Alternative Fact of the Week: The Amazon obsession
Apr 05, 2018 | 12:15 PM
Amazon's stock has fallen again, following another angry tweet from President Donald Trump. (April 2nd, 2018)
President Donald Trump's well-documented propensity for lying may keep him out of an interview with special counsel Robert S. Mueller III, but it won't keep him away from one of his favorite pastimes — grossly distorting reality on Twitter. And he was in high form this week, particularly with his serially fact-deprived rants on immigration, DACA, Honduran caravans and the like. But we'd like to focus on a pattern we've noticed here in the Alternative Reality of the Week command center: The more Mr. Trump becomes angry and obsessed with a certain individual or institution, the more he will lash out at this perceived enemy, and the more his attacks will divert from reality.
Henceforth, we shall refer to this as the "Jeff Bezos Effect." President Trump's anger toward how he and his administration have been covered by The Washington Post has translated into a singular fury at the newspaper's owner, Amazon CEO Jeff Bezos, and the online retail giant he founded. This past week has featured a veritable early spring blizzard of attacks against Amazon, variously accusing the Post of being a lobbyist for Amazon (it clearly isn't) and Amazon of not paying its fair share of taxes compared to local brick-and-mortar stores. (Two things: The remedy to that unfair advantage for e-tailers, an Internet sales tax, is broadly opposed by members of Mr. Trump's own political party in Congress. Also, Amazon does collect sales taxes on its own direct sales in Maryland and every other state that has such a levy, and it has in recent years been advocating for laws requiring other online retailers to do so as well.)
The attack that deserves scrutiny here, however, was also Mr. Trump's most pointed: "Only fools, or worse," President Trump tweeted on Monday, "are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed."
Well, call most everyone who doesn't live in taxpayer-subsidized housing at 1600 Pennsylvania Avenue a fool "or worse." The U.S. Postal Service may be losing money, but it sure isn't because of Amazon. We know this because the Postal Service actually reports to Congress regularly on its finances. And, as we've pointed out in the space before, one of the chief culprits is a federally-mandated requirement that the agency pre-fund its retiree health benefits.
Financially, package delivery is the best thing USPS has going. Not only is it the greatest source of revenue — the $19.5 billion collected last year was more than one-quarter of all post office revenue — but it's also the growth area, having increased $2.1 billion from the year before. You want to point a finger at costly excess, you should point it at Joe Average Bag-of-doughnuts for not writing enough letters. Regular old first-class mail has been shrinking, down $1.87 billion in 2017 from the year before.
Now, we will grant you that Amazon gets a discounted rate. All bulk shippers do because they help do the post office's own work, delivering packages pre-sorted directly to USPS distribution centers. But the USPS literally can't lose money on Amazon. Why? Because there's an actual law preventing it — the 2006 Post Accountability and Enhancement Act that prevents the post office from cutting deals below cost. It's a point Joseph Corbett, USPS' chief financial officer, made rather well last summer in response to a Wall Street Journal op-ed that can be read here: http://about.usps.com/news/statements/080117.htm.
Finally, we'd be delighted if Mr. Trump wanted to tackle all the red ink at the post office. If he's serious about it, he should give a call to Sen. Tom Carper, the Delaware Democrat and the Senate's leading expert on the issue of postal solvency (who hopped of the Amtrak recently to discuss the subject with us). More likely, however, is that Mr. Trump just wants to make Mr. Bezos squirm by driving down the value of Amazon stock on the theory that even the world's richest man can be blackmailed into submission. It's a behavior unbecoming a U.S. president, but, at this point, not really surprising. Customers who bought this buffoonery in 2016 still seem to be interested in whatever he's selling.