After New York Debacle, $100 million Amazon HQ2 Subsidy Sparks Backlash in Nashville

Amazon's proposed new site in Nashville, Tennessee is the focus of anger by locals following news of a large taxpayer-funded handout to the company | Photo: Mark Humphrey/AP

Nobody wants Amazon in their backyard. A few weeks ago, the company made headlines after pulling out of its planned move to site the proposed HQ2 in New York. At the time, a campaign led by Rep. Alexandria Ocasio-Cortez successfully booted the project from New York, citing the threat of gentrification and the perceived wastefulness of the $3 billion tax incentive package put forward by state and local officials.

This time around, the city of Nashville, Tennessee is also witnessing its anti-Amazon movement following news that the online retail giant intends to build the second half of HQ2 in the city. A bipartisan motley crew of everyone from trade unionists to libertarians have come out in opposition to the development, citing similar reasons to the New York fiasco. Just like in New York, their reasons reek of entitlement and ignorance, but unlike New York, it seems like Amazon will get its way.

Why Doesn’t Anyone Want Amazon Around?

According to local pressure group Stand Up Nashville, Amazon’s presence in the city would do far more harm than good. For one thing, the U.S. median household income stands at about $61,000, while HQ2 Nashville’s promised 5,000 new jobs will pay an average of $150,000. This could create a similar situation to that of the San Francisco Bay Area, which has become a watchword for gentrification.

Understandably, state and city officials are licking their lips at the possibilities opened up by injecting $750 million annually into the local economy. Residents fear however, that the resultant upward pressure on property values will force them out and turn Nashville into yet another overpriced Potemkin village filled with cash-flush tech bros and pretentious cafes selling overpriced craft beer and lattes.

While trade unionists and other left-leaning interests worry about gentrification, libertarians in Nashville point to the proposed $100 million+ subsidy package from the city to Amazon in exchange for siting HQ2 as an example of bad business. According to this school of thought, big players like Amazon are hurting the essence of capitalism and distorting the market by using their economic heft to win unearned favors from the government.

The Market Always Wins

The alliance of strange bedfellows has yielded some fruit, with news that Amazon will have to publish proof that it has lived up to its promise to place locals into highly-paid employment. That notwithstanding, HQ2 is still going ahead. In the long run, even if Amazon imports the vast majority of the workforce to fill the 5,000 new jobs in Nashville, there is little or nothing that the government or pressure groups can do about it. At worst, it may be forced to repay some of the $100 million worth of subsidies – pocket change for the world’s most valuable retailer.

The left wing argument against HQ2 Nashville – like a lot of left wing positions – is both naive and unrealistic. While residents may feel strongly about being pushed out of their neighborhoods by exploding property values, the fact is that this is what capitalism looks like. They currently live in Nashville as a result of a financial transaction, be it a house purchase or a lease. There is no point romanticizing what has always been an economic interaction.

If the market determines that the cost of that financial transaction has gone up, the unfortunate reality is that no one has a god-given right to live where they want. Like the prior residents of the Bay Area, they will simply have to either adapt to the changed environment or move away. The entire history of America is that of people adapting and making the most of their circumstances – this will be no different. Economics is no respecter of “community.”

The right wing argument is even more tenuous, because it completely ignores the fact that using financial advantage to undermine competition and improve one’s own prospects is a fact of capitalism – something that libertarians of all people should know. It would seem that not even political polarization is enough to get in the way of human entitlement.