Amazon Gets $3 Billion in NY Tax Breaks While Underfunded Public Transport Enters ‘Death Spiral’

Updated : Mar 02, 2020 in Articles

Amazon Gets $3 Billion in NY Tax Breaks While Underfunded Public Transport Enters ‘Death Spiral’


BEN NORTON: It’s The Real News Network and
I’m Ben Norton. Amazon is one of the most powerful companies
in the world and it is owned by the richest man on earth. Jeff Bezos, the founder and CEO of Amazon,
has a net worth that is well over one hundred billion dollars. In just one day of April in this year, Jeff
Bezos’ wealth increased by 12 billion dollars, 12 billion dollars in just one day. And now, the New York state and city government
are going to use our tax dollars to help further subsidize the richest person on the planet. Amazon has announced that it will be creating
a new headquarters in Queens, New York. The New York state and city government enthusiastically
fought for this new project, which is known as HQ2. To attract the corporate giant to New York
City, the local government offered Amazon a staggering three billion dollars in tax
breaks. New York State is giving Amazon one point
seven billion dollars in grants and tax breaks, and New York City is giving an additional
one point three billion dollars in tax breaks. This is the biggest tax incentive package
that New York State has ever given to a private company. Residents here in New York City are furious,
because rent is already unaffordable and real estate developers are rapidly gentrifying
longtime residents out of their homes. Bringing in a new Amazon headquarters will
likely pour fuel on the fire of gentrification in Queens, pushing out longtime poor residents. And meanwhile, while Amazon is getting three
billion dollars in tax breaks, the public transportation system here in New York City
is also falling apart as social spending continues to decline. The Guardian reported this week, New York
City’s subway and bus services have entered death spiral. The newspaper noted that officials at the
Metropolitan Transportation Authority, MTA, warned that without a major infusion of cash,
without major increase in local government funding, they will have to drastically cut
service and/or increase fares on the system, which carries around millions of people every
single day. Likely next year, the MTA will increase fares,
even while its services are declining. So joining us to discuss why the New York
government is subsidizing one of the most powerful corporations while our own social
infrastructure is falling apart is the world renowned economist, Richard Wolff. Richard Wolff is a professor emeritus of economics
at the University of Massachusetts Amherst and at the New School University. He has authored a dozen books, including most
recently, Capitalism’s Crisis Deepens: Essays on the Global Economic Meltdown. And Rick’s organization, Democracy at Work,
has a new book out called Understanding Marxism, which you can find more information about
at democracyatwork.info. Thanks for joining us, Rick. RICHARD WOLFF: Glad to be here. Thanks for the invitation. BEN NORTON: So, Rick, let’s talk about this
the story here with HQ2. Why do you think the New York state and city
governments are providing such large tax breaks to bring Amazon here? What we’re told from Mayor Bill de Blasio
and Governor Andrew Cuomo is that they’re doing this to bring 25,000 new jobs to New
York City. But the thing is, that’s actually not a lot
of jobs for New York City. In fact, in 2017 alone, New York City gained
over 72,000 new jobs, so 25,000 new jobs is just about four months of job growth in New
York City. Don’t you think that four months of job growth
is not much for three billion dollars in state and city tax breaks? What is your take? RICHARD WOLFF: I agree with you, but it’s
actually – and I’m sad to say this – much worse than that. And let me just give you a few examples. We’re not even clear that the 25,000 jobs
will mean new jobs or whether they’ll just move personnel from other parts of the Amazon
to come here, in which case New Yorkers will be subsidizing job movement for existing employees
and not at all new jobs. Let me give you another example. When you give a deal like this to a corporation,
let alone a super-rich, super profitable one, you ought to accompany it by some sort of
guarantees. It’s like you hire a construction firm to
build something for you. If they do the work they’ve promise on time,
well and good, you pay them. But if they don’t do it on time, if they don’t
meet the deadlines, well then, they have a penalty to pay, et cetera. This interaction between the city and the
