Crony Capitalism Stopped In New York City

Heritage.org posted an article today about Amazon’s decision not to locate in New York City.

The article reports:

Based on Amazon’s public statement, it seems the company couldn’t rely on the deals it had cut or the political support it had received to last beyond the next election. And businesses can’t base long-term decisions like this on shifting political sand.

That’s part of the problem with crony capitalism. It may procure short-term wins for a select few politicians and for businesses that can afford to pay to play, but it’s not a strategy for long-term success.

Employers want to set up shop in places where they can grow and succeed. The best environment for that is a level playing field with minimal government interference and low, broad-based taxes—not picking winners and losers through special-interest subsidies

A favorable business environment is one where local leaders work to help all businesses equally, not a select few. Employers want leaders who can listen to their needs without telling them how to run their business, and they want communities and leaders that welcome the jobs and economic growth that employers bring, instead of protesting their presence. 

It turns out this is not what New York City had to offer. Amazon said that certain politicians “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.”

New York City is not a friendly business climate, and losing those special “relationships” would have left it exposed to the same burdens and barriers that other businesses face in New York. 

For most businesses, deciding where to locate really all comes down to the bottom line.

The article notes that businesses and people are leaving New York:

According to the ALEC-Laffer State Economic Competitiveness Index, “Rich States, Poor States,” New York ranks dead last in the overall economic outlook ranking, while Virginia ranks among the top 10. 

And Amazon isn’t the only company wary of locating in New York. Plenty of individuals, families, and businesses are fleeing the state, and they’re taking their income and tax revenues with them. 

In fact, between 1997 and 2016, every dollar of income that left New York was replaced by only 71 cents coming in. That deficit will only continue under New York’s current policies.

The article concludes:

States and cities should also take a lesson from this New York episode: Crony capitalism isn’t the way to win over more business. The key is to provide a level playing field that offers opportunity for all businesses to grow and thrive.

If You Give A Mouse A Cookie…

Until recently it was understood that if you immigrated to a country, you learned the language and adopted the culture. You might keep the traditions of your culture alive in your own home, but for the most part, you tried to assimilate into the culture of your new home. Unfortunately, there are many immigrants who have recently arrived in America with the idea of transforming America into the country they left. If you are happy with the culture of the country you left, please stay there–do not attempt to bring that culture here.

BizPac Review posted an article today that illustrates one of the problems immigration without assimilation creates.

The article reports:

group of Muslims who work for Amazon would rather pray than work, and because the multinational tech giant refuses to grant them this entitlement, the Muslims are now fighting back. How? By protesting and airing their grievances to sympathetic ears in the left-wing media.

On Dec. 14 the group of Minneapolis-based East African Muslims held a protest outside the Amazon warehouse where they work to demand longer break times.

…At the moment the Muslim warehouse workers receive two 15 minute breaks and one 30 minute break per shift. According to Somali immigrant Khadra Ibrahin, these breaks are too short. Why? Because they make it impossible for her and her peers to both use the restroom and pray.

“And so most of the time we choose prayer over bathroom, and have learned to balance our bodily needs,” she said to Vox, adding that to do otherwise would affect their production rate.

Each employee must pack at least 240 boxes per hour, or 4 per minute, which is possible so long as their breaks are short, i.e., under 15 or 30 minutes. But to use the restroom and pray, Ibrahin and her coworkers would need longer break times. And that’s exactly what they want.

“Workers and the community want respect,” Abdirahman Muse of the Awood Center, which reportedly organized the protest, said to Vox. “Responding to our demands for basic fairness and dignity are things we shouldn’t have had to even push Amazon on. We don’t want charity; we want respect and a fair return on the hard work that brings Amazon their profits.”

A spokesman for Amazon noted, “Associates are welcome to request an unpaid prayer break for over 20 minutes for which productivity expectations would be adjusted.” To me that seems like the perfect solution–you may have all the prayer breaks you want but you will only be paid for the breaks other employees are also paid for. Amazon has a responsibility to allow for religious practices–it does not have a responsibility to pay someone to practice their religion on company time.

I hope that Amazon stands strong on this–caving would set a very bad precedent.

Choosing Winners And Losers

Fox5 is reporting today that Amazon has decided to open two new facilities–one in Alexandria, Virginia, and one in Long Island City, New York.

The article reports:

New York state is kicking in more than $1.5 billion in taxpayer-funded incentives for getting half of Amazon’s second headquarters located in a section of Queens.

The Seattle-based company made its long-awaited announcement Tuesday, saying Long Island City and Alexandria, Virginia, will each get 25,000 jobs. The online retailer also said it will open an operations hub in Nashville, creating 5,000 jobs.

…New York state’s incentives are nearly triple those of Virginia’s, while Tennessee’s are $102 million.

According to Amazon, the cost per job for New York taxpayers is $48,000, compared to $22,000 for Virginia and $13,000 for Tennessee.

In a statement released by Amazon, Cuomo called the agreement “one of the largest, most competitive economic development investments in U.S. history.”

I have a few questions. How many years will these tax incentives last? Will Amazon leave the state when the incentives end? If each job cost New York taxpayers $48,000, how much do these jobs pay? The company is getting tremendous tax breaks to come to New York and create jobs, can New Yorkers afford the increases in their taxes to pay for those jobs? Wouldn’t it be better to cut taxes for all businesses in New York and make the state more attractive to businesses looking for a place to relocate? Lowering taxes across the board actually increases revenue, choosing winners and losers simply makes people angry.

