Let Them Eat Cake

 

We’ve all been told that is what the clueless queen, Marie Antoinette, told the commoners and thereby sparked the French Revolution. But what happens when the leader of the revolution tells the commoners the same thing? Well Alexandria Cortez pretty much said that to her constituents regarding the Amazon deal. Or maybe she told Amazon, “Don’t give us cake, we would rather eat stale bread and mush.” Unfortunately, her constituents probably are as economically dull-witted as she is. Well at least a few guileless ones backed her on that. Now I’m learning that “civic leaders” in NYC are begging Jeffrey Bezos to reconsider NYC. Maybe these leaders should have confronted Alex when she was attempting to torpedo the Amazon deal. Maybe those leaders now know who they must campaign against in about a year. 

By cratering the Amazon deal, Alexandria and her fanatical followers took away millions and millions and millions of dollars that would have gone into the local economy, thereby stopping an great opportunity for their constituents to improve their quality of life and that of their families. After which she was silly enough to brag about it.

Several scathing analyses of Ocasio Cortez’s rejection of the Amazon deal have been written. I’m sure they are more definitive than my post. You can clink on the links here to read them:

However my purpose is different. I hope to illuminate her cluelessness with such clarity that all but her diehard progressive socialist followers will be boiling at her self-serving stupidity, which has set their lives back, possibly forever.

Let’s start with her oblivious statement about the proposed 3 billion dollar tax credit that was to be given to Amazon:

 “We were subsidizing those jobs so for… the city was paying for those jobs. So frankly, if we were willing to give Amazon three…if we were willing to give away $3 billion for this deal, we could invest those $3 billion in our district ourselves if we wanted to.”

Has she never paid taxes? Does she, I think an economics major, not understand the concept of a tax credit? A junior high civics teacher could explain this idea in just a few minutes and all but the dumbest would understand. Was Alexie asleep in class-every day?

I may not be as good at explaining this issue of the tax credit as a junior high school teacher, but after reading my example, even those who voted for her will understand she has screwed them:

As Alexie says when she is questioning someone before Congress: “Let’s play a game.” Does that make you cringe and even cause you to feel embarrassed for her and more so for her constituents? Anyway, let’s pretend that you rent a place that includes a garage. You are parking your car in the garage but you could park it on the street. Joe comes over one day and says he wants to start an auto engine rebuild shop and your garage would be perfect for it. Could he rent it from you?

Even though you are progressive socialist, you see an opportunity in this offer. You think about it, then say yes, but you want $50 for every car engine he rebuilds in the garage.

Joe says that Sam down the street would rent his garage for $40/car, but your garage is bigger and a better fit for he business, but there is a problem. He will have a lot of startup costs like wiring the garage for more power and building some shelves for his tools, and even buying some tools. Then Joe says if you  will forgo the $50 on the first six cars it would be a deal. After the first six cars, he would begin to pay the $50 tax per car that you are imposing on him. Plus he’ll tune up you car for free.

You say okay, you’ll give him a $300 credit (6 cars @ $50 a car that you will not charge him during his start up phase). Now you  are grinning and thinking about all the cool stuff you’ll be able to get with the money you’ll make, like a dishwashing machine or some shoes that don’t have holes in the bottom.

So you go into the house to tell your old lady, Alexandria Oblivious Child. She shoves you in the chest, and mobilizes her cronies who are sitting on your beat up couch watching Dr. Phil, and they all stomp to the door and scream at Joe, “Get out of here, you filthy oppressor of the people, you dark money monger, you smarty pants, hardest working and richest guy in the neighborhood. NO DEAL!!”

Then she turns to you and sticks her palm under your nose. “Now give me that $300 that you were going to give him. I need a new pair of designer glasses and an expensive tube of red lipstick.”

Your shrug your shoulders and say, “There is no $300 dollars. There would have been eventually, and probably a lot more. We might even have made enough to buy a clothes washer, but you just sent the money away.”

There was no 3 billion dollars being given to Amazon. Instead Amazon was just not going to pay its first 3 billion dollars of taxes, building fees, etc. This was money NYC was willing to not receive from Amazon in order to get long term economic benefits which would include future Amazon taxes, but also immediate income taxes from all of the Amazon employees, as well as taxes from many support businesses and their employees, all of which would have been immediate, and could have been applied to social programs that would have helped Cortez’s district. She was willing to give that up just to be able to make her progressive socialist point, something socialist do often. Rhetoric and doctrine and dogma are more important to them than people.

