The Amazon Deal: Above All No Zeal
The recriminations over the Amazon pullout have been as bitterly tribal as the debate over the project itself. I think it would be helpful to provide an analysis of the political arithmetic underlying this Amazon debate, in the context of the clash between the political traditions of Gotham and the new progressive politics. There are five factors and three tests worth exploring.
First, the opponents of the Amazon deal prevailed despite clear public support in all the polling data. That was a significant tactical achievement for the opponents. Let’s look at the most recent polling data from the Siena poll. Overall by 56-36 % registered voters in NYS supported the Amazon project.
The cross tabs were revealing for support in NYC was 58-35%, 66-25% in the Suburbs and Upstate where support and opposition was tied 46-46%. Among the key ethnic, racial and religious voting blocs support ranged from landslide margins among minority voters: 81-17% among Hispanics and by 70-25% among blacks, to solid support of 58-37% among Catholics and 55-37% among Jewish voters, with white support at the 51-40% level.
In terms of income levels, support was greater among those earning less than $50,000 (56-34%) and those earning $100,000 or more (60-35%) than those in the middle range of $50,000-$100,000 in income (53-39%). In terms of ideology: moderates supported the project 64-30%, while conservatives supported it 52-39%, but liberals supported the project by a scant margin of 48-46%. In terms of partisanship: Democrats supported the project by 56-37%, Republicans by only 47-42% but Independents were in support by a wide margin of 64-29%.
Second, given where public opinion stood, it is curious why the progressives struck such a hard line of opposition. Progressive candidates ranging from Zephyr Teachout in 2014 and again 2018, through Bernie Sanders in 2016 and Cynthia Nixon in 2018 had little luck connecting with minority primary voters. By aggressively opposing the Amazon deal, the progressives have probably steepened their climb to claiming a greater measure of minority support in future elections.
Compounding this was the progressive rejection of a long held political tradition in New York. New York has always been a unique amalgam of an economy producing great wealth tied to a politics which advanced social justice. New York spawned great fortunes from the Vanderbilts through the Morgans and the Rockefellers on to Michael Bloomberg. Yet New York was also the crucible of progressive values from enacting a minimum wage, child labor laws and unemployment insurance on to the recent enactment of paid family leave and increasing the minimum wage to $15 an hour. In effect, the political tradition of New York encouraged the formation of great fortunes, but then made sure that social justice measures drove government policy.
Had this New York tradition held, those who opposed the original project would have put forth a list of compromises to improve rather than killing the project. For the long haul, the opponents could have looked at the deal and put their focus on how to apportion the net of $21 billion in tax revenue this project would have generated: $24 billion in new revenue minus the $3 billion going to Amazon in as of tight tax incentives. But the instincts of this generation of progressives are far different than those of David Dubinsky, Frances Perkins and Reinhold Niebuhr.
Third, the Senate Democrats’ approach was most interesting. The voters who grew the State Senate’s Democratic majority were not those powering the successful anti-IDC primaries (although that altered the ideological equilibrium within the Democratic conference). What grew the Democrat’s Senate majority to 39 members were the victories on Long Island and the Northern Suburbs beginning with Shelley Mayer’s victory in the Westchester special election expanding in November to elect Harckham in Westchester, Putnam and Dutchess counties and the two Mid-Hudson seats (Metzger and Skoufis).Those four seats plus the Long Island Six (the Democratic Senators on LI) are the ten seats which powered the Democrats move to a strong majority of 39 seats.
The key voting blocs in those suburban districts in general elections were moderates and independents. The support for the Amazon project respectively in those 3 subsets: moderate and independents in the Suburbs was between 64-66% in the most recent Siena poll. In these suburban districts, Democrats only win by carrying moderate independents.
