Liberal Dems laud Amazon win, moderates fret leftward drift?
By LISA MASCARO and STEVE PEOPLES
Friday, February 15
WASHINGTON (AP) — What is happening to the Democrats?
Captivated by a handful of liberal superstars, they are venturing where the party has long feared to tread: Steep taxes on the rich. Abolishing an immigration enforcement agency. Proposing “economic transformation” to combat climate change. Gleefully waving goodbye to a big business — and its jobs.
On Thursday, newly-elected Rep. Alexandria Ocasio-Cortez led a chorus of cheers as Amazon announced it was abandoning plans to build a sought-after headquarters in New York City. Activists berated the online giant for a $3 billion package of tax breaks she said the city could better invest in hiring teachers or fixing the subway.
This is not the Democratic Party of yesteryear. Or even last year.
“The Amazon New York fight is an illustration of how power is moving to the left,” said Ben Wikler, of the liberal group MoveOn. “One of the world’s most powerful organizations doesn’t want to pick a fight with progressive activists.”
As the liberal flank celebrates its sudden ascendance in the party, energized by the new House freshmen pushing the party toward bold policy solutions, others wonder if the Democrats are veering so far left they’re about to fall off a cliff.
It’s a valid question ahead of a presidential primary season with an unusually robust roster of contenders trying to wrest the White House from President Donald Trump. The race comes at a time of shifting party loyalties and eroding confidence in traditional corridors of power, a dynamic that has recast the policy prescriptions of both parties.
The big questions for 2020: Will Democrats move beyond the center-left policies that have dominated the party since Bill Clinton’s presidency? And if so, will they find the electorate is repelled, as Republicans claim, or will they discover that a country long described as “center-right” is receptive to a return to liberalism?
Democratic pollster John Anzalone said the leftward lurch that’s playing out in the Amazon fight wouldn’t necessarily hurt the party heading into 2020 and could resonate with voters.
“When you’re doing corporate giveaways, whether for a big company or a sports team, it’s not as cut-and-dry as most people think,” Anzalone said. “The fact is there tends to be a belief that these big corporations have a lot of money and use their power to get deals they don’t need.”
As if to highlight the churn within the party, the 2020 class was mixed in their reactions.
A spokesman for former New York City mayor Michael Bloomberg didn’t respond to a request for comment. Howard Schultz, another business-minded former Democrat who’s now weighing an independent bid for president, also declined to comment.
Massachusetts Sen. Elizabeth Warren and Vermont Sen. Bernie Sanders, who have long railed against the influence of corporations, weighed in, as did New York Sen. Kirsten Gillibrand.
“The people of New York and America are increasingly concerned about the power of large multinational corporations and the billions in corporate welfare they receive,” Sanders said in a statement. “Our job is to end the race to the bottom where taxpayers in one city or state are forced to bid against each other for desperately needed jobs. This is what the rigged economy is all about.”
Warren tweeted: “One of the wealthiest companies on the planet – just walked away from billions in taxpayer bribes, all because some elected officials in New York aren’t sucking up to them enough. How long will we allow giant corporations to hold our democracy hostage?”
And Gillibrand said, “Walking away so quickly shows that Amazon was interested in the taxpayer assistance and not being a good neighbor in Queens hiring the greatest workers in the world.”
As liberal activists across the country welcomed Amazon’s decision as a fresh demonstration of the increasing power of the Democratic Party’s far-left wing, Republicans highlighted the same thing, using the situation to cast the modern-day Democratic Party as extreme. Following Trump’s lead, they pepper their speeches with claims that Democrats are veering toward socialism.
“Now, thousands of #New Yorkers will be deprived of good paying jobs at #amazon because of socialists like AOC – and unfortunately the promise of a #greenjob won’t pay the bills,” former Trump aide Sean Spicer said on Twitter.
On Capitol Hill, it’s hard not to compare the arrival of Ocasio-Cortez and the emerging Democratic divide to the tea party class of 2010 that took control of the House and pushed the Republican agenda rightward, ultimately helping give rise to the politics of Trump.
