AMZN - Amazon.com Inc.

[HJ]

Better question: why the hell does a city like NYC need to give incentives and tax breaks to a company like Amazon? There are many, many companies with corporate HQ's in NYC who did not get the same treatment. They come for the talent/skills/closeness to other firms present in NYC and are willing to pay taxes/high real estate costs/etc for it. There is no reason why Amazon should be treated any different. You can talk about general reform in making it easier for tech companies to do business in NY/NYC, but trying to woo an individual company like Amazon is foolish and unlikely to build a tech ecosystem.

 

This whole "competition" for Amazon HQ2 was a smart move by Bezos. Places went out of their way to "compete" to give Amazon the best offer. It's like an open-outcry auction. The buyer is referred to as the "winner" of the auction, but it's usually the seller who is actually winning. Hence why Munger states him and Warren avoid such auctions.

 

Several of years ago, there was a big hoopla about Goldman Sachs potentially moving a bunch of people across the river to New Jersey, and New York dished out tax incentives to keep those jobs downtown.  When GE moved its headquarter from CT to Boston, look at the local real estate value! This is what the Chinese local governments do to attract business all the time, especially in the early years of reform.  Shanghai still regrets to this day that it didn't do enough to get Alibaba headquartered there instead of Hangzhou. 

 

Kind of circle back to the question of why corporates level taxation should exist at all. 

[fareastwarriors]

I'm sure other cities will be glad to receive these tens of thousands of high-paying engineering jobs ¯\_(ツ)_/¯

 

Isn't that the beauty of the USA though? We can be mobile and can move if we choose to.  There are still plenty of other options out there. If the next winning city is in Texas, the South, or Midwest, this is still a win. I'm okay with NYC or SF not having all the HQ's of major companies. And I live in the SF area.

 

 

 

 

[Dalal.Holdings]

Better question: why the hell does a city like NYC need to give incentives and tax breaks to a company like Amazon? There are many, many companies with corporate HQ's in NYC who did not get the same treatment. They come for the talent/skills/closeness to other firms present in NYC and are willing to pay taxes/high real estate costs/etc for it. There is no reason why Amazon should be treated any different. You can talk about general reform in making it easier for tech companies to do business in NY/NYC, but trying to woo an individual company like Amazon is foolish and unlikely to build a tech ecosystem.

 

This whole "competition" for Amazon HQ2 was a smart move by Bezos. Places went out of their way to "compete" to give Amazon the best offer. It's like an open-outcry auction. The buyer is referred to as the "winner" of the auction, but it's usually the seller who is actually winning. Hence why Munger states him and Warren avoid such auctions.

 

These types of incentives are apparently the norm and other companies making substantial investments are getting them, it's just not front page news because it's not Amazon.

 

And they need to do it because cities and state compete with each other for these valuable prizes, and if high-cost (high tax) areas don't sweeten the deal, they'll lose almost every time to low cost (low tax) competitors, and yet it can still be win-win to give tax breaks because of the multiplier effect of having something like 25,000 high-paying jobs for the long-term in an area.

 

This is NYC we’re talking about, not Buffalo, NY or Nashville, TN or the state of Nevada. NYC needs no such incentives to attract such firms. De Blasio and Cuomo come off looking clueless here.

 

NYC should’ve sat out to begin with. Glad Amazon pulled out.

[Gregmal]

Better question: why the hell does a city like NYC need to give incentives and tax breaks to a company like Amazon? There are many, many companies with corporate HQ's in NYC who did not get the same treatment. They come for the talent/skills/closeness to other firms present in NYC and are willing to pay taxes/high real estate costs/etc for it. There is no reason why Amazon should be treated any different. You can talk about general reform in making it easier for tech companies to do business in NY/NYC, but trying to woo an individual company like Amazon is foolish and unlikely to build a tech ecosystem.

 

This whole "competition" for Amazon HQ2 was a smart move by Bezos. Places went out of their way to "compete" to give Amazon the best offer. It's like an open-outcry auction. The buyer is referred to as the "winner" of the auction, but it's usually the seller who is actually winning. Hence why Munger states him and Warren avoid such auctions.

 

These types of incentives are apparently the norm and other companies making substantial investments are getting them, it's just not front page news because it's not Amazon.

