Amazon Runs the World – but hasn’t made a profit… yet

I know. What? How is it possible that the company everybody buys everything from and is seemingly everywhere, has not posted a profit after almost 20 years in business? Business writer Daniel Gross has the amazing but true spooky Halloween story of the amazing world dominating company that makes no money and yet makes people rich.

Historically speaking, it is rare for a company to be in hypergrowth mode when it is nearly 20 years old and has annual sales of about $65 billion. That’s why investors love Amazon. But historically speaking, it’s also very rare for a company that has been around for 20 years—large or small—not to make money, to run on margins so thin that they can easily be eaten up by interest cost, or capital expenditures, or the loss of value in an investment like Living Social. (Amazon.com had to write down its investment in the daily deal company by $169 million in the most recent quarter.)

How odd is it for a historically great company to be uncontaminated by profit?

One thing many of the historically great companies share is reliable, decent operating margins. By the 1920s, 20 years after Henry Ford founded the Ford Motor Company, Ford was racking up profits of about $90 million per year. Between 1893 and 1901, John D. Rockefeller’s Standard Oil threw off $250 million in dividends alone. The company was so profitable that Rockefeller didn’t know what to do with the profits and was forced to invent modern philanthropy just to get rid of it…

Intel was founded in 1968 and operated in a highly competitive, capital intensive industry. Yet in 1988, Intel earned $452.9 million on $2.87 billion in revenues—a fat 16 percent profit margin. The first Walmart opened in 1962. In 1982, 20 years into its life, Walmart had sales of $2.4 billion and profits of $55.7 million, a razor-thin 2.5 percent margin but a profit nonetheless.

What Amazon investors are counting on is the sort of “insane growth” that Walmart had in its second 20 years that gave it 10% of all retailing in the U.S. Amazon is investing billions in its own infrastructure in order to reap the expected benefits of world domination. But Gross asks a good question:  given how fickle consumers are, what if the next Amazon has already started somewhere and is ready to come along  and undercut Amazon?

I just ordered an egg and cheese sandwich on Amazon.  I should probably just go to a restaurant and get it fresh, but then I’d have to put my pants on like a sucker.

Democrats are the racists, oh yeah, sure, we believe you

One of the great zombie arguments I get, even from intelligent people, is that the Republicans were the party of Lincoln and the Democrats the party of slavery. The Democrats ran the South during the Jim Crow era so it’s the Dems who are racist.

Then I have to yell, YEAH, AND THEN ALL THOSE RACIST SOUTHERN DEMOCRATS BECAME REPUBLICANS! (MORON!)

Samuel “Joe The Plumber” Wurzelbacher, the conservative activist and failed Ohio congressional candidate who rose to prominence after he had a campaign trail confrontation with President Barack Obama before his election in 2008, posted a tweet Friday accusing Democrats of having “a history of lynching Black Americans.” Wurzelbacher’s tweet was accompanied by a picture showing the word Democrat with the final “T” replaced by an image of a burning cross.

Just you nevermind that 90% of blacks vote Democrat, obviously they don’t know what’s good for them. They’re like children, right?

Makes my head explode when Republicans argue that they’re not racist just because they hate cities, hate government, hate safety net programs, hate affirmative action, hate diversity, hate sensitivity, etc.  They don’t hate black people. Hell, they give money to Allen West. They really appreciate what Clarence Thomas stands for.

Like almost every issue they can’t actually say what they believe because it’s no longer acceptable – people wouldn’t understand. So they invented the term “political correctness” to derisively comment on their forced lack of candor. Effectively, they’re claiming victimhood, because society is censoring them from saying what they believe; actually, what they believe we ALL believe if we’d just admit it.

I don’t know how many times I’ve heard white people (always white people) from the South crow about how good their relationships with Southern blacks were/are. Better than in the hypocritical North where we just shunted blacks into ghettos and never pretended to have warm relations with them as they cleaned our houses and took care of our kids.  There was venomous racism everywhere. But don’t try to tell me anything was actually better in the South of Bull Connor and George Wallace.

So yeah, the Voting Rights Act of 1965 delivered the rest of the segregationist Democrats to the Republicans, who welcomed them with open arms, a wink and a nod and the Southern Strategy. And now as black and brown people stand on the precipice of being majority minority in some Southern states (Texas, Georgia), in conjunction with the most conservative Supreme Court in 100 years, it’s time to take action against voting while black, er Democrat.

What’s the definition of a gaffe? When someone tells the truth. I’m sure you probably heard about this idiot NC GOP official who gaffed all over the place about the NC voter ID law. He was comedy gold for The Daily Show portraying a walking, breathing stereotype down to saying “one of my best friends is black”.  The real news was that he admitted that it’s all about keeping Democrats from voting. Again, it’s not racism, whether it’s lazy black people, lazy brown people, lazy students, even lazy whites, anybody too lazy to get a pho-to ID shouldn’t vote anyway.