Fourth, the role of editorial boards appear to have been discounted by the elected officials who opposed the Amazon project. Newsday and the Daily News were strongly in favor of the Amazon deal and white hot in their criticism of those elected officials who opposed the project after Amazon left. The Times editorial page was in a mend the Amazon deal but not end it mode. The Post was opposed to the Amazon deal, but that did not lead the Post to praise for the progressive opponents of the Amazon deal.
But for Ulrich supporting the Amazon the Amazon project and Blake’s de facto alignment with the Times mend it don’t end it approach, all the candidates for Public Advocate seem to be in a competition for how strident their opposition to the Amazon project could become. Nor did any of the prospective NYC candidates for the open 2021 mayoral election, aggressively step up to support the Amazon package. I am therefore surprised why so many of these current and future candidates for citywide office appear to be discounting the importance of editorial endorsements.
Fifth, the Daily News editorial page speculated last week that the reason the Amazon project failed harkens back to Alexandria Ocasio-Cortez’ upset of Joe Crowley in NY’s 14th congressional district. They cited her 15,897 to 11,761 (4,136 vote margin) victory over Crowley. Their contention was that the elected officials were all in a panic over being victim to the same shocking defeat that hit Crowley.
If the Daily News editorial board is correct, it may be worth exploring the math underneath the so called AOC phenomena. It is undeniable that Ocasio-Cortez ran a brilliant tactical campaign that caught Crowley flat footed. But it is equally undeniable that her victory was in a small vote June primary. In the September gubernatorial primary Cuomo carried that same 14th Congressional District over Nixon 39,070 to 18,181. So no matter how you measure it: margin of victory (Cuomo 20,939 v. AOC’s 4,136 votes), or percentage (Cuomo got 68% to AOC’s 57.5%) or overall TO (57,251 voters in September to 27,658 vote is in June) it is hard to say that AOC has more bragging rights to support in the 14th CD than Governor Cuomo.
Now her admirers could argue that today Ocasio-Cortez is far stronger than she was back in June of 2018 when she beat Crowley. Except that when Ocasio-Cortez went to other states to endorse candidates, she did not fair nearly as well for others, especially in high turnout elections, as she did for herself. When she sent to Missouri to oppose Congressman Lacy Clay in the 1st CD, Clay beat the candidate Ocasio-Cortez supported by 20% in a TO that surpassed 143,000( a margin of 28,370 votes , which was larger than the total vote cast in AOC’s primary win against Crowley). Then Ocasio-Cortez went to Michigan and Gretchen Whitmer beat the candidate AOC endorsed by a 22% margin in a million plus turnout gubernatorial primary.
As an aside, I would argue that arithmetically the most impressive progressive victory in the 2018 was Ayanna Presley’s victory over the incumbent Mike Capuano in Massachusetts’ 1st CD. Pressley, who Ocasio-Cortez backed, beat Capuano 59,815 to 42,252 votes (an 18% landslide in a turnout of 102,067 voters). I have been amazed that Pressley’s truly impressive achievement in a high turnout primary, has been largely ignored.
Moreover, in last year’s large turnout primaries : Governor Cuomo and Tish James here in NYS, Senator Carper in Delaware and Gina Raimondo in Rhode Island all beat back progressive candidates by landslide margins. Time will tell, but the contention that the AOC coalition can knock out incumbents in large turnout primaries is a rather shaky postulate, rather than a sturdy theorem in terms of hard electoral math.
The good news is that we will have three tests (one short term, one intermediate and one long term), to assess the ultimate fallout from the collapse of the Amazon deal. The first test will come next week in the results of the Public Advocate’s race.
If the six candidates who most opposed the Amazon project all finish high up and one of them wins, then the argument can be advanced that the passion of the opposition trumped the overall public support for the Amazon project in the polls. Those six candidates most opposed to the Amazon deal were Williams, Mark-Viverito, Kim, Konst, Espinal and O’Donnell. But if Ulrich, the only candidate for Public Advocate who gave full throated support to the Amazon project, or Blake, who was functionally aligned with the Times editorial recommendation, either won or surged toward the lead, passing all but Williams and perhaps Mark-Viverito, that could underscore the surmise that the polling data favoring the Amazon project accurately reflected public opinion. In addition, it will be interesting to see if those editorial boards who seem so disappointed in the outcome of the Amazon deal, transform that disappointment into the rationale for their endorsements. As I finished writing this column, the Daily News just endorsed Ulrich.
