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Saturday 23 Mar 2019 | 21:37 | SYDNEY
Saturday 23 Mar 2019 | 21:37 | SYDNEY

The botched Amazon deal and its importance for 2020 US elections

Amazon decided it will not be opening its second headquarters in New York City (Photo: Wikimedia Commons)

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22 February 2019 16:00

As with many of his unprecedented moves, President Donald Trump’s declaration of the state of emergency dominated the media cycle last week to the point that nearly all other news of significance for US polity and economy flew largely under the radar.

One such example is the news that Amazon decided it will not be opening its second headquarters in New York City. This announcement almost perfectly encapsulates a number of important questions regarding the role of government and corporations in the United States that will inevitably have to be answered as it braces itself for the 2020 elections.

The Amazon case raised a set of complex questions around the role of government in the new economy, future of jobs, and the approach to the new type of corporate monopolies.

Even though the elections are some 20 months away, there is no shortage of political fantasy-football regarding who would be the winning ticket for the Democrats in what is seen as the race that’s theirs to lose given the record low approval rates of the incumbent president. Yet, as each week brings a new announcement of exploratory committees and campaign commencements on the Democratic side, there is also plenty of evidence the Democrats are fighting for the direction of their party.

Amazon’s recent quest to find a location for its second headquarters turned into an epic contest between different local governments, which almost looked like a race to the bottom given the huge tax breaks and incentives that were offered to the e-commerce giant. New York City’s original bid included four different locations, out of which Long Island City neighbourhood was chosen as one of the sites for the so-called HQ2 (the other that was chosen was in Washington DC suburbs in northern Virginia). Yet, soon after the decision was made in November last year, the opposition to the New York City site became obvious and very vocal.

Only a week before Amazon’s decision, the midterm elections in the US saw a blue wave of sorts given the Democrats were able to seize control of the US House of Representatives, as well as prevail in a number of important state races. Yet, the midterms also magnified an unresolved issue from the 2016 elections – who speaks for the Democratic Party and what is its policy platform?

While the Republican Party is largely Donald Trump’s party now, judging by the lack of meaningful pushback from the party leadership so far, Democrats are continuing the battle of ideas that commenced with Hillary Clinton and Bernie Sanders sparring in the Democratic primaries three years ago.

The Amazon case is a telling one on two counts – it highlighted the tensions between the more progressive young guns and the more moderate older guard, while it also raised a set of complex questions around the role of government in the new economy, future of jobs, and the approach to the new type of corporate monopolies. On the former issue, it has been abundantly clear that there is a new generation of Democrats who don’t shy away from referring to themselves as democratic socialists in that they want to see the government play a much greater role, and who have ample experience with grassroots organising and mobilising supporters.

Alexandria Ocasio-Cortez has become the most recognisable name among the rejuvenated left, following in the footsteps of Bernie Sanders. Their position is clear – they will oppose corporations such as Amazon to show that they stand for organised labour, greater infrastructure spending rather than corporate incentives, and policies to decrease the costs of living.

However, a more pressing question is how will the Democrats move forward to reconcile its messaging and policy platform?

As the Amazon example demonstrates, there is a Democratic urban centre and coastal base which opposes big corporations and is successful at mobilising people to join in protests and boycotts. At the same time, Trump’s victory was the product of turning red the states that were thought to be a part of the blue wall – Michigan, Wisconsin, and Pennsylvania – and the votes that made the difference belonged to the white blue-collar workers that traditionally voted for Democrats.

In that respect, campaigning on opposing corporations that can bring jobs to areas hungry for investment such as the American midwest is not going to win them votes there.

The GOP has already seized on the narrative that the Democrats are trying to institute socialism in the US, as could be heard in the recent State of the Union address. It’s debatable how successful such tactics will be in the 2020 campaign, particularly given that the term is (over)used to describe a number of different ideas on the left end of the political spectrum, as well as given that it is no longer a scary word it once used to be.

Yet, with a Democratic field which now includes around a dozen contenders, the wicked problems raised with Amazon are sure to come back.

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