Twitter feud with Amazon

Donald Trump’s Twitter feud with Amazon, explained

A frightening plunge into authoritarianism, or maybe more meaningless nonsense.

By Matthew Yglesias

President Trump is mad on Twitter this week about Amazon, the retail and technology giant whose founder and CEO also owns the Washington Post.

In a series of tweets spread out over days, Trump accused the company of a variety of inaccurate misdeeds, including not paying its fair share of taxes, receiving a sweetheart deal from the United States Postal Service, and setting up the Washington Post as a de facto lobbyist for the company.

The story is of interest because it once again raises one of the scariest prospects of the Trump era — that Trump is seeking to move beyond the venal corruption involved in things like his hotel to a form of systemic corruption where the success or failure of a business enterprise hinges fundamentally on whether its owners and managers are aligned with the ruling regime. The fact that Trump is explicitly injecting the Post into the debate certainly suggests that aspiration on his part.

But nothing appears to be actually happening on Amazon’s core policy interests. Instead, in a practical sense, Amazon — like most big American companies — is benefiting from Trump corporate tax cuts and his lax approach to labor law enforcement, and Trump’s slate of very orthodox conservative judicial nominees will protect the company from the left’s aspirations to wield antitrust law against it.

To the extent that Trump really is moving in the direction of systemic corruption, it appears to involve completely different companies and policy issues — issues he mostly doesn’t tweet about — like Sinclair Broadcasting’s favorable treatment from the Federal Communications Commission. The feud with Amazon, meanwhile, is all for show.

Trump’s charges against Amazon, explained

The president’s charges against Amazon, as tweeted, contain essentially three policy critiques plus the undeniable observation that competition from Amazon has put some other companies out of business:

• Amazon does not pay its fair share of taxes.
• Amazon does not pay fair rates to the US Postal Service.
• Amazon uses Jeff Bezos’s ownership of the Post as a covert lobbying tactic.

These two March 31 tweets sum up the issue well.

Twit:
 While we are on the subject, it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon. That amounts to Billions of Dollars. The Failing N.Y. Times reports that “the size of the company’s lobbying staff has ballooned,” and that...

Twit:
 ...does not include the Fake Washington Post, which is used as a “lobbyist” and should so  REGISTER. If the P.O. “increased its parcel rates, Amazon’s shipping costs would rise by $2.6 Billion.” This Post Office scam must stop. Amazon must pay real costs (and taxes) now!

Trump then reiterated Tuesday morning that he is correct about the USPS issue and the senior leadership at USPS is making a mistake.

Twit:
 I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy. Amazon should pay these costs (plus) and not have them bourne by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!

On all of these points, Trump is offering half-truths, which would be bad by the standards of ordinary presidential conduct but by Trump standards is really more of a glass-half-full situation.

• Taxes: Under current law, a state may only charge an internet retailer sales tax if the retailer maintains a physical presence in that state. This gives internet retailers a meaningful advantage over brick-and-mortar retailers and has helped Amazon in the past. However, Amazon’s network of warehouses is now so extensive that it actually does pay sales tax in every state that has a sales tax. But in addition to acting as a retailer, Amazon also facilitates “marketplace” sales by third-party companies that do not need to pay sales tax in states where they don’t have a physical presence. Amazon qua marketplace benefits from the no physical presence loophole, but Amazon qua first-party retailer would benefit from closing the loophole, and the company’s official position is that it should be closed.
• Postal Service: The Postal Service books accounting losses because of the requirement that it pre-fund its pension obligations, and broadly speaking, the problem for the USPS business model is that it’s supposed to benefit from a lucrative monopoly on regular mail delivery but the monopoly is becoming steadily less lucrative over time since people send less mail. Amazon’s parcel delivery business, by contrast, is growing, and USPS says its deal to conduct last-mile deliveries for Amazon is profitable. Both USPS and Amazon operate at an unparalleled scale, so there’s no situation to which to directly compare the pricing involved, and it’s at least theoretically possible that USPS could or should be charging more.
• Washington Post: The idea that the whole Washington Post newsroom involving hundreds of dedicated journalists is nothing but a publicity operation for Amazon is a ridiculous smear, and to call it a lobbying operation involves a fundamental misunderstanding of what lobbying is about. It’s probably fair to say that a desire to cultivate goodwill among political elites and a reputation as a virtuous and civic-minded figure are part of the reason Bezos bought the Post, though of course this kind of situation is hardly unique in the history of American newspapering.

Something that’s noteworthy is all the charges Trump isn’t leveling against Amazon — a company that’s been controversial for a long time.

Trump isn’t actually doing anything about Amazon

The company has been dogged for years by complaints that it mistreats its warehouse workers, while a new school of left-wing antitrust advocates has been pressing to rethink American competition policy to target Amazon even though it pretty clearly delivers lower prices.

In a practical sense, though, it’s worth noting that Trump isn’t really doing much at all about Amazon. Gabriel Sherman, reporting for Vanity Fair on “Trump’s War on Amazon,” says, “Advisers are also encouraging Trump to cancel Amazon’s pending multi-billion contract with the Pentagon to provide cloud computing services.”