Amazon corporation is all for Amazon and none for the city. The city has to give three billion dollars
with the state, but what share of the profits that flow from Amazon will the city, that
is the public taxpayer who provides this money, what will we be getting as our share of their
profits? Answer, nothing. If they don’t meet the deadline, if they don’t
have 25,000 jobs, or a it takes them ten years to get there, will we be compensated for having
been promised something that wasn’t delivered? No, there’s no such involvement. There’s no such commitment. And then there’s even the further question,
which makes me so angry at the politicians, in this case Governor Cuomo and Mayor de Blasio,
that they’re not telling us that if you take three billion dollars of the city and state’s
money, that leaves the city and state with two options. The three billion dollars would otherwise
have gone for public services, but they are not going to be available because they’re
being given to Amazon. That’s going to cost jobs, jobs for the city,
jobs for the state and jobs for all of the people and businesses who aren’t going to
have those three billion dollars spent on that. Where does that figure in the calculation? Well I can answer the question, it’s ignored. And likewise, finally, there’s all the consequences
of not using three billion dollars, for example, on our subway system. As you rightly point out, the Guardian and
any other newspaper that cares to investigate it, would quickly discover that the city of
New York has, if not the most filthy subway system in the world, we are certainly in contention
for that dubious prize. And we’re not doing anything about it, which
is why people don’t use the subway as much as they otherwise would, which decreases the
amount of money it gets. So you get this situation that some service,
like the subway, which serves billions of people, is being ignored and sacrificed to
give additional profits to what is already an extremely profitable company generating
the richest person on earth as the CEO. You put all this together and it is a really
revolting display of politicians basking in the public relations done by Amazon as if
they’re doing us a great service. And by the time we figure out that, once again,
this hasn’t worked to the benefit, these politicians will be on to higher office. It’s a sad commentary on how American capitalism
works. BEN NORTON: Let’s talk more about those politicians,
specifically the two leaders who are trumpeting this as some kind of great victory for New
Yorkers, are the mayor Bill de Blasio and the governor, Andrew Cuomo, both of whom are
Democrats. Andrew Cuomo is known as a pro-business Democrat,
a kind of neoliberal, corporate Democrat. But Bill de Blasio, interestingly, is at least
portrayed in media outlets and by some Democratic organizations as a progressive. In fact, we recently saw that he was invited
to a progressive summit in Vermont. So why do you think that we have this neoliberal
corporate Democrat, Andrew Cuomo, and Bill de Blasio, this ostensible progressive, united
on a deal that, as you point out, would really effectively amount to subsidizing an already
very profitable corporation? RICHARD WOLFF: I think that Mr. de Blasio,
who is definitely to the left of Mr. Cuomo, which is, you might say, a very low bar – being
to the left of Andrew Cuomo is not much of an achievement, but Mr. de Blasio has at least
achieved that. I think they’re both caught up in the mythology
of American capitalism, that it is the job of city and state politicians to get down
on their knees, begging any corporation, large or small, to come to their jurisdictions,
offering tax holidays, subsidies, every kind of direct and indirect support, that’s in
the nature of what has come to be meant by the term “economic development.” And they love the publicity, they like that
front page picture, and the New York Times, for example, made that available to the governor
and the mayor. There they are, touting the jobs that will
come to the city, leaving the details of how many jobs, the details of who will get these
jobs, the details of what jobs will be lost when city and state money is diverted into
the hands of this corporation. They leave all that unhappy detail out of
the picture so that they can get a wonderful photo op for their political careers. And then, the newspapers and the media tend
to go along, they don’t look a gift horse in the mouth. In fact, the most interesting thing that has
happened here in New York is that a number of observers have been so grossed out by the
