Week 12: November 12-16

November 14th Class Notes: Economics & Politics

The Amazon headquarters deal

  •  Will the deal be beneficial for Virginia and New York?
  •  Should the government be bribing businesses to come to their localities?
    • VA & NY governments spent millions in taxpayer dollars to entice Amazon to choose them for their new headquarters
  •  System privileges richer states, who can make high bids. States (ex. Tennessee) who need investment can’t afford to bid
  •  Amazon & Arlington are splitting the costs of upgrading the metro, adding new entrances & stations, and building a bridge from the metro to the airport

Winners & losers of the Amazon deal

  • Winners: people who get new jobs (tech workers, etc.), local economy & businesses, people who own homes (the value of homes may increase)
  • Losers: renters, uneducated/low-skilled workers, people looking to buy homes, taxpayers
    • Displacement of poor people who will no longer be able to afford living in Arlington
    • Retired people on fixed income may face increase in rent/cost of living
    • Amazon could take away business from Walmart

Distribution Matters

Article: $9.6 billion to Harvard is “philanthropy,” but free community college is socialism

  •  Harvard has an extremely large endowment – they could offer every current student free tuition
    • Endowment: money solicited from alumni, etc. Schools can spend the income off the endowment.
  • Giving money to community colleges would have a much greater impact than giving money to Harvard, a place that already has so much money – distribution matters 

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