It wasn't an auction. As the letter points out, each location put in a single, sealed bid, invisible to everybody else. There were no multiple rounds of bidding, as is typical for an auction.

You've literally described a silent auction.


Ah, I stand corrected, thanks!

No, you mean a blind auction.

Eh, a sealed first-price auction is still an auction. It’s fair to call it that.

I'm glad they dropped it. There are some grounded concerns:

* Amazon is one of the most successful enterprises in human history and should not require support from taxpayers beyond their voluntary patronage of Amazon itself.

* Most of these "deals" were put together secretly without input from the public. Millions (or in NY's case, billion+) of dollars were packaged and presented without community input or oversight

* While amazon is talking about bringing middle and upper-income jobs to these communities, overall amazon has a documented history of paying poverty wages despite its tremendous financial success

* State and local governments probably shouldn't be diverting billions of their citizen's tax revenue to lure corporations who will only impact a tiny subset of their citizenry. Does the taxpayer in Buffalo New York benefit if their tax money goes to fund some HQ in Queens, if the bulk of the state's tax capture is just "handed" right back to Amazon?

With that said, there's nothing wrong with large organizations asking state and local governments to expedite things like site identification, planning, zoning, permitting, licensing, environmental studies, etc since you're talking about a MASSIVE undertaking during a short window of time. But beyond that, governments should avoid a race to the bottom with this stuff.

> Does the taxpayer in Buffalo New York benefit if their tax money goes to fund some HQ in Queens, if the bulk of the state's tax capture is just "handed" right back to Amazon?

You have to be exceptionally uninformed to believe that taxpayer money from Buffalo was being used to lure Amazon.

In reality, Amazon was getting a $3bn discount on their tax bill, which would have still come out to $27bn over the same period. The majority of this $27bn would go to the state. Given that western New York gets more in state funding than it pays in taxes, this would have been net positive for Buffalo [1].

Second, Amazon would have brought 25k high paying jobs to LIC, at an average pay of $150k/year. In addition, there would have been thousands of secondary jobs in construction, restaurants, building management, and so on. All that state tax money is now going to Virginia and Tennessee.

[1] https://www.politifact.com/new-york/statements/2016/oct/14/c...

edit: go Sabres!

> Most of these "deals" were put together secretly without input from the public. Millions (or in NY's case, billion+) of dollars were packaged and presented without community input or oversight

The letter specifically addresses this. That $3B was effectively a loan with massive ROI.

I think, based purely on the separation of concerns, it'd be good if states wouldn't finance loans to companies.

It's problematic, because it's hard for states to provide equal treatment (ever firm should be equal in the eyes of the law), states shouldn't be in the business of analyzing business plans and taking on risk.

That said, NY would have probably benefited from HQ2, though it's not that there's a lack of upward forces on the salaries of those jobs there, not to mention real estate.

"loan" is here a figure-of-speech, not an actual loan. It was a $3b tax incentive, where amazon would still be paying $27b in taxes over the same period.

> * Most of these "deals" were put together secretly without input from the public. Millions (or in NY's case, billion+) of dollars were packaged and presented without community input or oversight

> * State and local governments probably shouldn't be diverting billions of their citizen's tax revenue to lure corporations who will only impact a tiny subset of their citizenry.

I haven't been following this closely. What did New York offer Amazon that it does not offer any other company? In the linked article the author states that Amazon would have been claiming existing tax credits. Did they receive anything else (not offered to any other new businesses)?

If so, the linked article seems to be presenting the argument in bad faith.

If not, you seem to be describing the offer in bad faith.

Yes, the letter asks us to believe that Amazon, after a lengthy nationwide search, ultimately chose a deal that only offered credits that were already on the books.

If the benefits of the deal are already available to all comers, why doesn't Amazon just continue with its plan?

Rezoning and eminent domain, resulting in massive windfall for Plaxall https://www.crainsnewyork.com/real-estate/plastics-company-a...

(Yes, some of that land is being purchased in a private sale, but its value is now significantly greater because of the city's rezoning and ability to stich-together workable parcels through eminent domain)Long island City residents aren't terribly happy about that.

Then there's the whole Excelsior tax credit scheme which Amazon really stretches. It's normally just 6.85% of wages per net new job. Amazon's is significantly greater. https://esd.ny.gov/excelsior-jobs-program

Use of eminent domain is disgusting and that alone is enough to kill the deal IMHO. Using eminent domain for a private business is wrong. It seems like New York does that too often.

