Start spreading the news, Amazon's leaving today. Not for New York but away, as the New York Times just reported. Forget the plans to create an Amazon Mini-Me in Long Island City, for which the state and city were going to provide billions in incentives and tax breaks. And that doesn't include the money that would be necessary to improve infrastructure and get subways up to snuff.
I guess New York Governor Andrew Cuomo won't have to change his first name to Amazon as he joked he might.
But this isn't really about Amazon, except as an example of something desperately wrong in business and public policy.
There was a lot of opposition to all the money that was about to be lavished. Amazon even said that it wouldn't take part in the opportunity zone tax breaks that it theoretically could have gained.
My guess is that had there not been so much public pressure and attention, the company would have been happy to take the extra benefit.
Most big companies are. That's why they pit cities and states against one another in ways to drive up the offers they see. The reason the politicians go for it is usually jobs. That's a benefit the voting public loves. But the extra employment frequently doesn't arrive. Things change and a lower number are employed. Or, in the case of a U.S. Steel and Gary, Ind., the number of jobs will diminish because investment is coming in the form of more efficient factories that need fewer people.
Billions and billions a year are collective poured into deals to entice corporations to come to a city, or even to keep them where they are. But it's a losing game, particularly when there is a much better way to spend the money.
If politicians and the public want growth, bet on smaller companies. Create growth funds to help them expand, increase research, ramp up manufacturing, and hire more people. Amazon is, what, 25 years old? Facebook is 15? Putting money into them is offering extra benefits for corporations that already make a bundle.
Help the small companies now that have a chance, in 10 or 20 years, to become powerhouses in their own right. Even if they aren't behemoths, think of the increase in economic activity, tax base, and employment. Most jobs ultimately come from small businesses, not the big ones.
You can start to help make this change by talking to lawmakers at the local and state levels. It's a lot easier than reaching the U.S. Congress and you can have more impact. When some areas start and begin to see real benefits, others will follow along. We could have an enormous shift in how we think about business, employment, entrepreneurship, and public investment.
Notice that all the big companies put money into small ones, even startups. They clearly know something. Time to learn.