 

And they need to do it because cities and state compete with each other for these valuable prizes, and if high-cost (high tax) areas don't sweeten the deal, they'll lose almost every time to low cost (low tax) competitors, and yet it can still be win-win to give tax breaks because of the multiplier effect of having something like 25,000 high-paying jobs for the long-term in an area.

 

This is NYC we’re talking about, not Buffalo, NY or Nashville, TN or the state of Nevada. NYC needs no such incentives to attract such firms. De Blasio and Cuomo come off looking clueless here.

 

I take it you've never heard of this Ocasio Cortez person...

[Liberty]

This is NYC we’re talking about, not Buffalo, NY or Nashville, TN or the state of Nevada. NYC needs no such incentives to attract such firms. De Blasio and Cuomo come off looking clueless here.

 

Apparently they do, and aren't as attractive as they think they are, because they won't get it even after offering it, and if they hadn't offered it, someone else would've gotten it.

[Dalal.Holdings]

This is NYC we’re talking about, not Buffalo, NY or Nashville, TN or the state of Nevada. NYC needs no such incentives to attract such firms. De Blasio and Cuomo come off looking clueless here.

 

Apparently they do, and aren't as attractive as they think they are, because they won't get it even after offering it, and if they hadn't offered it, someone else would've gotten it.

 

No one cares about Amazon—the tech hub effects were hyped up. Amazon’s HQ1 is in Seattle and how has Seattle fared? Still peanuts compared to NYC which is a global mega city and really only LA can even be seem on the same level as far as U.S. cities (but even that’s a stretch).

 

NYC shouldn’t have played Bezos’ game. Glad AOC made it all collapse.

[Liberty]

No one cares about Amazon—the tech hub effects were hyped up. Amazon’s HQ1 is in Seattle and how has Seattle fared? Still peanuts compared to NYC which is a global mega city and really only LA can even be seem on the same level as far as U.S. cities (but even that’s a stretch).

 

NYC shouldn’t have played Bezos’ game. Glad AOC made it all collapse.

 

Lot of non-sequitur here. 25,000 engineering jobs don't matter because Seattle isn't bigger than NYC on the basis of one company being based there? How does any of that follow?

 

NYC will be fine, but it's still a self-own, brexit style.

[rb]

Lots of unemployed engineers in NYC?

[Dalal.Holdings]

No one cares about Amazon—the tech hub effects were hyped up. Amazon’s HQ1 is in Seattle and how has Seattle fared? Still peanuts compared to NYC which is a global mega city and really only LA can even be seem on the same level as far as U.S. cities (but even that’s a stretch).

 

NYC shouldn’t have played Bezos’ game. Glad AOC made it all collapse.

 

Lot of non-sequitur here. 25,000 engineering jobs don't matter because Seattle isn't bigger than NYC on the basis of one company being based there? How does any of that follow?

 

NYC will be fine, but it's still a self-own, brexit style.

 

Nah—the point is that Amazon’s presence isn’t some great boon that turns your city into a major tech hub. Seattle has nothing on the Bay Area despite Amazon being there.

 

NYC is not on the same level as locales that do big giveaways to lure firms. It will always be sought after within reasonable terms even with higher taxes and real estate costs. Hence NYC doesn’t need to stoop down to Tenessee and try to lure a firm there. Or Wisconsin luring Foxconn. NYC is on a whole nother level and doesn’t need to give tax breaks/etcto attract big firms. Big firms will tend to go there without such incentives. Losing a single company like Amazon is a drop in the bucket for NYC but would be a big loss for Tulsa, OK. Regardless, talent and firms will continue to seek out NYC.

 

NYC should’ve sat out of the open auction. As they say, “NYC will be fine”. That’s because it’s NYC.

[Liberty]

Lots of unemployed engineers in NYC?

 

It's not a zero-sum game.

[dwy000]

No one cares about Amazon—the tech hub effects were hyped up. Amazon’s HQ1 is in Seattle and how has Seattle fared? Still peanuts compared to NYC which is a global mega city and really only LA can even be seem on the same level as far as U.S. cities (but even that’s a stretch).

 

NYC shouldn’t have played Bezos’ game. Glad AOC made it all collapse.

 

Lot of non-sequitur here. 25,000 engineering jobs don't matter because Seattle isn't bigger than NYC on the basis of one company being based there? How does any of that follow?

