Economics: The War On Amazon

(Drivebycuriosity) - The Biden administration declared war on Amazon. Lina Khan, chair of the mighty Federal Trade Commission (FTC), filed a huge law suit against them on the claim of monopolist behavior (over 172 pages). The attack is the crown of her anti-Amazon crusade, which started in 2017. Then the Khan, just as a law student, published a paper called "Amazon`s Antitrust Paradox" ( yalelawjournal). 

The Khan complained that Amazon´s prices are "too low" (!), which would drive competitors out of business and would hinder potential competitors to emerge. The Khan ignored history, economics and the continuously growing number of Amazon competitors ( reason   yalelawjournal  driveby). In 2021 President Biden rewarded the activist and called her Chair of the FTC, apparently as a weapon against an unloved big corporation.

The FTC bases her law suit on a long list of accusations (ftc.gov ). Chair Khan alleges that Amazon has a monopoly on the online superstore market, repeating her monopoly claim from 2017. According to the FTC Amazon had in 2021 77% of the market, Walmart had 13% and Target 2%". 

Apparently the Khan repeats her mistake from 2017. She overlooks again that markets are very dynamical and are changing fast. In the second quarter 2023 Amazon`s online shops advanced just 5% Y-o-Y , while Walmart`s e-commerce segment expanded 24% and e-commerce platform Shopify´s revenues jumped 31% ( cnbc  ir.aboutamazon shopify). How can Amazon be a monopolist and stifle competition when competitors are growing much faster?

 

 ( source)

The Khan is also blind to the fact that Amazon is competing against foreign giants like Alibaba, Rakuten & Mercado Libre and versus innovative online platforms like TikTok, Google & Meta, who all are aggressively entering the highly competitive market ( apnews). Monopoly?

As in her anti-Amazon paper from 2017 Chair Khan overlooks that Amazon`s success is inspiring competition - not stifling.

 

                   Falling Online Prices

While the Khan in 2017 complained that Amazon´s prices are too low ("predatory") she now laments that Amazon raises prices ( marginalrevolution)! Whatever Amazon does, it is wrong in the eyes of the Khan. 

Since going online Amazon has been been obsessed with efficiency, cost cutting and delivering goods cheap, fast & reliably. They have been constructing a network of huge fulfillment centers which are very efficient and save a lot of costs. The competition with Amazon inspires Walmart, Target and many other retailers to be efficient and curb their prices as well. Today also Shopify, Wayfair and many other e-commerce companies are competing with Amazon which forces them all to sell at relatively low prices.  

As a result online prices are already falling, helping to curb the general inflation. Adobe reports that online prices extended their deflationary trend (adobe ): "Online prices in August 2023 fell 3.2% year-over-year (YoY), hitting a 40-month low—and marking a full year (12 consecutive months) of YoY price decreases". 

 

 ( source)

 

                        Based On Ideology

Khan´s Amazon law suit is not based on facts but on ideology ( drivebycuriosity). Khan`s FTC represents a Marxist ideology, explained former FTC-Commissioner & Khan colleague Christine S. Wilson (ftc.gov ). According to Wilson the FTC tries to replace the market process of supply and demand by a continuously regulated environment. Wilson calls the FTC´s antitrust enforcement "a politicized exercise that serves as a tool of oppression". 

Khan`s Amazon obsession is apparently driven from the Marxist belief that the competitive process inevitably leads to the emergence of “an ever-decreasing number of ever more powerful capitalist overlords - over the corpses and semi-corpses of small and middling capitalists" (Leon Trotsky  marxists.org). 

According to Marxist Trotsky “Large enterprises enjoy technical, financial, organizational, economic and, last but not least, political advantages over small enterprises. The greater amount of capital, being able to exploit a greater number of workers, inevitably emerges victorious out of a contest. Such is the unalterable basis of the concentration and centralization process of capital”.

 (ftc.gov )

The FTC law suit reminds me of Aynd Rand`s comment (aynrand ): "Under the Antitrust laws, a man becomes a criminal from the moment he goes into business, no matter what he does. For instance, if he charges prices which some bureaucrats judge as too high, he can be prosecuted for monopoly or for a successful “intent to monopolize”; if he charges prices lower than those of his competitors, he can be prosecuted for “unfair competition” or “restraint of trade”; and if he charges the same prices as his competitors, he can be prosecuted for “collusion” or “conspiracy.” There is only one difference in the legal treatment accorded to a criminal or to a businessman: the criminal’s rights are protected much more securely and objectively than the businessman’s."
 