It’s not just Ocasio-Cortez. She and House colleagues — Reps. Ilhan Omar of Minnesota, Rashida Tlaib of Michigan and Ayanna Pressley of Massachusetts — jointly announced their opposition to the bipartisan border security deal. They want to cut the Department of Homeland Security’s budget over the administration’s deportation policies, including those that separated families at the border.
The four lawmakers were urged on by activists outside the Capitol, protesting what’s seen as ICE’s unnecessarily harsh deportations and raids against immigrants here illegally.
Omar, who is Muslim-American, pushed the party further into conflict this week with comments about Israel that were widely seen as anti-Semitic. She apologized. But the questions she and others are raising about the longstanding U.S. ally reflect a growing unease among some Democrats with Israel’s treatment of Palestinians.
House Speaker Nancy Pelosi says the Democratic Party’s diversity in the House is its strength, as evidenced by the way her caucus held unified against Trump’s demand for money from Congress to build the wall on the border with Mexico.
“Welcome to the Democratic Party,” Pelosi said Thursday. “We are not a monolith, never have been. And who would want to lead a party that would be described that way?”
While some high-profile newcomers are capturing media attention, the House majority was also won with new lawmakers who are more measured in their approach to governing even as they battle Trump. All but 19 Democrats approved the bipartisan border package late Thursday.
But other Democrats marvel at how quickly the party has shifted even since the 2016 election.
This week, when the Republican leader of the Senate, Mitch McConnell, announced an upcoming vote on the Green New Deal climate change plan as a way to force Democrats into an awkward vote, the Democrats responded, “Bring it on.” They say Americans want answers on climate change, and Republicans have none.
Ocasio-Cortez, who stunned Washington when she knocked off an incumbent party leader during a primary last year, recently suggested a 70 percent marginal tax rate on top earners.
“Anything is possible,” Ocasio-Cortez tweeted Thursday, “today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world.”
Amazon’s exit could scare off tech companies from New York
By MICHAEL R. SISAK and JOSH BOAK
Friday, February 15
NEW YORK (AP) — Amazon jilted New York City on Valentine’s Day, scrapping plans to build a massive headquarters campus in Queens amid fierce opposition from politicians angry about nearly $3 billion in tax breaks and the company’s anti-union stance.
With millions of jobs and a bustling economy, New York can withstand the blow, but experts say the decision by the e-commerce giant to walk away and take with it 25,000 promised jobs could scare off other companies considering moving to or expanding in the city, which wants to be seen as the Silicon Valley of the East Coast.
“One of the real risks here is the message we send to companies that want to come to New York and expand to New York,” said Julie Samuels, the executive director of industry group Tech: NYC. “We’re really playing with fire right now.”
In November, Amazon selected New York City and Crystal City, Virginia, as the winners of a secretive, yearlong process in which more than 230 North American cities bid to become the home of the Seattle-based company’s second headquarters.
New York Mayor Bill de Blasio and Gov. Andrew Cuomo heralded the city’s selection at the time as the biggest boon yet to its burgeoning tech economy and underscored that the deal would generate billions of dollars for improving transit, schools and housing.
Opposition came swiftly though, as details started to emerge.
Critics complained about public subsidies that were offered to Amazon and chafed at some of the conditions of the deal, such as the company’s demand for access to a helipad. Some pleaded for the deal to be renegotiated or scrapped altogether.
“We knew this was going south from the moment it was announced,” said Thomas Stringer, a site selection adviser for big companies. “If this was done right, all the elected officials would have been out there touting how great it was. When you didn’t see that happen, you knew something was wrong.”
Stringer, a managing director of the consulting firm BDO USA LLP, said city and state officials need to rethink the secrecy with which they approached the negotiations. Community leaders and potential critics were kept in the dark, only to be blindsided when details became public.
“It’s time to hit the reset button and say, ‘What did we do wrong?’” Stringer said. “This is fumbling at the 1-yard line.”
Amazon said in a statement Thursday that its commitment to New York City required “positive, collaborative relationships” with state and local officials and that a number of them had “made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward.”
