This has become a suicide pact. The UK had a great arrangement with the EU. They helped write the terms of the trade zone. They got to keep their own currency and manage their own immigration and visa system. The UK was a unique, powerful member of the Eurozone.. Now they are going to trigger an economic disaster, as well as lose Northern Ireland and Scotland. Simple as that. The Union is about to be broken, and they caused it themselves. And this Eton-Oxford elitist (who intentionally acts like a buffoon to disarm the UKs normally aggressive press) will go down in history as the man who killed-off the UK.
If Amazon was going to open a large office in New York anyway to support its original programs ("streaming content"), then New York should never have offered incentives or tax breaks aside from the lease of city land. New York offered Amazon far too much. And we’ll be reading articles supporting that in the years ahead.
And that’s if this deal sticks. Perhaps it won’t.
New York attracts smart, energetic people to live there, just as it called me in 1995, when I was just 22. They know what New York has to offer. Pity Amazon didn’t see any value in my city without corporate welfare and publicly-financed handouts. Or maybe, New York isn’t as great as it thinks it is. Maybe having some of the best museums, parks, bars and cultural institutions in the US is not a draw at all. We don’t have the best hospitals and universities in the US. That’s Boston. We don’t have the best mix of dominant professional sports teams in the US either. That’s also Boston. Maybe New York doesn’t realize that it’s not number one in anything aside from population and local taxes. It’s just another desperate city begging corporations to rent space. That’s what this process revealed.
This is classic welfare for billionaires. States and cities should stop giving taxpayer money to the richest corporations and individuals on Earth, and spend it on public projects for the benefit of the people. Wouldn't that be a radical idea. Having a contest between cities intensified the madness and showed the intelligent among us how destructive it is..
This isn’t the first time that New York State has thrown taxpayer money away in trying to attract new companies. The Start Up New York program blew a big budget ad campaign and tax breaks to net either just over or under 1,000 new jobs, depending on which report you choose to believe.
Considering how much Albany was willing to give, one has to wonder if New York’s economy is not as strong as Albany tries to make it appear. Upstate unemployment is a Mississippi-like 11%. The city is now made up of luxury towers full of millionaire families and absentee billionaires built over crumbling infrastructure. New York is not well. And I think Albany showed its hand and its future economic forecast in this deal.
There is strong resistance to this deal. It has already exceeded exceptions in that it has forced Amazon to reconsider leasing land in Queens. And the resistance has proven that the Democratic base in New York has shifted to the left. Governor Cuomo and Mayor de Blaso are not progressives, and the base knows it.
And as a footnote to this ordeal, I hope that Mayor de Blasio has killed one of the worst buzzwords of corporate America in the last 20 years: synergy. When he and Cuomo did their rare joint press conference to announce the Amazon deal, de Blasio was asked wouldn’t it be awkward for Amazon to build a corporate campus next to a public housing complex. He answered that having the rich and poor next to each other on the Long Island City waterfront would produce extraordinary “synergy.” In other words, both sides would benefit from each other. Bullshit. Get out of here with that word. That buzzword is now dead. And hopefully, so is the Amazon tax break and subsidy from Albany. Amazon can reconsider Virginia or North Carolina now.
Back in the halcyon days of the Reagan administration, corporations joined the late capitalist movement of putting the enrichment of the investor class above nearly every other consideration. This involved crushing what was left of industrial unions, stealing the pensions of retired workers through the perversion of bankruptcy laws, and, needless to say, the ruthless looting of public subsidies and tax breaks. Naturally, the public subsidies were delivered, but the promised jobs and prosperity somehow never arrived. GM was simply following the new rules of corporate citizenship when it took the public money, and then walked away when their promises came due. Surprised?
High speed rail is not coming to the US in any sustained system, except perhaps in California.
Why? The USA missed its chance after World War II, when it had the capital and its rail corridors could have gotten the width they needed for freight and passenger trains on their own tracks. If the US tried to make room for high speed rail on the west and east coasts today, it would cost hundreds of billions. Of course, the US is still spending $2 Billion a week in Afghanistan. So I guess we can't afford it.
