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Cities Selling Themselves Out to Amazon

Saturday December 2nd, 2017   •   Posted by Paul Theroux at 3:26pm PDT   •  

25656202 - santa clara,ca/usa - february 1, 2014: amazon building in santa clara, california. amazon is an american international electronic commerce company. it is the world's largest online retailer. Amazon made its reputation as the world’s largest online retailer by making it possible for anyone anywhere to buy consumer products. But has anybody considered what the company itself is capable of buying when it becomes the consumer?

In September 2017, Amazon announced that it was seeking to establish a second headquarters in the United States, where the company would seek to invest $5 billion in the construction of new facilities and which would potentially house as many as 50,000 employees. Called HQ2, Amazon succeeded in soliciting hundreds of offers from city governments across the country, where some have truly crossed the line of ethics in looking out for the best interests of their residents.

Danny Westneat is a columnist at the Seattle Times, who has obtained details of the bids offered by 30 of the 238 cities that have actively solicited Amazon to locate their HQ2 project in their municipalities. That limited sample shows some of the extreme lengths that local politicians have gone, where some City Halls even offering to give the Amazon corporation control over their civic governments.

Most of the HQ2 bids had more traditional sweeteners. Such as Chula Vista, California, which offered to give Amazon 85 acres of land for free (value: $100 million) and to excuse any property taxes on HQ2 for 30 years ($300 million). New Jersey remains the dollar king of the subsidy sweepstakes, having offered Amazon $7 billion to build in Newark.

But more of a bellwether to me are proposals that effectively would put Amazon inside the government.

Some are small. Boston has offered to set up an “Amazon Task Force” of city employees working on the company’s behalf. These would include a workforce coordinator, to help with Amazon’s employment needs, as well as a community- relations official to smooth over Amazon conflicts throughout Boston. (Surely Amazon can handle these things itself?)

But wait, there’s more! And it gets worse….

But the most far-reaching offer is from Fresno, California. That city of half a million isn’t offering any tax breaks. Instead it has a novel plan to give Amazon special authority over how the company’s taxes are spent.

Fresno promises to funnel 85 percent of all taxes and fees generated by Amazon into a special fund. That money would be overseen by a board, half made up of Amazon officers, half from the city. They’re supposed to spend the money on housing, roads and parks in and around Amazon.

The proposal shows a park with a sign: “This park brought to you by Amazon,” with the company’s smiling arrow corporate logo.

“The community fund projects would give Amazon credit for the funding of each project,” the proposal says. “The potential negative impacts from a project would be turned into positives, giving Amazon credit for mitigating it.”

Is it even legal to give a company direct sway over civic spending like that?

It rather makes the deal offered by Chicago, a city whose reputation for extreme corruption is well established, pale by comparison. Here, if Amazon locates its second U.S. headquarters in the Windy City, the company would be allowed to pocket all of the local income taxes that its employees in the city would see taken out of their paychecks.

60778788 - 3d flag of fresno city (california), usa. 3d illustration. This kind of dealmaking exposes the practice of offering incentives such as these to attract employers as the scam that it is, where the people most harmed by the practice are those whose “best” interests elected officials have specifically pledged to serve. The money for every goody and perk being offered to appeal to these rent-seeking corporations has to come from somewhere, and since it will not be from either the officially-blessed corporation or the city officials’ own pockets, the burden of paying the bills will instead fall squarely upon the indigent city residents who the rent-giving politicians seeking crony relationships with rich corporations would truly seem to hold in very low esteem.

In far too many ways, the bidding frenzy for Amazon’s HQ2 project parallels the games that billionaire sports team owners have played in getting local governments to pick up the tab for the multi-million dollar stadiums they demand, where the public often finds itself obligated to pay the municipal debts taken out to finance the projects long after the teams have packed up and moved to other cities where more corrupt officials were all-too-willing to get them even sweeter deals at the expense of their citizens.

It’s amazing how extraordinarily generous city officials can be with taxpayer dollars when presented with the public policy equivalent of a get-rich-quick scheme. It’s disturbing to find that some of these officials appear to view the anti-democratic transfer of political power away from the people who live in their communities, as in Fresno, to be a benefit.

For whose interests do the politicians and bureaucrats in these communities really work?

Feds Reward Waste, Incompetence and Corruption

Tuesday October 9th, 2012   •   Posted by Lloyd Billingsley at 10:10am PDT   •  

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Buried in the Bill

Sunday October 7th, 2012   •   Posted by Craig Eyermann at 2:47pm PDT   •  

Law professor Elizabeth Price Foley has been guest blogging at Instapundit this past week, introducing a pretty interesting running feature on just what exactly is in the Patient Protection and Affordable Care Act (aka “ObamaCare”):

NOW THAT ITS PASSED, NANCY, I FOUND OUT WHATS IN IT: Remember former House Speaker Nancy Pelosis comment about Obamacare, We have to pass the bill so you can find out whats in it? Well, Nancy, Ive now finished reading the 2700+ page Affordable Care Act. So Im going to start posting a few of the stranger, little-known provisions for our readers enjoyment. Im going to call them Obamacare Fun Facts because this should be fun. Hold onto your hats, folks.

