Amazon HQ2 Is A Scam | The Capital I

The Amazon HQ2 competition has gotten a lot of attention. People aren’t thinking this through. There is one location that is almost certain to get the new headquarters. Washington, DC is where the future of Amazon as a company will be decided, so that’s where Amazon needs to be. All this other stuff is window dressing, and information gathering for Amazon’s already formidable data machine.

I’ve decided to use this video to kick off another one of my periodic jeremiads about the growing centralization of power in the United States, and the fact that all that power is pouring towards Washington, DC, or at least will be. Back before Trump was elected I used French history to illustrate what happens when you do away with local sources of power. Also of interest is my discussion of the true network of power that runs the united states, and my long discussion of the military industrial complex.

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Video Transcript after the jump…

First off, I’d like to say that I love Amazon. I use their products all the time, and I even own a few shares of their stock. But. Amazon is now one of the biggest companies in the world, and its growth is accelerating. When it does something crappy, it needs to get called out. And this Amazon HQ2 competition is really crappy.

For those of you who don’t follow this sort of thing, Amazon is currently holding a competition to see where they will locate their second headquarters. They’ve got cities and states all over the country bending over backwards to try to impress them. Mayors and Governors across the country are making this a priority.

Today I’m filming from Newark New Jersey. Newark is a very troubled place. Despite being a quick train ride from New York City, Newark has been suffering economically for decades. What Amazon is promising would make a huge difference. Amazon is promising 50,000 high paying jobs, and 5 billion dollars in investment. Having Amazon is a potential game changer for a place like Newark. Amazon HQ2 would be better than another redevelopment project, because Amazon’s commitment would be on-going.

It all sounds too good to be true.

That’s because it is.

Now I’m not talking about the tax break issue. Amazon is fielding criticism for the bidding war it has set up between cities and states with this competition. Newark’s Mayor and Senator, and New Jersey’s Governor got together to announce the city’s bid, which apparently offers 7 billion in tax breaks for that 5 billion in investment. This is too bad, but it’s not something you can lay at Amazon’s feet. Tax arbitrage is a big factor in the US economy today, from the locations of Manufacturing plants, to the reason why the Walking Dead is filmed in Georgia. Amazon isn’t helping but they didn’t create this problem.

No, what bugs me about the whole Amazon HQ2 thing is the fact that I’m pretty sure this competition has been stitched up from the beginning. Places like Newark are jumping through hoops for no good reason. From the moment the competition was announced, I was convinced that Amazon was going to the Washington, DC area.

After growing slowly but steadily for quite some time, Amazon is now becoming a behemoth. Amazon eats industries. Retailers are closing all over the country because of Amazon. Competition law in the United States is still stuck in the 19th century for the most part. It’s good for dealing with railroads, not smartphones. But as tech companies like Amazon have gotten larger and larger, the drum beat for new laws has increased.

Amazon really wants to stop this drum beat, or at least turn it towards its rivals. Why do you think Amazon CEO Jeff Bezos bought the Washington Post? Sure, maybe he just really likes newspapers, but it’s pretty easy to see an ulterior motive here. Because government regulation is the main threat to Amazon’s business going forward.

Owning Washington DC’s home paper is one thing. But there is no substitute to actually being in a place. 50,000 jobs eventually means a lot of friends and family members working for the government. It means that all the state and local politicians that are physically closest to Congress and the regulatory agencies will be really invested in nobody killing the golden goose.

I am not talking about corruption here. Or at least nothing that breaks the law. This is how the world works. Which makes Amazon’s next location pretty obvious. To me anyway.

Last month Amazon announced the top 20 contestants, and big surprise, all three of the jurisdictions that make up the DC Metro area were included. There may very well be a competition going on here. But it’s only between DC, Virginia, and Maryland.

Maybe I am wrong about this. Maybe the fix wasn’t in from the beginning. There’s really only one way to prove that. Amazon should put its new headquarters in a place like Newark that actually needs it. Or maybe Texas. Moving one of our country’s dominant companies to the capitol only accelerates one of the 21st century’s worst trends, the growth of Washington DC as an imperial metropolis. Next up in this series, I’ll cover what’s happening to New York, the old imperial metropolis.

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