 

NYC will be fine, but it's still a self-own, brexit style.

 

Nah—the point is that Amazon’s presence isn’t some great boon that turns your city into a major tech hub. Seattle has nothing on the Bay Area despite Amazon being there.

 

NYC is not on the same level as locales that do big giveaways to lure firms. It will always be sought after within reasonable terms even with higher taxes and real estate costs. Hence NYC doesn’t need to stoop down to Tenessee and try to lure a firm there. Or Wisconsin luring Foxconn. NYC is on a whole nother level and doesn’t need to give tax breaks/etcto attract big firms. Big firms will tend to go there without such incentives. Losing a single company like Amazon is a drop in the bucket for NYC but would be a big loss for Tulsa, OK. Regardless, talent and firms will continue to seek out NYC.

 

NYC should’ve sat out of the open auction. As they say, “NYC will be fine”. That’s because it’s NYC.

 

If NYC doesn't need to stoop to that level why would Amazon walk away even after being offered $3bn in incentives?  If firms are driven away after being offered a $3bn sweetener, why would anyone want to set up there without any sweetener?  Money, people and talent are increasingly mobile. 

 

This reminds me of IBM playing high-and-mighty as the brand leader, milking their customers and not changing with the times to the point that they have made themselves irrelevant and are now playing catch up.  Cuomo put it quite well in saying does NYC want to be dependent only on finance and Wall Street or do we want to diversify? 

 

[Liberty]

Nah—the point is that Amazon’s presence isn’t some great boon that turns your city into a major tech hub. Seattle has nothing on the Bay Area despite Amazon being there.

 

NYC is not on the same level as locales that do big giveaways to lure firms. It will always be sought after within reasonable terms even with higher taxes and real estate costs. Hence NYC doesn’t need to stoop down to Tenessee and try to lure a firm there. Or Wisconsin luring Foxconn. NYC is on a whole nother level and doesn’t need to give tax breaks/etcto attract big firms. Big firms will tend to go there without such incentives. Losing a single company like Amazon is a drop in the bucket for NYC but would be a big loss for Tulsa, OK. Regardless, talent and firms will continue to seek out NYC.

 

NYC should’ve sat out of the open auction. As they say, “NYC will be fine”. That’s because it’s NYC.

 

I have no opinion about the tech hub angle.

 

As for the rest, that might be correct, or maybe not. It's hard to know for sure, there's no control group in history. But history seems to be on the side of big global cities being made stronger by large investments that create lots of high-quality jobs, rather than by minority NIMBY movements that block investment and development.

 

All the nice neighborhoods of New York that used to be crap in the 70s and 80s (been watching The Deuce on HBO, so it's on my mind), it would be interesting to rewind history and see if many of the same arguments used today don't apply about a lot of what made them this nice today.

 

Maybe there's a case to be made that the incentives offered were too high, but I haven't really seen it. I've mostly seen politics, which isn't the same thing.

 

Ed says it well:

[Guest cherzeca]

Better question: why the hell does a city like NYC need to give incentives and tax breaks to a company like Amazon? There are many, many companies with corporate HQ's in NYC who did not get the same treatment. They come for the talent/skills/closeness to other firms present in NYC and are willing to pay taxes/high real estate costs/etc for it. There is no reason why Amazon should be treated any different. You can talk about general reform in making it easier for tech companies to do business in NY/NYC, but trying to woo an individual company like Amazon is foolish and unlikely to build a tech ecosystem.

 

This whole "competition" for Amazon HQ2 was a smart move by Bezos. Places went out of their way to "compete" to give Amazon the best offer. It's like an open-outcry auction. The buyer is referred to as the "winner" of the auction, but it's usually the seller who is actually winning. Hence why Munger states him and Warren avoid such auctions.

 

These types of incentives are apparently the norm and other companies making substantial investments are getting them, it's just not front page news because it's not Amazon.

 

And they need to do it because cities and state compete with each other for these valuable prizes, and if high-cost (high tax) areas don't sweeten the deal, they'll lose almost every time to low cost (low tax) competitors, and yet it can still be win-win to give tax breaks because of the multiplier effect of having something like 25,000 high-paying jobs for the long-term in an area.

 

This is NYC we’re talking about, not Buffalo, NY or Nashville, TN or the state of Nevada. NYC needs no such incentives to attract such firms. De Blasio and Cuomo come off looking clueless here.

