Long Island City should now be called New Seattle...
Long Island City should now be called New Seattle... Charles Mudede

So it's official. Amazon is opening new offices in three cities: NYC and Northern Virginia (which will both be home to HQ2) and Nashville, where there will be a new Operations Center of Excellence. The corporation will also receive a total of $2.2 billion "in performance-based incentives." These cities are essentially buying jobs. That is the state of our post-crash economy. Jobs are no longer created by exciting private investment; they are purchased outright with the public's money. The rationale for this kind of planning is that the jobs will pay for themselves in the long run. The public has been forced into this pitiful corner because it's prevented from funding plans and programs that can lead to local job creation and economic activity.

Under the regimen of a fully implemented neoliberal discipline, municipal budgets must be constrained in bad times and good. And so, the post-war logic of procyclical fiscal policies has been abandoned. The federal government authorized massive tax cuts during a period of economic expansion, nixing any hope of the kind of budget surplus the US enjoyed during the end of the Clinton years. Seattle's mayor, Jenny Durkan, is in the process of imposing budget cuts during a boom. But when the downturn eventually occurs, we can expect emergency tax cuts to be applied, like defibrillator paddles, on the arrested animal spirits of entrepreneurs (they will, of course, pocket the free cash—this is the much ignored law of "liquidity preference"), and budget tightening to reduce deficits that are only mounting because of declining tax revenues. You can't win.

None of this is rocket science. It's pure political economy. Many in the locations that were awarded parts of the Amazon H2Q prize now have Seattle as the city in their future. That is the terminal point of this kind of pro-market urbanism. Expect your already bad housing crisis to worsen, your city government to kowtow to the richest man on earth, and your homeless population to spike like never before. What's missing from all of the pages of orthodox economics are models that explain why widespread prosperity is impossible if the state apparatus (the democracy) is embedded in the market, rather than the other way around. The former will always concentrate socialism; the latter expand it.