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Amazon HQ2: Faux Free-Marketeers and Their Crocodile Tears

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Crystal City

What does a newly elected, radical Marxist, democratic bartender-turned Congresswoman have in common with the conservative National Review and the Neo-con Weekly Standard? They are all critical of local and state governments electing to use tax incentives and outright cash credits to lure Amazon and its twenty-five thousand high paying jobs to those jurisdictions.

The primary rule of free markets is that incentive matter.

If people in a free market can enter that market and use whatever legal means they have, from cash, to trade, to barter, to make the best deal they can for a product or service, why can’t the duly elected representatives of those people do the same?

The criticism of Arlington County, Virginia, New York City, or New York State for offering incentives using tax dollars and credits rings hollow coming from people and publications that purport to understand free markets. That left-wing criticism is expected from Marxist bartenders who don’t have a basic clue about free markets.

Ironically, all of these jurisdictions are liberal-controlled governments, and yet each recognized that using tax incentives and cash payments to incentivize a company that did not “need” those incentives was in the best interest of the jurisdiction.

Need doesn’t have anything to do with the leverage that Amazon commands.

Do you want twenty-five thousand jobs in your jurisdiction that pay an average of 150K? Do you want property value increases of 5-7% region-wide, resulting in hundreds of millions of annual tax revenues? Do you want to lure educated, well-employed, taxpaying, shopping, spending, and homebuying people to your community to pay taxes and enrich a region?

If you do, then you make the best deal you can to land a company that delivers what you want. Hopefully, you give as little as you need to win the competition and thus maximize the return. By every measure, Arlington and the DC metro area, as well as Staten Island and The New York metro area did just that.

Somehow, we are now told by “free market” forces at National Review and the anti-Trump Weekly Neo-Con Standard that these incentives are corporate giveaways or crony capitalism. Really? It seems these people don’t even understand those terms, let alone the basic principles of free markets.

Why give one of the wealthiest companies in the world a break? Because your community will profit, that’s why. That’s market dealing 101. The government isn’t picking and choosing what company or industry it wants to be a winner. THAT is crony capitalism. The government is picking a proven winner and trying to land a huge revenue windfall by competing with incentives on top of the natural advantages the areas offer that company. That’s smart.

Should jurisdictions offer this to every company? No? Why? Free markets.

Not every company brings the same value or return. This is the essence of free markets, and wise decisions to attract great companies that benefit your region financially over the long-term is a reflection of good governance, not the model of abuse. This isn’t government subsidies of a lagging industry where the subsidy is acquired by lobbying friends who obtain benefits and cash the market would not otherwise support. This is a straight, free-market, bidding war where Amazon used its power to gain concessions, and the bidders used their savvy to win the competition.

Heck, even the most liberal jurisdictions get that. They should, they want that long-term tax revenue for political gains and leverage to buy votes. They are smart, frankly. Of course, they are also smart enough not to tell their drone supporters just how important real markets are to paying for everything.

It is our friends on the right who suddenly find competition, winners and losers, and incentives a problem. That should concern real conservatives and free-market adherents. So political has become our country that reason-based thinking is thrown out with the bath water. Up is down, in is out, and free markets are now crony capitalism and corporatism? I don’t think so.

Arlington County and the DC Metro area just hit the economic jackpot. But yes, it had to buy a ticket. Unlike the lottery, however, this was a calculated investment with the likelihood of enormous returns, and the cost (the ticket) is only paid if you win.

Arlington County and Virginia made a great deal in a free market bid for economic growth and prosperity. Its taxpayers should be delighted, assuming they understand even basic free market economies.

Richard Kelsey

Author: Richard Kelsey

Richard Kelsey is the Editor-in-Chief of Committed Conservative.

He is a trial Attorney and author of the new book on higher education, “Of Serfs and Lords: Why College Tuition is Creating a Debtor Class”

Rich is a former Assistant Law School Dean and Law Professor. At Mason Law Kelsey conceived of, planned, and brought to fruition Mason’s Center for the Protection of Intellectual Property, known as CPIP, drawing on his expertise as a former CEO of a technology company specializing in combating cyber-fraud.

Before returning to private practice, Rich taught legal writing and analysis and an advanced litigation seminar. In 2014 he was elected by the graduating class as the faculty speaker at their graduation.

He is a regular commentator on legal and political issues in print, radio and on TV. Rich has appeared on hundreds of stations as a legal expert or political commentator. He provided the legal analysis for all stages of the Bob McDonnell trial and appeal for numerous outlets including NPR and WMAL.

Rich also writes on occasion for the American Spectator and CNSNews.com.

In his free time, Rich is part of the baseball mafia of Northern Virginia, serving on numerous boards and as a little league and travel baseball coach.

His Twitter handle is @richkelsey.