Amazon isn't taking money from the government. They're getting a relief of $3 billion IF they fulfill their promise. I'd take 25k-40k jobs for my people over $3 billion in taxes any day. As the director quoted the governor, the best social program is still a job.

Many companies in New York create jobs for the state. Some even more than Amazon, and generate even greater amounts tax revenue.

Are they too entitled to tax relief?

Amazon is a tremendously successful company. You start handing it tax breaks and you begin walking down the path of making it a government-sanctioned monopoly.

In this case, yes. $2.5 billion of the $3 billion amazon was getting were credits open to any company.

The letter addresses this, they're "as of right" credits open to all.

This is what detractors of the deal keep saying. You can speculate on the organic growth rate of the NY economy all you want. But at the end of the day, there are 25,000 - 40,000 jobs which definitely won’t be coming to Long Island City now.

That's not obviously true.

The land is still there. Other companies could use it. Unless everything Amazon might have purchased goes totally undeveloped, the impact is less than the 25k jobs.

And given the time horizons involved, I'd take that bet.

Anyone else who proposes to develop at the scale that Amazon was proposing, would likely be achieving similar tax incentives as to what Amazon was offered. Particularly since the terms of the deal were made public, that becomes an anchor point for any similar discussions.

There is no question that organic growth will eventually create 25,000-40,000 jobs. But the net present value (NPV) of that future job creation is significantly reduced after applying the discount. So even the same number of jobs is not a comparable economic impact.

So the state should have been happy to give 26B in subsidies then? They could bank the 1B and have 25k to 40k jobs.

The math isn’t as clear as you are making it out to be. Google or companies like it will change their investment whether amazon is there or not.

I’m not sure if it was a typo on your part, or you might be misinformed of what the actual deal was that was struck. From TFA;

“Amazon was to build their headquarters with union jobs and pay the city and state $27 billion in revenues. The city, through existing as-of-right tax credits, and the state through Excelsior Tax credits - a program approved by the same legislators railing against it - would provide up to $3 billion in tax relief, IF Amazon created the 25,000-40,000 jobs and thus generated $27 billion in revenue. You don't need to be the State's Budget Director to know that a nine to one return on your investment is a winner.“

The crucial point is that there is no cash to bank! The politicians statements that the “money could have been better spent on xyz” was a lie.

The deal was to reduce taxes on future revenue if and only if Amazon met specific (lofty) investment and job creation requirements.

”Make no mistake, at the end of the day we lost $27 billion, 25,000-40,000 jobs and a blow to our reputation of being 'open for business.'”

Giving amazon the ability to not pay taxes is a subsidy. My question is whether it would still have been a good detail if NY had removed 26B of their tax burden because of the economic benefit?

Where is the line in your view? How much help is too much for a company?

The purpose of city government is collection of taxes from one set of people and expenditures of revenue to another set of people, in an effort to serve the greater good of the community.

The economics which determine where the “line” is, is set by the market of people/companies willing to move into and invest in the city, the services and infrastructure and regulation and talent pool they require to be able to function effectively in the city, and the tax burden they are willing and able to shoulder relative to other available tax/service/infra/talent bundles available elsewhere and their own profit margins.

And all that is a calculation companies perform within and between municipalities when selecting where to grow and invest.

And also a similar calculation made by the residents who move into and out of a city based on the services, infrastructure, tax rate, and companies that are present.

Some economicist must have modeled all this and drawn all the supply/demand curves, and the equations which show how certain curves shift in response to taxes or stimulus or investment in any of the various areas.

The short answer is at the bottom of the letter — a 10:1 return on investment would have been a massive win for any development agency.

Maybe there is a way to model the breakeven point accounting for all the various future cash flows. Maybe we can make a list of all the similar projects and their expected ROI and rank them, e.g. as a dollars per job created number, or a ratio of tax dollars forgiven versus tax dollars collected.

But very subjectively a good deal is one that leaves the community better off in the long run. There’s no way to know this a priori, but all the evidence points to this deal being a truly massive loss for this community.

Amazon can do things for a locale that no amount of simple tax revenue can do. Because they can profitably employs tens of thousands of people. It’s actually the most important function of a city, to enable profitable sustainable jobs for its residents. It’s not, in fact, simply all about the Benjamins.

