Archive: Opinions

So, Amazon too its ball and went home. Long Island City in Queens went from an East Coast Seattle, a mega-hub of one of the 21st century's behemoths of commerce and free enterprise, to the laughingstock of American media. Businesses, politicians, unionists leftist and rightists, practically everyone with access to a keyboard weighed on the great 'abrakadabra' as Amazon said 'Thanks, New York City, but no thanks. We're outta here.'

Let's look at the results, first, then get into some informed speculation on why Mr. Bezos pulled the plug.

New York State and New York City offered Amazon $3 billion in tax breaks to locate their distribution center. Please note that New Jersey and Newark put up an offer of $7 billion in tax breaks (Didn't know that, did you?). Everyone was outbidding each other for those 25,000 jobs. And those 25,000 jobs would easily translate to over 40,000 jobs as the payroll expanded the need for services, dining, construction and transportation. $3 billion in tax breaks over ten years? Even Albany admitted that over 25 years New York would benefit to the tune of $186 billion in positive economic impact, including $14 billion in additional tax payments. Not a bad investment, even if you're using Ocasio-Cortez's math.

Instead, a big fat zero is now on the New York books, and a burgeoning state deficit once again is being blamed on federal tax policies, Medicaid costs (maybe even global warming) and any other cause that the people in charge can blame, while they put Jeff Bezos on 'Wanted' posters for corporate greed.

Just as a comparison, it might help to look at two other 'hubs' that Amazon is currently building in Arlington, Virginia and Nashville, Tennessee. Now, according to Andy Pozder, former CEO of CKE restaurants, author of 'The Capitalist Comeback' and Wall Street Journal columnist, a good number of Amazon employees earn an average of $150,000 a year. I'm a bit skeptical of that number, but, that's not a heck of a lot of money if you are a family living in Queens or if you're trying to buy a house in Seattle these days), but I'll use his figures as we look at what a prospective Amazon employee in Nashville or Arlington can expect to see in their paycheck.

If you're an Amazon employee in Queens at $150,000 a year, you will pay $9252 in state income tax and $5379 in New York City tax. The Virginia employee will, as soon as the Amazon center opens, pay $8142 in state income tax, and that's it as far as income taxation goes in Virginia. $6489 in the Amazon employee's pocket in Virginia vs New York. Tennessee? No state income tax. Put that total of $14631 in the family wallet. That's just income tax. Imagine how much farther income can go for housing in one of those southern locations, food, transportation, etc.

So, in reality, those 25,000 jobs that are going someplace else will get a better deal without greasing the money-grubbing hands of our taxing entities. Who (or what?) is the greedy one, now, with those figures in hand?

Michael Gianaris, the state senator from Queens was widely cited as one of the nay-sayers (his own district!) on the Amazon deal. He was appointed to a state oversight board with potential veto power over the entire deal. He was quoted as saying: "Let's be clear. This was not a subsidy that Amazon needed to function. This was a shakedown pure and simple. Amazon is the biggest company with the richest man as its head. They did not need our $3 billion, they just decided to shake us down for it."

Now, Mr. Gianaris, if they are indeed the 'biggest company' with the 'richest man at its head', then why, pray tell, would they assent (they were offered it, remember) to accept $3 billion in tax breaks over ten years when the 'richest man' is supposed to be worth $250 billion and the company has surpassed $1 trillion in valuation? Amazon shook down New York? Wait a minute. You have made a major faux pas here, perhaps an outright contradiction of your own words, maybe even a 'bait and switch' with the truth? You offered the tax break, THEY didn't shake YOU down. But, since you used an organized crime term such as 'shakedown', let's take a look at a couple of other facts that appear to have gotten lost in all the ink, hand wringing and radical clap-trap.

Dear reader, do you know who met with Amazon executives two days before the 'abrakadabra we're outta here'? It was leaders of the AFL-CIO, Teamsters, and the Retail, Wholesale and Department Store Employee's Unions. They met in a conference room on the 39th floor of the State Executive Building, next to the governor's office, who may or may not have been present, but who initiated and hosted the meeting. The dialogue/transcripts of that meeting apparently are unknown or unavailable. Or maybe, no one dared take notes.

