In the News: Stacy Mitchell
September 11, 2017
Media Outlet: The Week
The Week’s Jeff Spross isn’t entertained by how Amazon is searching for massive subsidies from local governments in the process of establishing a second North American headquarters. In his piece he cites ILSR’s press release on why local governments are at a massive disadvantage when being asked to dance for Amazon executives:
When you’re offering that kind of economic value, in a national economy that’s still struggling, why wouldn’t you offer it up to the highest bidder?
For Amazon, it makes sense. For Amazon’s metropolitan suitors, it makes sense. But from the perspective of America as a national community and economy, there is something cynical about this whole display.
The Institute for Local Self-Reliance and Good Jobs First are nonpartisan research outfits that track these sorts of bidding wars by cities and states for corporate investment, and are generally critical of them. They found that from 2005 to 2014, local governments forked over $613 million to Amazon to attract construction of the companies’ various fulfillment centers, and another $147 million to attract its data centers. And it’s only ramping up. Since 2014, states and cities have given Amazon well over $1 billion in the form of subsidies and tax breaks.
Now, fear-mongering over deficit spending is foolish and destructive where the federal government is concerned. It controls the currency in which it taxes, spends, and borrows, and thus can never face a debt crisis by definition. (It can cause an inflation crisis, but that’s another matter.) But state and city governments don’t control the currency. In their case, the old adage that government should live within its means — same as a household — actually applies.
Cities absolutely should want to have thriving universities and robust transit and internet infrastructure and educated workers. But they should want those things because they’re good for the people who live and work in those states and cities — not because those things are good for Amazon. And the more public funds local governments give up to attract Amazon, the less they’ll have to invest in creating those public goods and services.