A Progressive Fawns as Amazon Shifts to Robber Barron Mode


Here’s an odd moment in a Scott MacKay essay on The Public’s Radio, about Amazon’s choice of our nation’s two bases of power — New York City and Washington, D.C. — for its new headquarters:

Luring 21st century innovation jobs to Rhode Island and southeastern Massachusetts will require changes in economic development thinking. These companies aren’t going to places that rely on the traditional metrics, such as low-taxes, low rents and cheap labor. “They aren’t going to low-cost places, right to work states,” says Michael Goodman, director of public policy at the University of Massachusetts Dartmouth. “Nowadays brains matter much more than brawn.”

That’s music to MacKay’s ears, because his a big union and high-tax guy, but it’s weird that he would present a behemoth establishment player like Amazon as an archetype of “innovation jobs.”  The choice of NYC and Washington for its new locations is an indicator that Amazon is shifting into robber baron mode, which means using the power of the media and government to suppress competition and secure its advantages.

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Of course the company is fine with high taxes and organized labor.  Its executives want to be sit in a room with other powerful people who can tell their constituents or members what to do.  The freedom of low taxes and a right to work makes things unpredictable for the power brokers.

But the real innovators will go to places where they aren’t inhibited by these legacy systems, meaning places where they can try new things and reinvest what they earn.  Mix that economic flexibility with a culturally intriguing location (characterized, I’d suggest, by the freedom and character that come from a government that doesn’t meddle in people’s lives), and we’d have something powerful in Rhode Island.

Unfortunately, that’s a big “if” and a big lift in Rhode Island.

  • Joe Smith

    Sometimes Ockham’s razor still holds.. Author (Robert Frank, CNBC) predicted DC/Northern VA well before the announcement.

    In his book “Edge City,” Joel Garreau examined 38 companies that left
    New York City; 31 of them moved to Greenwich or Stamford, Connecticut,
    where the average distance from the CEO’s home was a mere eight miles.

    In other words, CEOs move their companies to locations convenient for the CEOs. And Washington, D.C., is quickly becoming a second home for Bezos.

    After buying The Washington Post in 2013, Bezos bought the most expensive home in the district, paying $23 million for the former Textile Museum in Kalorama. The Obamas and Kushner-Trumps live nearby. He’s spending at least $12 million more to renovate it and turn the 27,000-square-foot mansion into a lavish complex for living and entertaining.

    Huge tax incentives and relatively cheap electricity (Amazon’s data hub is in Virginia) help too.

    If low taxes didn’t make s difference, McKay should go back and research where some of the top CEOs (or former CEOs) with their big houses along the RI coast actually *claim* residence for tax purposes..