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Tags: amazon | cuomo | incentives

NY Punished for AOC's F-Grade in Economics

NY Punished for AOC's F-Grade in Economics

Rep. Alexandria Ocasio-Cortez, D-N.Y., arrives to hear President Donald Trump deliver his State of the Union address to Congress on Capitol Hill, Tues. Feb. 5, 2019. (Carolyn Kaster/AP)

Michael Dorstewitz By Friday, 15 February 2019 04:08 PM EST Current | Bio | Archive

Rep. Alexandria Ocasio-Cortez, D-N.Y. who is at the center of her proposed Green New Deal, demonstrated her economic illiteracy — again.

The people of New York will pay the price.

One week after New York Gov. Andrew Cuomo — a Democrat — lamented his state’s $2.3 billion shortfall in tax revenue, the young congresswoman was performing a victory dance over Amazon’s decision to reject plans to build a headquarters in a Queens, Long Island City neighborhood.

Ocasio-Cortez has been a vocal opponent of the proposed project from the beginning, despite Amazon’s plans to provide 25,000 high-paying jobs in the area bordering her district.

Her opposition is centered on the state’s offer of $3 billion in tax incentives.

"Amazon is a billion-dollar company," she tweeted in mid-November when the retail giant announced New York was under consideration. 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."

A company statement said that it was basing its decision to pull out of their plans for the New York operation in part on politicians who "had opposed our presence and will not work with us."

The statement continued, "After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens."

Local business leaders, perhaps not as economically challenged as Ocasio-Cortez, were crestfallen over the decision, and placed the blame where it belonged.

"I think those local politicians, their careers are over," said Eric Benaim, chief executive officer of Modern Spaces, a Long Island City brokerage, who distributed pins and posters supporting the Amazon deal. "They’re responsible for losing 25,000 jobs."

Rep. Ocasio-Cortez, however, sounded as though she’d just won the Super Bowl, the World Series, and the Indianapolis 500 — all at once.

She condemned those politicians who attempted to broker the Amazon deal on behalf of New York. "If we’re willing to give away $3 billion for this deal, we could invest those $3 billion in our district ourselves if we wanted to," Ocasio-Cortez said from Capitol Hill Thursday.

"We could hire out more teachers, we can fix our subways. We can put a lot of people to work for that money if we wanted to."

The idea that the young Democratic socialist is this confused about tax incentives is frightening. The state wasn’t "giving away" anything. It offered the Internet retailer a temporary tax break in return for bringing in tens of thousands of jobs and stimulating the economy.

Th notion that she believed that the state was going to simply hand $3 billion in cash over to Amazon was confirmed in her second sentence, when she said the state could use the money to “hire out more teachers [and] . . . fix our subways."

The Daily Wire’s Emily Zanotti sounded equally alarmed, especially given that Ocasio-Cortez has a Boston University economics degree.

"That $3M (sic) isn't fungible," she tweeted. "It's taxes Amazon simply wouldn't have paid. That money doesn't yet exist, and can't be reallocated to other projects. This doesn't seem like a concept that's super hard. You'd think an Econ major would get it."

Ocasio-Cortez continued demonstrating her economic ignorance in her final sentence.

"Additionally, those jobs, there was no guarantee that those jobs were for the New Yorkers that were here," she said.

First of all, it’s highly unlikely that Amazon would have "imported" 25,000 employees from elsewhere to fill the positions. But even if it did, so what?

The point is, those 25,000 employees would have added tax revenue to the state in the form of income and sales taxes, and to the local coffers in the form of property taxes.

But more than that is the multiplier effect that those additional, 25,000 high-paying jobs would have on the local economy by boosting economic demand.

Each of those highly-paid employees would have purchased goods and services throughout the community, which would boost their income, which in turn would boost government revenue.

Therefore, Amazon’s decision to pull out of New York represents an opportunity lost, at a time when the governor is looking to make up the state’s shortfall.

But it’s an opportunity gained for other states, including Virginia, which said was willing to take up some of the slack.

A quote, traced to author Maurice Switzer (1907), and variously attributed to either Abraham Lincoln or Mark Twain, goes, "Better to remain silent and be thought a fool than to speak and to remove all doubt."

That’s advice Ocasio-Cortez should have tattooed on the palm of her hand.

Michael Dorstewitz is a retired lawyer and has been a frequent contributor to BizPac Review and Liberty Unyielding. He’s also a former U.S. Merchant Marine officer and an enthusiastic Second Amendment supporter, who can often be found honing his skills at the range. To read more of his reports - Click Here.

Related stories:

Report: Amazon's NYC Pullout Boosts Other Cities in Bid Process

Blankfein: Move Against Amazon in NYC 'Anti-Democratic'

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The idea that the young Democratic socialist is this confused about tax incentives is frightening. The state wasn’t "giving away" anything. It offered the Internet retailer a temporary tax break in return for bringing in jobs and stimulating the economy.
amazon, cuomo, incentives
Friday, 15 February 2019 04:08 PM
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