sheer size of this tax giveaway to another corporation that they have opposed it. Local politicians, more than we would have
expected, have come out against it. The New York Times, despite that front page
picture, has editorially spoken against. Now, they pick up on this or that detail,
when what is really going on here ought to be a protest against the absurdity of democratic
political institutions giving up their own money and putting it in the hands, without
conditions, of private profit corporations. At least there is more opposition this time
than I have seen, and that gives me a little bit of hope, even though the political leadership
is AWOL, big time. BEN NORTON: Let’s talk more about the state
of social spending in New York, because as you’ve critically pointed out, this three
billion dollars in tax breaks could go toward actual social spending, which in New York,
is every year dwindling. It’s not just public transportation. In fact, a shocking recent report found that
roughly one out of every ten students in New York City public schools is homeless. That is more than one hundred thousand children
that are homeless, and this is actually more than at any time since records began. So we see massive homelessness, we see the
dwindling public transportation system which is falling apart around us, we see gentrification
pushing people out of their homes, rents skyrocketing, and now we see this Amazon headquarters, HQ2,
that is going to come to Queens and push out further many of these poor residents who have
been in Queens for many generations. So why do you think that our politicians,
people like Bill de Blasio, are not prioritizing fighting homelessness and investing in public
infrastructure? Instead, they’re putting this money into a
corporation like Amazon. I mean, why haven’t we seen a drive for more
social spending? RICHARD WOLFF: Well, we have. We have seen demands around the community
for help in the schools, which are a problem, housing, as you put it, the homeless children,
the subway. It’s a scandal, it’s talked about in the media
and so on, but I think that’s the general problem of American capitalism, that the mass
of people have needs, those needs are pretty well known, but that the political system
and the political actors who run it, the politicians, have learned the basic lesson, that the bulk
of the wealth has been concentrated in the hands of the corporate leadership of America. They call the shots. If you want a political career, you’d better
do what they want or else they will fund your political adversaries and you won’t keep your
job and you won’t rise up in the political system. You will barely be able to survive, so you
better please the people who sit at the top of the economic pyramid and basically fob
off the rest of us with speeches and promises that you hope everybody will forget. Mr. Bezos is in the position to donate to
political campaigns because he’s a super-rich person. Let me remind you that the three billion dollars
that the city and the state have to take from the social services those monies would provide,
if they were taken from Mr. Bezos, they would still leave him the richest person on earth
with excess of one hundred to one hundred and fifty billion dollars of wealth. If he had any decency, just as a person, he
wouldn’t make a request to make life harder for the millions who depend on the city and
the state of New York in order to become even richer than he already is as the richest person. And if that weren’t enough, he recently purchased
the Washington Post newspaper, and Mr. de Blasio and Mr. Cuomo are very keen on getting
good stories from that important newspaper in America, and they don’t want to displease
Mr. Bezos. And there you see it again, a system in which
the mass of people’s needs are ignored, because the power derives from the money, and the
people sitting on the big piles of money are the corporate leaders in America. This is just the grossest recent example of
what that means. BEN NORTON: Well, we’ll have to end our conversation
there. Thanks so much for providing this analysis. We were speaking with Richard Wolff, who is
a world renowned economist and a Professor Emeritus of Economics at the University of
Massachusetts Amherst and New School. He also has recently released the book, Capitalism’s
Crisis Deepens. And you can find another book recently published
by his organization, the Democracy at Work organization. Their website is democracyatwork.info. Thanks so much for joining us, Rick. RICHARD WOLFF: Thank you, Ben. Glad to have been on the program. BEN NORTON: For The Real News Network, I’m
Ben Norton.

