Class Warfare Blog

December 29, 2019

The Fly in the Ointment

I read recently an article about how Amazon.com is creating many, many small businesses to deliver their goods. Amazon originally used USPS, UPS, and FedEx and the like as their delivery agents and negotiated their prices down, down, down but reached a limit of those services which pay their employees fairly well and treat them fairly well. (Trust me, I had a brother in law who worked for UPS and UPS is not a saintly organization. It is just that their jobs weren’t “shit jobs.” Their employees had pension plans, healthcare, decent wages, unions, etc.)

Amazon is creating little entrepreneurs to Uberize the delivery business.

Amazon also squeezes its own employees terrifically for better performance but not for higher wages. For example, Whole Foods, an Amazon subsidiary, announced it would be cutting medical benefits for its entire part-time workforce. The annual saving to Amazon from this cost-cutting move is roughly what Bezos – whose net worth is $110 billion – makes in two hours.

Does the man deliberately cultivate the aura of a Bond villain?

Amazon’s commercials aside about how wonderful some of its employees think the company is, the number of stories of employee abuse hasn’t declined much. And, Amazon raised the wages of its base employees only under considerable pressure from outside.

Now, as Americans, we believe that businesses should be “free” to run their businesses any way they want (within some rough standards of practice, outlined in the law) but the question I am asking here is “To what end?”

I ask, “Why does Amazon need to lower its employee costs, lower its shipping costs?” The “old Amazon” made Jeff Bezos the richest man in the world. He can’t move any higher on that list. So, why are these practices necessary? So Mr. Bezos can make even more money when he cannot possibly spend the wealth he has accumulated so far? Please recall that to spend one billion dollars ($1,000,000,000) one has to spend $532,000 per hour of every business day for an entire year. In just one morning or afternoon, this amounts to as much money as I earned in just under 40 years of working as a college chemistry professor. And Mr. Bezos has in excess of a hundred times that much accumulated wealth at this point.

This is the core problem of capitalism. There are no limits placed upon greed.

Mr. Bezos, like Costco, could settle in and provide high quality jobs for his employees (and reap the loyalty that invokes) and provide quality goods for his customers and make money hand over fist for decades if not longer. But he is not, he is squeezing the system so that more and more money oozes out of the top and into his pockets.

I have come to agree with Bernie Sanders in that a democratic republic such as ours cannot tolerate billionaires. Wealth taxes (such as inheritance taxes and new ones) need to reduce the fortunes of these greedy SOBs. I know this is intolerable to the greedy class but I can’t feel pity for someone whose wealth is limited to the mere hundreds of millions.

Oh, and the right to do this? The right is called self-protection. In this country money is power. People like Bezos and Bill Gates have acquired way too much power for the good of the system. We all have to concede some of our individual rights for the good of the collective whole. This is one of those.

And if you think such a thing is antithetical to capitalism . . . you are just wrong. Consider the case of the capitalist state of . . . Finland.

6 Comments »

  1. Reblogged this on Scotties Toy Box and commented:
    Hello Steve. Thank you, I struggle to explain why I think that run away capitalize is killing the goose that lays the golden eggs. You did that here very well. By having no restrictions and be willing to do anything including harming employees is a throw back to a system resembling slavery or a serf populations. It is not a system for a progressive country in 21 century. Hugs

    Like

    Comment by Scottie — December 29, 2019 @ 11:58 am | Reply

  2. What’s interesting about this is the beliefs that secure self debasing political platforms. Even the poorest of Christians support the right of the wealthy, while simultaneously supporting their right to grovel in their poverty as a test from the almighty. It’s their god-given right, ya know, to be free. The antithesis of freedom is when regular people like you and me try to navigate the absolute corruption of this system. One step forward and two steps back. God is that good.

    Liked by 2 people

    Comment by jim- — December 29, 2019 @ 12:14 pm | Reply

  3. What people tend to forget is that the ultra wealthy got rich in the first place by screwing over their employees and the consumers who buy their products. They aren’t some kind of benevolent factory owners. As a former coworker of mine once said, they’d fire their own grandmothers if it would save them a nickel.

    Interestingly enough, the US had some of its most prosperous years when income taxes were the highest. Back in the 50s, 60s and 70s, the top income tax rates were well over 50%, and in some cases as high as 90%. In 1958 the tax rate on income over $200,000 was 91%. That sounds almost insane today, but at that time that rate applied only to about 10,000 people in the entire country, and when other factors like deductions, etc. were taken into consideration, the average tax rate on the 1% was about 49% if I remember right. The “conservatives” would have a collective heart attack if someone suggested the top tax rate be bumped up to 50%, much less pushing it to 90%.

    Like

    Comment by grouchyfarmer — December 29, 2019 @ 10:53 pm | Reply

    • There are many reasons for the postwar boom, not the smallest was that most of our competitors around the world had been bombed extensively.

      But, back in the day, when marginal tax rates were that high CEOs negotiated perks like company cars, big offices, etc. So, there were ways to display their “accomplishments.”

      The thing that bugs me most is that the vast majority of CEOs are mediocre and drawing premium pay.

      On Sun, Dec 29, 2019 at 10:53 PM Class Warfare Blog wrote:

      >

      Liked by 1 person

      Comment by Steve Ruis — December 30, 2019 @ 10:18 am | Reply

      • Good point about our competition still not fully recovered from WWII. Still, I think the high tax rates encouraged companies to invest more heavily in research and development, but I’m not an economist or a historian.

        That’s also a good point about the incompetence of a lot of CEOs. Look at what Marissa Mayer did to AOL as just one example.

        Like

        Comment by grouchyfarmer — December 30, 2019 @ 10:52 pm | Reply

    • Another reason for the high tax rates is that we were still paying for WWII; paying off all those liberty bonds. Consider England….they were paying the US Lend-Lease payments until 2006.

      Like

      Comment by brucedesertrat — January 5, 2020 @ 11:50 am | Reply


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