In France, Germany Japan and China, where four of the world class train systems are found, the high speed passenger services were built from scratch, not piggybacked on an old, existing, mostly freight rail system. A world war helped, and that included a lot of bombing by the US and UK. But I don't think that's any excuse. The USA remained a wealthy nation through the space age. Just look at what happened to Penn Station. The French National Rail Corporation would die laughing if it ever got a good look at Penn Station and Amtrak. After all, France is a first world country, while the United States barely qualifies as a banana republic. And I wrote these words before news came out that the state of New York is considering yet another private company to manage the crumbling Penn Station.
This ties into the bigger, more obvious issue that mass transit in the US is generally terrible. The underlying reason is the same: the best chance for planning and funding was in the last century (either before the 1920 crash, or just after WWII). In my father's day, New York City took care of it's essential infrastructure. The automobile had not yet become the dominant means of transportation, and Robert Moses had not yet rearranged the city to accommodate millions of cars. Now, after decades of neglect, the bill is coming due. I hope the city gets the help it needs, because it's approaching a dangerous tipping point.
Splendidly, I see. When a minority party member delivers that much burn, you see just how outdated and terrible the DUP is. If anyone believes that Northern Ireland, in 2017, is "Britain," then he's really living in the past.
When the Conservative Party won the flash general election this past June, it was obvious that it will be difficult to form a stable government. The Tories, desperate to remain in power, had no choice but to let the Unionist tail wag the UK's dog. This deal with the backward Irish Orangemen promised to produce a hideous government in Westminster.
But as you might have seen today, the chances of that government holding together became more difficult. How a party looks can be just as important as how a party performs. That rule used to be true in the US, but it holds in the UK.
As you probably recall, back in the 1990's, peace was impossible in Northern Ireland because the British Tories were absolutely dependent on Ian Paisley's Unionist Party for their parliamentary majority. It was only when Labour won in 1997 that the Good Friday agreement became possible. Because Blair's government was not in need of Unionist votes, he could use Clinton's good offices to broker a deal in Belfast.
The most successful revolution of the past fifty years has been the "revolt of the haves". Between 1940 and 1970, taxes on the rich were very high. The marginal tax rate on incomes over $1,000,000 was at least 90%. Yet these were the years when the American economy grew steadily, and productivity gains were matched by solid increases in average wages and salaries, and a narrowing gap between the very rich and everyone else. So what happened? The Republican Party convinced millions of ordinary white Americans that black people were prospering off of them, and far too much money and effort was being diverted to the unworthy poor. By 1980, with the Pied Piper from California spinning his fantasies about out "bright, shining city on a hill", and how government was the problem, not the solution, the people were willing to buy the nonsense that massive tax cuts for the rich would translate into prosperity for all, as far as the eye could see. And here we are. The top 0.1% are taking in nearly ALL the additional GDP bring created by the economy. And Trump the simple wants MORE tax cuts, and yet less regulation! Sure, why not?
Yet another new study shows that the US has not seriously taxed its rich people since Reagan signed his tax reform into law in 1986. The great project launched in 1980 by Reagan has reached its apotheosis. We have a government of, for and by the rich. SUCCESS!!!
As this Guardian opinion piece by Susan Campbell illustrates, Americans already operate under austerity. "One hand tied behind our back," is our baseline. Some of the hardships and sacrifices Greece is being forced to accept have been commonplace in the US for over 40 years.
And what's so frustrating is that millions of Americans believe the "if you work hard enough" fairyland talk. It certainly doesn't help that we are generally such an ill-informed public. Even when some are enlightened enough to more or less understand, the resentment factor kicks in from the "we are paying for them" crowd. The fact that WE could easily become THEM doesn't register.
None of this is news to Americans who live in our largest cities. Chris Rock is probably correct about most middle Americans being oblivious to class inequality. There, the reality of inequality is right in your face, unambiguously and apologetically slapping you, just in case you might miss it. In the small towns and suburbs, where most Americans live, the arrogance and entitlement of our plutocrats -and yes, our kleptocrats too- is more abstract, out of sight, and almost never encountered in person. The great and mighty fly in their private jets, to their palaces in the sky, or their private islands. Out of sight, and out of mind, they float above the rest of us, supremely confident and protected.
Like most essays Tim Wu has written, this one is pretty awesome.
As airline customers, we must suffer at baseline. And besides, suffering not only builds character, it reinforces an important social lesson. The natural order of things requires that we all understand that decent treatment is a privilege, to be purchased with money. If you lack money, you don't deserve the good treatment that only money can buy. If you have money, no matter how you acquired it, you are entitled to the best of everything. Furthermore, everyone must be conscious of the differences having money brings. So, if you're part of the great, unwashed masses, and you're miserable in airports, bus stations, subway stops and other places of public accommodation, the system is working, and the correct lesson is being taught.
This is not a popular question, but I feel the need to ask it out loud. 30 years ago, when Act Up taught me how crucial it was for homosexuals to get the same civil rights I enjoy, in the face of a deadly pandemic, did they envision a future in which gays would become the new conservatives? The capitalists. The owners. The bankers and politicians. The same boys club that keeps women from getting birth control? The same club that doesn't blink when unarmed black teenagers are gunned down by police? What I'm asking is, do we all want to be this affluent New York couple? To be wealthy conservatives? Or am I reading too much in a Tiffany ad?
Every civil rights movement in the USA has begun from an edgy place. Secretive women's afternoon meetings. The pews of black baptist churches. Or a loud protest outside a gay bar in New York. The goal of every civil rights movement is to obtain equal rights for all, so anyone can be anything they want to be. But when I see capitalists embrace a group that was only recently kept out of the mainstream, I have to wonder, is that what we were fighting for? Did corporations embrace gays only when they realized how much disposable income they have?
And gay friends, do I even have a right to bring this up? Is this topic off-limits for straights?
I'm afraid this post is going to be a mess. There is no easy way to report on the disappointment that is our capitalist system without writing a book about it. Fortunately, that book was published last summer.
In a summer full of bad news the world over, we in the US should be focused on the five biggest stories that directly effect us: our endless wars, our loss of the Fourth Amendment, our loss of women's reproductive rights, our ongoing water crisis / environmental crisis, and our unsustainable economy.
New York City increasingly relies on executive pay and Wall Street bonuses to keep its treasury full. Once any economy relies on the top 1%, it becomes unsustainable. Even Michael Bloomberg knew this. So the city has had to rely on tourism to make up the gaps. I don't think that is sustainable, either.
This post will focus on our current economy. Simply put, the rich get richer. Here's are just a few angles of the same overall story.
First up, CEO pay is ruining our economy. We now have proof. I can see you are not impressed. Occupy Wall Street tried to make us pay attention, but they didn't succinctly make their case. And now we have articles and books, like the ones above, to prove that Occupy was right, and those kids were on to something. But now we don't give a shit.
But let me elaborate on this a bit more. What does the economy of a city that relies on the top earners look like? How does it function? The answers are right above us, in the new supertall residential buildings going up. In a city in which there is an oversupply of office space, there is a bubble economy in the new luxury residential market.
Who is driving up the prices in new luxury construction? Mainly Wall Street managers and wealthy foreigners. And this price war has helped sustain a real estate appreciation across the whole city that has priced out the middle class. Millions of New Yorkers, whether they care or not, have lost their chance to buy.
Second up, Wall Street. The average Wall Street annual compensation with bonus is $369K. The average white collar NYC salary is $69K. The US median salary is $51K. And over half of New Yorkers make less than $40K. And what is our national economic policy? Be extra nice to those at the top. Given their contributions to the health of the economy, don't they obviously deserve such a large percentage of the income in the city? After all, consider what their taxpayer backed financial manipulations created in 2008. The world has staggered through the deepest recession since World War II, and the authors of this catastrophe have gotten richer every day since. Ah, the wonders of Capitalism.
And third is the current bubble. Looking up and down the Northeast Corridor, one can see that we are in the midst of a dangerous and destructive real estate bubble. While housing in Baltimore and Philadelphia remains affordable, comparitively speaking, the bubble is in full swing in Boston, New York, and Washington DC. Let's take a quick tour.
In Manhattan, the bubble is not done expanding. It wasn't long ago the average sales price of a Manhattan apartment (condo or co-op) exceeded $1 Million. This past fall, it surpassed $1.68 Million. 2014 was simply a blockbuster year for the borough. It marked the continued inflation of a real estate bubble that began in 2002, and survived the national sub-prime explosion. The average price per square foot in Manhattan is over $1,400. Units in Tribeca or those with a view of Central Park, are setting new records above $5,000 and $6,000 per square foot. On the rental side, it was about 15 years ago that we first saw studios pass the $1,000 per month mark. How does $90 per square foot per month sound?
And at the very top of the market, the properties for the top-half of the top 1 percent live in their own bubble that even Tokyo and London do not yet match. The epicenter of this bubble is the new row of super-tall residential towers in the 50s, with offer upper half residents views of Central Park. The entry-level building for this segment, Extell's One 57, has seen its sales grind to a halt while the elite wait for the completion of 432 Park Avenue, which offers more spectacular views and floorplans, and Extell's upcoming 225 West 57th Street, which will set a new height record for residential towers in the western hemisphere.
Outside of the new midtown skyscrapers, there are the blockbuster exotics, like the crazy triplex co-op at the Pierre Hotel, the new penthouse on top of the Puck Building, and the multi-level mansion at the top of our nation's first skyscrpaer, the Woolworth Building.
The Woolworth Building was once the crown jewel of downtown. In some ways, turning it into condominiums for plutocrats nicely summarizes what's happened to the economy, and the once great city of New York.
There had to be a point where the prices in Manhattan would be out of reach for most dual $100K earners. Even the affluent are tiny compared to oligarchs and investment bankers. So they shifted their search to Brooklyn. Now Brooklyn is almost as ridiculous as Manhattan. Wait, did I say almost?
How about Queens, then? Nope. Not affordable any more.
The madness continues. When will the city realize it's sitting on a real estate bubble? And do we really have to be reminded of what inevitably happens to bubbles? But say this for bubbles, they can be fun until they burst.
The high end condos are driving the market, but the law of supply and demand will raise both prices and sales everywhere in New York. At least, until the current bubble bursts, and it hits the fan again. But in the meantime, isn't capitalism fun?
And we have a bonus stop on our tour: Boston.
Have you seen the asking price for the penthouse in the yet unbuilt Millennium Tower next to Filene's in downtown Boston? It won't be finished until 2016, so there's still time to buy, if you can come up with $37,500,000. At that low price, it might attract a bidding war. The new apartment building at the TD Garden will feature apartments on the upper floors of $8,000 to $10,000 a month. IN BOSTON. I guess the Manhattanization of Beantown is nearly complete.
I must say, aside from grabbing a copy of Capital in the Twenty-First Century, this is the must read economics article of the Christmas shopping season:
John Bois: A eulogy for RadioShack, the panicked and half-dead retail empire
What a nightmare the American working class is living through! Since the Reagan administration at least, American workers are routinely treated like soulless, right-less, replaceable machine parts. We're back to working conditions that were common before the Progressive movement, and which we imagined were largely abolished in the New Deal and Fair Deal of the 30's and 40's.
Well, we were wrong, and the capitalists have won. Hooray for us.
Update, February 23, 2015: As Radio Shack closes this week, John Oliver has contributed this little gem:
Well, that ruins whatever respect for Mr. Page I had left. I used to occasionally point to him as a fellow Gen-X'er (a fellow salt and pepper haired Gen-X'er at that) who led a corporation and became an infulencial leader and innovator. This is because too many in my generation struggle to get hired, let alone land an opportunity to found and lead a company.
Well, he's an idiot. And his definition of charity is frankly twisted and dangerous.
Establishing large, well run, philanthropic institutions is nothing new. Carnegie and Rockefeller were pioneers of creating highly managed charitable giving. But, and this is a huge but, those foundations give money to charitable causes, which directly assist the poor, not corporations, which might produce benefits for them. Those organizations, and their many imitators, have supported colleges and universities, built public libraries -my hometown library in Brockton was built with Carnegie funds- built hospitals, clinics and research facilities, fed the poor, and provided open space and public recreation for countless people.
Larry Page hasn't a clue what charity is, and it's pretty clear he never will.
Just a quick observation. In the US the people are afraid of the government; in France the government is afraid of the people.
Citizens don't need to own firearms to make their government fear them. It just takes united demands, constant political pressure, and some strong unions here and there. While I understand the argument that unionized workers see themselves as union members first and company employees second, look at the victories they have won for workers in France, including workers who aren't unionized. Here's the latest example.