We rarely agree with socialist Congresswoman-elect Alexandria Ocasio-Cortez, but she’s right to call billions of dollars in taxpayer subsidies for Amazon “extremely concerning.” These handouts to one of the richest companies in the history of the world, with an essentially zero cost of capital, is crony capitalism at its worst.

Amazon staged a year-long competition to find a second headquarters beyond its Seattle home, and politicians bid for it like millionaires at a Picasso auction. Except they were bidding with other people’s money. The two ostensible big winners, announced Tuesday, are Long Island City in the Queens borough of New York City, and Crystal City in Virginia, across the Potomac River from Washington, D.C.

They stand to split about $5 billion in Amazon investment, with the promise of 25,000 new jobs each at an average salary of $150,000 a year. Amazon plans to occupy about four million square feet of office space in each location, with the potential to double that if necessary. The kicker is that Amazon has extracted state and local subsidies of more than $2 billion for the privilege.

Virginia Gov. Ralph Northam and Arlington County officials agreed to a cash grant of $550 million for Amazon that could increase with the number of jobs, with another $23 million in infrastructure improvements. New York is even more generous, with starting subsidies of $1.525 billion. As Amazon put it on its website, this works out to $48,000 per job. Apparently bodega owners in Brooklyn are supposed to be happy about subsidizing a third of the salaries of hipster techies.

Amazon will also get a grant of $325 million from the Empire State Development program based on the square footage of buildings it occupies. New York City is kicking in its own subsidies, though its biggest concession was to waive local control over city land—a privilege other businesses don’t get.


The New York site may also benefit from hundreds of millions of dollars in federal subsidies through the “opportunity zone” provision in last year’s Tax Cuts and Jobs Act. The decision hinges on whether the IRS designates the new compound as a separate entity rather than part of the company’s existing structure.

Congress created opportunity zones to reinvigorate neighborhoods that have a hard time attracting private investment. But the danger is that Uncle Sam might subsidize investments that would have been made anyway. Long Island City is a classic example as it’s already been undergoing an investment boom.

It’s hard to blame Amazon CEO Jeff Bezos for accepting what politicians give him, though we wonder if he isn’t a tad embarrassed. The man who was able to buy the Washington Post for the equivalent of pocket money hasn’t made more political friends outside of New York and Virginia with this subsidy sweepstakes.

The worst actors here are the politicians who pose as job creators but are essentially job buyers. New York Gov. Andrew Cuomo once famously said he’d change his name to Amazon Cuomo if the company located in New York, but he didn’t need to pay such a Queens ransom. Google and other companies have created thousands of jobs in New York without similar subsidies, and Amazon might well have done the same given the city’s intellectual capital.


Mr. Cuomo says the state will make money from Amazon despite the subsidies, but that depends on Amazon’s decisions and long-term success. The Governor also says he had to offer subsidies to compete against states that don’t have an income tax, though that admission underscores the state’s lack of tax competitiveness. Mr. Cuomo taxes New Yorkers at confiscatory levels, giving himself more money to spend. Then he turns around and takes credit for sparing powerful interests from those taxes.

In New York they call this a racket, and with good reason. One of Mr. Cuomo’s closest pals was convicted recently in the “Buffalo Billion” scandal as he and others sought to profit from the Governor’s subsidy scheme to invest $1 billion in the Buffalo area. Amazon’s case is aboveboard, but it still amounts to a company with a market capitalization of nearly $800 billon getting paid to create jobs it would have created somewhere anyway.