 

NYC should’ve sat out to begin with. Glad Amazon pulled out.

 

you have obviously never been to Long Island city.  would have jumpstart a conversion of the large area from dying low tech industrial to high tech engineering.  frigging shame it won't go through.

[SHDL]

New Yorkers should feel free to run their city however they want, but if it’s true that 70% of them really wanted Amazon to come and that got shot down by some vocal minorities that’s a shame.  Yet another failure of democracy.

 

And nor is any of this good for their reputation. 

[Dalal.Holdings]

Better question: why the hell does a city like NYC need to give incentives and tax breaks to a company like Amazon? There are many, many companies with corporate HQ's in NYC who did not get the same treatment. They come for the talent/skills/closeness to other firms present in NYC and are willing to pay taxes/high real estate costs/etc for it. There is no reason why Amazon should be treated any different. You can talk about general reform in making it easier for tech companies to do business in NY/NYC, but trying to woo an individual company like Amazon is foolish and unlikely to build a tech ecosystem.

 

This whole "competition" for Amazon HQ2 was a smart move by Bezos. Places went out of their way to "compete" to give Amazon the best offer. It's like an open-outcry auction. The buyer is referred to as the "winner" of the auction, but it's usually the seller who is actually winning. Hence why Munger states him and Warren avoid such auctions.

 

These types of incentives are apparently the norm and other companies making substantial investments are getting them, it's just not front page news because it's not Amazon.

 

And they need to do it because cities and state compete with each other for these valuable prizes, and if high-cost (high tax) areas don't sweeten the deal, they'll lose almost every time to low cost (low tax) competitors, and yet it can still be win-win to give tax breaks because of the multiplier effect of having something like 25,000 high-paying jobs for the long-term in an area.

 

This is NYC we’re talking about, not Buffalo, NY or Nashville, TN or the state of Nevada. NYC needs no such incentives to attract such firms. De Blasio and Cuomo come off looking clueless here.

 

NYC should’ve sat out to begin with. Glad Amazon pulled out.

 

you have obviously never been to Long Island city.  would have jumpstart a conversion of the large area from dying low tech industrial to high tech engineering.  frigging shame it won't go through.

 

Lol. Well, maybe Newark, NJ will get it. Or maybe Tulsa, OK. They sure need it a helluva lot more than LIC does.

 

Amazon is and always has been free to build HQ2 in NYC. It just shouldn't require the governor and mayor to step in and give them a sweetheart deal to do so. Shouldn't we be for less gov't/political intervention in these things ?

 

As Buffett shows--if a deal ain't on your terms, you have to be willing to walk away. The governor and mayor were just doing this to win political points. There was very little real benefit to the people of NYC. A lot of similar deals around the country have turned out in similar fashion (see: Wisconson and Foxconn).

[Guest cherzeca]

"There was very little real benefit to the people of NYC." 

 

so I am replying to this because it is one thing to be philosophically opposed to location incentives, which I get, and another thing to be wrong on facts.

 

NYC is growing as a "silicon alley" on the east coast, transitioning from mostly a financial hub (and cultural/fashion center) to a more diversified high tech hub.  goog's presence on 18th street has been a massive boon to downtown economy, and I expect amzn's location in the complete backwater of LIC would have created not only a lot of high tech jobs, but also the secondary and tertiary effects of more well paying nontech jobs from the creation of a desirable neighborhood from what is now largely a pit.  the whole resistance was progressive politics, not economics or even rationality.

 

and your surmising of lack of benefit is equally vapid.

[Dalal.Holdings]

"There was very little real benefit to the people of NYC." 

 

so I am replying to this because it is one thing to be philosophically opposed to location incentives, which I get, and another thing to be wrong on facts.

 

NYC is growing as a "silicon alley" on the east coast, transitioning from mostly a financial hub (and cultural/fashion center) to a more diversified high tech hub.  goog's presence on 18th street has been a massive boon to downtown economy, and I expect amzn's location in the complete backwater of LIC would have created not only a lot of high tech jobs, but also the secondary and tertiary effects of more well paying nontech jobs from the creation of a desirable neighborhood from what is now largely a pit.  the whole resistance was progressive politics, not economics or even rationality.

