Comment by slg | Hacker News Reader

Comment by slg | Hacker News Reader

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>I'm scared to see the numbers of "incentives" that local politicians try and hand out to Amazon. There's little evidence that the public money used/lost will ever be recouped.

It is a classic example of the winner's curse[1]. If Amazon is auctioning off the HQ for tax breaks, the government that wins is likely going to overestimate the value that winning the bid will provide. Those odds greatly increase when you throw in the fact that governments have misaligned incentives. Most politicians will choose the continuation of their career over the good of the people they govern. "Winning the Amazon bid" might be enough to get a politician elected to a higher position long before any economic reprecussions are felt. You see this same scenario play out all the time when public money is used to build sports stadia.

[1] - https://en.wikipedia.org/wiki/Winner%27s_curse

Yep, this is a common case with everyone's favorite repeat offender: Which city gets to host the Olympics?

And that has been shown, time and again, to be a huge money loser and not at all something that invigorates the economy or somehow makes a city "more legit" in the global sphere. It is, at best, symbolic and at worst, charitable [on the part of the host city].

Calgary made money on the olympics; our HQ2 bid isn't shortlisted though

While that's generally been true on a global level, the olympics have generally been profitable endeavors for American host cities. the 1984, '96 and '02 all turned a profit for host cities.[1] Further, if olympic upgrades are done responsibly the games can act as a subsidy for local improvements to mass transit, universities and other civic spaces even if the city doesn't turn a profit.

[1]https://en.wikipedia.org/wiki/Cost_of_the_Olympic_Games

I agree, and this is a problem of government. Amazon is exploiting it. Good for them. The ones that have to get their act to gether are local govs.

Seattle and San Francisco already screwed it up big time. I am hopeful some city will lean heavily towards land value taxes instead of income and prop taxes, and then companies like amazon would go there naturally and economic propserity is relatively assured as rents go up.

If that's the case, then perhaps we should lay (some of the) blame on the people who would chose to 'continue' the career of the said politician, no? Lets not deny agency the people have in making informed decisions.

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