News & Politics  
comments_image Comments

Larry Summers and Jeff Bezos Get Virtually No Scrutiny by the Media, Just Awe and Praise

It will be a big step forward when reporters and columnists are able to look at the people they consider brilliant with open eyes and talk about their accomplishments and failures in a serious way.

Continued from previous page

 
 
Share
 
 
 

This comes to real money. Last year Amazon.com's sales in North America were $34 billion. Amazon does collect taxes in some states and in many states sales taxes are lower, but if we assume an average uncollected tax rate of 5 percent, Amazon and Bezos effectively got a subsidy from taxpayers of more than $1.7 billion last year. This was a year in which Amazon recorded a small loss.

In fact, if we go back through Amazon's history, the size of the implicit subsidy through Amazon's sales tax exemption vastly exceeds the company's cumulative profits. This raises the question of whether Amazon would even exist today without the generosity of taxpayers in being willing to subsidize Amazon's business at the expense of brick-and-mortar competitors.

None of this changes the fact that there are many would-be Jeff Bezos out there who benefited from the same subsidy in setting up online retailers, but who did end up out of business. The subsidy by itself didn't make Bezos ridiculously wealthy. But it is absurd to imagine that Amazon would have been anywhere near as successful if it had to compete on a level playing field with traditional retailers. Those who leave this fact out of the picture are re-writing history.

It will be a big step forward when reporters and columnists are able to look at the people they consider brilliant with open eyes and talk about their accomplishments and failures in a serious way. In the recent Summers and Bezos chapters, they have been awed into vapidity.

 
 
See more stories tagged with: