Friday, February 15, 2019

Shock and Awe

That was my reaction when I heard about Amazon's withdrawal from New York HQ2 on of all days, Valentines Day.  It felt sweet in ways that no candy could ever satiate.

I have been long questioning the bullshit behind the search as I questioned how any company could validate having not one but three headquarters and two of them firmly on the East Coast when most of the interests of Amazon are well located in Seattle and the West Coast proximity to the Valley and of course Whole Foods whose offices are in Austin.  There was something sinister about how they got cities to compete, provide deep research and data all on their dime and in turn the lack of transparency with regards to Governments and their incentives to encourage Amazon to set up shop.

If there is one thing we have learned from these bullshit parlor games is that they rarely meet their end of the deal when it comes to corporations and their promises from number of jobs to pay rates.  Then we have the push me pull you when companies decide to pack up and go to the next whore who offers a better deal.  The incentives and taxes are not clawed back and all of it is an overall loss to the state and in turn revenue that could be used to build infrastructure, fund schools and build housing.  But hey we got Amazon and the promise of thousands of jobs over dozens of years right!?

And Amazon is not alone. Google has expanded its footprint across the United States and all tax free like Duty shops only without booze or perfume 

Nashville is peeing itself that New York's loss will be this city's gain and to that there is no evidence that Amazon will suddenly up and build more in a state where the educational achievement, the bullshit politics and the lack of a significant infrastructure will happen overnight and in turn enable them to consolidate their enterprises here.

Reviewing once again the endless reality of living in Nashville is to acknowledge the rising crime mostly by teenagers, the low attainment in education and the overall corruption that exists here.   Today they were proud that the overall ignorance here was above Alabama!  YEE HAW!

And more worries here in greed town was the drop in housing sales and in turn overall prices which I am thrilled about with regards to my apartment going condo.  The two offers pending over financing have been withdrawn and I could not be happier as that too was a Valentine's present.

But this again is not good news for the morons who overpaid for their properties.

"Nashville is slowing down faster than the nation," said Skylar Olsen, senior economist at Zillow. "But I don't think (prices) will begin falling in Nashville for some time yet."
Meanwhile, rents are feeling the slowdown too. They rose, year-over-year, just 1.5 percent to a median $1,512 per month in January, according to Zillow. 

Housing market slides

Since April 2017, the 10-county Nashville metropolitan area slid from the third to the 14th fastest growing real estate market among the nation's largest cities, according to Zillow. 
Cities from coast to coast are experiencing similar housing market deceleration — with the most extreme downturns in Seattle, San Francisco and other areas that saw the most dramatic gains in recent years.
"The places where the slowdown is more apparent are places that were moving at such an incredible, unsustainable pace," Olsen said. "When prices go too far, too fast, demand starts falling back and appreciation slows down." 
The Nashville area's real estate industry hit an all-time peak in the third quarter of 2017, according to The Colliers Index, which was developed by the global real estate services and investment management company. 
That quarter was a time of record investment in new offices and a record number of construction permits issued. 
"I'm not concerned about a lull because economies are cyclical, of course, and there will be lulls," said Janet Miller, CEO of Colliers International Nashville. "Lulls in Nashville are not as painful as in other places. We're not seeing a slowing of people moving to Nashville."

Downturn seen as healthy correction

Property data analyst CoreLogic predicts the nationwide cooling will continue with smaller gains at this time next year. 
Interest rates are expected to continue to tick upward throughout the year, putting more pressure on buyers. 
But, all in all, the news isn't bad. 
The downturn is a healthy market correction after years of housing price increases outpaces wage gains, analysts said. 
In late 2018, Nashvillians needed to earn a $74,018 salary to afford a home, according to real-estate industry analyst Attom Data Solutions. But the average worker made $59,020. 
"Housing markets are supposed to move closer to income," Olsen said. "I hope we'll only be seeing those (record-high home price growth) numbers in the rear-view mirror. It is certainly exciting for home owners watching their values appreciate. But it was really hard for home buyers."
At the peak of Nashville area's housing boom in April 2017, 31 percent of buyers paid more than the listing price for homes because competition was so high. 
In January 2019, 13 percent of buyers paid more than the home's listing price, according to Zillow. 
"13 percent is still pretty high," Olsen said. "That just tells you we're not back to a normal housing market. It takes a little bit of time for our expectations to catch up."

That is why when you realize that Amazon is supposedly paying wages three times above the average salary there is something wrong here.  Finally someone did the math when it came to the move by Alliance Bernstein and they realized that the range of salaries can often reflect an average that leans to the higher end when you have several executives making significant wages. Wow this was news.

But again there are still businesses closing around the region and this was another one regarding Payless Shoes.  Payless is following a long line of bankruptcy filings including Gibson Guitar, ToysRUs and Sears.   Remember 2008? I do.