Here is how the 27B was calculated: https://www.democratandchronicle.com/story/news/politics/alb...

Even if you believe all those numbers, that is $60 a year per New York resident in revenue. New York City itself has 4M jobs: https://www.labor.ny.gov/stats/nyc/

Amazon would have been a small part of that. So whether HQ2 should located in NYC and whether the residents around it would be hurt or helped are all valid questions. This isn’t going to make or break New York City or New York in general by any stretch of the imagination.

NYC tech scene is still booming, Google et al. is still on a hiring spree there.

The letter says the next biggest company deal with jobs was 1,000 people. So no, there aren’t many other compnies bringing 25k jobs. Especially ones with average incomes of $150,000.

Would the bulk of the taxes paid by Amazon be paid back? The article said that Amazon would get $3 billion in existing credits (i.e. not deal specific, just business tax credits) and would be paying ~$27 billion. Seems like a steal for NY.

Look at this beyond the scope of Amazon.

If the basic premise here is that any company should get a tax break if they are capable of hiring enough workers whose tax payments would exceed their employer's tax payments, all you're doing is just shifting the tax burden onto the workers in the form of regressive income, sales, and property taxes.

You assume there is no economy of scale for government spending. For example, building a road to serve 10 million people may be cheaper per capita than a road for 1 million people. Same on the revenue side: doing a single large deal for $27B is probably cheaper than doing a thousand deals for $27M.

For there to be an actual increase in tax revenue for the state via income tax, those workers would have to be receiving higher salaries than they would have otherwise, would they not? Or emigrating from somewhere else, which they would be unlikely to do if they are not receiving an increase in compensation.

This reads a bit like "we could've used that 3 billion to pay for teachers". This logic is flawed because the 3b is created by Amazon in the first place.

What's wrong with giving Amazon billion dollar for building an office? Just to put it in perspective, lets say they would create 30000 jobs with average pay of $80000/year. That is $2.4 billion in just salaries over single year. According to random tax calculator I found online it is about 0.7 billions in taxes every year. This is crazy ROI. If I could put money which would have 70% safe yearly return that would be insanely awesome investment.

foxconn made very similar promises in wisconsin. that worked out really poorly indeed.

GE made similar promises in boston. that’s worked out really poorly indeed.

And amazon's incentives were tied to the number of jobs and how much they paid.

so were GE’s.

So how did Boston get fleeced? (genuinely curious, not overly familiar with the GE situation.)

kind of a slow moving crap fest. They’re going to repay some tax breaks, at least in theory, but we’ve dropped 160mil into renovations for a site that probably will never happen.

https://www.universalhub.com/2019/ge-give-back-87-million-ta... , https://www.universalhub.com/ge has a long running chronology.

Amazon would have to first hire those people. And the NYC labor market is already pretty efficient and saturated. It would basically push a lot of IT and related job wages up, for not much direct benefit - other than dumping a big cashflow on the city. (Which pushes up real estate and other prices.)

I'm not saying having HQ2 there would have no positive effects, it'd have absolutely contributed to the growth of the tech scene. But it'd have probably accelerated the arrival of other problems, which is something the city might not be ready to tackle.

Interesting. None of your concerns have anything to do with New York. Each would apply anywhere Amazon would choose to build.

Yes, that’s largely the point. I don’t think Amazon (or any company like amazon) should receive massive tax credits for jobs it needs to create anyway.

Ironically, much of the visible 'local' opposition, which was happy to appear at press conferences and protest at City Council hearings during work hours, were actual organizers paid by one union: RWDSU. (If you are wondering if that is even legal, probably not).

That is a pretty strong accusation to put in writing. I get the feeling that some investigation is going to happen on that one. Paid protestors presented as "concerned citizens" is not exactly a new tactic, but money is a lot easier to track these days.

Its very common in NY for high profile issues.

When fracking was the cause de jure, hundreds of people were being bussed to Albany weekly to protest.

I’m not sure if it’s good or bad, but it’s a thing.

We do have some experience with it out here in the middle. I have a relative (by marriage) who did a pipeline protest then went to "protest a volcano in Hawaii". Apparently, it was a good gig.

I'm just surprised that the NY government put it in a press release. It really seems odd, but maybe that union has really separated itself from the herd, politically.

Yes, there were people paid to blockade and prevent the construction of a new state-of-the-art science telescope on Mauna Kea. They were successful in pressuring the state to renege on the contract and block construction.