59 Comments

  • Amazing. The world's richest man, living off of the people's hard earned tax dollars, to help him make more money. Bezoz already knew where he wanted his new Headquarters. His bid wars that had cities all over the country fighting for his business was just to collect data. Now, with his new stations built on the east coast, he'll literally have a stranglehold on the economies on both sides of this country. Small businesses will suffer, and his employees will be living off of food stamps, and relying on housing programs, both paid for by the tax payers. Same shit here in Seattle. People who argue on his behalf are nothing but blind peasants defending their sociopathic king. How anyone can defend this is beyond me. Billions of dollars towards corporate welfare, but using our own money to help with schools and healthcare is socialistic savagery at best in the eyes of those who oppose it. Guess it's better to have our taxes go towards bombing school buses and villages in foreign nations than to take care of our own citizens. F**K!!!!!!!

  • I liked Bloomberg more as mayor- NYC was running well and subways were working fine under him and his enormous contributions to communities that have innovate solutions to climate change is a big 👍🏼. If this amazon thing backfired I do think both governor “Amazon” cuomo and current mayor deblasio term will be short lived

  • It's even more chilling than it looks. As abysmal as this will be for New York and Virginia, the 200+ other cities who bid on HQ2 and lost were suckered and scammed, too. When they submitted their bids, they handed over all kinds of non-public data to Amazon – for free – that gives Bezos an unbelievably unfair proprietary advantage over other companies, pretty much akin to insider trading. The data included things like future infrastructure plans, such as new highways and transit line expansions, new schools, budget planning, you name it. Just imagine the possibilities! Bezos could snatch up real estate along a proposed highway for dirt-cheap before they skyrocket in value, use the data to strategically locate new fulfillment centers, or even monetize this data by spinning off a new division which negotiates with municipalities on behalf of paid clients (i.e. other oligarchs). Amazon stands to profit far more from this treasure trove of non-public data than it ever will from New York and Virginia. It makes my stomach turn.

    http://inthesetimes.com/article/21571/the-hq2-scam-how-amazon-used-a-bidding-war-to-scrape-cities-data

  • Genterfication. Making blighted places nicer to live in is bad. Keep us ethnic minorities in the crumbling neighborhoods that's somehow virtuous to maintain.

  • WTF? WTF? WTF?
    There are just no words to describe the absolute hypocrisy and vileness of this move. What the frick is wrong with the New York City people to allow this to happen?
    oh right this is America the American citizens have no say-so in what their goddamn government does!!!

  • Robots don't use public transportation. Drones don't deliver by road.
    And Bezos will be arriving by helicopter, so who cares about the infrastructure.

  • They keep acting like the 3 billion will be taken from the actual budget. The 3 billion is tax money that will not be collected from Amazon. It is Amazon's money- NOT money paid in taxes from the people of New York. That is a very big distinction that is consistently ignored in this piece .

  • Bezos is a classic liberal democrat overlord. He knows how stupid, illogical and vapid liberal dem voters are. Just like Hillary. Libs are lemmings.

  • Well what else do you expect from the radical left wing dems in charge of New York? Of course dems give to the corporate rich elite. Meanwhile those guilty of voting for the dems into New York congrats on getting 0 back from your representatives. You get what you asked for more if the same failing infrastructure, collapsing education with nothing to help you out individually. Lol
    Thank God trump had ensured you have a job cause your officials cant afford to help you out if you need it .

  • Yet people defend these greedy CEO's like Bezos who makes over 300 times his worker pay. These people who defend greedy CEO's like Bezos are stupid.

  • And this is just further proof that fascism comes out of socialism the oligarchs of technology who are super liberal are now imposing fascism on the rest of us just raining speech stealing tax dollars etc etc so don't try and tell me that this is the problem capitalism no this is the problem of socialism, that leads to fascism that leads to Communism!

  • Tax subsidies should be reserved for small businesses and industries that are struggling due to trade tariffs and that should be about it.

  • All of Amazon profits, (before taxation) will be put into offshore bank accounts, and Americans will receive NOTHING of a financial benefit.! Get the facts and use them to democratically control your rogue governments.

  • OMG; TRNN delivers another knock out blow. I started not to watch this video because letting one person run a company that should be a Co-Op utility is the apex of stupid. A distribution center that the Federal, State and Local Governments subsidize belonging to one individual is madness. I just watched a video that had an interesting take on this Amazon deal. Amazon got a lot of data about demographics of different Cities when searching for a headquarters. Amazon picking New York as a headquarter puts it in the Financial hub of the US and a headquarter in Virginia has Amazon in the Intelligence hub of the US. Great video and is that a Jade Plant in Dr. Wolff's living Room; impressive.

  • Extinction Rebellion and the mother of all bombs,
    99% of Rhinos gone since 1914.
    97% of Tigers gone since 1914.
    90% of Lions gone since 1993.
    90% of Sea Turtles gone since 1980.
    90% of Monarch Butterflies gone since 1995.
    90% of Big Ocean Fish gone since 1950.
    80% of Antarctic Krill gone since 1975.
    80% of Western Gorillas gone since 1955.
    60% of Forest Elephants gone since 1970.
    50% of Great Barrier Reef gone since 1985.
    40% of Giraffes gone since 2000.
    30% of Marine Birds gone since 1995.
    70% of Marine Birds gone since 1950.
    28% of Land Animals gone since 1970.

    28% of All Marine Animals gone since 1970.
    97% – Humans & Livestock are 97% of land-air vertebrate biomass.
    .01% – What percentage humans & livestock were 10,000 yrs ago.

