We Need a Federal Law Banning Corporations Like Amazon from Shaking Down Localities

Abe Polin, the late owner of the Washington Wizards and Washington Capitals, was once asked why he didn’t seek public money for the coliseums in which his teams played. Looking offended at the question, he said, “You don’t think I can afford it?”

But, that was a long time ago. Tycoons no longer take pride in their ability to move mountains with their own resources and champion the communities in which they live. Now, they take pride in extracting resources from these communities—strip mining them and laying them bare and emaciated.

Sports team owners started the trend of taking highly profitable businesses and leveraging their political capital of these teams’ popularity to get public money for stadiums. But over the last 20 years, corporations have taken up the initiative. Here in Dayton, NCR and its spin-off Teradata have spurned the communities that have embraced them for decades. Instead, they sold their headquarter locations off to the towns willing to empty the public coffers to lure them there. Amazon is the latest and perhaps largest company in this trend.

Between NCR, Teradata, and Amazon, they have attracted billions in public money to locate their companies in Atlanta, San Diego, New York City, and Washington DC respectively —towns which they almost assuredly would have located regardless. So, the rich markets are getting richer while the small and mid-size markets are being pillaged.

This is public money being taken away from crumbling infrastructure and struggling education systems.

Further, in the instance of FoxConn bringing a manufacturing facility to Wisconsin for $3 Billion in public money, the result is not higher employment of locals, but importation of foreign nationals to perform the work. Other times, the jobs brought are so low wage, that further subsidies are required for employees in the form of welfare and food stamps. The benefits of these subsidies to the CEOs and shareholders are staggering, while the benefits to the communities almost never live up to expectations.

But, politicians have been, and always will be, eager to write these checks so they can claim to be wizards at job creation. And, with the next town over always willing to play the patsy and offer money, there is no way any state or local law will keep this practice in check.

So, we need a federal law capping these incentives to save localities from themselves. The law should limit the amount and types of infrastructure investment specific to a corporate location being allowed. Discretion and honor being left in the hands of billionaires and politicians is a fool’s errand. Common sense limits on these subsidies will not cost jobs and put more money in to public resources like education that will grow our economy much more than having a new warehouse or call center come to your town.