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Iowa's handout to Apple illustrates the folly of corporate welfare deals

latimes.com

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Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#231

Post by breck »

chmaynard wrote: post #164
breck wrote: post #6

> We were highly skeptical of this deal when it was announced Aug. 24. In the fullness of time, we’ve subjected it to closer scrutiny. And now it looks even worse. Oh great, so you carefully gathered data and put it into some sort of spreadsheet or something? Where's the spreadsheet? Where's the decision tree that shows this is a bad deal for Iowa? Oh, you don't have any of that actual diligence? You started with a c…

This is an opinion piece, not a news article. I don't think it's appropriate to flag it. From the HN Guidelines: "If a story is spam or off-topic, flag it ... When you flag something, please don't also comment that you did."

Thanks for the comment. I believe the story was off-topic though, as defined in the guidelines by: "Ideological or political battle or talking points"

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#232

Post by chmaynard »

breck wrote: post #231
chmaynard wrote: post #164

Earlier quoted context omitted.

This is an opinion piece, not a news article. I don't think it's appropriate to flag it. From the HN Guidelines: "If a story is spam or off-topic, flag it ... When you flag something, please don't also comment that you did."

Thanks for the comment. I believe the story was off-topic though, as defined in the guidelines by: "Ideological or political battle or talking points"

It's sort of a gray area because Apple doings are generally considered newsworthy by HN readers. The author is a columnist for the LA Times. Columnists, like newspaper editorial writers, almost never back up their arguments with data or cite sources. They don't leave their offices to dig up information in the field. I think of them more as pundits than journalists.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#233

Post by abalone »

AnthonyMouse wrote: post #205
abalone wrote: post #193

Earlier quoted context omitted.

You're again wrongly assuming that the public costs of all pollution can be tied back to the bottom lines of individual corporations within a timeframe that affects their decisionmaking, or even at all. If this were the case, global warming wouldn't be happening. Not all externalities can be internalized; that is the fundamental flaw in your reasoning.

I am in no way assuming that. The externalities that cannot be internalized at the state level are the exception. That is why, as I explained, environmental regulations have to be national -- pollution crosses state lines. And if you go above the national level, climate change is one of the only examples. Most of the things a state does has minimal effect on other states. If people are homeless in Miami, that may be…

Yes you are. Regulating at the state level does not necessarily internalize pollution on the balance sheet of polluting firms. It merely motivates firms to move to states with weaker regulations. The very process you champion as "competition" specifically undermines the internalization mechanism.

This is true for positive externalities as well, such as education and public health. Firms can simply move to the states that invest the least in public services and have healthy, educated adult workers provided by other states move there. Tax competition undermines the mechanism of internalizing the taxpayer-funded cost of their education and health.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#234

Post by Aaargh20318 »

AnthonyMouse wrote: post #171
Aaargh20318 wrote: post #155

Earlier quoted context omitted.

Would the people who down-vote care to explain why they support unbounded population growth ? That would be great.

Your premise is that anyone having children at all is equivalent to unbounded population growth . If literally everyone stopped having children, humans would obviously become extinct. Moreover, it is generally considered a sound principle that successful professionals should be encouraged to have children. Whatever combination of genes, knowledge and resources allowed them to become successful themselves is more like…

You completely misread. The post I was replying to implied everyone should breed. Which is stupid and harmful.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#235

Post by Caveman_Coder »

brianwawok wrote: post #33
smegel wrote: post #28

$208M is around 27 years of salary for 50 employees on $150k.

Data center grunts and security guards are NOT making 150k.

...depends on what you mean by "data center grunts"

As a former "data center grunt" for Google, I can tell you that total comp was around $140k, which was great for Iowa. The fix-it roles made less and the security guards made just a tad bit over min wage.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#236

Post by Caveman_Coder »

cabaalis wrote: post #16
privong wrote: post #12

Earlier quoted context omitted.

> You started with a conclusion and then wrote a bunch of B.S. with cherry picking and misleading statements throughout? This is why I flagged it. Can you expand on this and point to some of the misleading statements and why you think they're misleading?

I think it is misleading to say everything was in return for only 50 jobs. Data centers require huge investments in development, connectivity, energy supply. All of these things take people to make happen.

This is true...the union halls will be busy with "travelers" to make up for the lack of local IBEW journeyman. There will be a flurry of economic activity during the construction phase but it will taper off eventually as the site completes construction. There will be continual economic activity for the contractors (electricians, pipe fitters, fire protection system technicians, etc.) that will service the data center.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#237

Post by ebbv »

PeterisP wrote: post #183
ebbv wrote: post #72

Earlier quoted context omitted.

> Who cares? The people in Iowa who have to subsidize this and don't have the billions sitting in the bank that Apple does? I can't believe anyone really seriously takes this side of this argument.

