Discover more from The Latest from Seton Motley
Without Massive Doses of Cronyism - Amazon Doesn’t Do So Well
It’s Not You - It’s Them
Most unfortunately, governments at every level - federal, state and local - have grown to exceedingly obese size and status.
Making them corpulent targets for bribes from monster companies - to ladle government gravy atop the monster companies’ biscuits.
Governments are monstrously outsized. So too, of course, is the cronyism monster companies seek and are getting.
Monster company Amazon (Market Cap: $940 billion) - has spent the last two-plus decades concentrating its efforts on getting huge…not profitable. Amazon did this - to empower itself to crush any and all competition. Often illegally.
“Jeff Bezos has forged an empire by exploiting low-wage workers and extracting billions in government subsidies.”
Speaking of government subsidies….
Amazon mainly, maniacally concentrated on growth at the expense of profitability - to get a seat at the only tables that anymore really matter…governments’.
Amazon long had their sites set on getting in on the government gravy train - which is where the REAL money is. And now they are all-the-way on board.
Amazon’s nationwide troll for governments to offer up bigger and bigger bribes to get them to build Amazon’s second headquarters in their locales - was a whole new level of nauseating.
We’re only now beginning to learn of all the anti-capitalism, anti-freedom crony crapola Virginia Democrat Governor Ralph Northam jammed into their offering to Amazon to secure half of HQ2 in Arlington, Virginia.
“$500 Million in Crony Gifts Are Just the Start….
“Northam’s Deal Vows to Protect Amazon from FOIA ‘Problems’….
“‘Under agreement between Amazon and Virginia, the commonwealth will give the company written notice about any FOIA requests “to allow the Company to seek a protective order or other appropriate remedy.”’…
“Arlington to Raise Taxes to Pay Amazon….”
And Virginia government was already handing Amazon huge heaps of our money.
“Virginia’s largest utility, Dominion Energy Inc., had planned to run an above-ground power line straight through a Civil War battlefield (and private property)…to reach a nearby data center run by an Amazon.com Inc. subsidiary.
“After three years of petitions and protests…, Dominion agreed to bury that part of the line along a nearby highway, at an estimated cost of $172 million.
“Within a month, however, the utility and state legislators had passed on the cost to Thomas and her fellow Virginians. The state’s House of Delegates approved Dominion’s proposal to raise the money needed for the Amazon line with an as-yet-unannounced monthly fee.”
Of course the hugest of all huge governments - is the United States’ federal government. Which currently spends $4.5 trillion - and that titanic number will always, inexorably rise.
Amazon wants in on as much of it as they could get.
“Amazon spent a record $3.2 million in the second quarter of the year, according to its lobbying disclosure. It’s part of Amazon’s fast-paced growth spurt in Washington, D.C., where it even hired a top fundraiser for Trump from the 2016 presidential campaign as one of its lobbyists….’
“Federal filings show that the tech giant spent nearly $13 million in lobbying costs last year, up from $11 million the year before.”
And shocker - it’s working.
“A $600 million computing cloud built by an outside company is a ‘radical departure’ for the risk-averse intelligence community.”
And now on the verge of happening - the cronyism piece de resistance.
A $10 billion deal to handle all of the Department of Defense (DoD)’s cloud computing.
Which was once a multi-source contract. Until a former Amazon employee - hired by the DoD - rewrote it to be a sole source contract. Which is a REALLY stupid and VERY dangerous change.
And then the ex-Amazon employee rewrote the contractor description - so that only Amazon met the specifications. Which means - only Amazon can get the monster gig.
All of this is, of course, exceedingly obnoxious.
But Amazon has reached this monstrous point - having almost never having had to actually compete with anyone.
They bullied and crony-ed their way to bigness - and then bullied and crony-ed their way to hugeness.
Amazon has never had to learn to actually compete in a non-crony-ed-for-them, dynamic marketplace.
And chinks in the armor are beginning to appear.
“Amazon.com Inc. is shutting its restaurant delivery service Amazon Restaurants in the U.S., putting an end to a four-year experiment that sought to compete with the likes of Grubhub and Uber Eats but failed to gain much traction.”
When golfer Tiger Woods was at the height of his power on the links, gambling on “Woods versus the field” - betting on Woods over everyone else in a particular tournament - was as close to even money as that particular bet had ever seen.
Amazon - with its hugeness and huge government cronyisms - has long been Peak Tiger Woods.
It appears, however, that gamblers are beginning to bet on the rest of the field.
“FedEx’s new focus will be on ‘serving the broader e-commerce market,’ with U.S. package volume from online shopping expected to double by 2026, the delivery giant said Friday….
“FedEx’s surprise move signals that the No. 2 U.S. courier will bank on e-commerce customers that lack Amazon’s power to negotiate big volume discounts….
“‘FedEx is ripping the Band-Aid off,’ said Kevin Sterling, a Seaport Global Holdings analyst. ‘You could see the Express business eventually fading out, and FedEx made the decision to go ahead and exit that side of the business with Amazon.’”
And this shift from Goliath Companies like Amazon to the very many Davids - is beginning to happen on the government side too.
“The idea that Silicon Valley’s biggest companies should be broken apart has gotten momentum in recent months (as) both parties in Washington…express interest in curbing the dominance of companies like Google, Facebook and Amazon.”
And the Little Guy companies - are beginning to look at a post-Monster future:
“Workplace tech companies Box, Dropbox, Okta, Slack, Twilio, Workday and Zendesk have launched the Enterprise Cloud Coalition, an industry group that will seek to advise policymakers on the enterprise cloud computing space….
“Some of the biggest names in cloud - including Amazon, Microsoft and Google - are notably not part of the effort.”
This may very well be a little too late to save us from Amazon’s HUGE DoD cloud cronyism.
But it may save us from the next. And the one after that. And….
This first appeared in Red State.