I live in Seattle now, and I remember talking to a petition signature gatherer for the recently passed gun control measure (petitions get them on the ballot). He was paid per-signature by a non-profit funded by the Open Society foundation. He said he was doing it Arizona before Seattle, and will keep going around to areas they pay for.

One does wonder if the individual you met and others paid there proper income taxes in each state they worked? I get the feeling that will come up before long.

I agree — We live in interesting times... the ability of populist agitators to amplify their voices is greater than it has been since the 1930s. There’s a reason why an oddball like Bernie Sanders (and a long tail of others, of all political stances) is a high profile figure in 2019!

POTUS has made this new “direct to you” model a thing that people are studying and learning from. Maybe this is a way to test the waters at communicating without lowering yourself to shouting to a mob on Twitter.

As someone who actually lives in NYC and would probably benefit personally from their HQ2 opening since my property-value would probably go up, I honestly wasn't terribly upset to hear that Amazon was leaving.

I am a little annoyed that only New Yorkers are paying the brunt of criticism on this. "If NYers hadn't complained so much then we'd have $27billion of revenue!!". But that's ridiculous; Amazon left NY because they felt like they had resistance, but you wouldn't know this based on the follow-up conversations.

I understand the tragedy of the commons, cities' race to the bottom, Amazon not needing breaks, so on.

I also think some of this could have been avoided if people felt like they were part of the process, instead of being told by the state "Hey we negotiated with a behemoth company for them to take over your community - trust me, you'll like it".

You cant involve public with everything, or it would lead to big overhead

For billions of dollars of tax breaks? I don't think it's asking too much. Washington State manages to have non-binding advisory votes on topics just like this without much complaint.

Very true, but we aren’t talking about involving the public in every single decision that government makes. But some of these significant ones might make sense. Especially if the outcome was that the deal went through.

Efficiency over democracy, everyone is doing it these days!

>The seventy percent of New Yorkers who supported Amazon and now vent their anger also bear responsibility and must learn that the silent majority should not be silent because they can lose to the vocal minority and self-interested politicians.

This like makes me frustrated. It shouldn't be everyone's responsibility to go on twitter or wherever and be loud. Maybe politicians should put in real effort to learn about who they represent. They could engage in the same kind of polling they do during election season, rather than just paying attention to whoever is loudest.

In a perfect world yes. In reality what matters is not how many people support a position but how many will vote based on that issue. If you support something but it is not in your top ten of voting factors (assuming you even vote) then in reality your view doesn’t matter to the powers that be.

> "The RWDSU Union was interested in organizing the Whole Foods grocery store workers. [...]. Organizing Amazon, or Whole Foods workers, or any company for that matter, is better pursued by allowing them to locate here and then making an effort to unionize the workers, rather than making unionization a bar to entrance."

I'm not familiar with how this works in New York. Someone who's registering a company needs to negotiate in advance whether the people they hire are part of some pre-existing union or not?

Wouldn't Amazon just have started hiring workers, and if those workers decided to organize into a union or join an existing one they'd have had to deal with that then? It seems not, so how does this work?

Perhaps they were looking for Amazon to guarantee they would only hire unionized workers (or X% unionized workers) for certain positions, as part of the deal?

Interestingly, although 70% of New Yorkers felt positively about the Amazon HQ2, I wonder what that percentage looks like for the actual current inhabitants of LIC. For many of the folks I know who rent in Queens, they were very much against the HQ2 and fearful of how it may affect their ability to afford living in Queens. Additionally, many New Yorkers I know who are around my age were very much against HQ2 because we felt that it was already so incredibly hard to even think about owning property in NYC, and that this was just one more notch that would make us feel like the possibility was slipping away. Not everyone works in tech/finance/RE and enjoys the salaries in those industries. Another common fear was how will this affect the subway system?

For many of the people I know who were against HQ2, it wasn't about the tax relief. It was about the feeling that the most valuable corporation in the world was going to move a lot more money into the city, and make it a lot harder for folks not in the industry to live.

A lot of these concerns where not addressed. It was always about jobs, jobs, jobs. And if they were addressed, it was not communicated effectively.

If they start handing out billions for corporate HQs it won't stop with Amazon. Google and everybody else will like up for theirs too.

Amazon would generate $30b in tax revenue over the deal length, for which it would be given a $3b break given certain conditions.

That is not a handout, because amazon generated all the money in question.