This is a significant deal that faced considerable skepticism from the House Appropriations Committee last month. If congressional Republicans succeed in drawing the president over to their side of the clash with the Pentagon, that could, indeed, scuttle the contract and cost Amazon some money. But a contracting dispute is hardly an existential matter for either Amazon or American democracy, and opposition to the deal seems to primarily reflect the lobbying clout of Microsoft, Oracle, IBM, and other rival cloud computing vendors.

On other fronts, where Trump really could do something, there’s simply nothing happening at all.

The US Postal Service is overseen by a nine-member board of governors appointed by the president, for example, but currently all nine slots are vacant and Trump has not nominated anyone to fill them. He’s also not backing any legislation in Congress that would force Amazon to pay sales taxes on its marketplace transactions, and, indeed, it’s not even clear that a bill like that would damage Amazon’s interests, since Amazon already does pay sales tax on its first-party transactions and many of its competitors do not.

Sherman also reports that Trump is “open” to the idea of “encourag[ing] attorneys general in red states to open investigations into Amazon’s business practices.” But in a practical sense, Trump has been filling the federal judiciary with orthodox pro-business conservatives who give no indication of any interest in changing antitrust doctrine in a way that would disadvantage Amazon. And Trump’s National Labor Relations Board picks have all been uniformly conventional pro-business conservatives with no interest in penalizing Amazon for anything it’s doing on the workers’ rights front.

In other words, while it’s true in principle that Trump’s tweets are raising dire prospects for American democracy, the practical stakes of this conflict appear to be at most a single government cloud services contract but perhaps not even that. All of which naturally raises the question of why the president would pick a high-profile fight that’s mostly for show.

When Trump really wants to meddle, things happen

On Monday, Trump tweeted praise for Sinclair Broadcasting — a national franchise of local television stations affiliated with various networks that has increasingly turned its local news broadcasts into pro-Trump propaganda broadcasts.

Twit:
 So funny to watch Fake News Networks, among the most dishonest groups of people I have ever dealt with, criticize Sinclair Broadcasting for being biased. Sinclair is far superior to CNN and even more Fake NBC, which is a total joke.

Here Trump didn’t mention that there are real policy issues in place. Sinclair is in the midst of trying to complete a $3.9 billion acquisition of Tribune Broadcasting’s stations and needs approval from the Justice Department and the FCC. Sinclair already gained approval from the Trump FCC for one acquisition, complete with a special waiver of rules that would normally prohibit it from operating KCFW of Kalispell, Montana, as a satellite of KECI in Missoula. Sinclair is also asking for some waivers pursuant to the Tribune deal.

Back in October, meanwhile, the FCC rescinded a longstanding rule requiring that broadcast TV stations maintain local TV news studios — a huge boost to Sinclair’s unorthodox centralized model of producing “local” television news.

Trump has, obviously, never tweeted at all about these low-key, financially critically regulatory issues. But it’s precisely in the subtle workings of the regulatory state that the potential for corruption is greatest. The Amazon fracas, by contrast, seems like more bark than bite.

Is there any method here at all?

If you want to interpret Trump as a shrewd operator, there is certainly some logic to his approach here. The fight with Amazon stirs up coalition trouble for Democrats, since big tech’s most vociferous critics are on the left but the technology sector is also one of the most Democrat-friendly swaths of American industry. Getting left-wing Democrats angrier at the Democratic establishment than they are at him has been one of Trump’s more effective political moves over the past few years, and the Amazon gambit arguably fits that pattern.

Going after Amazon’s interests in a more substantive way — through antitrust law, labor law, tax law, whatever — would provoke contention inside Trump’s coalition. Big policy changes would provoke ferocious pushback from the US Chamber of Commerce and other business interests, whereas hostile tweets are simply ignored by a business community that is largely enthusiastic about the vast majority of Trump’s policies.

On the other hand, Amazon is fundamentally a very popular company.

There are 63 million Trump voters in America and 90 million Amazon Prime subscribers. A recent poll found Amazon to be the most trusted of the big tech companies in America, with 66 percent of respondents saying they trust Bezos’s company — poll numbers that either political party would kill for. Indeed, the Harris Poll’s annual reputation quotient poll released on March 13 found that Amazon has literally the best reputation of any big company in America.

Trump’s efficacy at messing with his opponents’ heads, after all, may simply stem from the fact that his actions simply don't make sense. It’s entirely possible that he’s lashing out at Amazon because he’s genuinely angry at Bezos, and that he’s doing so in a way that lacks policy efficacy because he’s simply bad at being president.

After all, just because I know that there are nine vacant seats on the US Postal Service Board of Governors doesn’t mean that Trump knows or that anyone in his inner circle has bothered to inform him of that fact. He’s managed, after all, to have a lower net approval rating than any other president at this point in his term despite what appears to be a healthy economy with low unemployment and rising wages.

And while it’s certainly possible that history will look back on this Twitter feud as the beginning of a frightening new autocratic era in American life, it seems equally likely that it will come to be seen as an example of the kind of floundering ineptitude that led Trump to sinking poll numbers and electoral defeat.