The Trial Lawyer Winter 2018 - Page 76

consumers who were the real victims in order to give billions to greedy bankers. That’s just one of the many highlights of capitalism that the younger generation experienced. They are also entering a job market that isn’t providing adequate pay and benefits, coupled with an older generation that can’t afford to retire so the number of openings is smaller than it was in years past. And that doesn’t even begin to hit on the massive inequality between the haves and have nots that was made worse with the GOP tax cut for millionaires and billionaires. But there is a bigger failure of capitalism that proves that the so-called “free market” died a long time ago, and it was perfectly exemplified with the recent Amazon headquarters decision. In November, Amazon announced that it had finally selected the areas where its new headquarters would be located: Brooklyn, Maryland just outside of Washington, D.C., and a smaller office in Tennessee. The company’s decision had taken more than a year, as it had been waiting on cities and states to offer up as many tax subsidies as possible before making the final decision. The areas chosen were actually not the highest bidders; Some states like New Jersey were offering close to $7 billion worth of subsidies and tax breaks to Amazon if they chose them. But considering that the combined subsidies that Amazon will enjoy from all of their new offices will total more than $2.4 billion, the company made out just fine. Amazon, like so many other companies before them, started a bidding war between states to see who was willing to give up the most in order to bring Amazon jobs to their areas. New York was willing to give the company $48,000 in tax subsidies for every single job that they create with the new headquarters. The headquarters outside of D.C. is going to receive $22,000 in subsidies for every job created. This is money that is going to help to starve local areas of revenue — areas that are watching their infrastructure crumble before their eyes. Amazon claims that it is bringing 50,000 new jobs to the New York office alone, so the $48,000 per job subsidy is just a small part of the other tax breaks the company will receive. It will get breaks on property taxes, income taxes, utilities, and every other subsidy the state could throw out them. The same scenarios will play out in the other two locations that the company will begin building. These subsidies are even more grotesque when you take into account the fact that Amazon founder Jeff Bezos’ average pay is $191,000 an hour. These subsidies are nothing new; corporations have been doing this for years. They announce plans to build a new office, tell cities that they are in the running, then sit back and see who is willing to give up the most in order to attract the company. This happens with stores like Walmart, Target, Best Buy, and even many fast food chains. Billions of dollars in tax revenue are lost every year just to companies being given these sweetheart deals. 74 x The Trial Lawyer And, according to studies, it is almost never worth it. The areas that receive the new locations rarely see all of the promised jobs become a reality. The low wages being paid to the employees require taxpayers to subsidize the workers in the form of food stamps and Medicaid. And the increased traffic causes further damage to infrastructure — the same infrastructure that will go even longer without repairs due to the loss of tax revenue. In these corporate bidding wars, cities and citizens are always the losers and corporations win every time. So why do they do it? The answer is simple: publicity. The amount of positive attention that state and local politicians get from announcing a new company moving into the area (and the promise of thousands of new jobs) is going to generate positive headlines for months. And once the new offices or stores are built and the jobs never materialize, the media has already moved on to the next story and the same politicians that arranged the deal never get held accountable when the city starts losing money. In fact, most of their constituents don’t even pay enough attention to realize that they got swindled. Here’s the thing: the free market and our capitalism-based economic system are supposed to work on the macro economic principle of supply and demand. If Amazon or any corporation saw the need to create a new headquarters or to build a new retail store, they would do it. That’s how the system is supposed to work. Those new Amazon headquarters, assuming they were actually needed by the company, would have been built regardless of many subsidies they received. Cities and states could have just sat back and waited for the company to make an announcement without ever promising a single dollar to the multi-billion dollar company. But because the free market doesn’t actually exist, the government stepped in and created a bidding war, pitting one city against another in a desperate scramble to woo Amazon. We are at a point in our country where cities are being starved of revenue. Education is taking a massive hit due to reduced tax revenues; infrastructure, including in the area of New York where Amazon will be building, is falling apart before our very eyes; vital government programs like SNAP and Medicaid are being slashed to make up for budget shortfalls; and yet we’re giving the most profitable corporations in America more of our tax dollars in the off chance they might come to our city. That isn’t capitalism or the free market — that is extortion on behalf of the corporations. These are just a few of the reasons why more and more people of all ages are losing faith in capitalism. In reality, capitalism doesn’t exist. The free market doesn’t exist. Even our Republic or democracy or whatever the hell we want to call it doesn’t exist. What exists today, and what rules this country, is a corporatocracy where corporate-backed politicians do whatever they can to enrich billionaires and starve the American taxpayers of basic services.