But she gave up a lot more than that. She gave up life changing opportunities for many in her district and those nearby. You’ve read my article “Show Me the Money,” right? So you know about the multiplier affect of money, and you know even before I enumerate it, that the immediate and future taxes were probably the smallest part of the benefits she sacrificed in the name of her dogmatic doctrine.

I will do a cursory analysis to demonstrate the damage done to the poor people of NYC by Oafish Child and her mindless minions. It should be edifying, that while it may be fun to cast your vote for a cow, or a bird, or a dog, or a cat, or even a child, you are ultimately doing damage to yourself and your community. You have to vote intelligently if you want to improve the lives of your neighbors and your family.  Now, if everyone in your community is under employed, unemployed, unemployable, or uninterested in being employed or employable, well then electing a hater of the successful, such as Oafish Child, might be satisfying to you, but that  is sad indeed.

Ecstatic that Amazon had pulled out of the NYC deal, one that would have helped her district immensely, Alexandria Ocasio Cortez cluelessly bragged, “Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world.”

Mindless leftist gibberish, quickly debunked:

Amazon’s corporate greed: Only childlike good ol’ Alexie would not know that almost every retirement plan has Amazon stock in its portfolio, and that includes everyday WORKING New Yorkers. Yes, Amazon is a public company and we all probably are owners of it, at least all of us who defer spending and save some money. Everyday WORKING New Yorkers, even those welfare cases that support aoc and even the diminutive aoc, herself, use Amazon because it is the quickest and usually cheapest access to things they want and need.

Worker exploration: Salaries at $125,000/year does not sound like exploitation. aoc at bartender wages would be exploitive-of management, that is.

Power of the richest man in the world: Wow, that’s important. I’ll cut off all my neighbors’ chances at improving their lives, just so I can say I defeated the richest man in the world. I hope your constituents see that statement for what it is. Jeffrey Bezos and Amazon will move on without blinking; aoc’s constituents’ will continue to amble aimlessly at  a flinching lurch-but she showed Jeffrey Bezos, by golly.

On to the numerical evidence that this woman is a disaster for those whom she represents. But first, here are links I have made to other articles on this situation, which probably are more illuminating than mine:

The Inquirer

CNN

Boston Herald.com

CNN ( a second article)

Business Insider, where aoc discounts criticism of her insane destruction of the Amazon deal because the source, in this instance, was a conservative group. I’m sorry Alexie, you and your fanatical friends did it, you own it, you even bragged about doing it, and it does not make any difference who criticized you for it.

Let’s start with a quote from one of the articles:

“As New York Mayor Bill de Blasio explained, the Amazon deal would have produced “$27 billion in new tax revenue to fuel priorities from transit to affordable housing — a ninefold return on the taxes the city and state were prepared to forgo to win the headquarters.” Unlike Ocasio-Cortez’s imaginary $3 billion slush fund, this is real money that actually could have been used to hire teachers, fix subways, provide health care, and put people to work. With Amazon leaving New York, that $27 billion is gone.

Ocasio-Cortez does not seem to understand that by helping to drive Amazon away, she did not save New York $3 billion; she cost New York $27 billion.”

I can assure you that NYC, an upscale and sophisticated city, did a very thorough study to arrive at those numbers. If city governments do anything well, it is thorough analysis.

This second quote further illustrates the benefits diminutive child aoc grasped out of the hands of her constituents and threw away:

“Case in point: Last week, Ocasio-Cortez celebrated the tanking of a deal negotiated by her fellow Democrats in which Amazon promised to build a new headquarters in Long Island City, N.Y., right next to her congressional district. Amazon’s departure cost the city between 25,000 and 40,000 new jobs. Forget the tech workers whom Amazon would have employed. Gone are all the unionized construction jobs to build the headquarters, as well as thousands of jobs created by all the small businesses — restaurants, bodegas, dry cleaners, and food carts — that were preparing to open or expand to serve Amazon employees.”

So now let’s make a limited overview of the numbers involved in the child congresswomen’s disastrous political ploy.

