Trump v Amazon

President Donald Trump giving Amazon CEO Jeff Bezos an earful.

President Trump is at it again.  *sigh*  His mouth is in overdrive, and his brain is in neutral.  His latest target is Amazon, the retailing behemoth.  Da Prez claims Amazon is ripping off the Treasury by not paying enough taxes, and is cheating the USPS, aka the Post Office, by not paying their fair share for shipping. I'm sure his displeasure has nothing to do with the fact that Bezos also owns the Washington Post, which has some very aggressive investigative reporters who have uncovered all sorts of Trump shenanigans.

Trump says Amazon is costing the USPS billions of dollars, financially breaking an already broke Post Office.  The only problem with that is it's not true.  No less than the Postal Regulatory Commission says the USPS makes a profit from its Amazon business, which subsidizes its other services.  In fact, as I recall, Amazon not long ago made a commitment to help keep the USPS afloat by maintaining or even increasing its business with them.  They had an ulterior motive for doing this, of course:  they didn't want to put all their eggs in only FedEx and UPS's basket. 

Now, about the state and federal government treasuries getting short changed.  Umm, President Trump, would you please show us YOUR taxes?  Have you not taken advantage of all the tax breaks YOU were legally allowed?  Of course you have, but somehow it's not OK if Amazon does the same?  

The truth is, Amazon pays state sales taxes on products they sell in those states where they have an actual physical presence.  In other words, if they have, for example, a warehouse or "Fulfillment Center" in a state, they pay that state sales taxes on everything they sell there.  But if you'll pay attention to Amazon's website you'll see that some of the things you can buy there are actually shipped from independent cooperating retailers, and THEY don't pay state sales taxes if THEY don't have a physical presence in the state they're shipping to.  While it does sound like an end run, it's legal.  Don't like the law?  Take a number....our tax code is hopelessly rigged.  And don't look to congress for a remedy.  They're the rig-ers.

If President Trump wants to pick on Amazon, why doesn't he point out all the local businesses they have helped close down over the years?  Why is Amazon allowed to keep buying up other businesses, like Zappos and Whole Foods, hastening its eventual stranglehold on American consumers?  "Economy of scale" is a double edged sword.  Bigger is definitely better....if you're big.  But if you're a small business, not so much.  It seems to me consumers are just unwitting pawns in their "bigger" game. 

S

Too big to give a damn

There is a reason that liberal Democrat Elizabeth Warren was elected Senator from Massachusetts, and liberal Independent Bernie Sanders came thaaaat close to being the Democratic nominee for President.  That reason is they exposed the massive hanky-panky going on in America's corporate suites, and it struck a nerve with voters.  Here's the latest scam just made public:  

Wells Fargo Bank, considered by many investors to be the Gold Standard for banks *a rather low bar* because of their great management, was fined $185,000,000 by the Federales for securities fraud.  It seems Wells Fargo regional managers gave their branch offices daily quotas to “cross-sell” financial products to existing customers. If someone had a checking account, they would sign them up for a savings account. Or a credit or debit card. Or online banking services.  Former CEO Dick Kovacevich invented this target for each customer, calling it the “Gr-eight initiative” — eight add-on products per household.

When some employees couldn't meet their quota, they would just forge signatures and open up accounts without their customer's knowledge or approval.  These 1.5M unauthorized accounts only netted Wells Fargo about $2.5M, so the $185M fine might seem rather punitive, right?

Umm, no.  Here was the real scam:  Wells Fargo constantly bragged in its earnings statements that their "cross-sell results are proof of their superior customer satisfaction."  Investors loved it, thinking the sky was the limit.  Yeah, right.  (The average Wells Fargo retail banking customer had 6.11 products by the end of 2015.)

The fake accounts goosed the stock price....Wells Fargo stock doubled from 2011 to mid-August 2015, the period described in the fraud complaint.   And just coincidentally, John Stumpf, the CEO of Wells, received $155M in stock options between 2012 and 2015 as the share price soared, in part based on the successful cross-selling strategy.  (This is why it was "securities fraud" and not simple "consumer fraud". The investors, not consumers, were the big losers.)

Wanna give 'ol Liz and Bernie heartburn?  Remind them that the executive who oversaw the WF banking unit the entire time those millions of fake accounts were opened is now “retiring” with a $124.6M Golden Parachute, and the 5000 employees who did bad were fired.  Sound fair to you?

I'm a staunch capitalist.  I believe those who work the hardest and come up with the best ideas benefiting both investors and consumers should do very well.  When Fred Smith turned his doctoral project into the reality we know today as FedEx, I think he deserved to get filthy rich.  When Steve Jobs and friends invented a revolutionary new iWorld, I think they deserved to get filthy rich.  The same for Bill Gates and Jeff Bezos and a few others, too.  

But the financial services industry has proven time and again they are all about smoke and mirrors, and little else.  They seem to be masters of just fleecing those who actually do contribute to the creation of real wealth.  They deserve our contempt.  Liz and Bernie just saw the truth before most of the rest of us did.

S

Now THAT'S going to put a crimp in Christmas!

Our local news just reported the Irving, TX fire department is responding to a 2-alarm fire at a FedEx shipping facility there.  Ouch!  So much for that whiz-bang new toy, the last one on the shelf, that Grandma was sending her favorite grandson.
  

Do you think maybe....could it be possible....?

S

The Postal Service strikes again!

I know the US Constitution specifically says the government is supposed to deliver the mail, but really, the Postal Service is about as worthless as a screen door on a submarine.   Why would anyone choose to deal with the USPS, given a choice?  How inept do you have to be to get a job at the post office?  Maybe that's why they lost $5.1B last year, and are projected to lose another $14.1B next year.  They can't even deliver a simple magazine in one piece:

Up through page 48 I just have to guess what the missing words might have said.  As far as I'm concerned, the USPS can go ahead and forgo Saturday delivery as they are proposing.  They should easily be able to compress their damage into a 5-day-delivery week, leaving their Saturday's free for banjo practice.

Long live UPS and FedEx!

S