Okay fine whatever, every other big employer will be lining up for the same deal or threatening to leave.

When Queens has attracted enough campuses like Amazons to become an ecosystem no incentives should be necessary.

The deal has positives and negatives for Amazon due to its location, and lack of an ecosystem. After Amazon moved 25k jobs there there it would have been hard for them to leave.

They weren't "handing out billions" to Amazon, as the letter explains.

This reads too much like a one sided political letter by a state functionary. It's curious no such 'open letter' was forthcoming from any public functionary accounting for the losses due to the long list of bank frauds and bailouts?

Many here swear by free markets, fair competition and a level playing field and yet do not see the contradiction of letting large companies play regions against each other to extract concessions.

Too many times we just see pro business narratives that rehash arguments by lobbyists, bought economists and the business press to support specific business interests and these one sided narratives are now being challenged.

There is such an open letter from Timothy Geithner, actually. It's worth the read.

These people you talk about don't live in those communities and haven't lived in communities that have been destroyed and made worse by big corporations like this. How's Seattle doing? Great for the rich, but not for anyone else. Walk the city streets in Seattle, head down to city mission in Pioneer Square, you'll figure out what the word "despair" really means.

I'm glad the public stood up. The workers have power.

Guessing this was just another Amazon game to slam unions to portray a massive negative image of AOC & worker power, like they did to collect city data.

Unfortunately, some other community will have to suffer having so many high paid workers.

And then face the crippling poverty, homelessness, death, drug problems that come with those high paid workers. They contribute nothing to society, see Amazon in Seattle. Where are the Bezos schools, Bezos housing communities for the poor, where are the Bezos fire departments, Bezos parks? Nowhere.

Just because you have different priorities, priorities that are "infinite growth" (cancer), doesn't mean its automatically a good idea. Those workers weren't being employed from NYC and surrounding areas, and you know it. They were coming there to displace people already living there.

It's time the lower end of society starts getting a fucking say too.

Just as a business can grow organically and through capital acquisitions, a city can grow organically or through capital investment.

A city can spend money (billions) on infrastructure and public spaces which serves the workers of the companies, and the campuses of those companies. A city can also ask companies to spend billions to help build out those spaces and that infrastructure and in return offer tax incentives. It works out exactly the same. Both subsidies serve the workers and the companies paying those workers in the same fashion.

> Ironically, much of the visible 'local' opposition, which was happy to appear at press conferences and protest at City Council hearings during work hours, were actual organizers paid by one union: RWDSU. (If you are wondering if that is even legal, probably not). Even more ironic is these same elected officials all signed a letter of support for Amazon at the Long Island City location and in support of the application. They were all for it before Twitter convinced them to be against it.

Twitter as of now is a cancer in our society. Is is a fine social and sometimes fun, but do not form your opinion on it.

Great letter!

And as much as I support unions, RWDSU really messed up on this.

People are upset about the beauty pageant.

If Amazon had never done their stupid HQ2 search which resulted in the two most obiovus cities “winning”, they would have an HQ2 in NYC already with the same tax breaks. It would’ve all happened behind closed doors.

This story is so good because it perfectly illustrates the issue with politics today:

- A vocal minority of leftists managed to force a silent majority. Once they won, they didn't really know what to do. Now everyone realizes that New York is worse off.

- All of the outrage started and snowballed on Twitter, where self-centered politicians decided to use it as a way to virtue-signal.

- The press did an awful job on this story: every article got a baked in narrative (From "Amazon was defeated and NYC won", to "NYC Lost and Amazon won"). It is simply very difficult to know what actually happened.

> Once they won, they didn't really know what to do. Now everyone realizes that New York is worse off.

Not sure how you've reached this conclusion. "Worse off" is subjective.

Has anyone from NY tried to get Amazon back?

The fact that this guy is writing this open letter on behalf of the governor’s office, and seems to believe we still live in a 2008-esque Change-We-Can-Believe-In view of tech company largesse, shows how clueless Albany really is.

If we have ACTUALLY learned anything from the past century of corporate relationships with muncipalities, it’s that you really do NOT want to encourage corporate monocultures within your cities. It distorts the local economy, creates its own social subculture that often overtakes the town’s existing culture, and presents a giant economic and existential crisis should the corporate giant need to downsize or exit the city (which they seem to always do, and always for someplace that has far more diversity, or a new host for their parasitism).

