Amazon Is Creating Cities for the Rich and Democrats Are Bending the Knee

Meanwhile, debt is exploding, Americans are very angry, and Donald Trump is honing in on a second term.

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Nov 13 2018, 8:19pm

(Photo by Alex Wong/Getty Images)

Democrats did very well last week, when they earned the party's best result in a midterm election since Watergate. Running candidates from a wide range of backgrounds with powerful stories, identities, and agendas, they struggled in a tough Senate landscape but still managed to win roughly three-dozen seats in the House and pick up governorships and state legislatures to boot. (Some close House races were still undecided as votes were counted in places like California.) The party's slate of candidates—a few have already announced—for 2020 appeared to be a mixed bag, a melange of old white men, retrograde moderates, squishy but vaguely inspiring neoliberals, and class warriors. But in taking the House back, the Democrats appeared to recruit themselves a nice crop of future leaders.

Let's hope they don't roll over for corporations the way the party establishment has been.



On Tuesday, news officially broke that Amazon would open not one but two new headquarters in Queens, New York, and Arlington, Virginia. The New York announcement in particular enraged progressives. The tech leviathan has emerged in recent years as an extremely powerful modern monopoly while jacking up rents, fomenting inequality, destroying smaller businesses, and demanding tax breaks. Yet prominent New York Democrats courted the corporation and promised it massive incentives to come to their city.

"This is a giant step on our path to building an economy in New York City that leaves no one behind," New York City Mayor Bill de Blasio, a progressive who ran hard on a "Tale of Two Cities" platform in 2013, said in a statement posted on Amazon's website. "We are thrilled that Amazon has selected New York City for its new headquarters." His gushing was echoed by his arch-nemesis Andrew Cuomo—apparently humiliating yourself for Amazon's investment can overcome bad blood of any kind—who made news last week for setting a new low in pandering to big tech. “I’ll change my name to Amazon Cuomo if that’s what it takes,” he told reporters. “Because it would be a great economic boost.” The praise was echoed by Virginia Senator Tim Kaine, the Democrats' vice-presidential nominee in 2016, as well as Ralph Northam, the moderate who won the governor's mansion in the state last year.

But the idea that bringing Amazon to your city is a clear economic boon is less than clear. It's safe to assume a significant amount of taxable profits will arrive in the New York and Arlington areas that would not have otherwise thanks to Amazon's infusion of capital. But it's equally safe to assume a generous portion of its new hires will be already well-off people either living in the area or else migrating from elsewhere to cash in. Meanwhile, New York alone is poised to throw as much as $3.5 billion in tax breaks and incentives to the tech giant, which, it's worth noting, has a long, ugly history of lobbying against taxation. We saw that in Amazon's home city of Seattle earlier this year, when Amazon led the charge of local business giants against a tax law that would have helped the poor and homeless. The law was repealed when local Democrats caved. And in New York a decade ago, Amazon actually sued over a sales tax slapped on internet retailers. (Even the right-of-center Supreme Court refused to hear its claim.)

Obviously, New York leaders didn't care about these concerns. They went so far as to turn local landmarks like the Empire State building and World Trade Center orange, the corporation's signature color, in a symbolic bending of the knee last year.

Not that the party has been unified in cozying up to Jeff Bezos. New York City Council Speaker Corey Johnson on Tuesday assailed the opaque process that denied many elected officials, including him, any input. State Assemblyman Ron Kim has argued for using Amazon incentive money to cancel student debt instead. And State Senator Mike Gianaris, who represents the Long Island City neighborhood that will house the new Amazon HQ and at least some of its employees, slammed the "subsidy" his colleagues offered the giant, calling for a rally against the move Wednesday.

"Our subways are crumbling, our children lack school seats, and too many of our neighbors lack adequate health care," he said in a joint statement with City Council Member Jimmy Van Bramer. "It is unfathomable that we would sign a $3 billion check to Amazon in the face of these challenges."

Which brings us to the potential impact on rent and the cost of living. Alexandria Ocasio Cortez, the Democratic Socialist who became the youngest woman ever elected to Congress last week and whose district includes parts of Queens, captured where the Democrats probably should be on the issue with a deluge of tweets early Tuesday. "Displacement is not community development. Investing in luxury condos is not the same thing as investing in people and families," she intoned. "Shuffling working class people out of a community does not improve their quality of life." That message was especially powerful since she wasn't just advocating for foreign constituents she didn't know, but as a politician who admitted it wasn't going to be easy to pay for her own apartment in DC until her congressional salary kicked in.

Indeed, leaving aside for a second the concern about further exploding inequality between NYC, the DC area, and the rest of the country, it's fair to wonder just how destructive Amazon might be within these cities. Housing prices in Queens were said to be rising in response to Amazon's planned move before the news was even official. And it's clear that Seattle rents exploded thanks in part to the company's effective makeover of large swaths of the city. Concentrating very wealthy people with lots of disposable income in cities with already burdened housing stock (even if Long Island City itself is relatively flush with lots of new towers) is a recipe for trouble.

Beyond the economics, the process Amazon went through to pick its new HQ sites was unquestionably shady. The company extracted swaths of extremely valuable data from literally hundreds of cities it probably never had plans to move to anyway, except maybe now they can more easily set up fulfillment centers there. Virginia has apparently agreed to give Amazon a heads-up about any Freedom of Information Act requests so the tech giant can try to intervene and avoid scrutiny. And amid concerns about how an influx of tech workers might further clog New York's strained subway system, the NYC deal appeared to include plans to erect or at least provide access to a helipad for Amazon execs.

Amazon punked mayors and other politicians across the country over the past year by dangling 50,000 new jobs and $5 billion in investment, only to choose the obvious places you'd expect a tech giant to set up shop. Many, many Democrats do not seem to have a problem with this, but the ones who do will be able to tap into the populist concerns of so much of their base. Yes, people want jobs and nice buildings in their cities. But they also want to be able to afford a place to live, to be able to get around, and to continue to work their existing gigs at smaller businesses that tend to get swept aside by the Amazons of the world. Ballot initiatives last week on questions from the minimum wage to Medicaid expansion showed once again that Americans like populist economic policies. Pew survey data from last year made it clear that most Americans thought big companies made too much profit. That Donald Trump, a demagogue who has mastered race-baiting populism, has also gone after Amazon repeatedly over its monopoly status shows just how powerful this issue can be.

But somehow, prominent Democrats still can't figure out how to tap into this sentiment. For years, national figures like Chuck Schumer, Bill Clinton, and Barack Obama—whose former spokesman is now a spokesman for Amazon—have suggested with their words or actions or both that the way to win power and help people is to get tight with corporate America. But the willingness of less established officials—from the local level up to Ocasio-Cortez to Senate populists like Elizabeth Warren and Sherrod Brown—shows there's an alternate way forward. Let's hope the Democrats are smart enough to take it in 2020.

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