Saturday, February 16, 2019

Life Is Not Fair...and The Earth Is Not Flat

“If you want more of something, subsidize it; if you want less of something, tax it” - Ronald Reagan

In the aftermath of Amazon’s decision to pull the plug on their plans to locate HQ2 in Long Island City, NY; we find ourselves once again debating the pros and cons of government subsidies to business and industry. Progressives are getting the blame (or the credit, depending on your opinion of such deals) for opposing, threatening and finally convincing Amazon that the best business decision would be to just walk away.

Frankly, in my opinion the Long Island City decision never made sense for Amazon from the get go. Subsidies notwithstanding, because Amazon was going to get all sorts of concessions and financial incentives no matter where they ended up; my gut tells me that the Long Island City choice was not all that popular with Amazon’s senior leadership, but was a Bezos big splash move. The devil is always in the details and when one of those devils turned out to be major opposition from “The Left”, it gave Amazon an easy out. I expect they were toasting each other in Seattle and heaving great sighs of relief over the bullet they just dodged. Trying to pull something like this off in the NYC metro area was a really bad idea. What were they thinking?

But, all that said, it still leaves the question around these huge subsidies local and state governments dole out to lure businesses. In the Amazon case, it really was go big or go home and this was a big deal. Most of the “subsidies” were contingent upon job creation. But there was a substantial amount of upfront money going to Amazon. The Left, occupying the moral high ground, demanded that these funds be used to make immediate improvements and upgrades to subway systems and community services for the benefit of those who live there now. Not for rich people who didn’t need it and would, in all likelihood, ultimately end up driving the poor and oppressed out of the area all together with their high paying jobs and the inevitable gentrification of surrounding neighborhoods.

The business community along with most of the mainstream politicians (both Democrats and Republicans), looked at the big picture and the long-term economic impact. Frankly, it is a no brainer. This was a great deal for NYC and would be a great deal for any place. Is it going to cause disruption? Yes. Will there be winners and losers? Yes. Will those who have money to invest or skills and talents that are in high demand mostly win? Yes. Will those who have little money or limited skills and talent mostly lose? Maybe.

And this brings us to the cultural battle that is raging in this country. One side wants not only equal opportunity, but equal outcomes. And if one group is doing better than another group, it is just not fair. Someone is being oppressed. Someone else has an unfair advantage or privilege. The “have-nots” are such, not by their choice or by chance, but because there was a “thumb on the scales” in favor of the “haves”. This injustice must be corrected.

The other side says it’s not about groups, but about individuals. While all are created equal, all are not equal when it comes to ability, ambition and energy. People are different. And life is not fair. Some people start out with more advantages than others. The playing field is not level. The earth is not flat. Get over it and get on with your life. No one owes you anything, but most people will help you if you are willing to help yourself.

If we want more jobs and more wealth for more people, and ultimately more tax revenue, then maybe, sometimes, it makes sense to subsidize a business. But if all you do is tax it, you will get less and less over the long run.

Thus, David slew Goliath on the banks of the East River in the year Two Thousand and Nineteen. And the rich and privileged fled, leaving the land to the oppressed who served the god of social justice and equitable redistribution of wealth to which they were entitled. Can I get an Amen?

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