A false shot at pros­per­ity Ama­zon con­ducts an un­fair com­pe­ti­tion to be­come its head­quar­ters

The Washington Times Weekly - - Editorials -

Ama­zon, the world’s big­gest re­tailer, founded and helmed by the world’s rich­est man, re­cently sub­jected scores of Amer­i­can mu­nic­i­pal­i­ties to a hu- mil­i­at­ing dog and pony show. The Seat­tle-based tech be­he­moth an­nounced it was plan­ning to build a sec­ond head­quar­ters some­where in North Amer­ica, promis­ing some 50,000 new jobs to wher­ever it landed. It then, in a slow-mo­tion im­i­ta­tion of a re­al­ity tele­vi­sion show, in­vited lo­cal­i­ties to sub­mit bids.

Sub­mit them they did: More than 300 ap­pli­ca­tions flooded in. Peren­nial eco­nomic lag­gards like Bal­ti­more; Bridge­port, Con­necti­cut; Cam­den County, New Jersey; Cleve­land; Gary, In­di­ana; and Toledo, Ohio, threw their hats in the ring, think­ing they had a shot at pros­per­ity. Most bids con­sisted, es­sen­tially, of cash strapped cities and states de­bas­ing them­selves be­fore the world’s rich­est man. They promised tax abate­ments, di­rect sub­si­dies and ded­i­cated tran­sit links. In other words, the idea was that be­lea­guered tax­pay­ers would foot the bill for a sparkling new head­quar­ters for a com­pany whose mar­ket cap­i­tal­iza­tion al­ready tops $750 bil­lion.

In the event, Ama­zon went with a Solomonic de­ci­sion: It will split the new head­quar­ters in two. And the com­pany se­lected two cities that al­ready sit atop the Amer­i­can heap: Long Is­land City, in Queens, New York; and Crys­tal City, in Ar­ling­ton, Vir­ginia, just across the Po­tomac from Wash­ing­ton. Ama­zon’s hon­cho, Jeff Be­zos, wants ac­cess to New York’s deep ta­lent pool and Wash­ing­ton’s po­lit­i­cal con­nec­tions – par­tic­u­larly as he faces grow­ing con­cerns on Capi­tol Hill over his com­pany’s mo­nop­o­lis­tic pow­ers.

In other words, both New York and North­ern Vir­ginia have as­sets that any com­pany would want to ex­ploit. That’s why it was puz­zling that both ar­eas ended up shelling out for the new head­quar­ters. New York is sub­si­diz­ing Mr. Be­zos to the tune of $1.5 bil­lion; Vir­ginia, north of $500 mil­lion. (Per­haps need­less to say, the tax­pay­ers of New York and Vir­ginia them­selves were not con­sulted in this de­ci­sion.) It seems un­nec­es­sary.

It’s also patently un­fair — and a vi­o­la­tion of the free mar­ket sys­tem that we at least pre­tend to as­pire to live in — to have tax­pay­ers pump money into one spe­cific cor­po­ra­tion. How might New York’s re­tail in­dus­try, al­ready suf­fer­ing at the hands of Ama­zon, feel about such a sub­sidy to the busi­ness that con­sti­tutes an ex­is­ten­tial threat? Alexan­dria Oca­sio-Cortez, the left­ist sen­sa­tion re­cently elected to Congress from New York is not of­ten right. But she had a point when she tweeted “Ama­zon is a bil­lion-dol­lar ,com­pany. The idea that it will re­ceive hun­dreds of mil­lions of dol­lars in tax breaks at a time when our sub­way is crum­bling and our com­mu­ni­ties need MORE in­vest­ment, not less, is ex­tremely con­cern­ing to res­i­dents here.”

All in all, the pros­tra­tion be­fore Ama­zon was an em­bar­rass­ing and in­de­fen­si­ble spec­ta­cle — par­tic­u­larly as two re­cent an­nounce­ments from other tech gi­ants makes clear.

First, there’s this: Al­pha­bet, the par­ent com­pany of Google, the world beat­ing search en­gine, re­cently an­nounced a New York in­vest­ment of its own.

“Al­pha­bet unit Google plans to spend $1 bil­lion to ex­pand op­er­a­tions in New York City, a move ex­pected to at least dou­ble its work­force there to around 15,000 over the next 10 years,” In­vestor’s Busi­ness Daily re­ported last week. “Google’s new 1.7 mil­lion square foot Hud­son Square cam­pus will in­clude two build­ings lo­cated at 315 and 345 Hud­son Street and an of­fice space si­t­u­ated at nearby 550 Wash­ing­ton Street in Man­hat­tan. The in­ter­net search gi­ant in March also bought the Man­hat­tan Chelsea Mar­ket for $2.4 bil­lion.”

That came on the heels of an­nounce­ment ear­lier in the month from Ap­ple, the hard­ware gi­ant be­hind iPhones, iPads, and lap­tops. “Ap­ple plans to spend $1 bil­lion to ex­pand its Austin, Texas, op­er­a­tions and es­tab­lish new fa­cil­i­ties in Seat­tle and San Diego, the iPhone maker said Thurs­day,” IBD re­ported on Dec. 13. “The iPhone maker also plans to ex­pand op­er­a­tions in Pitts­burgh, Boul­der, Colo., and Cul­ver City, Calif., the com­pany said. Pitts­burgh has emerged as one hub for ar­ti­fi­cial in­tel­li­gence re­search.”

And here’s the thing: Nei­ther Ap­ple nor Google is re­ceiv­ing a state or lo­cal sub­sidy for its ex­pan­sions. Each com­pany made a busi­ness de­ci­sion — what ar­eas are af­ford­able, have a ta­lent pool and a busi­ness-friendly en­vi­ron­ment — and choose ac­cord­ingly. That, un­like the Ama­zon spec­ta­cle, is how it’s sup­posed to work. Let’s hope that if Mr. Be­zos an­nounces an­other hu­mil­i­at­ing con­test for a fourth head­quar­ters, cities re­call how the last one turned out. Per­haps they can Google it.

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