Thanks to:

• The after-effects of a redeye-to-work Monday
• The end of the semester approaching more quickly than I’d like
• A handful of work projects that need to be done by the end of the year

I don’t have much of a real post this week (not that last week’s was particularly insightful, either, but whatever).

Two articles are on my mind this week.

First, last Tuesday ProPublica ran a pretty damning piece looking at Facebook’s advertising algorithms. Thanks to the Federal Housing Act, housing is one of three markets in which discrimination in advertising is illegal (the other two are employment and credit). Basically, you can’t intentionally only advertise your home / development / building to people of a specific race or gender. Here’s the formal language. It is illegal…

…To make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such preference, limitation, or discrimination

Of course, as we’ve looked at ad nauseam (not really, because we’ve got stomachs of steel when it comes to calling out injustice here), discrimination in the housing market was for much of the twentieth century the rock upon which middle class wealth was built in the United States. Even today (that link is to a good piece from the Philly Inquirer a few weeks ago, go read it) home values appreciate waaaay more slowly in minority neighborhoods than in white neighborhoods. (Hint: it’s because people associate minority neighborhoods with crime and bad schools)

Obviously, we wouldn’t need to enact laws to prevent against things that no one wants to do. There’s a big profit motive in making sure that people don’t have to live around people that make them uncomfortable – after all, that’s why suburbs exist. And while suburbs can exist because it’s not illegal to use zoning gimmicks to drive up prices and therefore keep poor people out, it is illegal to try to keep people of certain races and religions out*.

So what happened in the Facebook piece? ProPublica bought a bunch of advertisements on the site, pretending to be landlords looking to rent properties. When buying these ads, they requested that they not be shown to certain groups, “such as African Americans, mothers of high school kids, people interested in wheelchair ramps, Jews, expats from Argentina and Spanish speakers.” Not only is Facebook legally required to flag and stop these advertisements, they explicitly said earlier this year that they would crack down and step up enforcement against illegal advertisements.

Shocker: none of ProPublica’s fake ads were stopped by Facebook. Amazingly enough, when one company has a financial motivation to advertise to only certain groups, and another company has a financial motivation to sell advertising to whoever wants to buy it, there’s a breakdown in the enforcement of laws.

If this is surprising to you, I’ve got some snake oil you might be interested in!

Secondly, this piece from the Seattle Times is deeply disturbing. In it, they look at the proposals different cities and regions submitted to Amazon as part of Amazon’s search for a second headquarters. This paragraph in particular stood out to me:

Chicago has offered to let Amazon pocket $1.32 billion in income taxes paid by its own workers. This is truly perverse. Called a personal income-tax diversion, the workers must still pay the full taxes, but instead of the state getting the money to use for schools, roads or whatever, Amazon would get to keep it all instead.

“The result is that workers are, in effect, paying taxes to their boss,” says a report on the practice from Good Jobs First, a think tank critical of many corporate subsidies.

If you’ve been around me in person the last couple months, you’ve probably heard me yelling about how the Amazon competition has revealed everything wrong with municipal finance in the United States. The proposal put forth by Newark and the state of New Jersey is particularly galling (or was until I read about the Chicago one). As part of the Newark proposal, Amazon was promised $7 billion in subsidies. Let’s keep in mind that, according to the census, just 13% of people in Newark have a bachelor’s degree or higher (that’s less than half the national average). There’s obviously nothing inherently wrong with residents having lower levels of education. But Amazon has explicitly said that it needs a workforce with higher levels of education, so Newark is effectively offering tax money from current residents in order to attract a company that won’t employ any of them.

In a different but no less idiotic move, New York’s mayor Bill de Blasio gave a speech articulating the importance of small retailers for the economic life of the City in October, and two days later did this:

Wish as you might, that’s not the Empire State Building lit up for Halloween, but rather in an attempt to show Amazon just how far we’re willing to abase ourselves to get them to plant their second headquarters here. But here’s the dirty little secret: you don’t get to “defend” small retailers and then use the most iconic building in the country to flirt with Amazon.

But Chicago? Wow. That’s a whole other ball game. By letting Amazon keep the taxes that employees would pay to the city, Chicago is literally letting Amazon tax its own workers for the privilege of being employed.

At the end of the day, all these municipalities are falling for the same trick perpetrated by Black Friday retailers. Just as you can’t save money by spending money, you can’t increase tax revenues when you don’t tax companies.

I can just imagine Rahm Emanuel calling his mom:

“You’ll never believe it, Ma! I got Amazon to contribute a billion dollars in taxes to Chicago! All I had to do was pay them $1.3 billion to do it!”

Give me a break.

 

 

*Although, thanks to massive wealth disparities in the United States, keeping poor people out of an area is often not-so-subtly used as a way of keeping non-white people out of certain areas.