 

and your surmising of lack of benefit is equally vapid.

 

Lol. My expectations of a lack of benefit are quite "vapid". Yes, we all know these deals never sound too good to be true, they generally pan out in meeting their expectations of broader second order economic effects (surely Amazon--mostly a giant retail company--will foment a startup culture with their brilliant "incubator" in Queens and turn it into "silicon alley"!), and are not just politicians trying to score points. Those politicians, after all, will be long gone and unaccountable when those "benefits" to locals surely pan out.

 

You know, instead those same politicians can do basic things like give tax breaks to software startups, loosening up regulation of that area, etc instead of pandering to a single, giant, established company...

 

Speaking of which, why did Google build in NYC without getting the same deal as Amazon? Why hasn't Google's longtime presence created a "tech hub" in NYC? After all, Google is the real silicon valley story here, not Amazon.

[Guest cherzeca]

"Speaking of which, why did Google build in NYC without getting the same deal as Amazon?"

 

good built nothing in nyc. 

[Spekulatius]

Better question: why the hell does a city like NYC need to give incentives and tax breaks to a company like Amazon? There are many, many companies with corporate HQ's in NYC who did not get the same treatment. They come for the talent/skills/closeness to other firms present in NYC and are willing to pay taxes/high real estate costs/etc for it. There is no reason why Amazon should be treated any different. You can talk about general reform in making it easier for tech companies to do business in NY/NYC, but trying to woo an individual company like Amazon is foolish and unlikely to build a tech ecosystem.

 

This whole "competition" for Amazon HQ2 was a smart move by Bezos. Places went out of their way to "compete" to give Amazon the best offer. It's like an open-outcry auction. The buyer is referred to as the "winner" of the auction, but it's usually the seller who is actually winning. Hence why Munger states him and Warren avoid such auctions.

 

These types of incentives are apparently the norm and other companies making substantial investments are getting them, it's just not front page news because it's not Amazon.

 

And they need to do it because cities and state compete with each other for these valuable prizes, and if high-cost (high tax) areas don't sweeten the deal, they'll lose almost every time to low cost (low tax) competitors, and yet it can still be win-win to give tax breaks because of the multiplier effect of having something like 25,000 high-paying jobs for the long-term in an area.

 

This is NYC we’re talking about, not Buffalo, NY or Nashville, TN or the state of Nevada. NYC needs no such incentives to attract such firms. De Blasio and Cuomo come off looking clueless here.

 

NYC should’ve sat out to begin with. Glad Amazon pulled out.

 

you have obviously never been to Long Island city.  would have jumpstart a conversion of the large area from dying low tech industrial to high tech engineering.  frigging shame it won't go through.

 

I have been to Long Island city and I didn’t see a dying low tech industrial area there. It’s more like a skyline that almost rivals Manhattan. Exorbitant housing costs with shoe boxes going for 600k. not that I th8no scaring AMZN away is a good idea. However, put yourself in the shoes of an average Joe trying to I’ve there and renting. He probably won’t get employed by AMZN, would he benefit when RE and rents really go through the roof? Most people are probably renting in LIC. From their perspective, it might be totally rational to be against AMZN expanding.

[meiroy]

"There was very little real benefit to the people of NYC." 

 

so I am replying to this because it is one thing to be philosophically opposed to location incentives, which I get, and another thing to be wrong on facts.

 

NYC is growing as a "silicon alley" on the east coast, transitioning from mostly a financial hub (and cultural/fashion center) to a more diversified high tech hub.  goog's presence on 18th street has been a massive boon to downtown economy, and I expect amzn's location in the complete backwater of LIC would have created not only a lot of high tech jobs, but also the secondary and tertiary effects of more well paying nontech jobs from the creation of a desirable neighborhood from what is now largely a pit.  the whole resistance was progressive politics, not economics or even rationality.

 

and your surmising of lack of benefit is equally vapid.

 

Spot on, I'd also add tech related education institutions and that some financial institutions now have more IT guys than tech companies.

 

There is one valid argument, though, that there would be a negative impact if infrastructure including housing does not keep up. 

