Damn Right Amazon Runs a Deficit and So Should America
Geege Schuman stashed this in Economics
But like in terms of cash on hand, Amazon is broke. Worse than broke, even. It owes people money.
How can this be, you ask? They generate so much revenue!
That’s absolutely true. They generate an absurd amount of revenue.
So why are they broke?
Because not only does Amazon cannibalize profit into self-investment instead of paying out dividends, they also borrow even more money on top of that to keep going.
Now, Amazon, as a company could fire like 90% of its staff tomorrow, dispense with all its R&D, and undoubtedly run a huge profit. Massive. Honestly, if they were to actually do that, it would be a huge market upset. I cannot even imagine how ridiculous an economic event Amazon suddenly deciding to adopt corporate austerity to pay out dividends would be.
But they won’t.
Because they aren’t stupid.
Figuring out how to get Amazon to make money is not the hard part here. I mean everyone knows how it makes money.
But if they were to try to make profit off of what they do, they would cease to be competitive. The idea of Amazon isn’t an industry secret.
But people aren’t investing in Amazon because it’s good at delivering books and gummy bears.
Amazon invests in its own enterprise to stay competitive. If they were to try and balance their budget, it would mean cutting the lifeblood that is ensuring the only thing about themselves that people are actually invested in seeing succeed: its own future.
For Amazon to balance its budget, it would have to liquidate its long-term potential for short-term gains solely to appeal to idiots who like the sound of the phrase “balanced budget.” They’d run profit for a brief window of time, making current investors a ton of money before they are invariably skullfucked by a competitor who doesn’t care about balancing budgets because the idea of balancing budgets when you’re trying to innovate solutions and grow as a business is absolutely stupid.
The weird thing is really stupid people think the Government, which is a nothing but the biggest public enterprise, should balance its budget because they like the sound of that. They think that the reason America is Bad is because we’re running a deficit.
Or worse still, they think the reason the economy is bad is somehow related to the public deficit.
No, even conservative economists agree that the economy is bad because of a lack of regulation regarding trading derivatives that allowed a housing speculation bubble to burst. No one denies this. The public deficit has nothing to do with that market failure.
So why do stupid people want to balance the budget?
For the same reason investors who think in short-term profits want Amazon to turn a profit: they don’t care about the vitality of the enterprise.
They don’t care if America is skullfucked by competitors.
A lot of people say they want to elect a President who thinks like a CEO, which I think is frankly absurd because America is not a marketplace and to imagine it as being such is intellectually reductive. But years of garbage media like CNBC have people thinking business leaders know more than the rest of us about what will save us from ourselves.
LOL BUT NOT IF THEIR ONLY SOLUTION IS BALANCING THE FUCKING BUDGET.
Why? Because a President’s job is to secure the union. Literally. That’s in the exact job description.
There is really only a simple mission statement for the office of the President and it’s don’t let America die.
So you can’t manage America like a startup where the board can one day decide to liquidate your assets and call it a day.
So it all comes down to whether we want to maximize the payout right now or invest in the future.
The writer makes the point that cashing out will benefit a few financially now but will have the lingering effect of crashing our country ... like, forever.
So it's maximize the payout right now for a few... Or invest in the future for all.
I can see why the few would want to have the payout right now. They don't want to share.