Conclusion: Amazon Prime membership offers benefits to consumers that other retailers are unable to provide, such as free, fast shipping options and the ability to return products at a number of convenient locations ( netchoice).  

Biden - and his protege Khan - hate Amazon because it is big and successful - and more popular than the President. I can buy an incredible array of goods through Amazon at prices that weren’t imaginable a few years back, delivered to my door within two days or less. The Khan wants to stop this.

 

 

 

Books: The Paying Guests

(Drivebycuriosity) - Frances has a problem: She loves Lillian, but she lives in England, shortly after WW I and Lillian is married. "The Paying Guests" by Sarah Waters describes the dramatic consequences of this love story (this is a spoiler free blog amazon).

The novel is one of the best books I have read in the recent years. I think if Alfred Hitchcock would be still alive he would love this book and would turn it into a great movie. 

Waters delivers an intense psychological study and describes the characters vividly & plausibly. The book is precisely & analytical written - but also entertaining and  kept me curious till the ending of the book. Thanks to the clear and fluid style the reader immerses deeply into France´s world, suburbian London in the late 1910s.

The plot changes the character several times over the course of the book, which makes it more interesting. It is sometimes an economical report, then a romance & steamy erotic novel, a dark thriller and a court drama. 

Waters writes about social aspects, especially the life of the declining English middle class, shortly after WW I, and describes painstakingly how a low income home has functioned in these times & place, she also philosophizes about relationships, conflicts of interest and about moral fault and guilty conscience.

Patricia Highsmith meets Anaïs Nin - well done! 

Photography: The Beauty Of Barcelona

(Drivebycuriosity) - Do you know Barcelona? If not, you have to visit her. The city on the northern mediterranean coast of Spain is such a beauty. The regional capital  (with 1.6 million residents wikipedia) stretches between the mediterranean sea in the east and the mountains in the west. Walking the streets up and down the hills or along the beach front is a lot of fun and gives plenty of awesome sights.

 

The city has a modern, clean & fast subway network. The trains come in 4-minute-intervalls in bring you to all important places in the city, but beware - on weekdays the subway closes around midnight; the claims that the Spanish are very nocturnal seem to be an urban legend.

 

But even when the subway doesn`t run, there are no problems to go anywhere. Barcelona is a very walkable city and it is entertaining to hike her streets because there is so much change on the way. And: The city has a long beach, how can you go wrong with that?

 

 

 

I enjoyed the southern flair of the city which is apparently shaped by an ambitious history and the "joie de vivre" (groove) of its residents. I got the impression that the Catalonian region blends Spain with the nearby France. 

Barcelona is filled with places which maybe best described with the Italian term "Grandezza", meaning greatness, nobility of soul. My American wife also praised that the city is properly managed, everything looks nice and clean and there is a lot of green.

 

                        Southern Light  

 I was impressed by the vibrant life on the streets and ubiquitous placas (places). Grown up in Germany, which is often dark and rainy, I  really enjoyed the southern light which seems to lift the general mood. 

 

The streets are often very narrow, especially in the medieval (gothic) parts of the city, which gives them an interesting attitude, amplified by the habit to air colorful laundry on the balconies. In the old parts of the city the streets form a labyrinth. Often we lost our way and didn´t find the place, we saw the day before, but otherwise we discovered something new, which made the place more interesting.

 

Part of the fun is the tapas-hopping. There are hundreds of cafes, bars & restaurants who offer small snacks (tapas) which are cheap and attract lots of the locals. 

The popular American travel author Rick Steves writes: "I can't resist stopping in local bars to munch on these small portions of seafood, salads, meat-filled pastries, deep-fried tasties, and on and on" (ricksteves). A small portion of tapas with a glass of wine (usually just €2) lends enough energy to continue a long walk through the fascinating city, which is really recommended.

 

 

Barcelona is not just a beauty, it seems their residents (and artists & architects) love beauty and are worshipping her. At least, almost everywhere you can find some sculptures of beautiful women. Barcelona looks like a museum of handsome statues.

 

 

 

Barcelona´s architecture is is partly grand and partly fanciful, maybe influenced by a powerful history and the southern flair. You also can see a lot of influences by Antoni Gaudi (1852-1926) , an architect with a kind of flamboyant style, who lived in Barcelona and designed many buildings there.

 

 

Barcelona has still some parts from the Middle Ages, including a gothic cathedral (domicile of bishops) and a basilica (no bishop). And the gothic churches got competition. 