The second test will play out over the next year or so (an intermediate test). Which regional economy will fare better: northern Virginia which has welcomed Amazon, or NYC which lost Amazon? If a recession hits the nation over the next nine months to a year, as appears more likely with every data point on the world economic stage, that could change voter’s perceptions about the importance of job growth.
If Amazon does little to nourish job and economic growth in Northern Virginia and merely sucks out tax breaks from the State of Virginia, the progressives will feel vindicated here in NYS. But if a recession hits nationally and the Amazon project anchors the northern Virginia economy in the storm by producing growth amidst the overall decline while New York is hit hard by a recession, especially if NYC government hits a revenue crunch, then the progressives here in NYS who led the opposition will have lots of explaining to do. The question will become who is smiling by 2021 over Amazon, Crystal City Virginia or Queens New York?
The final test is a long term test. What impact will the collapse of the Amazon deal have on the regional economy? If the loss of Amazon is quickly forgotten, with no attending slowdown in New York’s economic growth, this controversy will turn into what Mario Cuomo used to call a walnut in the batter of eternity and the progressives will have lost nothing politically. But what if there is an Amazon hangover exacerbated by other events. For example, what will the impact be if the private sector changes not just how business sees greater New York, but whether affluent New Yorkers question their decision to stay in New York? In that case, the collapse of the Amazon deal could be seen as an inflection point in what Ken Auletta called the dangers of killing the goose that laid the golden egg, in his classic history of the NYC fiscal crisis in the 1970’s entitled “The Streets Were Paved with Gold.”
Let’s hope that does not occur, for all of NYS benefits from a vibrant Big Apple economy. But two things might give us pause. One was Mayor DeBlasio immediately switching his tone after Amazon pulled the plug, from being a proponent of the project, to attacking Amazon with rhetoric mimicking the anti-corporate rhetoric of the project’s opponents. In so doing, Mayor DeBlasio seemed akin to the proverbial French General, who could not control his troops and therefore exclaimed, ‘There go my troops, I must lead them.’
The second concern is substantive. Because our state and local income tax structure has become so progressive, our tax revenue has become incredibly dependent upon high income earners. The statistics are startling: state taxpayers paying over $500,000 in state taxes account for only 1.8% of state taxpayers, but pay 47% of NYS’s personal income taxes; taxpayers paying over $500,000 in taxes account for only 1.6% of NYC taxpayers, but pay 48% of NYC’s income taxes. Finally more than one third of the net income that left New York in 2016 left for states with no personal income tax. Each of those statistics comes from government reports (NYS Department of taxation; NYC IBO; and the IRS).
Those statistics make you wonder if our liberal forebears were wiser than our present day progressive policy advocates. If may not be a bad idea to make the wealthy feel welcome in Gotham, even as we pursue social justice. No one knows where the tipping point is, but if both business and the high earners come to see NYC as less than hospitable to the private sector and they leave, then the impact due to our progressive tax structure could bring us to another fiscal crisis.
Let me end as I began. I don’t know enough about economic development or tax policy to opine if the Amazon deal made sense or not. But my sense is the politics underlying the collapse of the Amazon recruitment lies beneath the surface. Let us hope there are melting ice cubes, rather than a hidden iceberg in our path. But I worry, for I can hear echoes of Talleyrand’s admonition going unheeded in this debate over Amazon, “Above all no zeal.”
Bruce N. Gyory is a political and strategic consultant at Manatt Phelps & Phillips, LLP and an Adjunct Professor of Political Science at SUNY Albany