This meeting came after the following statements were made to the media:

"We're a union town. There is going to be tremendous pressure on Amazon to allow unionization and I will be one of the people bringing that pressure. I believe that pressure will win the day." --Mayor Bill DeBlasio.

In response, an Amazon executive when asked if Amazon would agree to unionization, said: "We have great paying jobs and we respect an employee's rights to choose or not to join a union. The goal you are trying to achieve is good jobs, not low-paying jobs."

The second quote sounds more reasonable (and employee oriented) than the first, does it not? After all, there are plenty of state and federal laws governing people's rights to organize dating from the thirties, set up and join a union, and many would argue that these rights are somewhat skewed to the employee's and union's side, and the NLRB protects these hard-earned rights. Amazon would adhere to these laws and protections, regardless of how politicians like Ocasio-Cortez scream about 'worker exploitation'.

So, if Amazon was ready to adhere (and there is absolutely no proof that they would do anything but obey federal and state regulations and laws, since they are not Mr. Peabody's coal mine) why do you think the last people that Amazon met with were the AFL-CIO, Teamsters and retail union chieftains?

I am going to speculate that the real shakedown was going on in Cuomo's conference room. I think the Amazon executives were given an ultimatum, as DeBlasio so arrogantly stated "We're a union town". Why do I hear strains of the Godfather theme here? I think it was not Amazon which contemplated getting around unionization procedures; I think the union chiefs were putting the 'squeeze' on Amazon to forego employee's right to choose whether or not to join, much the same as municipal employees in New York are forced into a 'closed shop', whether they desire to be a union member or not. After all, New York is a 'closed shop', where if you are employed by a unionized employer you must join the union and pay union dues out of your paycheck. The public sector unions as well as other politically active unions (Teamsters, AFL-CIO, AFSCME, NYSUT, etc. who combine in political contributions in the millions) received a body-blow recently by the Supreme Court who told them to refund union dues that were earmarked for political causes if requested by members who disagreed with those contributions. New York's unions stand to lose a tremendous amount of income (read: political influence in Albany) with this ruling and are desperate to make it up. Thus, a 'shakedown' or even veiled retribution unless Amazon relinquished its rightful and established rights under established labor law. You wouldn't want any trouble before you even started building, would you?

The shakedown started, and ended, in that conference room. Bezos told New York to stuff it. If that's the price for so-called 'incentives', then the world's richest man and the world's richest company doesn't need the Big Apple, its high taxes, its corrupt politics and its union leaders who thought they 'had the goods' on unionizing a company that apparently has convinced its tens of thousands of workers that a union might be superfluous and not in their best interest as 'exploited workers'.

Abrakadabra. New York showed its true colors. And someone a lot smarter and more focused on its core mission and employees said, in essence, "Thanks, New York, but no thanks."

A last quote from Mr. DeBlasio (who had to have a hand in this shakedown, since Tammany is not dead, but alive and well in the Big Apple): "There wasn't a shred of dialogue. Out of nowhere they just took their ball and went home."

Wrong, Bill. There was plenty of dialogue. And it wasn't out of nowhere. It was out of your mouth and out of that conference room on the 39th floor, as well as press conferences by New York politicians. But you're right about one thing: they did take their ball and went home. Much like Ellis Wyatt in 'Atlas Shrugged'. You might recall, if you read it, that when Wyatt finally had enough of 'the people', the government who purported to represent the people, and got tired of being called a 'greedy capitalist' he blew up his oil fields and left a sign in front of the burning oil rigs: "It's all yours now. I'm leaving it all exactly the way I found it."

Jeff Bezos could be a modern-day Ellis Wyatt, and allowed Long Island City to return to exactly how he found it. Struggling. Bezos might even be a modern-day hank Reardon Hank Reardon. Ayn Rand saw it coming. Too bad Cuomo and DeBlasio didn't. Roll on, Bezos and Amazon. Illegitimus non carporandum. If that Latin phrase eludes you, write me a letter care of the Lansing Star.

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