Eric Starkman: Detroit’s Near-Death Amazon Giveaway Deserves Outrage

January 29, 2018, 12:10 AM

The writer is a former Detroit News business reporter currently living in Los Angeles. 

By Eric Starkman 

Wake up, Detroit! Your political and civic leaders conspired to give Amazon the keys to the city and let the company kill its heart and soul. Why are you not outraged?

Had Amazon bit on the obscene economic package they were offered to locate their second headquarters in Motown, some 50,000 high paid technology workers would have invaded the city. Detroit would have shed its Motown moniker and come to be known as the Amhole pit of Middle America. Amholes are what locals in Amazon’s Seattle home base call people who are attracted to the company’s purposefully combative back-stabbing culture.



Working at Amazon is like being part of a cult: Employees are called Amazonians and everyone is religiously committed to CEO and founder Jeff Bezos’s goal of making Americans lazy and mindless. Some workers are so drunk on Amazon Kool-Aid they fund company projects with their own money, despite working for the richest person in history.

Sadly, some of Amazon’s Kool-Aid found its way to Detroit and Lansing. The economic incentives Amazon was offered to come here were over-the-top. It’s a wonder the city didn’t offer to rename Woodward Avenue Jeff Bezos Way, replace the Joe Louis fist with a giant oversized Alexa cone, and rename the Lions the Amazonians. Detroiters should be angered that economic incentives were not publicly debated or extensively studied. Dan Gilbert, with his wide swath of area real estate, would have profited handsomely from the city sellout. Call me old fashioned, but when someone stands to profit from the tax sacrifices of his fellow area residents, that’s a conflict of interest.  Gilbert spearheaded the deal, admittedly at Mayor Duggan’s request.

Crain’s Detroit Business reporters Chad Livengood and Kirk Pinho deserve kudos for filing a FOIA request and ferreting out how the giveaway came together. This is the benefit of still having at least one newspaper that is owned by a local resident who cares about the city and its economic issues. The corporate owners of the Freep and News respectively reside in Virginia and Denver.

Greater Fool Theory

Amazon’s public headquarters search validates what is known as the Greater Fool Theory. More than 200 cities and regions fell over themselves offering huge tax breaks and other incentives, the full extent of which are not publicly known. The contest did Monty Hall proud: Check out the shamelessness of America’s city leaders. The University of Michigan and Michigan State joined the fray with their Amazon Detroit headset stunt “to get in Bezos’s ear.”

Actually, Detroit and Michigan had Amazon’s ear well before its HQ2 search. It has sponged off millions of dollars in tax breaks to build three massive warehouses in southeastern Michigan that will be fully operational this year. The company also has several floors of office space at 150 West Jefferson Ave where it reportedly employs more than 100 people. I’d bet that Amazon, a company that it obsessed with “Big data,” knows more about the state than the Michigan Economic Development Corp. does.

"(Michigan) has been a source of exceptional talent for Amazon, and we're proud to be creating great jobs with benefits for Michiganders," Sanjay Shah, Amazon's vice president of North American operations, said in a news release. Here’s the skinny on those “great jobs” he was referring to at the warehouses: They start at $12.75 an hour.

Even before the HQ2 sweepstakes, Amazon raised concerns about whether the Detroit area has a sufficient transit system to shuttle workers to its warehouses. Know why? Because people earning $12.75 an hour can’t always afford to own and operate a car. The New Republic this month published a story showing just how parasitic a company Amazon truly is and how the government is funding food stamps for its workers.

Amazon said it rejected Detroit because there wasn’t enough tech talent. There might be some truth to that. Ann Arbor, for example, is the nation’s leader in clean technology “innovation density.” Another local company is Duo Security, a maker of cybersecurity software, which LinkedIn ranks No. 18 on its list of leading technology industry disrupters.


Perhaps I’m romanticizing here, but I imagine that someone with the smarts to pioneer leading clean air technology or cybersecurity software wouldn’t find it particularly rewarding developing ways to make the American shopping experience faster and more efficient. It can’t be easy convincing talented engineers to endure the rigors of a Michigan winter, but maybe the biggest recruitment selling point is that Ann Arbor isn’t known as a city of Amholes.

Alexa and Amazon Prime

Let’s not forget Amazon’s contribution to the world. Thanks to Bezos, we can now sit on our butts indefinitely drinking beer and watching some great television on Amazon Prime, while instructing Alexa to order our food, turn up the lights, or play our favorite music. Alexa can read us the news and answer our questions.  This might not be progress: Studies show that sitting for extended periods of time is quite hazardous to your health.

There is a wide body of research documenting that tax incentives are ultimately just corporate giveaways that would be better spent on education, infrastructure, and other improvements. Lansing’s economic leadership bulbs appear to have dimmed mightily since I lived in Michigan and the state’s finances were managed by whiz kid Robert Bowman.

It’s now known the grab bag of economic goodies Michigan and Detroit were willing to shower on Amazon, so any other big company considering a move to the state can legitimately ask that they, too, be allowed to keep employee withholding taxes. Here’s a slogan to consider: “Pure Michigan: The Pay Taxes to Your Employer State.” (Credit goes to Good Jobs First for the inspiration).  

I’ve long been fascinated how so many famous and influential people come from Detroit. The positive contributions Detroit-born residents have made in business, government, music, art, and academics far exceeds what should be reasonably expected from an area this size. There is something about Detroit’s grit that mysteriously produces people of incredible talent and accomplishment. All of America would likely have lost had Amazon been allowed to overrun the city.

Detroit, your city was almost killed by the mindlessness of your leaders who chose to participate in a bogus municipal beauty contest where the winner likely was determined even before it was launched. It is most disappointing there isn’t a drumbeat of rage demanding an accounting.  

Just remember: At the end of the day, people get the government they deserve.

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