Not that Amazon is blameless, experts say.
Joe Parilla, a fellow at the Brookings Institution’s Metropolitan Policy Program, said the company’s high-profile bidding process may have stoked the backlash. Companies usually search for new locations quietly, in part to avoid the kind of opposition Amazon received.
“They had this huge competition, and the media covered it really aggressively, and a bunch of cities responded,” Parilla said. “What did you expect? It gave the opposition a much bigger platform.”
Richard Florida, an urban studies professor and critic of Amazon’s initial search process, said the company should have expected to feel the heat when it selected New York, a city known for its neighborhood activism.
“At the end of the day, this is going to hurt Amazon,” said Florida, head of the University of Toronto’s Martin Prosperity Institute. “This is going to embolden people who don’t like corporate welfare across the country.”
Other tech companies have been keeping New York City’s tech economy churning without making much of a fuss.
Google is spending $2.4 billion to build up its Manhattan campus. Cloud-computing company Salesforce has plastered its name on Verizon’s former headquarters in midtown, and music streaming service Spotify is gobbling up space at the World Trade Center complex.
Despite higher costs, New York City remains attractive to tech companies because of its vast, diverse talent pool, world-class educational and cultural institutions and access to other industries, such as Wall Street capital and Madison Avenue ad dollars.
No other metropolitan area in the U.S. has as many computer-related jobs as New York City, which has 225,600, according to the Bureau of Labor Statistics. But San Francisco, San Jose, Seattle, Washington, Boston, Atlanta and Dallas each have a greater concentration of their workers in tech.
In the New York area, the average computer-related job pays roughly $104,000 a year, about $15,000 above the national average. Still, that’s about $20,000 less than in San Francisco.
Even after cancelling its headquarters project, Amazon still has 5,000 employees in New York City, not counting Whole Foods.
“New York has actually done a really great job of growing and supporting its tech ecosystem, and I’m confident that will continue,” Samuels said. “Today we took a step back, but I would not but the nail in the coffin of tech in New York City.”
Follow Sisak at www.twitter.com/mikesisak and Boak at www.twitter.com/joshboak .
Boak reported from Washington. Associated Press writers Bernard Condon in New York and Chris Rugaber in Washington contributed to this report.
Amazon HQ2: Texas experience shows why New Yorkers were right to be skeptical
Updated February 14, 2019
Nathan Jensen, Professor of Government, University of Texas at Austin
Calvin Thrall, PhD Student in Business and Development, University of Texas at Austin
Disclosure statement: Nathan Jensen received funding for this research project the University of Texas IC2 Institute. He is also a Senior Fellow at the Niskanen Center. Calvin Thrall does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
New York offered Amazon close to US$3 billion to build a “second” headquarters in Long Island City on the promise of 25,000 jobs.
Since the deal was joyfully announced in November, however, many local residents and some politicians in the area have been questioning whether it’s worth it, both in terms of the price tag and the impact on housing and traffic congestion. And on Feb. 14, Amazon backed out of the deal, citing political opposition to its plans.
The research supports those who question the wisdom of cities and states incentivizing economic development. Studies suggest the jobs and economic gains are usually not worth the tax breaks since the majority of companies would have come even without incentives.
And that’s when the companies try to live up to the promises they made. They don’t always do so, with the latest example being Foxconn’s announcement that it is reconsidering plans to build a factory in Wisconsin – less than a year after agreeing to create up to 13,000 high-tech jobs in exchange for more than $4.5 billion in incentives.
But how often do companies that agree to build factories and create jobs in exchange for economic incentives back away from their promises? And when they do, do taxpayers ever learn about it?
To shine light on these questions, we conducted a study of a Texas economic development program. Taxpayers in any American city considering luring a company with cash should take heed.
Something to hide?
The Texas Enterprise Fund, which started in 2003, allows the state to offer cash grants to companies in exchange for promises of investments and job creation. As of Jan. 1, the program had provided over $600 million in cash incentives to companies vowing to create over 94,000 direct jobs in Texas.