 

 

Since the late 19th century a private foundation has been constructing the Basílica i Temple Expiatori de la Sagrada Família (image with the cranes below), designed by Gaudi. 

The construction works got rekindled in the recent years thanks to a growing flood of money (rising number of tourists who pay admission fees) and the technological progress, which has been reducing the construction costs. 

 

The model designers, who are in the construction process involved,  even use 3D-printers, which reminds to the fact, that Barcelona also became a technology center. The city is attracting a growing number of IT-companies, parts of the metropolis are becoming a kind of Catalonian Sillicon Valley.

 

 

The new developments are reflected in some modern elements like Frank Gehry’s 52m long golden fish sculpture “El Peix” (or is it a whale?), which was built for the 1992 Barcelona Olympics.

When you are in Barcelona you shouldn´t miss the museums.

 

The Barcelona Museum of Contemporary Art (MACBA) has surprising & provoking exhibitions, displayed in a fascinating building, created by the American architect Richard Meier (driveby).

 

 

 

The Museu Nacional d'Art de Catalunya offers a foray to different epochs of art with a focal point of medieval paintings. I enjoyed the huge spectrum of styles which give an impression of the evolution of European art. Visiting the museum was like taking an academic course in art history (driveby). Above this paragraph you can see some of my favorites.

 

I also enjoyed the Fundació Antoni Tàpies, a cultural center and museum, which shows Tàpies´s works and also exhibitions of others (driveby).

And there is much more to see and to discover in Barcelona.

Stay tuned!

 

 

Books: The Wright Brothers

 (Drivebycuriosity) - I cannot imagine a life without flying. Born in Germany, I wouldn´t have met my American wife & I wouldn´t live in New York. I am interested how human flight was made possible. So I read the biography "The Wright Brothers" by David McCullough (amazon).

The author tells painstakingly why the brothers succeeded while others had failed. He draws a portrait of scientific explorers who had stubbornly strong beliefs into themselves and who benefited from a solid intellectual education. He describes the various challenges they met, how they had to struggle with nature, technical issues and an ignorant & skeptical social environment.

The books portraits a milestone of history and it also helps to understand how the US evolved into the largest economy of the world.

Contemporary Art: Daniel Heidkamp @ Half Gallery New York

(Drivebycuriosity) - Manhattan´s East Village is a
cluster of dives and fast food places, but there is at least one art gallery which has frequently interesting exhibitions: Half Gallery. They display now works by Daniel Heidkamp (halfgallery). The show is called "Make Hay".

 

I like the use of light. Apparently the artist was inspired post-impressionist artists like Vincent van Gogh, Paul Cézanne and Paul Gauguin. The style is known as "Fauve". The image on the top of the post also reminds me of David Hockney`s pool paintings, just without the boys.

 

 

 

The press release explains that Heidkamp`s  images "emerge from his ongoing investigation into the art historical landscape of the South of France: mapping the seashores, mountains, and villages employed as inspiration for so much important painting of the last centuries right up until today". 

 

I also enjoyed this paragraph in the press release:

"In “The Decay of Lying” which Oscar Wilde wrote as a companion essay to “Dorian Gray,” the author contends that nature imitates art. He’s talking about this idea that we only perceive what we can conceive. There were no fogs in London until artists started painting them and all of a sudden people were dying of respiratory illnesses. Oscar Wilde was into this notion, almost his way of doing art criticism. Liberties were taken to make his point. The simple fact that art was superior to nature."

 

To be continued

 

Economics: Biden`s Crusade Against Amazon

 (Drivebycuriosity) - It seems that President Biden hates Amazon. In 2021 the President made Lina Khan, Amazon´s nemesis, chair of the mighty Federal Trade Commission (FTC), America´s antitrust agency. 

The Khan became famous in 2017 when she, just being a law student, published an anti-Amazon paper. She complained that Amazon´s prices are "too low" (!), which would drive competitors out of business and would hinder potential competitors to emerge. The Khan ignored history, economics and the continuously growing number of Amazon competitors ( reason   yalelawjournal  driveby). In the second quarter 2023 Amazon`s online shops advanced just 5% Y-o-Y , while Walmart`s e-commerce segment expanded 24% and Shopify´s revenues jumped 31% ( cnbc  ir.aboutamazon shopify). Monopoly?

Unfazed the Khan continues her attacks on Amazon. The Biden protege claimed publicly, that the corporation is "guilty of antitrust violations and should be broken up." (yalejreg.com wsj.com). Since she is in command of the FTC the Khan uses her power and employs the agency as weapon in her crusade against Amazon ( bloomberg). 