New York State is, if anything, Exhibit A for all of this. The story of Kodak and Rochester, and the years of decline in Kodak’s absence (and before anyone mentions it, yes, I know there’s been a very recent Renaissance) is a story known to pretty much every urban planner who’s been educated in the past 25 years. Yes, you get a really easy bump in total jobs that is hard to replicate through more organic means; but you know, if you want to live in an interesting, dynamic society, you’re going to choose to go about it the hard way.

Maybe the evil labor unions ruined the deal. Maybe the politicians flip-flopped. Maybe the tax credits pencil out. It doesn’t matter. There are large numbers of people who didn’t want Long Island City to turn into another Rochester. Or, to put it in a context that might be more understandable to the crowd here, they didn’t want to see Amazon do to their neighborhood what Snapchat and Google did to Venice Beach over the past 10 years. I’m sure the tax receipts are way, way up in 90291; at the same time, it’s not really Venice anymore, and those revenues have allowed the tech firms to hold the community hostage for whatever they want (for example, Google had an arbitrarily placed stop sign and crosswalk put in for their use, and managed to get the LAPD to cart off longtime homeless residents in the process (who, by virtue of the law of unintended consequences, have been replaced by far more aggressive and transient homeless people)).

I’d love to see some of these politicians run on the “I stood firm on welcoming Amazon” platform for their next election. I don’t think the ones who flip-flopped into the negative are idiots; rather, they’re smart enough to see the writing on the wall. The tide is shifting, and fast.

TIL Amazon sells Banana Republics and we all clamor for canoes and paddles.

San Francisco-ization it seems. Liberals going against their own interests. Reminds me of an apartment complex under construction in SF that was forced to include a larger amount of low-income units. The builders found it would no longer be profitable, and ceased building. So lose-lose, prisoner's dilemma, vocal social media forces "won," lacking the cooperative biases that humans normally have. They all end up with nothing.

tfw you can't make a profit renting housing in San Francisco.

Lack of a streamlined and efficient construction approvals process is really hurting (some ?) US cities. Or the real estate developer community is really spoiled there.

And by streamlined I don't mean just rubber stamp everything. But instead have clear rules, and check the plans fast whether they are compliant with them. (Basic civil engineering stuff, fire hazard, environmental protection, noise, traffic management, historic status. What else is there to check?)

Sounds like there's plenty of stuff to blame besides low-income people wanting a place to live.

Yes, but getting more units in a building that won't be build doesn't help said low income residents.

This is a moral argument that does not fit the facts we know, and hence can't have a morally good outcome.

I was not trying to make a moral argument, but an observation that many seem ready to believe any statement by the powerful no matter how dodgy, while the powerless are assiduously made invisible.

I don't see how the people that dictated terms to the point where the project was unprofitable is powerless.

I also question if the people fighting for this outcome are the same low income residents affected, because I have a hard time believing actual low income residents in line for the units would prefer an outcome where no units gets build in order to make a moral point.

Why is it morally good to make an idealistic stand that cause no units to be build? To me that seems factually wrong.

OP told an unsourced story about a supposed SF housing project cancelled because of supposed demands for low-income units. You appear to have uncritically accepted this story as true, to the point where you are ranting about the injustice and immorality of those pesky poor people demanding an affordable place to live. You are demonstrating my observation that many people are inclined to accept the viewpoints and arguments of the rich and powerful without question or examination.

Even if such a development existed, I would not take the word of the builders that it was annoying poor people that doomed it, without taking a closer look all the things that can cause such a project to fail, including the competing actions of other greedy rich people.

I’ve seen this happen countless times in SF. It is a pattern to do this here. It is unproductive and hurts everyone except those owning existing housing due to increasing prices caused by artificially restricted supply.

Win-win scenarios are possible more often than one might think.

Should shelter, a basic human need, be for-profit? If so, why?

Here's a thought; do you want to rely on the goodwill of people you don't know, that live hundreds or thousands of miles away, to get up at 4am to farm and create food (a basic human need) for you?

Or do you want to rely on the profit motive? If not, why?

Life is a bit more nuanced than profit-motive vs charity. I'd guess most of the folks on HN work for a salary at a company. There isn't a ton of "profit-motive" in the work. You don't necessarily get more money if you do a better job. At least not reliably (it's up to the discretion of the company usually).

So if a lot of people are willing to do work for a salary, why wouldn't a farmer or landlord be willing to do work for a salary? Why does a landlord need a profit motive? Why does a farmer need a profit motive?