He isn’t the first pasty white male to give way the game. Jeez, what other game could there possibly be, given that voter fraud is a nonexistent problem?  I expect that these stupid, stupid, stupid, undemocratic actions will once again boomerang back in their stupid faces in 2014 with lazy blacks, lazy whites, lazy women, lazy browns, lazy Asians, lazy Jews, lazy students, lazy fair-minded people of all creeds, colors, and sexual persuasions going to the polls despite all the obstacles.

The GOP’s Obamacare Chutzpah

I don’t usually quote this extensively, but in this case Ezra Klein and Evan Soltas hit the hypocrites on the head this morning:

The classic definition of chutzpah is the child who kills his parents and then asks for leniency because he’s an orphan. But in recent weeks, we’ve begun to see the Washington definition: A party that does everything possible to sabotage a law and then professes fury when the law’s launch is rocky.

On Tuesday, Rep. Paul Ryan became the latest Republicans to call for HHS Secretary Kathleen Sebelius to step down because of the Affordable Care Act’s troubled launch. “I do believe people should be held accountable,” he said.

Okay then.

How about House Republicans who refused to appropriate the money the Department of Health and Human Services said it needed to properly implement Obamacare?

How about Senate Republicans who tried to intimidate Sebelius out of using existing HHS funds to implement Obamacare? “Would you describe the authority under which you believe you have the ability to conduct such transfers?” Sen. Orrin Hatch demanded at one hearing. It’s difficult to imagine the size of the disaster if Sebelius hadn’t moved those funds.

How about congressional Republicans who refuse to permit the packages of technical fixes and tweaks that laws of this size routinely require?

How about Republican governors who told the Obama administration they absolutely had to be left to build their own health-care exchanges — you’ll remember that the House Democrats’ health-care plan included a single, national exchange — and then refused to build, leaving the construction of 34 insurance marketplaces up to HHS?

How about the coordinated Republican effort to get the law declared unconstitutional — an effort that ultimately failed, but that stalled implementation as government and industry waited for the uncertainty to resolve?

How about the dozens of Republican governors who refused to take federal dollars to expand Medicaid, leaving about 5.5 million low-income people who’d be eligible for free, federally-funded government insurance to slip through the cracks?

The GOP’s strategy hasn’t just tried to win elections and repeal Obamacare. They’ve actively sought to sabotage the implementation of the law. They intimidated the people who were implementing the law. They made clear that problems would be exploited rather than fixed. A few weeks ago, they literally shut down the government because they refused to pass a funding bill that contiained money for Obamacare.

The Obama administration deserves all the criticism it’s getting for the poor start of health law and more. Their job was to implement the law effectively — even if Republicans were standing in their way. So far, it’s clear that they weren’t able to smoothly surmount both the complexities of the law and the political roadblocks thrown in their path. Who President Obama will ultimately hold accountable — if anyone — for the failed launch is an interesting question.

But the GOP’s complaints that their plan to undermine the law worked too well and someone has to pay border on the comic. If Republicans believe Sebelius is truly to blame for the law’s poor launch, they should be pinning a medal on her.

The lack of perspective on this fake imbroglio is killing me. That the GOP hates this law so much but now are suddenly so concerned that people can’t sign up quickly is the absolute apex of concern trolling.  

Raising the Medicare Age is a Baaaaaaad Idea

From the Incidental Economist, Aaron Carroll, a great healthcare info cite.  The CBO checked into that federal spending savings we’d get if we raised the Medicare eligibility age to 67, um, no. 

Phasing this in starting in 2016 could save $19 billion over the next 8 years. That’s less than $3 billion a year. That’s… insane.

Why isn’t it more? Well, once again, the more people you kick of Medicare, the more you get on Medicaid. That increases federal expenditures. More people will also need exchange insurance, too, which means more people needing subsidies. That will also increase federal expenditures. These expenditures reduce the savings to the federal government from the $63.5 billion it would have cost to cover the 65 and 66 year olds to only $23 billion in savings.

1. Many people who are sicker get on Medicare earlier than 65, and so those costs for ages 65 and 66 would be passed on to Medicaid or the states so that cuts into the savings.

2. Some 65 and 66 year olds continue to get insurance from employers, they only use Medicare as a supplementary, so again, less savings than you think.

3. We end up paying for these people one way or another. Medicare is the most efficient way to do so.

The amazing thing is this almost happened in 2011, as Paul Krugman reminds us.

We should be lowering the Medicare age. Hell we should lower it to zero and give it to everybody, but let’s start with 55.

When the RWNJs say that Obamacare is the slippery slope to single payer I say “Amen brother!”

The real reason 500,000 people died in Iraq

Howard Zinn wrote about it. Rachel Maddow’s “Drift” too. Go back to Mandelstam’s “The Best and the Brightest” about Vietnam. War isn’t just hell, it’s usually completely avoidable hell being prosecuted for no good goddam reason.