What Results Look Like

During the final weeks of the mid-term election campaign, you will hear Democrats say, “The tax cuts were only for the rich–they didn’t help anyone else.” A misinformed friend of mine posted that on Facebook recently. So let’s look at the facts.

The Conservative Treehouse posted an article yesterday about the impact of the Trump Tax Cuts on average Americans.

The article quotes a Business Insider article that reports the following:

  • Walgreens Boots Alliance announced that it will make investments around $150 million to boost mainly its in-store wages in fiscal 2019 in the light of favorable tax reforms.
  • Walgreens CFO said Thursday that the increase in store wages was “in light of the favorable tax reforms in the US.”

…The pharmacy-chain owner Walgreens Boots Alliance announced Thursday that it will make investments of about $150 million to boost mainly its in-store wages in fiscal 2019 in wake of  President Donald Trump’s tax reforms.

The announcement marks a 50% increase in company’s investment towards wages which was announced in March. At the time, Walgreens said it would invest around $100 million per annum to increase wages beginning later this calendar year.

“We will be making select incremental investments of around $150 million in fiscal 2019, mainly in store wages, but also to fuel our new community health care initiatives, and you can view these in light of the favorable tax reforms in the US,” Walgreens CFO James Kehoe said Thursday, on the company’s fourth-quarter earnings call. 

The article at Business Insider explains how the tax cuts have impacted the average worker:

In December 2017,  the Trump administration slashed the federal corporate tax rate from 35% to 21% and allowed a one-time repatriation of overseas cash. The bill also allows companies to bring overseas profits back home to invest in domestic projects or repurchase of shares.

Kehoe said the investments will result in a headwind of approximately $0.12 a share, or two percentage points of earnings-per-share growth for the coming fiscal year. 

US retailers are scrambling to keep workers as they look for opportunities with higher pay and attractive benefits. The US unemployment rate fell to a 48-year low of 3.7% in September. According to the Bureau of Labour statistics, there were 757,000 retail-job openings across the United States in July, which is about 100,000 more than a year ago.

The surge in the number of retail jobs has allowed workers the opportunity to move around within the industry. As a result, companies are raising wages to try and retain workers. Earlier this month, Amazon hiked its minimum wage to $15 per hour, effective November 1. That followed wage hikes from places like Target and Costco

That is significant.

The Conservative Treehouse concludes:

Back in January 2017 Deutsche Bank began thinking about it, applying new models, trying to conceptualize and quantify MAGAnomics, and trying to walk out the potential ramifications.  They began talking about Trump doubling the U.S. GDP growth rate when all U.S. investment groups couldn’t yet fathom the possibility.

It’s like waking up on Christmas morning every day to see the pontificating Fed struggling to quantify analysis of their surrounding reality based on flawed assumptions. They simply have no understanding of what happens within the new dimension.

Monetary policy, Fed control over the economy, is disconnected and will stay that way for approximately another 12-14 months, until Main Street regains full operational strength –and– economic parity is achieved.

As we have continued to share, CTH believes the paycheck-to-paycheck working middle-class are going to see a considerable rise in wages and standard of living.  How high can wages rise?… that depends on the pressure; and right now the pressure is massive.  I’m not going to dismiss the possibility we could see double digit increases in year-over-year wage growth in multiple economic sectors in several regions of the U.S.

Remember, as wages and benefits increase – millions of people are coming back into the labor market to take advantage of the income opportunities.  The statistics on the invisible workforce varies, but there are millions of people taking on new jobs in this economy and the participation rate is growing.

Winnamins.  We’ll need lots of them…

Wow.

 

Discrimination Against Conservative Organizations

The Daily Caller reported yesterday that Amazon has barred the Christian legal group Alliance Defending Freedom from taking part in their Amazon Smile program.

The article reports:

Amazon allows the left-wing Southern Poverty Law Center to determine which groups are and aren’t allowed to take part in Amazon Smile 

The article lists some of the groups who will be participating in the program:

Unlike ADF, hardline Islamic groups are allowed to participate in Amazon Smile. That includes the Islamic Center of Jersey City, whose imam called Jews “apes and pigs” and requested Allah’s help in killing them “down to the very last one,” according to the Anti-Defamation League.

 

The Islamic Society of North America (ISNA) is able to take part in Amazon Smile, despite a 2009 federal court ruling the U.S. government has “ample evidence” of ties between the group and Palestinian terrorist organization Hamas.

The similarly named Islamic Circle of North America (ICNA) is also an Amazon Smile member. ICNA promotes the establishment of an Islamic caliphate and has ties to a radical Pakistani political groupJamaat-e-Islami. The ADL has criticized ICNA for giving a platform to extremists.

Amazon’s spokesperson declined to comment to TheDCNF on the eligibility status of individual organizations but stressed the diversity of the more than one million participants in the program.

ISNA is listed as an unindicted co conspirator in the Holy Land Foundation Trial which began in July 2007. The Holy Land Foundation Trial dealt with groups funding money to Islamic terrorists. These are the people Amazon is allowing to participate in their charity programs while keeping Christian organizations out. This is definitely backwards.