I don't think you can argue that landlords are more attentive because they receive profit over a salary.

The term "profit motive" as generally used applies equally to money made from salary or equity.

> Why does a farmer need a profit motive?

Lets assume farmer refers not to a slave fieldhand working for a corporation but to an independent farmer who actually owns his own land on a critically endangered economic entity known as a "family farm".

Many family farms still left in the US at least are not profitable. They exist because their owners (foolishly?) are holding on to a dream of a farming lifestyle. The salaries are subsidized by federal price supports and things like family members working day jobs.

Farming that works economically is farms owned by large multinational corporations which employ slave labor.

The family farms owned by individuals who are doing things for a love of farming are on their last legs. Few left. Soon it will be none. Then it will be the corporate owned ones only.

This will be celebrated by those who have spent the last decades incessantly demeaning and insulting the small family farmers, claiming that they are vile despicable capitalists living on the labor of the common man. These anti-family farm advocates push society towards the inevitability of corporate dominance of all farming and its necessary reliance on slave labor.

The profit motive was a justification for slavery.

Want to try another argument?

Profit motive leads to more shelter being built. The same reason why you want food production for-profit.

Not everything works best with profit motive (eg, healthcare) but if you want affordable housing then maximizing profit motive will help produce more housing.

No, profit motive leads to more shelter being built for those who can afford it and everyone outside of that gets to live on the streets. See: Seattle.

Well, we had food and shelter before we had profit motives.

> Well, we had food and shelter before we had profit motives

Did we? The Hobbesian original condition is one of the strongest "profit" motives around. Natural selection is unsentimental and unforgiving. This idea of distributing things according to "need" is a very recent novelty.

It existed, but was very unequally distributed. And that’s why so many people starved and died from natural disasters.

I don’t think profit margin typically makes things possible in a binary manner. I think it just makes them more efficient.

Because empirically, we have learned that the best system we have for distributing goods such as shelter, food, and clothing is a well regulated free market economy. It’s not perfect, but it is less terrible than anything else humans have tried.

Money, necessary to acquire food and medicine, is another basic human need. If you have something someone else needs more, it is their fundamental right to have it.

> The union that opposed the project gained nothing and cost other union members 11,000 good, high-paying jobs.

I want to see this feature film so people stop wasting their time with them

Every NY voter needs to read this letter.

> First, some labor unions attempted to exploit Amazon's New York entry.

When a company sees a market opportunity and increases prices to take advantage of it (or benefit from tax exceptions, which is the same as generating inflation on everything but their prices), it is praised. When a labor union does the same, it is evil.

The 1% want to have the capitalism cake and eat it too.

And for some reason we are boasting a letter from the person bought to defend the tax break in the first place. If you want one single proof that this is an "advertisement" for public opinion, i will give one on the very first paragraph: he compares "25,000-40,000 jobs" as if 100% oscillation is an acceptable negotiation scale (hey, i can pay you $100 to $200k a year if you accept now to work 12h a day every day!") and then proceeds to compare it to non-tax exempt jobs. Which is like comparing one thing to another completely different, for either incompetence or malice. Since he is a Budget Director, i will bet the later.

"If New York only allows unionized companies to enter, our economy is unsustainable"

Dear workers: you must remain poor and powerless forever, for the greater good.

Did you miss the surrounding context? His point is that NY has very strong worker protections, and that it's much better to let a non-unionized company set up in NY and then organize it, rather than trying to make organization a condition to entry.

Isn't the validity and relevance of those points something for the unions to decide for themselves?

Some people are still able to distinguish reality from a sales pitch.

No? I don't understand how you're connecting these dots.

It's not like we have to wonder whether the union strategy worked here. It demonstrably failed. Amazon didn't buckle, they didn't accept Whole Foods unionization as a condition of setting up shop in Queens, and the union will not in fact see a single additional job as a result of what happened.

"the union will not in fact see a single additional job as a result of what happened"

That assumes that all union organizing will now cease or come to nothing, and the unions will get no benefit from keeping a huge, dedicated anti-union company out of their back yard.

No, it just means that this particular transaction was net-negative for unions.

So your argument is that the unions should have just taken the deal as dictated to them without considering their larger self-interest?

Yes? "As dictated to them" is a weird way of putting it, since they were the ones making the demands.

