Long Island City Gets Amazon; Alexandria Ocasio-Cortez and Other Protestors Misguided
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Long Island City Gets Amazon; Alexandria Ocasio-Cortez and Other Protestors Misguided

I live in New York and have for many years.   I have been a big beneficiary of the fact that this City, under Michael Bloomberg’s and Bill De Blasio’s leadership, has attracted Google and now Amazon to make major investments here.   Google has contributed to completely transforming the direction of the City and to broadening its pool of major employers beyond just banks and hedge funds.

Much has been made the last several days of the advantages that accrue to Google and now to Amazon of employing large numbers of young people in a place that is so much more stimulating than a city where they could presumably employ similar talent at half of the cost, such as, say, Atlanta.   I find that simply extraordinary, but I am certain that these companies have considered all this carefully.

What I do not understand is how anyone in their right mind – including Alexandria Ocacio-Cortez and the other local Democratic leaders – could possibly be taking to the street to protest Amazon’s decision or the $1.70 billion in incentives provided by New York City to attract them to the Queens neighborhood called Long Island City (where Ms. Ocasio-Cortez is the Congressman-elect).

These folks are making the specious argument that there is so much more that New York City could accomplish by applying the $1.70 billion to other areas.   (This argument seems odd in a City where the Democrat-led government cannot figure out how to solve a signal problem in the subway for less than $11 billion.)

The argument is based on a fundamental misunderstanding.  The taxpayers of New York have not just written Amazon a check for $1.70 billion.   They have provided concessions (tax and otherwise) to Amazon over a long period of time.  The City may be foregoing that much in property and other taxes over time, but that money simply is not real money available today - and would not be there unless Amazon were to be willing to come and invest in Long Island City without such concessions (which they certainly wouldn't do).

The actual amount that New York is really giving up is only a small fraction of the $1.70 billion number, perhaps $100 million or less.   It is certainly an amount of money which on its own would do nothing important for this part of New York City (which really isn't all that nice right now) compared to what it might become with Amazon's investment.

I am not a big believer that the government acting on its own can do anything meaningful and lasting by throwing small amounts of money around.   I am also not a big believer in public-private partnerships to solve infrastructure issues.  By providing $1.70 billion in concessions to Amazon, New York is leveraging its resources with a major technology partner that is at the cutting edge in multiple industries and that treats their employees well.  In fact, New York City wasn’t the only place to make this type of judgment.  Atlanta was willing to provide over $2 billion in incentives if they could have gotten Amazon there

There is so much else more pressing than Amazon coming to town to be outraged about these days.   Congressman-elect Ocasio-Cortez can be a tremendous force for good, but she needs to redirect her protests towards 57th and 5th.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to bank transparency and the climate crisis. Since co-founding BestCashCow in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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