26 October 2017 — FAIR

What would happen in Amazon brought 50,000 workers to your city? Ask Amazon. (Washington Post, 10/19/17)

A matter of huge political import is taking place in scores of cities throughout the country. From Chicago to Charlottesville, San Diego to St. Louis, metropolitan areas big and small are making their best pitches to Amazon to move its second headquarters to their towns. These pitches typically involve some combination of groveling by city officials (New York City lit the city up orange) and massive tax breaks (New Jersey is offering $7 billion), all in hopes of reaping a massive economic bonanza from the relocation.

When a major paper of record such as the Washington Post reports on this massive story, one would want it to seek out disinterested, outside voices to provide perspective on the rush to woo the Seattle-based company. This is especially true since the Post is directly owned by Amazon CEO and chief stockholder Jeff Bezos, giving the paper a clear reason to encourage generous bids to their boss.

The entire crux of the online retail giant’s case to city governments—and, more importantly, their citizens—is how much positive contribution its second headquarters will make to the local economy. As such, establishing the magnitude of that impact is a crucial job for news outlets. So where did the Post turn for this hugely consequential number? An Amazon press release.

Twice in two articles, DC-based Post reporter Jonathan O’Connell referenced massive, sexy dollar amounts on how much Amazon might bring to local economies:

• “Amazon has contributed $30 billion to the local economy [of Seattle] and as much as $55 billion more in spinoff benefits.” (10/19/17)
• “To accommodate the company’s growth in Seattle, taxpayers funded hundreds of millions of dollars in improvements, although Amazon directly contributed $30 billion to the local economy.” (10/23/17)

The fact that neither reference had a link or a citation was a red flag. The figures could be derived by adding up numbers in an Amazon press release O’Connell had linked to as a source for a separate claim about which cities were submitting bids. When asked via Twitter where he got the figures, O’Connell linked to a different Amazon press release with the same totals, but added something about talking to “econ folks.” (When asked which “econ folks,” O’Connell didn’t respond.)

The press releases gave the following figures:

• Capital investment (buildings & infrastructure) $3.7 billion
• Operational expenditures (utilities & maintenance) $1.4 billion
• Compensation to employees $25.7 billion

This equals $30.8 billion.

• Additional investments in the local economy as a result of Amazon’s direct investments $38 billion
• Increase in personal income by non-Amazon employees as a result of Amazon’s direct investments $17 billion

This equals $55 billion.

It seems clear that O’Connell did some simple back-of-the-napkin math that took his boss’s business at its word. (The Amazon press release provided no source, methodology or meaningful third-party confirmation.) Copy-and-pasting a corporation’s claims for its own economic impact—when it has every incentive to hype these numbers—is sloppy enough, but doing so for a corporation whose CEO is also your CEO is a clear conflict of interest.

Other outlets who cited these figures, such as AP (10/18/17) and Business Insider (9/20/17), have noted that they were simply assertions by Amazon. While an independent source would be ideal, at least they provided attribution and a notice to readers to take the claims with a grain of salt. The Post, by contrast, presented Amazon’s press-release figures as fact, with no clue that these totals were simply Large Sexy Numbers thrown out by Amazon’s marketing department without any third-party analysis.

When Bezos bought the Washington Post in 2013 for $250 million, many speculated on his motives. We can never really know, but having a major national paper uncritically write up Amazon press releases as the company is engaged in a massive, nationwide drive to squeeze as much out of a host city as possible makes the paper seem less like a billionaire’s toy and more like a shrewd PR investment.

Read the original post here.