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Why would anyone in Delaware want more traffic, over all congestion and stress on services..
Because Delaware continues to lose good paying jobs. Without jobs, there is less money to pay for all the services needed to keep the state functioning: schools, police, highway maintenance, senior centers, health and social services, Del Tech, prisons, state parks and on and on. Without good jobs, young people will bypass Delaware for more appealing places.
Now the question is whether Delaware should throw its hat in the ring for the Amazon HQ. Well, why not? But I would hope people should realistically consider the likelihood of Delaware actually landing this plum. Exactly where will Amazon set up shop? Where will all new houses come from to house these 50,000 new employees plus their families? Where will all the new kids go to school? What highways will accommodate 50,000 new residents (plus their families) as they go about their day-to-day activities? What will rush hour look like on Kennet Pike, 141, Lancaster Pike, 202 and Kirkwood Highway? Where will all new the grocery stores, drug stores, movie theatres, gyms, gas stations, day care centers and all the other businesses go that will be needed to accommodate this influx of new residents? Where will all the new medical services come from? Where are all the hotel rooms that will be needed by the avalanche of business travelers? It would seem to me all of NCC would to be paved before Delaware could handle an influx of this size.
Hi Pine - Did you look at what Wisconsin is paying to get the Foxconn plant? Over 3 billion dollars in subsidies. For 3000 jobs, maybe more latter. Do a Google search. These deals come with a price..
Hi Pine - Did you look at what Wisconsin is paying to get the Foxconn plant? Over 3 billion dollars in subsidies. For 3000 jobs, maybe more latter. Do a Google search. These deals come with a price..
As a relatively well-off recent transplant... I will say deals like this help the richest institutions in the world far more than the current residents of the places that "win" them. The people who benefit are likely to benefit well-off transplants and current residents far more than the people in the region who need support the most.
I'm not necessarily against pursuing the deal, as long as they don't give away the store. But in general that's what places do.
How is this not considered a government give-away? What about all the existing businesses in the state that don't get paid to be in the state like suckers?
As a relatively well-off recent transplant... I will say deals like this help the richest institutions in the world far more than the current residents of the places that "win" them. The people who benefit are likely to benefit well-off transplants and current residents far more than the people in the region who need support the most.
I'm not necessarily against pursuing the deal, as long as they don't give away the store. But in general that's what places do.
How is this not considered a government give-away? What about all the existing businesses in the state that don't get paid to be in the state like suckers?
Icarus,
Respectfully, I somewhat disagree. If this HQ houses R&D, accounting, human resources functions, etc. then the average salary will be quite high and the average worker somewhat skilled.
While I am not an economics major, someone who is whom I know and respect once told me that an economy is like an ecosystem. Consider capital like water in an ecosystem. There are inflows and outflows. Certainly you have feedback loops, that is the water that leave the system, by say evaporation, re-enters in the form of rain.
Now lets transfer that notion of inflows and outflows to something like Amazon HQ2. Those 50,000 people will have to live someplace. Imagine even if only 50% of them live in Delaware, that's 25,000 people buying/renting housing stock, furnishing those houses, hiring contractors to work on those houses for improvements, cosmetic, etc. So, the salaries of those employees cycle back through Delaware's economy. Those contractors and their employees, have more work and make more money. They then decide to buy that new car, buy that new boat they had their eyes on, eat at a restaurant when the didn't previously, etc. That is then yet another recycling of capital through Delaware's economy.
The more money you have cycling through an economy there are many more opportunities for those not directly employed by Amazon to also profit and or enjoy benefits of increased revenue.
Let's take the increase in state revenue collected through taxes. That means more money for things like addressing the drug epidemic. With more people enjoying success with rehabilitation, that means reduction in associated crime as well as fewer tax dollars spent on crime fighting. Coming along with this is a greater sense of well being and quality of life. The people now rehabilitated are available to participate in job training programs that were funded because of the increase in state tax revenue. This is yet another type of cycling of capital through the State's economy from taxes to services to rehab to job training. The trained rehabbed individual then gets a job and adds yet another stream of tax revenue to the state. See another stream of capital cycling through the state.
Add to that the improvements to state infrastructure (roads, bridges, etc.) that everyone enjoys. This will also translate to more or better tourist experience, yet another stream of revenue cycling through the economy.
So, it is not simply the Company and its employees, rather it is the additional streams of capital that will cycle through Delaware's economy. It is the inflows, outflows, and cycling multiple times that makes an economy strong. With each cycling through a different cohort benefits.
I am a firm believer that Governments don't create jobs and companies don't create jobs. it is the customers that create jobs. More customers for Amazon means
more customers for contractors etc. that is more cycling between outflows back to inflows.
Respectfully, I somewhat disagree. If this HQ houses R&D, accounting, human resources functions, etc. then the average salary will be quite high and the average worker somewhat skilled.
While I am not an economics major, someone who is whom I know and respect once told me that an economy is like an ecosystem. Consider capital like water in an ecosystem. There are inflows and outflows. Certainly you have feedback loops, that is the water that leave the system, by say evaporation, re-enters in the form of rain.
