Pittsburgh’s $21.6 billion Amazon embarrassment

Pittsburgh’s $21.6 billion Amazon embarrassment

Writing in 1886’s “Beyond Good and Evil,” German scholar Friedrich Nietzsche reminded that “In individuals, insanity is rare, but in groups, parties, nations and epochs it is the rule.”

Never has that sentiment been more apropos to describe the total lack of critical thinking that eluded public officials across America and locally as they prepared, then hid, their insane offers of public “incentives” to Internet retailing giant Amazon hoping to secure its new headquarters.

Sites in suburban Washington, D.C., and in New York were chosen from among 20 “finalists,” Pittsburgh included. And, make no mistake, the “winners,” in their promotion of a subsidy war that is but a Pyrrhic victory, only thumbed their nose at sound economics and good public policy.

Simply put, the “winning” bids are embarrassing. And Pittsburgh’s losing “economic offer” was a convoluted sleight of logic that its pushers valued at $21.6 billion – in return for Amazon’s promised $5 billion investment.

That first number is the amount noted on page 6 of the bid and, parsed by promoters every which way to Sunday, is said to include significant savings for Amazon and buy-ins from the mega-rich online behemoth.

Lots of smoke; plenty of carnival mirrors; tax receipt redirections and a few folks whose resources were pledged who didn’t even know they were pledged. (Think Pittsburgh Public Schools’ offered tax-increment financing deal for which the Post-Gazette says the district knew none of the details.)

Hey, there was even talk of expanding Allegheny County’s light-rail system, a mass-transit methodology that, in general, is routinely panned for its economic and operational inefficiency.

Ah, a supposedly cutting-edge offer from dull blades.

And, shuh-ZAM, it is proffered by promoters, only new taxes generated by Amazon would have paid for it all. Rube Goldberg would have been proud. After all, who would not adore such a perpetual tax receipts machine?

But the bottom line is that such an offer should land the region’s bid-makers in the funny farm after they’ve been driven out of Pittsburgh on a rail. For their actions redefine insanity.

No wonder that public officials, by hook and by crook, made the Amazon offer in total secrecy, the public be damned, in contravention of the law and in contravention of the courts upholding the laws that guarantee the public’s right to know such things.

Then the secret offer-makers abused the court system and expended even more public money to further hide their machinations.

When a judge accuses public officials of using a non-profit organization to “launder” from public view a pledge of public money and/or resources – as an Allegheny County judge accused the top elected official of the city and the county of doing with the Allegheny Conference on Community Development – there should be legal repercussions.

There won’t be, of course; politicians behaving badly always seem to be able to rationalize their lack of accountability and escape any consequences. It is the ultimate anathema to good government. And Pittsburghers should be sorely ashamed that their “leaders” are not leaders in any sense of the word.

There’s a curious concluding line in a blistering anti-Amazon editorial that the Post-Gazette published in advance of Pittsburgh and Allegheny County officials releasing their bid details.

After thoroughly eviscerating Amazon and running it through the old ringer-washer multiple times, it took on the government suckers who play the subsidies game:

“American cities, states and their political leaders have never learned the lesson that professional sports teams have been teaching them for decades: Bullies always take all the money in your pockets and knock you down in the snow drifts anyway.”

Of course, back in 1997, when The Stadiums Tax was being debated, it was an old iteration of the P-G editorial board that emboldened the new sports facilities’ bullies.

If the P-G editorialists indeed have learned their lesson, allow me to be the first to welcome them to the bright, and right, side of the public policy debate.

Speaking of curious public policy epiphanies, the typically reliably liberal Atlantic magazine, in a story published before Amazon’s formal site selection for its “HQ2” was announced, also skewered local governments for continuing to play this outrageous game of plying uber-rich companies with public subsidies.

“Every year, American cities and states spend up to $90 billion in tax breaks and cash grants to urge companies to move among states. That’s more than the federal government spends on housing, education or infrastructure.

“And since cities and states can’t print money or run steep deficits, these deals take scarce resources from everything local governments would otherwise pay for, such as schools, roads, police and prisons.”

Concluding that corporate America “is getting all the help it doesn’t need,” staff writer Derek Thompson proposes that such practices – he calls it, properly, “corporate bribery” — be barred by law.

Actually, and depending on how the corporate welfare-ists structure such deals, it already is barred in the Keystone State — by Article VIII, Section 8, of the Pennsylvania Constitution.

Of course, pol after pol and “leader” after “leader” always seem to give the grandmotherly retort of “Just you pay no never mind” to that silly old Pennsylvania Constitution.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).