 

 

 

[Dalal.Holdings]

For those who see no downside to government brokered sweetheart deals to individual corporations (only tremendous economic upside!):

 

https://www.bloomberg.com/news/articles/2019-02-15/amazon-s-nyc-retreat-heralds-new-era-of-corporate-welfare-fights

 

https://www.bloomberg.com/opinion/articles/2019-02-15/amazon-hq2--new-york-dodged-bullet--wisconsin-still-has-foxconn-

 

“For the first time ever, the American public got a look behind the curtain, at the dark underbelly of the tax-break industrial complex, and they don’t like what they see,” said Greg LeRoy, executive director of Good Jobs First, a Washington-based organization that opposes the subsidies. “People got angry and organized and moved their public officials, who were out endorsing the idea of the project before, to reject it.”

 

Foxconn, which won a $4.5 billion incentive package from the state of Wisconsin, indicated last month it was reconsidering whether it is economically feasible to develop liquid-crystal displays in the state, as it promised. The state economic development agency said the company deserves “flexibility” after it changed the fundamental terms of its contract and missed its first-year hiring target.

 

Surprise! Foxconn keeps changing the terms of its original deal and the government keeps caving. Who would've expected such poor negotiating from government officials? Who could have foreseen that all the promises made in the original deal didn't pan out? Surely the model of local politicians doling out tons incentives to individual companies and perpetually caving is sustainable and likely to provide great outcomes for those communities...

 

I mean, why would these politicians who craft these deals have the long term interests of the city/state/province in mind? They're only going to be around for the ribbon cutting and out of office before all of the "good stuff" happens anyway...

[dwy000]

As Liberty pointed out, the state is not cutting a check to the company.  It is reductions in taxes that otherwise would have been non existent without the company coming in.  In addition, the Amazon deal was conditioned and effective only after the company fulfills its obligations (hiring 25k people).  Are you surprised that a quote from  "Good Jobs First" isnt supportive? 

 

Driving employment, investment and progress out because it is disruptive is a long term policy disaster.

[dwy000]

quote from your article:  “When everyone else is offering, cities or states that fail to do so will tend to lose out on opportunities,”

[Dalal.Holdings]

As Liberty pointed out, the state is not cutting a check to the company.  It is reductions in taxes that otherwise would have been non existent without the company coming in.  In addition, the Amazon deal was conditioned and effective only after the company fulfills its obligations (hiring 25k people).  Are you surprised that a quote from  "Good Jobs First" isnt supportive? 

 

Driving employment, investment and progress out because it is disruptive is a long term policy disaster.

 

Yes, the Foxconn deal was contingent on a lot of stuff that is never going to happen either, yet the politicians will continue to cave until Foxconn gets more and more and the whole thing becomes a boondoggle (it already is). If private enterprise is negotiating on one end and political officials/bureaucrats on the other, who do you think is going to win in the long run?

 

My original arguments stands: NYC doesn't need or care about this (lol, all of this noise for 25k jobs in a city with 8.6 Million people in it...). It's a drop in the bucket and a non-issue for what is considered the greatest city in the world on many metrics.

 

What's amusing is that a lot of political nutjobs (including those on here) have been drawn into this issue because of their underlying biases. Pro-AOC, anti-AOC, pro-Amazon, anti-Amazon, pro-Bezos, anti-Bezos repeat for De Blasio/Cuomo. Best to ignore the political noise and focus on the merits of the deal.

 

The benefits of the deal are minimal at best and the drawbacks much more severe than you think they are (eg. the precedent it sets for other companies--including the thousands already with HQ's in NYC--to then turn around to NYC and demand the same deal or better -- Jamie Dimon has already said he'd fight for the same tax breaks Amazon gets wherever it ends up: JPM is HQ'd in NYC in case you didn't know). So, Wisconsin is just one example of how this thing could go south for the people of NYC. These types of deals maybe make sense for an undesirable locale (ie. your company offering you higher salary to relocate to the middle-of-nowhere), but not for a highly desired place like NYC.

[Liberty]

Whitney Tilson writes about Bozos and TRT.

 

 

This is stupid.

 

Either that, or he's working out and taking care of himself, and didn't use to, y'know. Maybe he can afford the very best trainers and cooks now? Lots of people Bezos' age can achieve that look, I don't really care that Tilson can't. Veins in biceps (and this is barely anything... he's not quite Dwayne Jonhson yet) is more about body fat than anything else, anyway. He's probably just cut sugar and refined carbs and started doing heavy dead-lifting and pull ups.