[NR] After a long process, Amazon finally announced that it will locate its new headquarters in New York and Virginia. Following the announcement, Representative-elect Alexandria Ocasio-Cortez tweeted that "Amazon is a billion-dollar company. The idea that it will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need MORE investment, not less, is extremely concerning to residents here."As a result of her tweet, conservative commentators all over twitter and on shows like Fox Business’s Varney & Co. are making fun of her. They argue that her reaction is yet more evidence that she doesn’t get economics and that doesn’t want New Yorkers and Virginians to get the thousands of jobs that will be created there thanks to the new headquarters.
I can’t believe I’m saying this, but Ocasio-Cortez is mostly correct on this matter, and her conservative critics are wrong. Handouts like this to Amazon and other prominent companies are appalling in their cronyism, pure and simple. I agree that she doesn’t understand economics and that her socialist ideal is a recipe for fiscal and economic disaster. But her conservative critics reveal their own economic misunderstanding when they support targeted tax breaks as a means of creating jobs.
First, let’s be honest. Tax incentives aren’t anywhere near the top of the factors that company considers when deciding where to locate. In all likelihood, Amazon first surveyed all available locations searching for factors that really matter most ‐ factors such as the presence of a skilled workforce, adequate infrastructure and transportation options (airports and a vast subway network), as well as synergies with other companies for the purpose of enhancing production supply chains and access to professional services. Once, it had a list of places that fit its needs, it might have taken under consideration the tax incentives.