The first two entries in the series didn’t disappoint! ObamaCare Fun Fact #1 dealt with breastfeeding – here’s a short excerpt:

OBAMACARE FUN FACT #1: BREASTFEEDING: All employers must now provide a reasonable break time and a private place other than a bathroom for employees to express breast milk for at least one year after childbirth. Employers with fewer than 50 employees may be exempt if they can demonstrate compliance would result in an undue hardship. [Section 4207, Affordable Care Act].

Other than a bathroom? So a special breast feeding lounge or something? I have absolutely nothing against breast feeding (quite the contrary), but this is a regulation that the federal government needed to impose on business owners in this economy? Really?

Nice to know the government cares so much about breastfeeding mothers that thousands of businesses will have to cough up either whatever it takes to comply with the law’s demands or the cost of whatever it takes to show they would have an undue hardship in complying with the law’s demands. For an item that more directly bills the taxpayer for its excesses, the topic of ObamaCare Fun Fact #2 is diversity:

OBAMACARE FUN FACT #2: TRAINING HEALTH CARE PROFESSIONALS FOR DIVERSITY: There is BIG money in Obamacare for all things relating to diversity, which is crudely defined as individuals from disadvantaged backgrounds. For example, section 5402titled Health Care Professionals Training for Diversity appropriates hundreds of millions of dollars to provide and expand scholarships and pay back student loans….

Foley lists three items in this section of the bill that, while doing nothing to improve the quality or availability of health care, never the less manages to stick U.S. taxpayers with a 575 million dollar bill over a five year period to accommodate the lawmakers’ other priorities.

We’ll keep an eye on the series as it progresses!

The Record for Racking Up Debt

Wednesday October 3rd, 2012   •   Posted by Craig Eyermann at 8:28am PDT   •  

Which modern U.S. President is responsible for racking up the most national debt the fastest?

That’s not as easy a question to answer as you might think, mainly because to be fair, you have to take inflation into account and also because the difference between Presidents for how long they were in office.

And then, there’s the problem of the size of the national debt itself, which is so large that it’s difficult to wrap one’s brain around!

So, to answer the question, we calculated the average annual change in the total public debt outstanding for the U.S. federal government per each U.S. household for each President from 1969 onward! The chart below reveals what we found:

Average Annual Inflation-Adjusted Change in National Debt per Household for Each U.S. President Since 1969

What we find is that the “winner”, by nearly a three-to-one margin, is President Barack Obama, who has nearly tripled the real annual rate of increase in the national debt per U.S. household of the “second-place” finisher, President George H.W. Bush!

But then, is that really a record of achievement of which one could genuinely be proud?

Government Pays Too Much for Pepper

Tuesday October 2nd, 2012   •   Posted by Lloyd Billingsley at 11:55am PDT   •  

Last November students at the University of California at Davis held a peaceful demonstration to protest tuition increases. Campus cops pepper-sprayed them, which drew international attention. So should the recent settlement, of a federal lawsuit as an example of government waste and hypocrisy.

As the Sacramento Bee reported, in the $1 million settlement, the 21 pepper-sprayed students will each get $30,000. The Bee helpfully listed the settlements real winners.

The ACLU and other attorneys who filed the federal lawsuit get $250,000 in legal fees, a large piece of the action. The Munger, Tolles & Olson law firm in San Francisco gets $320,000 for work on a systemwide review of how UC campuses should respond to demonstrations. Actually UC bosses should have known all along. Some UC Berkeley officials worked on that review and will get $88,686 paid in salaries and other fees. Apparently their already high salaries werent quite high enough.

The Marsh Risk and Insurance Services of San Francisco gets $119,714 for providing real time crisis management support for UC Davis. UCs own bloated management is apparently not up to the task. The internal affairs investigation of one UC Davis cop who deployed the pepper spray cost $230,256. Regular salaries should have covered this project.

The big winner in the pepper-spray sweepstakes was the New York-based Kroll consulting firm. Kroll bagged $445,879 nearly half the entire $1 million settlement for an independent probe that reported its findings to a panel headed by former state Supreme Court Justice Cruz Reynoso. As the Bees Sam Stanton noted, Krolls billing included more than $10,707 in airfare, $3,181 in ground transportation and $8,800 in hotel charges. Its all for the students, of course, and for justice.

