April 4, 2018

Trump vs. Bezos Is a Clash of the Titans

The president has attacked Amazon in recent days, highlighting some political discord.

Donald Trump versus Jeff Bezos. The world’s most powerful man versus the world’s richest man. A battle royale.

To his enemies and critics, President Donald Trump is an infuriating enigma. Far from destroying Trump, their attacks seem to make him stronger. Even more disconcerting and baffling for those used to Republicans rolling over and playing dead, Trump fights back, and hard. He embodies the Malone character from “The Untouchables,” who told Prohibition Agent Elliot Ness how to take down the mobster Al Capone: “They pull a knife, you pull a gun. He sends one of yours to the hospital, you send one of his to the morgue.”

The renewed dust-up between President Trump and billionaire Jeff Bezos is the latest example of Trump’s willingness to fight back ruthlessly when attacked.

Bezos became the world’s richest man — worth more than $115 billion — by leading Amazon’s revolution of retail marketing. E-commerce is still in relative infancy, but Bezos and Amazon control nearly half of the e-commerce market.

With his rapidly growing wealth, Bezos bought The Washington Post, one of the top players in the news media market. And this is where the friction between Trump and Bezos took root. The Post has given up any pretense of objective journalism regarding Trump. Instead, Bezos has used his newspaper to attack Trump relentlessly and often falsely.

Over the last couple of years, the Post has repeatedly published stories that have subsequently been debunked — for example, falsely claiming former FBI Director James Comey was fired for requesting more funds to investigate Russian collusion, and falsely claiming Asst. U.S. Attorney Rod Rosenstein threatened to resign. The “journalism” has been so shoddy that Post reporter Josh Rogin published three stories in 10 days that were completely wrong on major points. Not once did these “errors” favor Trump.

Another Post reporter, Janell Ross, not only attended a secret meeting of the Democracy Alliance — bankrolled by billionaire socialists like George Soros — she was a presenter. The group’s stated goal is to destroy “modern conservatism … free enterprise, limited government, and traditional family values.” This is not remotely objective journalism.

For his part, Trump has attacked Bezos where it really hurts — his wallet, by way of Amazon. Trump launched a counteroffensive on Twitter, criticizing Amazon and Bezos four times in the last week, including tweeting that The Washington Post should register as a lobbyist. Following Trump’s tweets, Amazon stock lost $16 billion in value as investors learned that Trump is reviewing changes to Amazon’s tax treatment.

In his tweets, Trump attacked Amazon and its delivery contract with the U.S. Postal Service, claiming the USPS loses $1.50 for each Amazon package it delivers, arguing this is essentially a taxpayer subsidy. The USPS disagrees, claiming it actually makes money from the deal and pointing out that, by law, it can’t deliver packages for less than its delivery costs.

Trump argues that Amazon is hurting brick-and-mortar retailers, but so long as the playing field is level, that should not be a consideration. The automobile effectively destroyed the market for farriers and wagon-makers, but that doesn’t mean we should go back to the horse and buggy.

The net result of the Amazon/USPS arrangement is up for debate. While Amazon deliveries have brought in more than $2 billion in additional revenue for USPS, an analysis by Citigroup of USPS delivery costs reports that each parcel delivered by the Post Office should charge an additional $1.46 to reflect the “true economic cost” of delivering. It should be noted that Amazon is just the biggest of many companies taking advantage of the USPS’s bulk parcel service, and the Post Office has been losing money for years, mainly due to exorbitant labor and pension costs. But that is another story for another day.

In truth, Amazon is just the latest in a long line of revolutionary companies that have completely changed the way we live, and for the better. That should be applauded. It is what Austrian-American economist Joseph Schumpeter called “creative destruction,” whereby new technologies destroy existing industries by being more efficient and offering newer, better, less expensive goods and services. Though difficult to envision today, Amazon will one day fall to some new start-up and go the way of Standard Oil, U.S. Steel, Blockbuster Video, and Kodak, all once the dominant players in their fields.

Trump is right to be concerned about the Bezos empire though; just not for its contract with USPS. Amazon has a contract with the CIA to host cloud services for extremely sensitive data. This creates a massive conflict of interest with The Washington Post. Rather than being a watchdog against government corruption, the Post would become a lapdog with a vested interest in protecting the government as a major client. Not to mention the fact that, while leaking classified information is a felony, it is not a crime for the media to publish state secrets once leaked.

This makes Jeff Bezos enormously powerful in ways that go far beyond his financial assets. It puts Bezos in a position of vast power politically, allowing him to influence a nation by framing the narrative of media stories through his progressive worldview, while masquerading as objective journalism. That combination of vast wealth, political activism and massive influence over the collective national consciousness is a danger to a free society.

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