Now lets transfer that notion of inflows and outflows to something like Amazon HQ2. Those 50,000 people will have to live someplace. Imagine even if only 50% of them live in Delaware, that's 25,000 people buying/renting housing stock, furnishing those houses, hiring contractors to work on those houses for improvements, cosmetic, etc. So, the salaries of those employees cycle back through Delaware's economy. Those contractors and their employees, have more work and make more money. They then decide to buy that new car, buy that new boat they had their eyes on, eat at a restaurant when the didn't previously, etc. That is then yet another recycling of capital through Delaware's economy.
The more money you have cycling through an economy there are many more opportunities for those not directly employed by Amazon to also profit and or enjoy benefits of increased revenue.
Let's take the increase in state revenue collected through taxes. That means more money for things like addressing the drug epidemic. With more people enjoying success with rehabilitation, that means reduction in associated crime as well as fewer tax dollars spent on crime fighting. Coming along with this is a greater sense of well being and quality of life. The people now rehabilitated are available to participate in job training programs that were funded because of the increase in state tax revenue. This is yet another type of cycling of capital through the State's economy from taxes to services to rehab to job training. The trained rehabbed individual then gets a job and adds yet another stream of tax revenue to the state. See another stream of capital cycling through the state.
Add to that the improvements to state infrastructure (roads, bridges, etc.) that everyone enjoys. This will also translate to more or better tourist experience, yet another stream of revenue cycling through the economy.
So, it is not simply the Company and its employees, rather it is the additional streams of capital that will cycle through Delaware's economy. It is the inflows, outflows, and cycling multiple times that makes an economy strong. With each cycling through a different cohort benefits.
I am a firm believer that Governments don't create jobs and companies don't create jobs. it is the customers that create jobs. More customers for Amazon means
more customers for contractors etc. that is more cycling between outflows back to inflows.
This is basically municipal-level trickle down economics. It doesn't really work. Do more big ticket projects get built are are high wage jobs brought? Yeah sure. That doesn't mean the people who need support most get any.
Unfortunately, economics tends to look at aggregate economies, not individual people. Look at the current residents and see if their lives are better after these kinds of deals have gone through.
A good portion of the time these companies already have one or two places they really are considering, and just want a feeding frenzy. Municipalities gladly play along.
This is basically municipal-level trickle down economics. It doesn't really work. Do more big ticket projects get built are are high wage jobs brought? Yeah sure. That doesn't mean the people who need support most get any.
Unfortunately, economics tends to look at aggregate economies, not individual people. Look at the current residents and see if their lives are better after these kinds of deals have gone through.
A good portion of the time these companies already have one or two places they really are considering, and just want a feeding frenzy. Municipalities gladly play along.
I said nothing in my post about shifting tax burden from the top wage earners with the idea
that it would spur investment "raising all ships." What I discussed is the increased tax revenue
and how the additional flows benefit others. What I discussed is the well paying salaried jobs
would create more customers thus introducing more flows. This is not the same as trickle down.
I said nothing in my post about shifting tax burden from the top wage earners with the idea
that it would spur investment "raising all ships." What I discussed is the increased tax revenue
and how the additional flows benefit others. What I discussed is the well paying salaried jobs
would create more customers thus introducing more flows. This is not the same as trickle down.
I didn't mean trickle down so literally, but I understand the hang up on the terminology.
But what you have said didn't address my point. Increasing tax revenue is great, but alone does not mean much. I'm asking what deals like this do for the existing people. The idea you present is that governments should enact huge giveaways to rich entities in the hopes that they provide employment and tax revenue in other ways. This is what I meant by trickle down... by giving away the store (as these deals increasingly do) we pin our hopes on the idea that these giveaways will help the rest of us in some way or other. Unfortunately previous deals like this have not shown that to happen. The competition is too fierce and the giveaways are more and more imbalanced in favor of the large company that result in an outrageous amount of money/"job".
Besides all that, I wouldn't be surprised if they've already chosen one or two likely sites and are just pitting places against each other for greater giveaways.
I don't get how this is a middle out. That post didn't describe what specific policies politicians supported that describe this model. In fact, it seems contrary, and perhaps irrelevant to today given most entrepreneurs these days did start out rich:
Quote:
Entrepreneurs start companies not because of tax breaks, but because there are consumers out there who want and can afford what the entrepreneurs make. And most entrepreneurs don’t start rich; most start in the middle class or below.
I didn't mean trickle down so literally, but I understand the hang up on the terminology.
But what you have said didn't address my point. Increasing tax revenue is great, but alone does not mean much. I'm asking what deals like this do for the existing people. The idea you present is that governments should enact huge giveaways to rich entities in the hopes that they provide employment and tax revenue in other ways. This is what I meant by trickle down... by giving away the store (as these deals increasingly do) we pin our hopes on the idea that these giveaways will help the rest of us in some way or other. Unfortunately previous deals like this have not shown that to happen. The competition is too fierce and the giveaways are more and more imbalanced in favor of the large company that result in an outrageous amount of money/"job".
Besides all that, I wouldn't be surprised if they've already chosen one or two likely sites and are just pitting places against each other for greater giveaways.
I don't get how this is a middle out. That post didn't describe what specific policies politicians supported that describe this model. In fact, it seems contrary, and perhaps irrelevant to today given most entrepreneurs these days did start out rich:
Perhaps this, more heady source, might elucidate more about middle out
And even besides all of the above, this leaves out what current residents of all stripes want. Are these policies, when fully described, supported by the current residents? We never really know the answers to this, because the questions are never asked by people making the deals and their cheerleaders.
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