As this shakes out, the students are simply an excuse for a wave of wasteful spending to politically connected firms, overpaid university bureaucrats, and washed up left-wing activist judges. Just so you know, Cruz Reynoso was an appointee of Gov. Jerry Brown to the California Supreme Court. In a rare display of good judgment, California voters booted Reynoso out of office in 1986 along with justice Joseph Grodin and state chief justice Rose Bird, two other Brown appointees.

Meanwhile, as Sam Stantons fine piece shows, any time any government purports to help victims, be sure and read the small print on the settlement.


Image source:


Free Lunch

Monday October 1st, 2012   •   Posted by Burt Abrams at 12:51pm PDT   •  

Source: Wikimedia Commons

Americans have become dependent on publicly provided free lunches, government programs without the taxes. The public whines about any attempt to raise taxes (other than those on the rich) while clamoring for all the entitlement programs the government can dish out. As a result of this whine and dining, nearly half of all households pay no income tax and the government must borrow forty cents of every dollar it disperses. Of course, there is no free lunch and the bill must eventually be paid. But it appears we will resist paying the bill until a crisis forces usto do so. Ask the Greeks and the Spanish how much fun that will be.

The Budget Control Act of 2012 helps to frame the problem. The Act calls for the imposition of major tax increases and spending cuts to be implemented after December 31 if Congress fails to reach a compromise on the budget. The tax increases comeprimarily from the reversals of the Bush temporary tax rate reduction and the Obama payroll tax holiday. Budget cuts under the Act will be widespread and automatic. Pundits have labeled the Act draconian and a fiscal cliff. Apparently we are doomed to fall into an abyss if the Act takes effect. Rest assured that our fiscal wizards in Washington will ride to our rescue to save us in the nick of time.

Chew on this. Allowing the Act to be implemented will give almost all Americans a strong dose of reality that there are no free lunches. If you like the governments programs step up to the plate and pay for them. If you dont like the size of the bill, cut down on some of the dishes by voting out big spenders. Remarkably, implementing the draconian Act only cuts the current deficit about in half. Lots of free lunches still willbe on the table as the government will be borrowing twenty cents of every dollar it spends. Thats how out of control the budget is. Bon appetite.

The Postman Always Defaults Twice

Monday October 1st, 2012   •   Posted by Lloyd Billingsley at 12:30pm PDT   •  

The U.S. Postal Service (USPS) recently defaulted on a $5.6 billion mandate to pre-fund retiree health benefits, the second time in two months the federal government postal service, has failed to deliver. In August it failed to make a $5.5 billion retirement prepayment slated for last September, which Congress conveniently deferred. So the USPS is a certified deadbeat and also a big-time loser.

In the third quarter of the most recent fiscal year the USPS lost $5.2 billion a full $2.1 billion more than the same quarter in 2011. From 2007 to 2010, the USPS lost $20 billion. A major cause of the losses is the decline in first-class mail, its major revenue source, and in which it holds a government-mandated monopoly. That monopoly cannot prevent individuals and businesses from turning to electronic communications. Since 2001, the volume of first-class mail has fallen 19 percent and by some projections will fall another 37 percent by 2020, a return to the levels of 1986. But the USPS is not only a loser. It is also decidedly Luddite.

Its plan to expand revenues calls for businesses to send more junk mail so unionized postal workers, who make 15-20 percent more than comparable workers outside government, will have more to do. The plan is called Every Door Direct Mail, and USPS bosses claim that by 2016 it could be a billion dollar product. Maybe so, but that would not begin to offset the massive losses.

The USPS wants to stop Saturday delivery, raise postal rates, and even lose some employees. Good luck with that because like all government employees postal workers also vote for a living. A better plan would be to lift the monopoly on first-class mail and privatize the service. The USPS already competes with FedEx and UPS in shipping, where USPS business is up 9 percent.

Expensive, inefficient, massively in debt, and more concerned about employees than customers, the postal service is a fitting symbol for the federal government. On the other hand, the USPS at least gives some clue what government health care will look like. But maybe we shouldnt be too hard on the USPS. After all, as Jay Leno says, for less than 50 cents they will carry a first-class letter all over the country for weeks. That works out to just pennies a day.

Unintended Consequences

Saturday September 29th, 2012   •   Posted by Craig Eyermann at 11:34am PDT   •  

Health Care


Do you remember when pushing medical providers to go away from paper-based record keeping in favor of electronic records offered the promise of reducing the cost of health care? Here’s what USA Today reported just over two years ago, on July 14, 2010:

WASHINGTON (AP) The Obama administration on Tuesday rolled out an ambitious five-year plan for moving doctors and hospitals to computerized medical records, promising greater safety for patients and lower costs.

Starting next year, doctors’ offices and hospitals can get federal money to help defray the costs of the systems, which can run to millions of dollars for hospitals. Providers who don’t comply by 2015 will face cuts in Medicare payments.