In our study, we submitted public records requests for company applications and agreements for grants. We wanted to see what companies had promised the state in return for the cash.
Our research led to two troubling findings. First, public record law in Texas allows companies themselves to legally challenge requests – which is controversial yet not uncommon among other states.
In our study, 42 out of the 165 recipient companies submitted legal challenges to our requests. Before even seeing the data, we were asking ourselves: What are these companies trying to hide?
Although companies were partially successful in limiting our requests, primarily in getting certain parts of their proposals redacted, the governor’s office ultimately provided us with a complete list of companies that had some amendment to their contracts.
To our surprise, over a quarter of companies in the program – or 46 – had renegotiated their incentive deals with the state. These deals weren’t announced by the governor’s office nor were they reported anywhere online.
Our public records request is still unfolding and we still haven’t received the contracts for roughly two-thirds of these companies. For the 63 companies whose contracts we received, 29 had amendments to the original.
SpaceX and Comerica
Most of these amended contracts were designed to reduce companies’ commitments to job creation. Two cases in point are SpaceX and Comerica.
SpaceX – a company that designs, manufactures and operates commercial spacecraft – received a $2.3 million grant in 2013 in exchange for a commitment to create 300 jobs at a new launch facility near Brownsville, Texas. In 2017, however, the company secretly renegotiated its grant contract to halve the size of the deal: SpaceX would reduce its commitment to 150 new jobs in return for a grant of $1.15 million. The situation is still a mystery, however, because the fund hasn’t paid any funds nor has SpaceX reported jobs as part of the program.
Comerica received $3.5 million in 2007 in exchange for its commitment to create 200 jobs as part of its plan to move its headquarters to Dallas from Detroit. In 2012, the financial services giant amended the contract to allow 15 of its current executives – including the CEO – to be counted towards the job and wage target as long they relocated to Texas.
In case after case, companies renegotiated grant contracts in similar ways to get a better deal, all while avoiding public scrutiny. In contrast, announcements of the original agreements were typically covered as big events and photo ops, such as when former Texas Gov. Rick Perry and SpaceX founder Elon Musk broke ground together.
Perhaps most disturbingly, our two findings – company challenges and renegotiations – were related.
We found that companies that had renegotiated their contracts were much more likely to have challenged our public records request, at almost double the rate.
This pattern is consistent with companies using public records laws to hide their non-compliance with their job creation promises.
The finding, even if limited to a single state, is troubling. If companies can not only secretly renegotiate the deals but also make sure that public records laws shield them from revealing that they did, then the contracts are meaningless. And we would argue that politicians are at the very least complicit with these private deals.
In the cases of New York and Virginia – the other state that received a new Amazon location as a part of its “HQ2” bidding process – the agreements they signed requires them to notify the online retailer of any public records requests in order to give it the opportunity to legally challenge them.
More broadly, secrecy pervades the entire process of economic development. For example, during the many months-long competition to win HQ2, Wisconsin officials purposely routed their Amazon bid through agencies not subject to public records requests, emails show. And cities like Austin and Los Angeles submitted their bids through non-public entities like the Chambers of Commerce as a way to shield them from public scrutiny.
When public records aren’t public
Throughout the country we have observed exceptions to public records laws and “creative” ways government official can circumvent these laws.
And the costs of this lack of transparency can be high, as audits of economic development programs in New Jersey and New York show.
The scathing audit of New York’s Excelsior Jobs Program found not only a lack of due diligence but also a staff that had changed the required number of jobs for companies that were falling short of their creation requirements. And this program would have also provided much of the incentives for Amazon’s HQ2.
In other words, after politicians stage photo ops of company announcements, little is done to make sure companies are complying with these agreements.
Now that Amazon has pulled a Valentine’s Day breakup with New York, it’s worth considering who is to blame.
We think that the governor and mayor seriously miscalculated by negotiating a secret deal with Amazon and then proposing it as a take it or leave it offer to New Yorkers. Amazon may claim that it dumped New York, but it looks like the break-up was mutual.