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By Eric Starkman
OK, perhaps my increasing anger about Amazon’s pretend search for a second headquarters comes off to some as a tad over-the-top (see here and here). I’m passionate about Toronto and Detroit and reckless government giveaways to billionaires orchestrated by millionaires make my blood boil. Forgive me for caring.
I welcome opposing arguments, but take great exception to Karl Wenclas, a Detroit literary blogger, for deriding me as “a shriek against the injustice of the universe.” (I think a shriek is a sound, not a person making the sound, but I defer to the literary expert.) Wenclas dismisses my arguments as “hyperbolic.”
Well, it turns out there is a fast-growing army of fellow shriekers in North America who share my concern about the giveaways cities and regions are offering to entice Amazon to choose them. A broad-based coalition of urbanists, urban economists, policymakers and leading city experts sign a petition supporting "a nonagression pact for Amazon's HQ2." They are more stridently alarming than I am.
Tax giveaways and business location incentives offered by local governments are often wasteful and counterproductive, according to a broad body of research. Such incentives do not alter business location decisions as much as is often claimed, and are less important than more fundamental location factors.
Worse, they divert funds that could be put to better use underwriting public services such as schools, housing programs, job training, and transportation, which are more effective ways to spur economic development.
While we support Amazon’s quest to build a new headquarters, we fear that the contest among jurisdictions—cities, metro regions, states, and provinces—for this facility threatens to spiral out of control. Already, at least four jurisdictions have proposed multi-billion-dollar incentive packages. This use of Amazon’s market power to extract incentives from local and state governments is anti-competitive. It is in the public interest to resist such behavior and not play into or enable it.
Hey, Wenclas, in case you missed it: Detroit is one of the four jurisdictions referenced.
The signers may not be literary experts, but some might be awed by their credentials. They hail from virtually all the Ivy League schools and Stanford, MIT, University of Chicago, University of Toronto, Berkeley and other prominent institutions.
Oh, almost forgot to mention University of Michigan’s Justin Wolfers, whose myriad bona fides include being named by the International Monetary Funds as one of the 25 brightest young economists in the world. (I find no mention of Dan Gilbert consulting with Wolfers before putting together Detroit’s Amazon giveaway package, but perhaps he was too busy focusing on rent increase projections for his properties had the deal gone through).
I also want to address this comment Deadline Detroit reader “Luc Skinster” made about me: "Betcha this guy can come up with 10 reasons why a 1/2 billion dollar lottery winner would be better off not claiming the prize money."
Actually, I would be the first to encourage a lottery winner to claim his good fortune, but I’d caution that person to stay inside at the first hint of rain. Statistically, one has a much better chance of getting hit by lightning than winning the lottery, so I wouldn’t tempt fate twice.
Instead of focusing on the lucky lottery winner, a responsible media would focus on the millions who wasted their money buying tickets. People with below average incomes are known to buy a disproportionate number of lottery tickets and scratch-off game cards. Lotteries are state-sanctioned exploitation of the poor.
That angers this hyperbolic shriek. I can’t blame a worker toiling in an Amazon warehouse sweatshop for $12.75 an hour praying that a lottery ticket might be a ticket to economic salvation. I just find it obscene that the taxes the poor worker pays on his paltry income goes to subsidize a warehouse controlled by the richest man in America.
Wenclas, and possibly "Skinster," think poor people should just suck it up.
"Yes, the economic system is unfair. Amazon is not a benevolent corporation. To quote from a classic film, 'The grown man knows the world he lives in,'" Wenclas says.
It's this kind of attitude that allowed Detroit's leaders to offer Amazon such a ridiculous giveaway.