It's not really equivalent to subsidizing (which would imply some transfer of value from Iowa to Apple, or selling something below cost) but rather to a discount. Iowa was willing to provide their services at a hefty discount, so Apple chose to "buy" them from Iowa and not another state - but in any case Iowa gets money from Apple (just not the listed rate) and the citizens of Iowa are better off than they would have…

Any discount given by the government is subsidizing, dude. That lost tax revenue that Apple gets to keep has to be made up for elsewhere.

It's not like when they give Apple this "discount" it goes along with a reduction in spending elsewhere. They're effectively reducing their tax revenue without any offset in costs and the tax payers have to make up that difference.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#238

Post by PeterisP »

ebbv wrote: post #237
PeterisP wrote: post #183

Earlier quoted context omitted.

It's not really equivalent to subsidizing (which would imply some transfer of value from Iowa to Apple, or selling something below cost) but rather to a discount. Iowa was willing to provide their services at a hefty discount, so Apple chose to "buy" them from Iowa and not another state - but in any case Iowa gets money from Apple (just not the listed rate) and the citizens of Iowa are better off than they would have…

Any discount given by the government is subsidizing, dude. That lost tax revenue that Apple gets to keep has to be made up for elsewhere. It's not like when they give Apple this "discount" it goes along with a reduction in spending elsewhere. They're effectively reducing their tax revenue without any offset in costs and the tax payers have to make up that difference.

The point is that without the discount there is no lost tax revenue that needs to be made up by a reduction in spending, because without the discount the facility gets built in another state and Iowa gets no taxes from it.

Offering the discount gets an increase in total tax revenue for Iowa and its residents, since it allows it to get something instead of nothing.

However, your argument certainly applies in a wider context - from the perspective of all states together it would make sense to not offer the discount and avoid the race to the bottom, but as they're not coordinated and each care about their own interests, then it makes sense for them to "defect" and offer such discounts to ensure that the facility gets built at their site.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#239

Post by AnthonyMouse »

abalone wrote: post #233
AnthonyMouse wrote: post #205

Earlier quoted context omitted.

I am in no way assuming that. The externalities that cannot be internalized at the state level are the exception. That is why, as I explained, environmental regulations have to be national -- pollution crosses state lines. And if you go above the national level, climate change is one of the only examples. Most of the things a state does has minimal effect on other states. If people are homeless in Miami, that may be…

Yes you are. Regulating at the state level does not necessarily internalize pollution on the balance sheet of polluting firms. It merely motivates firms to move to states with weaker regulations. The very process you champion as "competition" specifically undermines the internalization mechanism. This is true for positive externalities as well, such as education and public health. Firms can simply move to the states…

> Regulating at the state level does not necessarily internalize pollution on the balance sheet of polluting firms. It merely motivates firms to move to states with weaker regulations.

But how does it motivate states to have weaker environmental regulations?

Suppose it saves a company $10M to not have to comply with environmental regulations, but as a result $25M in damage is done to the state.

A state has no rational incentive to do that. They are paying $25M in costs to give the company a $10M incentive. They could give them $10M in tax credits instead and be ahead by $15M.

Irrational or corrupt states may do it anyway, but in that case the problem isn't competitive pressure, it's stupidity or corruption. And then the next state over can out-compete them by offering environmental regulations with a $12M tax credit which the dumb state can't afford because it lost those resources to pollution.

> This is true for positive externalities as well, such as education and public health. Firms can simply move to the states that invest the least in public services and have healthy, educated adult workers provided by other states move there. Tax competition undermines the mechanism of internalizing the taxpayer-funded cost of their education and health.

No it doesn't. A state doesn't provide good schools because it's trying to please school children, it does it to satisfy the parents. You can't stock up on healthcare and once you've accumulated 20 years of it, go move somewhere without it and not need it anymore.

Workers are not going to leave a place with good schools and government subsidized healthcare for a place without them unless the company pays them enough to afford private schools for their children and private healthcare. Which, if the government was providing efficient schools and heathcare, will cost as much as the difference in taxes.

Even things with positive externalities are not inherently problematic. If Massachusetts spends $10M on scientific research and the result is $25M in benefits for Massachusetts and $500M in benefits for the rest of the world, they have no incentive to stop doing it because they're still coming out ahead by $15M.

There may be other programs that yield the same benefits and cost $50M instead of $10M, but a state that yields the $25M partial benefit will never have the incentive to fund those. For that you need federal grants in the same way you need federal environmental regulations for interstate pollution.

Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals

#240

Post by crb002 »

colechristensen wrote: post #24

These are property tax abatements. I don't see the big deal. Apple has to pay the property tax equal to the farmland for the next 20 years instead of the much higher tax on the datacenter property. Who cares? Unless someone is arguing the datacenter is going to use a lot of tax funded city services (police? fire? ... ?), Waukee isn't giving Apple anything. On top of that Apple is pledging to give them $100M for vario…

Apple paid the City of Waukee a $100m bribe to influence their vote to abate $188m in property tax. The County/State were robbed in broad daylight.

Imagine going to your city council, and pitching them a 50% bribe in return for a 71% abatement. You or I would be going to jail.

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