Recently the FTC sued Amazon and alleged that the firm used deceptive practices to manipulate consumers into signing up for its Prime offerings and then "sabotaged" attempts to cancel their accounts ( netchoice). Observers tested Khan`s accusation and were able to cancel Prime in less than 90 seconds, some needed just 30 seconds (twitter twitter  twitter).

Bloomberg and other media report also that Khan`s FTC prepares “the big one,” a major lawsuit targeting Amazon’s core business. Apparently the agency wants to attack Amazon´s market place (where others can sell on Amazon) and the 2-days shipment (bloomberg twitter cnbc  arstechnica). The lawsuit is expected for tomorrow. 

The crusade against Amazon is part of a broader movement called Neo-Brandeisians (after Supreme Court Justice Louis Brandeis, 1916-1939). Lina Khan & Jonathan Kanter, head of the antitrust division of the department Justice (Justice ATR), another Biden protege, are working on a fundamental change of America´s economic structure and try to expand the role of the government in the U.S. economy significantly ( pbwt.com dailyjournal promarket reason). 

According to former FTC-Commissioner Christine S. Wilson the FTC represents a Marxist ideology and tries to replace the market process of supply and demand by a continuously regulated environment (ftc.gov ).

Biden´s antitrust zealots want to expand the targets of antitrust policy. They intend to fix issues like underemployment, income disparity, political power, and wealth accumulation (thehill ). Lina Khan wants to reconfigure antitrust toward the redistribution of economic and political power and away from concerns regarding price (lpeproject  realclearpolicy).  

Unfortunately the crusade happens under the radar. Who knows Lina Khan? Who has ever heard of the FTC? Who can explain the term "antitrust". On Internet you could find some elitist comments by some scholars. People will only notice when the damage is done.

Americans love Amazon Prime as a service. Poll after poll, and brand survey after brand survey, show that Amazon is one of the most favored institutions and among the most trusted brands in the US ( twitter). Amazon Prime membership offers benefits to consumers that other retailers are unable to provide, such as free, fast shipping options and the ability to return products at a number of convenient locations ( netchoice). Biden hates Amazon because it is big and successful - and more popular than he.

 

 

Books: The Europeans By Orlando Figes

 

(Drivebycuriosity) - The 19th century saw a lot revolutions, political, technological & cultural. Orlando Figes, author of "The Europeans: Three Lives and the Making of a Cosmopolitan Culture", tells over almost 500 pages how these changes influenced Europe`s cultural elite, at least some of them (amazon ). 

The author, an expert of Russia history, used the lives of 2 persons, a Russian writer and a Spanish/French female opera singer, as the frame of his report. I have never heard about them and didn`t care much about their stories, but their lives mingled with the lives of countless cultural important people and interesting developments.

The book has mountains of information and is almost arbitrarily stuffed with hundreds of names & places like a French Goose. The index stretches over 30 pages. I got tired after a while and started to browse the text, pickings just the tidbits.

                 Western Russophobia

Anyway, I learned about the evolution of copy rights, the economics of operas, serfdom in Russia, the struggles of the Impressionists, the popularity of spa towns, the cultural importance of railways and much more.

For instance:

George Sand was one of the thousands of poor students, would-be-writers  and artists living in the garrets of the Latin Quarter, the cheapest area in Paris at this time. The French called them "Bohemians" because of their scruffy appearance, which they associated with the gypsies from Central Europe, or Bohemia. The label was adopted by the students as a badge of non-conformity.

When Victor Hugo died "the whole of France came to a stop". When Verdi died shops and theaters closed their doors in a sign of national morning.

There was already a "Russophobia" (SIC) in the West, the dislike of everything Russian (page 68). Apparently the Russians have to share this fate with the Jews.

 

                 Frat Boys At Paris Opera

A chapter about Richard Wagner was particularly interesting. In 1861 the composer tried to start his career with his opera "Tannhäuser " at Paris Opera, but he run into difficulties. The opera management demanded that the opera has a ballet in the second act, because a group of young men, members of the so-called Jockey Club, used to visit the opera just for the ballet and to leave after (some had their mistresses in the ballet). Wagner did no think that a ballet would fit in his opera, but he had to compromise, so he put a ballet at the begin of the first act. The opera management cut their connections with Wagner because the Jockey club was displeased for needing to change their habits and to arrive earlier. This anecdote reminds me of today´s obnoxious frat boy parties in New York.

Even though the encyclopedian "Europeans" had much more information that I need, I find the more than 500 pages worth browsing and to discover interesting facts.