I think this summarizes how I feel about this bullshit that businesses put cities through to gain some savings that do nothing for the community.  I want to point out that Amazon has generated an 11 Billion dollar profit and paid no taxes for the past two years.  Why is that? For the few activists and legislators that balked I want to say Goliath meet your David.

Amazon Isn’t Interested in Making the World a Better Place

New Yorkers who expected better bought into the myth that tech companies are more than just self-interested businesses.

By Kara Swisher
The New York Times
Ms. Swisher covers technology and is a contributing opinion writer.

Feb. 15, 2019

The announcement on Thursday that Amazon has canceled its plan to build a headquarters in New York City is no victory. It’s no defeat, either.

What it is, to use a Big Apple term, is meh, yet another indication that the dulcet attractions of tech have lost their charm for many and that the business — which has been this country’s most innovative and promising and often its most inspirational — is just that: a business, like any other, out for itself and itself alone, and most definitely not changing the world for the better.

That was the cry of tech from its start — especially of the internet types like the Amazon head, Jeff Bezos. Bankers never said they were going to make the world a better place. Nor did makers of toilet paper or potato chips. Maybe soda makers like Coca-Cola said it in their ads, but we were all in on the joke when they told us that sugar water would bring the world together.

But Silicon Valley truly believed its own myths — that tech leaders had arrived from the mountaintop to deliver the gleaming devices and magical software that would transform humanity, and that they would never be evil.

Most of all, they really believed they were more than whatever they actually were doing, whether slinging better ads by sucking up our data, or taking a vig for getting us a date or a car, or in Amazon’s case, selling us piles and piles of stuff in really cheap and convenient ways.

That’s why only a few years ago, it would have been easy for Amazon to saunter into a place like Long Island City, Queens. In fact, the online giant’s effort to decide where its “second headquarters” would be was originally greeted with enthusiasm, with multiple municipalities going to comical lengths to bring in the promised 25,000 high-paying jobs.

There is, of course, no such thing as a second headquarters — this was a marketing circus from the start. But everyone bought into the narrative, especially the media, painting it as if it was going to be a much more transformative opportunity than it ever could be. “Saturday Night Live” got at the heart of it with a sketch a year ago, in which the reps from various cities bowed and scraped, offering all manner of delicious foods and financial gimmes to the world’s richest man.

It was satire, but really, was it?

It cut too close to home for many, who wondered why, in an era when all kinds of public services are being cut and the city’s infrastructure is crumbling, a trillion-dollar corporation was getting so much. When it was revealed exactly how much — $3 billion in tax breaks after largely secret negotiations between civil potentates like Gov. Andrew Cuomo and faceless Amazon execs — the situation was ripe for disruption. (Was it curious that Mr. Bezos was never the ringmaster in these negotiations? Not to me. He often stays behind the scenes in these situations.)

Tech people are always bragging about how they “move fast and break things,” as Facebook’s now-unfortunate motto put it, while seeking out new markets. This time, the disruption came from newly emboldened activists, with high-profile figures like Representative Alexandria Ocasio-Cortez (whose district is adjacent to the Queens area where the complex was planned) weighing in with some choice words about the deal.

“Can everyday people come together and effectively organize against creeping overreach of one of the world’s biggest corporations?,” she tweeted this month, part of a relentless series of these kinds of challenges.

Amazon, which never seemed to think it needed to do anything but assert that future tax revenues and other theoretical economic benefits would allow the deal to pay for itself, wasn’t prepared for this kind of scrutiny. So it decided to pull out before it got any hotter. With the prospect of drawn-out negotiations — the cost of not bringing everyone onboard at the start — and the glare of attention such a back-and-forth would bring, the always calculating company came to the obvious calculation that it was not worth the trouble.

In other words: “Thank u, next.”

It was a little funny that Mayor Bill de Blasio, who was a big proponent of the deal until he wasn’t on Thursday, tried to slap back at Amazon for not being able to stand the heat of New York’s kitchen. Twitter having become the means of governing now, he tweeted: “You have to be tough to make it in New York City.”

Oh stop. Amazon is plenty tough, but it just decided to fold up its circus tent and move on. It turns out it won’t even take that show anywhere else and instead says it will simply double down on its other second headquarters in the Washington area, which pretty much tells you that this was all a charade from the beginning.

Many New Yorkers had cheered on the opposition, assuming that it might persuade Amazon to strike a better deal with the city. They mostly agreed that more tech jobs would be good for New York (good salaries and more money for retailers, restaurants and the real estate industry) more than bad (gentrification, congestion).

But no one wanted to end up like San Francisco — which has become a modern hellscape even as internet companies build their airy HQs and become ever richer. There, tax giveaways only exacerbated income inequality and offered no solutions.

Amazon certainly could have been more creative in proposing some balms for those ills in New York. For example, could it have entered into a cool public-private partnership to fix the junky subways its employees would have ridden, perhaps in new and innovative ways?

You know, making the world a better place? No, I guess not.

No comments:

Post a Comment