A senior official from former President George W. Bush’s administration is quoted in “Days of Fire: Bush and Cheney in the White House” saying American troops went into Iraq because the U.S. was looking for a fight.

“The only reason we went into Iraq, I tell people now, is we were looking for somebody’s ass to kick. Afghanistan was too easy,” the anonymous official said, according to Politico.

Go through the list of American military involvements and the sad reality is that most, and some would say all, were about projecting strength, protecting business interests, or just the plain, cynical, political advantage one gets from flag waving. Especially when the flags end up on coffins.

Killing mass numbers of people, just to prove that you can, is morally unconscionable. But does it even work? After nearly seven decades of post World War II butt-kickery, U.S. respect and support — and arguably power and influence — are at or near record lows. The nations that are on the rise are the ones that have invested less in producing weapons of mass butt-kickery and more in “soft” things like education and bridges that don’t collapse.

Exactly.

Prisoners of Profit – The Tragedy of Private Youth Prisons

One of the surest symptoms of a society gone mad is the story of how we’ve privatized our prisons making incarceration an industry with a profit motive. Please read this harrowing expose from the Huffington Post.

“It’s everything that’s wrong with politics rolled up in a package,” said Evan Jenne, a former Florida state representative who toured one of YSI’s youth facilities after local public defenders raised concerns. “You’re talking about society failing children. It’s politically motivated, and it’s money-motivated.”

Shut Down & ACA Website Fiasco – The Nail in the Coffin of Reaganism

In conversation with my puzzled and disappointed Austrian friends, they asked how the U.S. had come to this sorry state of affairs with a faction of know-nothing, anti-government (apparently anti-business as well, they really are confused) extremist wackos forcing a government shut down and near default. The answer is the unfortunate legacy of Reagan who announced that “government is the problem”.

As Ian Reifowitz pointed out in Daily Kos “Barack Obama made clear that the shutdown and the threat of a national default flowed directly from Reaganism, that the tea party republicans are no fringe element, but rather represent the core values of today’s Republican Party.”

After forcing the government shut down (or as the Orwellian mind fuckers at Fox News referred to it, the “slim down”), the GOP celebrated its own “accomplishment” (while simultaneously trying to blame it on the President), but then went running to the microphones as people realized that things they needed government to do weren’t getting done.

The spectacle of Congressmen who just shut the government down then yelling about the consequences of what THEY DID had to have been the laugh highlight of the fiasco. Their screaming at park rangers over the closure of veterans memorials or donning lab coats to talk about the National Institutes of Health (whose funding they are always threatening even in good times) has only been topped by the more subtle post closure story of their full dudgeon carping about the failures of the Obamacare website.

In their race to defend their anti-government dogma of “see? government doesn’t work” they once again prove the opposite point. The ACA website is also government and their complaining about it not working well illustrates that WE NEED GOVERNMENT TO MAKE THINGS TO WORK FOR US. Just like with their entire argument to repeal Obamacare, but offering no replacement for it to help those without healthcare coverage, they are giddy to criticize the failures of the federal government website (as opposed to the states that wisely chose to handle it themselves and are not having trouble) but it’s all just pointless politically motivated complaining with no solutions offered. The ACA is an effort to help people whereas their simplistic drivel HELPS NOBODY.

Barack Obama, Octobber 17, 2013

In fact, one of the things that I hope all of us have learned these past few weeks is that it turns out smart, effective government is important.  It matters.  I think the American people during this shutdown had a chance to get some idea of all the things, large and small, that government does that make a difference in people’s lives.

We hear all the time about how government is the problem.  Well, it turns out we rely on it in a whole lot of ways.  Not only does it keep us strong through our military and our law enforcement, it plays a vital role in caring for our seniors and our veterans, educating our kids, making sure our workers are trained for the jobs that are being created, arming our businesses with the best science and technology so they can compete with companies from other countries.  It plays a key role in keeping our food and our toys and our workplaces safe.  It helps folks rebuild after a storm.  It conserves our natural resources.  It finances startups.  It helps to sell our products overseas.  It provides security to our diplomats abroad.

So let’s work together to make government work better, instead of treating it like an enemy or purposely making it work worse.

Government is only the problem when it’s perverted into a great make work program for politicos who funnel tax dollars away from services for the American people towards their crony contractor contributors and K Street lobbyist golf partners – which is the real legacy of Reagan, Gingrich, DeLay, Boehner, Bush, Cheney, etc.: making government work for you, but nobody else.

P.S. – In a matter of weeks or months the website will get fixed, but the GOP will still be stupid.

P.S.S. – 20 years from now, nobody will remember the website issues, but they will remember they got healthcare.

P.S.S.S –  Lost in all this is the fact that the website was put together by a Canadian private contractor that probably shouldn’t have gotten the contract. There’s plenty of failure here, but the GOP answer is to do nothing and let the market handle it, no answer at all.