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April 3 2018

Capitalism Under Twitter Attack

by Charlotte Hays

President Trump's ability to fight back is one reason he prevailed over shoo in Hillary Clinton.

But something concerning is happening lately. He is using twitter to attack an American company. Rich Lowry writes this morning:

President Trump gets results. His attacks on Amazon have tanked the company’s stock.

It’s hard to think of a more pointlessly destructive act of presidential jawboning in our history. The online retailer is a jewel of our market economy that has delivered more choice and convenience at a lower cost.

The backdrop for Trump’s animosity is that Amazon CEO Jeff Bezos owns The Washington Post, which, like much of the major media, is unrelentingly hostile to the president. WaPo’s bias is nothing new, nor should it be taken out on the underlying business of its owner.

Trump’s anti-Amazon jag can be put in the same bucket as his tariffs against China — Trump being Trump, unleashing in accord with his gut instincts and animosities.

The similarities end there. The difference is between targeting the Chinese regime and a great American company, between lashing out against mercantilism and against a capitalist success story, between berating an adversary of the United States and an adversary of his own.

Lowry debunks two of the President's charges against Amazon, that it doesn't pay sales taxes and that its arrangement with the Post Office cheats the PO of revenue. As Lowry noted, it is possible that a better deal could be had for the Post Office (which claims the current deal is profitable) and Amazon does now pay sales taxes (it now collects sales taxes in states that have sales taxes--not sure this is a better deal for the consumer).

A larger complaint from the President is that Amazon is destroying brick and mortar operations. If you have stock in these companies, chances are that Amazon has hurt your portfolio. You may dislike Amazon on personal grounds, and that is perfectly understandable. But this is also how capitalism works. Lowry wrtes:

If Amazon is sharp-elbowed and aggressive with its competitors, no one is forced to buy from it. Customers go there because they find it easy to use and cheaper than the alternatives. Amazon isn’t pocketing huge profits. Instead, it’s doing what companies should do: innovating, then plowing the proceeds into more investments (Amazon is much more than an e-commerce company).

Its fulfillment centers are wonders of productivity and hold the promise of as-yet-unforeseen transformations in other businesses.

Michael Mandel of the Progressive Policy Institute points out that online shopping saves consumers the time involved in driving to a store and looking for a product — and shifts all that (unpaid) labor to (paid) workers in its fulfillment centers and drivers.

This is a good deal all around, especially if Mandel is correct that jobs in fulfillment centers pay 30 percent more than jobs in traditional retail. These jobs provide, he writes, “decent pay for a high-school graduate, in a fast-growing tech-related industry, which requires a mixture of physical and cognitive skills. Many of them are full-time jobs with full benefits. They aren’t easy jobs, for sure — but neither are manufacturing jobs.”

There are many problems that need to be addressed in tech world. Trump supporter Peter Thiel has begun to address the leftward ideological bias of Silicon Valley. But the innovation and new jobs created are not problems. They are capitalism.

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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