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

How much is too much?

How big is too big?

For better or worse, I live in one of the fastest growing metropolitan areas in the country.  I say "for better or worse" because for years now I've been looking for that sweet spot that's big enough to have everything I need/want, but not too big to be overwhelmingly congested.  Everywhere I look these days all I see is more construction.  I'm losing ground to "overwhelmingly congested"!

Smaller towns love growth.  More people means more grocery stores, and retailers, and more tax revenue to support filling potholes and building new, state-of-the-art schools.  More restaurants and theaters and maybe a few more doctors and even a new hospital, too.  The improving "quality of life" in turn entices companies looking to relocate or expand to move in, and the cycle repeats itself.

My DF/W Metroplex is now pushing 7.2 million residents.  Houston has 6.7M, Chicago has 9.5M, LA has 13M, NY has 20M, London has 18M, and Tokyo has 38M (metropolitan areas in total).  Which begs the question:  How big is TOO big?

At what point does growth stop being a positive and become a negative?  How many steak houses or burger joints do you need?  Or pediatricians and 24-hour corner urgent care clinics? Or AMC  theaters?  However many you might think appropriate, ask yourself if it's worth the traffic congestion, and road rage, and crime, and the daily frustrations that tie us in knots?  At some point are we really just taking one step forward and two steps backward?

Who benefits, really, from all this growth?  The landowners and developers, for sure. And the select few contractors who can build all those highways and mid-high rise buildings.  And of course the bureaucracy.  More people means more tax revenues, and higher salaries for those who hustle new businesses and make more rules for the rest of us to follow.

It seems like it's all just a giant ego trip.  "My city is bigger than yours.  My airport handles more flights.  My skyline is more dramatic."   Virtually everyone benefits a little I suppose, but IMO most of us are just treading water at best.

My fear now is that someday I might actually be able to move to my dream destination, some comfortable mid-size town in Colorado, only to be run over by a stampede of people fleeing Dallas and LA and Chicago who are following my lead.

Umm, now that I think about it....I didn't write this.  You never read this.  Nice not talking to you.  Bye-bye.  ;)

S

 

The Discount Society

We've become a discount society. In fairness, most of the rest of the world is right on our heals, but I think this is one area where we really are still Number 1.

I doubt Walmart started it, but they certainly epitomize it today.  When did this happen?  I can remember when I was a kid we weren't so concerned about beating the other guy down into an "I win, you lose" position.  We did expect to negotiate on the price of a car, but most everything else was priced fairly straight forward.

We bought most of our clothes at the local "haberdasher" (except we didn't call it that).  You wanted a shirt or a pair of pants, you went to Ken's Mans Shop.  An appliance, Hollinshead's.  Hardware....Plaza's.  Groceries....Wyatt's.  Our pharmacy was Payne's.  They posted an honest price right up front and we paid it.  We knew each other, we were neighbors (literally), and we all did pretty well.  "Amazon" was still just a river in Brazil.

Those days are gone.  Today we buy our clothes at mega-conglomerate superstores (Macy's), appliances come from one or the other big box home stores as does our hardware, our pharmacy is more likely to be a huge national chain (Walgreens, CVS), and our groceries come from Kroger, Safeway, or increasingly, Walmart.  Even our shoes come from Discount Shoe Warehouse, and our tires from Discount Tire.  They even put "discount" right up front in their name! 

To make this theme work, the first discounters, among other moves, demanded employees work for much less than they had before.  This meant the business could cut their price, gain market share, yet still make the same profit (maybe more) for their owners.  But they were counting on everyone else still having plenty of disposable income to buy whatever they were selling.

Oops.  That's where it all hit the fan.  It wasn't long before virtually every business became "discount" oriented.  It became an all out war.  Perpetual "sales" became the norm.  Manufacturers were sucked in to the price cut war, too.  Wage and benefit concessions, or at least curbs on raises, were demanded from all.   If they weren't forthcoming, the business relocated to a new low wage location, often overseas. 

At first we loved it. We could buy cool stuff for less than ever.  WooHoo!  But now we've learned the meaning of an increasingly popular term, "unintended consequences".  Now we HAVE to shop at discount stores because that's all we can afford. 

This is the age of Bigger Is Better.  All the small entrepreneurs I know are just trying to build their businesses up to the point they can sell out.  If they get too successful and attract the attention of the Big Boys, they get promptly squashed.

The days of each generation having it better than the previous one are over.  At least that's what the 20-somethings living with their parents while they try to pay off their mountain of college loan debt tell me.  

I have no answers as to how we can make things better.  I doubt there IS a way we can make things better.  The genie is NOT going back in the bottle.

The Discount Society has morphed into today's "Settle Society", as in, "I guess I'll have to settle for that".

The takeaway lesson:  We really do need to be careful what we wish for.  Often times things don't work out as planned.

Hey, it's just an observation.  Don't shoot the messenger.

S

Bigger is better....truth or myth?

Wonder who it was that first came up with the slogan "bigger is better"?  I will agree that in a few very specific circumstances bigger might indeed be better, but generally speaking bigger just means "bigger headaches".

I read in the paper yesterday that now that the US economy is recovering, the size of newly built homes is growing again.  It said that new homes now average over 2200 square feet, but I can tell you that around here (Dallas), that's a relatively modest starter house.  The vast majority seem to be well in excess of 3000 feet.  For families with kids this might make sense, but not for empty nesters (and there are a lot of us).

Build 'em big.  Build a lot of 'em.  

I haven't built a home smaller than 5500 square feet in years.  Right now I'm adding on to a 6300 square footer I built 2 years ago ^ , bringing it up to around 9000 feet.  I can't imagine living in a house that large.  It just isn't my thing.  (But of course, if they're intent on giving their hard earned money to a builder, it might as well be me. ;)

I had a large(-ish) home myself a few years ago, but with the recession of '08 approaching I knew that its value was only going to drop, so I bailed when I could and did fairly well.  

The main reason I bailed, however, was because I was tired of paying all the property taxes, the insurance, the utilities, the maintenance, the yard upkeep, the cleaning, etc.  I was getting no satisfaction from ownership, and in fact it was an albatross around my neck.

I began thinking about it and realized we actually only used about 1300 square feet, the rest just being space that was never used.  All that hassle wasn't worth it to my teeny ego.  Or maybe I'm just lazy? (Full disclosure.)

We rented a 2 bed-2 bath apartment* in a nice area and found it to be plenty big enough....after getting rid of everything we knew we were never going to use again.  Before long we realized even that was too much (the spare bedroom became a catch-all junk room) so we downsized again to a one bedroom apartment.  The peace of mind knowing that I have virtually no chores to do around the house/apt is very liberating.

This would do just fine.

But now here's the crazy part:  I sometimes think it would be nice to build another home for K and me.  I could make it state-of-the-art, energy efficient, super durable, etc, but I would want absolutely no more than 1,000 square feet, and there's the rub.  No city around here will allow a home to be built that small.

Why, you ask?  (Go ahead, ask.)  Because the cities like all the property tax $$$$ big houses bring in.  Screw what the people want, this is what the cities want.  The tail is wagging the dog.  

So the next time you hear some bureaucrat from the Department of Overpaid Gubment Employment preach that we need to preserve water and power, use less everything, recycle more, live smarter and such, remind them of this hypocrisy.

S

* Sometime I should write about my downsizing experience.