Amazon Pull Out


This post is by Jeff Carter from Points and Figures


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It’s too bad that Amazon pulled out of NYC for the people of NYC.  Other cities will benefit.  However, Amazon won’t be able to build a core group of people in one place.  25k people in the same office can be creative if management set it up right.

Instead they will build out their Nashville office, and their Virginia office.

I was just in Nashville.  It’s booming.  There is a very positive vibe there.  That city is really going to change in the next five years.

I am not a big fan of giving away tax subsidies to get companies to move.  I understand it’s done and I understand how economists will justify it by incorrectly framing the costs/opportunity costs.  What I wonder is if I were already a business operating there, why shouldn’t I get the same subsidies?

Mayor Bill de Blasio said, “We’re a union town. There is to be tremendous pressure on Amazon to allow unionization and I will be one of the people bringing that pressure. I believe that ultimately that pressure will win the day.” You might recall Comrade de Blasio’s saying there’s too much money in the NYC in the “wrong hands.”

For people like de Blasio, guess what?  They are losing the day and they are losing bigly.  In my home state of Illinois, companies are fleeing to right to work states.  The Machine politicians not only have passed so many regulations it’s hard to do business but we have some of the worst workman’s comp laws in the US.

When Amazon decided to drop out, politicians all over the country picked up the phone.  Amazon wasn’t listening they had other plans. Chicago’s city council went into action.  Alderman Pawar proposed a “robot tax”.

This is the tone deafness of many politicians these days.

Maybe we should tax ATMs, dishwashing machines, washing machines, blenders, food processors, boilers, dryers and other “robots”.

Alderman Pawar is not alone.  A lot of politicians in Illinois think like this.  Currently our governor is proposing policy after policy that is anti-business even though he “came from business”.  We had a bunch of “businesspeople” propose a 1% hike in the income tax for individuals and corporates.  Of course, a lot of them are not actually residents of Illinois so they won’t have to endure it.  Corporates only aggregate taxes, so they will just raise prices.

These policies are one reason our tech sector has a problem.  When you tax innovation and are hostile to innovation, you get less of it.  People move away.  We aren’t captive here.