Dear workers: you must remain poor and powerless forever, for the greater good.

Once again, we don't have to wonder whether this particular strategy worked. It demonstrably did not. Workers in NY state and at Whole Foods are worse off than they would have been. This is a setback for the effort to unionize Whole Foods.

You seem to be confusing strategy (long term thinking) with tactics (short term thinking)

I wish I could understand why you seem to think it's a no-brainer that workers should unilaterally resign what they see as their long term interests to accept unquestioningly a corporate agenda with uncertain benefits for them in an indeterminate future.

It doesn’t matter who’s side we’re on. I think Whole Foods should unionize. What was done here to try to accomplish that backfired, spectacularly. Labor will have less of a voice in similar negotiations in the future.

What is keeping unions from continuing to try to organize Whole Foods in New York?

Reads as unreliable (presumably factually accurate but too motivated to be trusted as presenting a full picture).

Anybody who pretends to be thinking about "loss for the city," is full of themselves. It's all politics, and disingenuous to imply otherwise. And morally, most other areas in the country need this more than NYC does.

It sounds like the thrust of the article is "Look how stupid the decision making process was!" Well, true politics is petty and unreliable especially at large-scale. But that has no bearing on the larger issue.

Factually accurate is a pretty good place to start. If you feel part of the "full picture" or "larger issue" is missing, then feel free to provide it.

I did. It's a disingenuous political move, swinging clumsily at unions, and hoping to rile up New Yorkers (such as myself).

While economical illiteracy of loud-voiced minority politicians is a fact that played here, I think Bezos just made out of himself a "rich jerk cry baby" who threw "i'm in control and don't need your candy" tantrum.


PS: That said, I'd be scared of how that would affect NYC traffic patterns if plans would go forward.

RWDSU... you really need to wake up. The Labor Union movement was making great progress with AMZN, raising the minimum wage of fulfillment centers to $15 hr.

Negotiating is a series of compromises. AMZN basically reflected your brinkmanship strategy back into your face.

While I wish corporate America was above this, the Unions are the ones that need to learn a lesson here.

AMZN conceded to 11,000 Labor Union jobs for construction and services. But RWDSU, you wanted it all... including operational jobs.

AMZN just will not capitulate to these tactics. And in fact, they'll go so far as to punish them and set precedence for future projects.

RWDSU didn't care about the construction jobs being unionized. Why? Because construction workers don't pay union dues to RWDSU. Unions are businesses. They exist to make money via dues, and do enough to benefit employees to get voted in. Once in, they benefit from laws that make it very hard to get them back out. RWDSU saw the dollar signs and looked to enroll new members--mostly people who didn't even live in the state yet and were not members of the local. Because NY is not a right to work state, they would be forced to begin paying dues to RWDSU without any vote or input.

A union's product is supposed to be advocacy for workers. But unlike lawyers or publicists, who are hired and fired by the people they advocate for, unions get voted in or established through hiring halls and high-level deals like these, and then they use the law to force workers to pay them for often unwanted or low-quality services.

The problem is old, going back, one example after another, continually to a famous quote of Jefferson about sewage news at


So, for a fix, first, mostly ignore the newsies (a word from a Bogart character in the movie The Maltese Falcon).

Second, much of politics is trying to get votes from name recognition from shocking statements based on gossip, lies, distortions, made up nonsense, etc.

Well, then, the newsies and the politicians have a strong interest in common: For name recognition for votes the politicians want their shocking stories told, and for ad revenue from eyeballs the newsies want shocking stories to tell. There was a similar remark in the movie Lawrence of Arabia.

So, the second step is mostly to ignore the politicians.

A third step is, for information that might be in the news, fall back to and insist on at least common high school term paper writing standards, rational, responsible content with thorough references to objective, credible, primary sources. With this third step will entertain:

Believe none of what you hear and only half of what you see and still will believe twice too much.

Measure twice and saw once.

Essentially everything you see in the media was put there and paid for by someone who wants to influence your opinion (Sharyl Attkissson).

It's not what you don't know that gets you into trouble. It's what you do know for sure that just ain't so (In the movie The Big Short and there attributed to Mark Twain).

Will conclude that for nearly all the news, printed on paper it can't compete with Charmin and on the Internet is useless for wrapping dead fish heads.

A hope is that the Internet will enable many more new information sources with some with lots of credibility and narrow specialization and that the best of these sources will help the US and civilization.

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