For the last few days, people have been jokingly telling me I should seek royalties from John Oliver. In a recent Last Week Tonight segment, he mocks cities and states for throwing billions in economic incentives to companies such as Amazon. It does indeed remind me of dozens of columns I've written on this topic over the last couple of decades. But Oliver takes it national—so no need for the royalties. He's hilarious and on target and I urge everyone to watch it. Then I dare anyone to believe anything Mayor Rahm and Governor Rauner say about the benefits of spending $2.25 billion to induce Jeff Bezos to open Amazon's second headquarters in Chicago.
Oliver hits all the major points. The endless mantra of bubble-headed politicians promising "jobs, jobs, jobs"—even if there's no proof the corporate handouts will create new jobs. He highlights such absurd handouts as the $18 million a company received to build a replica of Noah's Ark in Williamstown, Kentucky. And there's the incentive that Fargo, North Dakota, gave to FedEx, even after a FedEx representative said publicly the company would come to Fargo without the subsidy.
It's similar to the tax increment financing funds Chicago has thrown at companies that were probably moving here anyway and most certainly didn't need it at all because they were already filthy rich.
If nothing else it's fun to watch Oliver's sputtering outrage. It's a reminder that you're not alone, that there are others out there who think these policies are insane.
Seeing examples of corporate welfare in other cities and states also helped answer a question I used to hear all the time. "Ben," they'd say, "this TIF stuff sounds bad, but don't other cities do the same thing?" People were particularly obsessed with New York City. As though, if New New York's wasting money like we're wasting money, then somehow it's not so bad that we're wasting money.
This is a distant cousin to the so-called Detroit Argument I used to hear back in the Mayor Richard M. Daley years. I'd rip Daley for something like, oh, offering a boatload of TIF dollars to the Chicago Mercantile Exchange. And someone would say, "If you don't like it here, move to Detroit!"
As if the only choice was corruption, waste, and autocracy in Chicago or the apocalyptic nightmare of Detroit.
It's oddly reassuring to learn from Oliver that New York has a nutty program called Start-Up New York that allows businesses to go ten years without paying any property, corporate, business, or income taxes. (In Oliver's mind it's enough to give President Donald Trump an erection.) That sounds like a wretched deal for New York's taxpayers, who'll have to pay more in taxes to compensate for the taxes the businesses aren't paying.But then I remembered Mayor Rahm earmarked $55 million in property tax dollars to essentially take valuable South Loop property off the tax rolls as part of the that has given the city Wintrust Arena and a Marriott Marquis hotel. So we spent millions to lose millions. Second City, my ass—let's see New York top that!
In each instance, as Oliver points out, the city or state doling out the goodies makes fantabulous job-creation promises that will never be substantiated, if for no other reason that no one's really paying attention once the money's been forked over.
Mayor Rahm's fantastic claims are that the new Amazon headquarters will generate $341 billion in total spending over 17 years, including $71 billion in salaries, and supporting an additional 37,500 jobs in the region annually.
If you believe this, I've got an ark in Kentucky I'd like to sell you.