Apple and Amazon Have Their Reality TV Moment
(Bloomberg) -- Reality television has come to Silicon Valley. Apple Inc. announced this week that it was accelerating “investing and job creation.” The numbers were HUGE. The company promised a $350 billion contribution to the U.S. economy over the next five years. Not only that. Apple pledged 20,000 new jobs in its homeland over that same period. Oh, and it’s going to create a new campus somewhere in the country.
Tucked away after the second or third commercial break was the real news. Apple is going to bring back its vast fortune to the U.S. to take advantage of a new, lower corporate tax rate. It will pay $38 billion in taxes for its massive store of wealth abroad. This suggests Apple will repatriate most of its $250 billion kept offshore.
Apple’s commitment to new jobs and bonuses doesn’t nearly explain how the company plans to spend most of that money. There will be a lot left over. Will there be buybacks or a dividend increase? Maybe a Tesla Inc. or Netflix Inc. mega-deal? Apple knows what the country—and its president—wants to hear right now. That’s jobs and growth.
President Donald Trump tweeted, “I promised that my policies would allow companies like Apple to bring massive amounts of money back to the United States. Great to see Apple follow through as a result of TAX CUTS. Huge win for American workers and the USA!”
Not to be outdone, Amazon.com Inc. reemerged with another episode of America’s favorite corporate reality series: the HQ2 bake-off. The company posted its not-so-short list of contenders for a second headquarters Thursday. The USA made a strong showing, with 19 of the 20 options. (Hang in there, Toronto.) Apparently 218 other cities submitted applications. Amazon has boasted that HQ2 would create 50,000 jobs and that the company would invest more than $5 billion in the winning city.
This week’s high-profile displays from Apple and Amazon, demonstrating their benefits to the U.S. economy, is a sign of the times. It’s been a priority of the Trump administration, and these companies are willing to take the free publicity. They know they should play it up. And it helps distract from questions about their potential detriments to society—for example, the effects of iPhone addiction on children.
The shows also reflect how dependent the U.S. has grown on the whims of a few big companies. Austin, Texas, and Denver must jockey with Washington and New York for the chance to boost their local economies with a new shiny Amazon headquarters. And Americans will eagerly tune in for the next episode.
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