    50 years until all the soil is gone.
    2030 = 40% more water needed + 30% more land + 30% more energy
    2018 = The world passes 100 million oil barrels/day for the first time.
    2025 = In 7 years oil demand grows 7 million barrels/day.

    We have to reduce emissions 50% in 10 years to avoid 1.5 C.
    We have to reduce emissions 100% in 20 years to avoid 2.0 C.
    100% emissions reductions will take 70 years says Vaclav Smil.

    Electricity production is only 20% of all the world’s total energy demand.

    If renewables = 25% of electricity production, then renewables = 5% of total world energy demand.

    f renewables = 40% of electricity production by 2040, then renewables = 10% of total world energy demand.

    Fix It Instructions

    The top 10% earners = 50% emissions, if taxed to middle income equivalent, emissions will decline 33%.

    If we tax the top 30% of earners to a middle income, emissions will decline 999% faster than any thing else we tried so far.

    We have 10yrs to reduce emissions 50%, and 20yrs to reduce emissions 100%.

    100% private carbon credits will unite the left and right and stop an ideological race/sex war. After taxing the rich to pay for education and health, you add a 100% private carbon tax which will act as a Basic Income currency worldwide. All America has to do to fix their county is cut the Pentagon budget 50%. These are the kind of actions needed to save mankind, worrying about your identity is for pub nights.

    Break It Instructions Fascism infects Socialism, Capitalism and Communism equally. Young socialists say there is no difference between male and female. They also say that since there’s more variation within each race than between races, then race is purely a social construct. They say that race and sex are social constructs. They also say white males are to blame. So, we are ruled by 2 social constructs. White and male. I knew whitey had it in him. We’re ruled by ghosts. These are the people you’re depending on. Brainwashed puppets.

    The 1st female Secretary of State starved 500,000 Iraqi children to death.

    The 2nd female Secretary of State destroyed Libya. She’s bi-sexual.

    The 1st Black President destroyed Syria, Iraq, Afghanistan and Libya.

    Blacks, gays and women are every bit as evil as white men.

    The Addiction Ghost of Ideology 25 min Gabor Maté [ Ideology as addiction ] https://www.youtube.com/watch?v=x2YdpvnwtGc

  • In Spain they are facing a series of strikes (for decent salaries and working conditions) and they had no better "Gringo" idea that "demanding" (sic) from the police to be present inside their facilities the days of the announced Christmas period strike and even the Spanish National Police Corps (not exactly the best friend of liberties and human rights to put it mildly) has replied that "nope", that would be too much.

  • So…if you haven't figured it out yet, tax cuts aren't about giving breaks to the rich, it's about de-funding the government. This is the most devastating thing corporations are doing in order to kill Democracy in America. Fascism is taking hold.

  • Amazon shold pay big to have any facility any where. Governments no longer even pretend to represent the people. The reasons given for this insanity are old, tired, trickle down crap!!! We will all go the same way: climate change. Going so fast, can't be stopped, doesn't care what you think, Climate Change. The economy will collapse from the cost of natural disasters. Fires, floods, hurricanes, tornadoes, extreme cold, extreme heat: very costly. When the government says we are broke and we can't afford healthcare or Social Security, and the government is ending flood insurance and advising everyone to get more insurance for homes and properties, clearly they are planning to abandon the people entirely in times of disaster. The EARTH will be fine. WE are going away.

  • Hey Bezos! Thanks for showing us the greatness of "Free Market" !! Baa-Baa sheeps using your corrupt services thank you so much!!

  • It's not that Bezos doesn't deserve to be wealthy, it's that we need to have some sense of fucking proportion

  • OK so are we still pretending VT is some how this bastion of ethnic inclusivity and diversity? After they fecklessly allowed heir first female minority Representative to be threatened by neo-nazi's and racists – the police force or the legislature did nothing to protect her and her disabled husband from home invasions and racial intimidation, leaving her little recourse but to give up her seat in the House?

  • What is so great about Amazon in the USA? They have opened up in Australia but it is hopeless. Go to Ebay and you get a better choice. Is it because it has not got fully operational here or what?
    Overall Australian Courier Services are as good as the USA and our Postal Services are superior and relatively cheaper.

