When You’re Worth $906 Billion - You Can Buy a LOT of Government
Jeff Bezos - The King of Cronyism
It appears that from their July 5, 1994 beginning - getting huge was Bezos’ only objective. For nearly two decades, Amazon Retail sacrificed profits to growth - and to killing-in-antitrust-violating-fashion more and more of its competitors.
“A key component of Amazon’s murderous business model – was operating for a quarter century making…almost no money whatsoever. And for many quarters at a time – actually losing coin. This from 2013:
“‘Amazon: Nearly 20 Years In Business And It Still Doesn’t Make Money:
“‘The company’s net profit margin has broken one billion dollars only once in the past nine years, in 2009. After reporting a loss last year, the world’s largest online store is expected to end this year with $349 million in net profit on nearly $75 billion in revenue. That’s close to the profit it made in 2005 ($359 million) on just a fraction of the revenue ($8.5 billion)….
“‘The net result of nearly two decades in business is that Amazon’s trailing 12-month price-to-earnings ratio stands at an alarmingly high 550.’
“Those tiny profits – off of those massive revenues. How is this possible?
“Because Amazon’s objective wasn’t money – it was growth:
“‘The company barely ekes out a profit, spends a fortune on expansion and free shipping and is famously opaque about its business operations….’
“And Amazons no-profit forced growth – comes at the expense of everyone besides Amazon selling…anything Amazon sells.
In March 2006, Amazon started Amazon Web Services (AWS). A cloud computing company - which generates lots of profits. All of which are plowed into Amazon Retail.
To subsidize Amazon Retail’s no-profit, expansive growth - and murder of Amercian retail.
“For the first time ever Amazon separated retail revenue from cloud services during a quarterly briefing last week and guess what? Amazon is a lousy retailer.
“It reported a loss of $57 million on $22.7 billion in revenue….Retailers have always suspected this, but now they have the facts. Amazon is subsidizing its retail division from profits made from cloud services.”
And now we know Bezos had at least two objectives in focusing on growth versus…everything else.
Artificially, illegally killing competitors - and getting big enough to get in on the biggest game of all:
Amazon mainly, maniacally concentrated on growth at the expense of profitability - to get a seat at the only tables that anymore really matter…governments’.
Of course, getting government cronyism - requires bribes of government. Oops - I mean lobbying Congress for redress of grievances…and contributing coin to political campaigns and elected officials.
For-Trillion-Dollar-Amazon - that’s no problem at all.
In fact, government cronyism helped fuel Amazon’s continued growth. Which is the vicious-est of circles.
Amazon bribes government…Government subsidizes Amazon…Which allows Amazon to better bribe government…Which means even more government subsidies for Amazon…Which….
“Jeff Bezos has forged an empire by exploiting low-wage workers and extracting billions in government subsidies.”
Bezos knows what anyone paying any attention at all knows:
There is NO better return on your investment - than an “investment” in government and its cronyism.
Kick in a few hundred thousand dollars a campaign cycle in contributions - and you’re set up for billions in government money on the other end.
As but one obvious example….
“Four out of every five renewable energy companies backed by the Energy Department was ‘run by or primarily owned by Barack Obama financial backers.’…
“Those companies’ ‘political largesse is probably the best investment they ever made in alternative energy….It brought them returns many times over.’"
The federal government spends $4.5 trillion per year. Gee…I can’t imagine why K Street is all glass and steel and lawyer appeal.
You want actual, real campaign finance reform? You don’t silence We the People - you shrink the government’s wallet. If The Feds spent $4.5 billion per year - K Street would look like Caracas, Venezuela.
Until we do shrink the government, we’ll keep getting stuff like this….
“Amazon is already deeply embedded in Washington and has plans to further entrench itself in the nation’s capital, putting it close to power brokers as well as billions of dollars in government contracts.
“While major tech companies have ingrained themselves in the capital in recent years, none are as present as Amazon, according to policy and lobbying experts.…
“Many companies have cozied up to Washington, but none have accrued the kind of presence and reach that Amazon will soon boast….
“‘I think they see there is a lot of profit to be made in government contracts and want to be part of that,’ said Frank Pasquale, a University of Maryland law professor.
“‘Maybe some of the Amazon executives in the area will end up going to the same country club as antitrust or tax policymakers and end up offering jobs or internships to bureaucrats or political appointees' kids, or engage in similar soft corruption.’
“‘There are a lot of opportunities for influence once you get your own people insinuated into the elite clubs, schools, and other social venues in D.C.’”
“Jobs (and) internships to bureaucrats (and) political appointees’ kids….”
How very, VERY cozy.
“(E)lite clubs, schools and other social venues in D.C.”
ALL paid for with money taken from us by The Feds - and then slathered generously upon the likes of Bezos and his well-compensated stable of Crony Makers.
I would say “Lather, rinse, repeat” - except that connotes something clean.
Did someone say “government contracts” - ???
But ALL of this massive Amazon cronyism - were but mere appetizers to what could be the hugest cronyism main course in history.
“Here’s why Amazon is heavily favored” - ??? Massive cronyism, natch.
The Amazon-Defense Department (DoD) cronyism is so obvious and pathetic…it’s actually a little sardonically humorous.
The Obama Administration started a new sub-agency in the DoD - in charge of tech procurement. And hired thereby was a huge Obama fan by the name of Deap Ubhi.
Where was Ubhi working when the Obama Administration hired him? Why…Amazon Web Services, natch.
The DoDs multi-provider contract process - then suddenly became a sole source contract process.
And the contractor description was rewritten - so that only Amazon Web Services met the specifications.
When Ubhi was outed for his inside-out Amazon cronyism - he recused himself…from a contract process he had already thoroughly corrupted.
And two weeks after his recusal - Ubhi quit the DoD…and went back to work for Amazon Web Services.
Nothing crony going on there.
That is a revolving door - crammed inside a phone booth.
Thank God - there is a new sheriff in in this rotten town.
Gone is the world’s-largest-cronyism-generator-ever Obama Administration.
Replaced by the “Drain the Swamp” Donald Trump Administration.
The DoD was originally supposed to award the could computing contract - sometime in the late summer or early fall of 2018.
But several Trump Administration officials serially examined the monstrous heinousness - and they all made the obvious determination that this is a monstrous heinousness.
All the way up the government food chain - to new Defense Secretary Mark Esper. Right after taking his oath of office, the good Secretary fully slammed the brakes on the whole monstrous heinousness….
This is no mere cursory glance….
Amazon long ago made what for more than a century has been a very safe bet:
They put most or all of their eggs - in the government cronyism basket.
And it paid off handsomely - for quite a long while.
But then We the People had finally had enough.
And We elected a man - who promised to not allow this monstrous heinousness to continue unfettered and unimpeded.
And now he’s keeping his word.
Much to Amazon and Bezos’ crony chagrin.
And to the detriment of their crony business model.
This first appeared in Red State.