We know that Amazon was planning to employ some 25,000 people at an average salary of $125,000/year. That would have been 3.1 billion in salaries coming to employees mostly living in New York City near or in diminutive aoc’s district. We know from the multiplier effect that a large part of that money would have recirculated through the community over and over, buying food, services, things from local stores, and making improvements to the local neighborhoods. But we’ve only talked about the direct employees of Amazon. It was estimated that an additional 15,000 support jobs would also come into the community. I estimate these at $80,000 per year, but they could easily be much higher paying tech jobs. Using my estimate, that would result in an additional 1.2 billion dollars flowing into the local area.

That sums to over 4 billion dollars from Amazon and contractors’ salaries alone would be flowing and flowing again through the community EACH YEAR. How could that hurt Queens? Little aoc’s community may be not too bright and not have valued skills, but those with a strong work ethic could have done well starting businesses: restaurants, laundry, bars, flower shops, janitorial, carpentry, repair and other services. Those who are less industrious or less creative, such as aoc, could work in at their neighbors’ businesses, serving possibly as baristas and making big undeclared tips.

One can argue that the more indigent would have been pushed out as the new money flowed in and improved the housing stock. Certainly, that would have been bad for aoc, who depends on a voter base of the indigent, the unsuccessful, and those who blame everyone else about their situation in life. However, even these people could have been better off because even though Amazon was to receive tax credits, these 40,000 highly paid employees would not.

How much would these employees pay in taxes? New York is said to tax at about the same rate as California, the tax tables of which I have.  Based on that we can estimate that all of these employees would have been taxed by New York at the marginal rate of  about 9 %. The actual taxes based on typical tax tables would have been about $9000/year for each person. That comes to about 300 million dollars per year in taxes that could have been spent helping the helpless with clinics, housing, education, etc. Keep in mind that we are only talking about the income tax paid by Amazon staff and contractors. It does not include the taxes from all those other support services, i.e. all those restaurants, shops, and businesses that would have grown up around the Amazon campus. And, very importantly, it does not include future taxes that Amazon itself would pay, which would have been huge, once their credit ran out, and that would happen very soon, i.e. within a few years. You should now be disgusted with aoc’s childish inability to make rational adult decisions? When you elected a child to congress did you really think it was  going to work out okay?

I have created a little back of the envelope, worst case scenario to show how mathematically ignorant aoc had to be to have ecstatically torpedoed the Amazon deal :

Let’s presume for the moment that NYC actually did loan Amazon 3 billion dollars, just like child aoc thought. Let’s also assume that the only benefit was the $300 million income taxes received each year from those 40,000 employees, which certainly would have been the minimum benefit. This obviously is much more severe than the actual deal, because NY would not have loaned or give any money, not $1 and the benefits would have been much greater than just the additional income tax that would have been collected from those employees. But assume that the 3 billion is amortized over as 20 year project life, then a return of 300 million per year, would be earn NY an 8% return, which is about 4 times what they could earn from the bonds that they normally invest in. Aoc failed to see that even in her worst nightmares this was still a good deal. This is because she reacted with mindlessly and juvenile communist dogma, rather than with thoughtful analysis. A congress person should have people on staff who can read, evaluate, run scenarios and who would talk to the NYC staff who had run scenarios, had done the calculations, etc., etc. Obviously aoc and her staff are incapable and incompetent. They are simply fanatic leftists driven by dogma, doctrine, slogans, and childish lack of real world experience, and they are a disaster for NYC. 

Not mentioned in all the above is that Amazon probably would have instituted programs to help the community. Most of these high tech firms are populated by liberals and have liberal leaning policies, included outreach to the local communities. I imagine that Amazon would have favored local businesses for the campus services: janitorial, food, security, office supplies, and other support. They probably would also have given direct support to the local schools to better prepare the youth to compete in the 21^st century high tech world. They probably would have helped establish adult school programs in the local community and have hired and trained local adults to fill positions as well. These programs may have been more valuable than the government programs.

But this is now all gone, because little aoc just cannot compromise with her communist fanaticism. She does not understand money, hence she hates money. She wishes that all money would go away and that we would revert to tribal bartering used 6000 years ago. She’s the kind of fanatic who ran amuck in the Chinese Cultural Revolution. All that aoc can give the citizens of NYC with regard to the Amazon deal is an overly lipsticked goofy grin and a slurred speech filled with cryptic leftist jargon about dark money, worker abuse, defeating the richest man, and how local nonworking New Yorker children united to shoot all their neighbors future in the head, something she seems to think is for the greater good, I guess in a Pol Pot kind of way.