  • And being Black Friday millions of people will be running to Amazon to buy things like they're the only place to buy things.

  • A terrific presentation by Richard Wolff. Many thanks to the Real News and Ben Norton for bringing us such a clear and cogent explanation of this gigantic swindle.

  • New York and New Jersey are the most corrupt states in the country. They're literally used for massive money laundering schemes. They know the people aren't really paying enough attention

  • Bill de Blasio is not a Socialist ! He's a so called ''Progressive'' (the re-branded new corporate Democrat aka ''Democratic Socialist'' epitomized in himself, Warren and Harris, and the bullshit conference they held in Burlington to the exclusion of real Socialists who are Anti-Imperialist).That's why! That's why there hasn't been any push towards social spending. Bernie needs to reconsider his current trajectory!

  • The entire western world is now fully controlled by corporate interests. In Canada most of our tax dollars is spent subsidizing corporations while all Canadians are just forever grossly over taxed. Eventually people will start protesting & this type of corruption leads to communism.

  • This is where Dr Stephanie Kelton comes in. This is why ALL of US need to understand how Federal finances works. This is why WE all need to educate ourselves with the description of MMT. MMT is merely a description of how federal finances works. It doesn't need to be implemented it all ready works the way MMT describes it.
    Article one section 8 of OUR Constitution states that only Congress can Mandate spending and taxation.
    We have been seeing a capitalists coup going on for the last 50 years and it is nearly complete.
    Richard Wolff is absolutely correct when he describes that the way the State has now list 3 billion in their tax revenues, because individual States DO NOT create the currency. …they rely on taxes to spend on their State and communities.
    Dr Stephanie Kelton was Bernie Sanders financial advisor during the primary. The real news DID interview her but they need to bring her back.
    People of this country need to understand the lie we ALL have been told before it really is to late.
    Please be respectful to my comment.
    If anyone has a question feel free to ask. Peace.

  • Jeff Bozos makes about $191,000 per hour. Amazon is a great business model for making money and delivering stuff, but they nickle and dime loyal customers by absorbing small residuals of gift certificates not used or orders made by card or certificate that were never delivered; these amounts are small – pennies to a few dollars but they are absorbed by Amazon because people do not want to wait on the phone to talk with some underpaid person from the subcontinent who feigns sympathy and tries to solve "your problem". These amounts on the order of millions per day worldwide add nicely to Bozos' bag. Well done Jeff! I agree with the speaker – NYC's metro is in need of funding; it is a laughing stock here in Japan. Sad, actually.

  • While I would agree that Amazon deserves NO tax breaks or subsidies, the NYC police refusal to prosecute subway fare jumpers spits in the face of decent people who pay the fare. OF COURSE the public transit system is in a "death spiral". Fare jumpers should be jailed and then banned from subway access for at least a year. It doesn't matter that subway fare enforcement would have a "disparate impact" on some demographic groups. Do selected demographic groups now get a pass to commit crimes with impunity?

  • Bootstraps for people if they can afford them, gilded helipads for corporations that could buy one with change from their couch cushions.

  • Wonder if striking Amazon workers could bring Bezos down… his relationship with the CIA is ominous.  I have boycotted Amazon for 5 years.  One or two days of nation-wide boycott would surely send Bezos a strong message.  Hats off to all the Amazon workers in other parts of the world who are striking!  Bezos is the most blatant and odious example of socialism for corporations, but not for the People.   #JeffBezosWelfareRecipient.

  • Bezos is rich but he's ugly as well. How would you like to look like an alien? The only thing missing are two horns on his head. By contrast, Richard Wolff is the greatest, and looks nice too.

  • Correct me if I'm wrong, but isn't it only that valuable because investors( gamblers) make it that valuable. Walmart does way more money. But has we learned from the last recession, money can disappear. Never will understand that, I guess. They certainly don't pass it down. Wish I knew how MySpace can be taken out by Facebook. Example. Or Kmart by Wal-Mart. Money seems to shift and disappear. Only thing is certain, the slaves want benefit. Makes me ponder what is money really

  • 3 billion in GVT sub does not mean that NY has 3 Billion in cash. Well people got their wishes. Amazon is not coming and NY is short 1.5 billion dollars in Tax money.

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