Federal incentive payments for doctors and hospitals to buy computerized systems could reach $27 billion over 10 years, and that’s only a fraction of what technology vendors stand to take in. It’s hoped the investment will streamline the delivery of medical care, yielding long-run savings.

The New York Times reports how that’s working out two years later:

When the federal government began providing billions of dollars in incentives to push hospitals and physicians to use electronic medical and billing records, the goal was not only to improve efficiency and patient safety, but also to reduce health care costs.

But, in reality, the move to electronic health records may be contributing to billions of dollars in higher costs for Medicare, private insurers and patients by making it easier for hospitals and physicians to bill more for their services, whether or not they provide additional care.

Hospitals received $1 billion more in Medicare reimbursements in 2010 than they did five years earlier, at least in part by changing the billing codes they assign to patients in emergency rooms, according to a New York Times analysis of Medicare data from the American Hospital Directory. Regulators say physicians have changed the way they bill for office visits similarly, increasing their payments by billions of dollars as well.

The most aggressive billing by just 1,700 of the more than 440,000 doctors in the country cost Medicare as much as $100 million in 2010 alone, federal regulators said in a recent report, noting that the largest share of those doctors specialized in family practice, internal medicine and emergency care.

So not only are taxpayers doling out money to health care providers so they can computerize their patients’ records, taxpayers are being charged more for the care that’s being recorded because the process of making the conversion is exposing more opportunities for medical professionals to be more fully reimbursed for the care they are providing to patients covered by the government’s health care programs. Care that they were previously providing to patients for free!

Why is it that every politician’s promise to reduce the cost of health care somehow ends up with the taxpayers being stuck with a even higher bill?

Golden Fleece for Gold-Plated Flight

Friday September 28th, 2012   •   Posted by Lloyd Billingsley at 8:55am PDT   •  

The federal government, more than $16 trillion in debt, saw fit to send the space shuttle Endeavour on a final joyride before it lands in a museum. Riding a Boeing 747, the shuttles farewell tour of California included two aerial laps around the state capitol in Sacramento. Fans were snapping pictures of a publicity stunt for NASA, another money-hungry federal agency. Charges of waste were few, but that was not always the case.

Were putting a truck up in the sky and were being told this is a second coming. I think this is being grossly oversold. That was Senator William Proxmire, a Wisconsin Democrat, when the original shuttle first flew in 1981.

NASA sold the shuttle to Congress as a way to make space flight cheap and frequent, about one flight per week. The actual rate was one-tenth of that, according to Roger Pielke Jr., science policy expert at the University of Colorado. According to Pielke, each flight cost $1.5 billion, and total costs of the shuttle program are $196.5 billion. So it wasnt cheap either.

Proxmire, who died in 2005, was right that the program was expensive and oversold but the shuttle wasnt his only concern. In its obituary, the New York Times noted that the Democrat was a maverick who crusaded against government waste. In fact, he gave out Golden Fleece Awards for such frivolous projects as: the National Science Foundation in 1975 for spending $84,000 to learn why people fall in love; the National Institute for Mental Health, for spending $97,000 to study what went on in a Peruvian brothel; $57,800 by the FAA on a study of the physical measurements of 432 airline stewardesses; $27,000 by the Justice Department to determine why prisoners wanted to get out of jail; and $3,000 by the Pentagon to study if military personnel should carry umbrellas in the rain.

The shuttle farewell flight would doubtless have bagged a Golden Fleece Award. So perhaps would the GSA for handing out bonuses to employees under fire for misconduct. Maybe Congress would get one for creating new and redundant federal agencies such as the Consumer Financial Protection Bureau. Without any doubt, Congress needs more mavericks willing to crusade against government waste.

Stuck in the Mud…

Thursday September 27th, 2012   •   Posted by Craig Eyermann at 5:21am PDT   •  

Now that the U.S. Census has released its newest estimate of median household income in the United States, it’s time to consider where the U.S. federal government spending per U.S. household stands with respect to the Zero Deficit Line, which is the amount of spending that the typical American household can actually afford. The chart below shows those two measures for each year since 1967, when the Census first began reporting its median household income figure:

Total U.S. Federal Government Spending per Household vs U.S. Median Household Income, 1967-2011

Looking at the chart, we see that median household income would appear to be mostly stuck where it has been since 2007, but for the third year in a row, the amount of U.S. federal government spending per household has soared from where it was in 2007 to just below $30,000 per U.S. household, where it has basically been stuck in the mud for the last three years.

Meanwhile, the amount of spending that the typical American household can actually afford for the U.S. government to do based upon its 2011 income of $50,054 is just $21,056 – approximately 70% of its spending per U.S. household.

Clearly, the federal government’s spending isn’t doing anything to boost the incomes of American households. Instead, it’s just racking up massive amounts of debt that will burden those incomes far into to the future….

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