FOD Saying of the Day
Laughing is one of the best exercises; it’s like running inside your mind. You can do it almost anywhere and it’s even better with a friend.
Fireball Opinion: Better the Rule Of Law Than The Rule of Deals
President Trump is the first president in recent memory that has not emerged from the ranks of professional politicians, but rather a professional businessman. I applaud President Trump’s efforts to “make America great again.” I never thought we were not great! Lots can be said regarding the current discussions regarding tariffs against China. I do believe it’s appropriate to listen to experts or at least economists regarding the benefits of tariffs. I have not heard from a single economist who favors or even endorses tariffs as an appropriate tool to use against China. While no one argues the need to curtail China’s theft of intellectual property, it is important to look at each opportunity American’s companies have entered into and evaluate whether that individual company knowingly or unknowingly entered into an agreement that made their intellectual property vulnerable to being compromised by a totalitarian regime intent on stealing every manufacturing advancement and/or technology advancement for their own benefit. It has always been the case and has accelerated since the US allowed and supported admitting China to the World Trade Organization. There is ample evidence to support multiple violations of nearly every rule. Yet the US and other nations has been the beneficiary of cheaply produced goods that has continued to support the US and other nation’s economies for decades. I would encourage the President to use the rule of law to counter China’s activities rather than attempting to make another deal. The Rule of Deals never goes smoothly and is not consistent with our nation’s values. And while I’m at it, I think in particularly inappropriate for the President to attack a public corporation like Amazon for what appears to be a veiled personally vindictive attack on the Jeff Bezos, who in addition to being the founder and CEO of Amazon also owns the Washington Post. President Donald Trump lit into Amazon.com Inc. for the second time in three days with a pair of Twitter messages last week that said the online retailer “must pay real costs (and taxes) now!” The president on Saturday claimed, citing reports he didn’t specify, that the U.S. Postal Service “will lose $1.50 on average for each package it delivers for Amazon” and added that the “Post Office scam must stop.” Amazon has said the postal service, which has financial problems stretching back for years, makes money on its deliveries. Amazon shed $53 billion in market value on Wednesday after Axios reported that the president is “obsessed” with regulating the e-commerce giant, whose founder and chief executive officer, Jeff Bezos. Those losses were pared on Thursday, the final day of a shortened trading week, even as Trump tweeted that Amazon was using the postal service as its “Delivery Boy.” The Postal Service is losing money, but its package delivery service is profitable, unlike its letter delivery. The Postal Service is required by law to cover its costs for delivering competitive products, such as packages for Amazon. The Postal Regulatory Commission, which oversees the service, set the appropriate share of the costs of package delivery at 5.5% a little more than a decade ago. Since then, the service’s delivery of packages has grown substantially, and the United Parcel Service argued in a submission to the commission in 2015 that a realistic appropriate share of costs for those deliveries should be about 24.6%. A Citigroup analysis last year found that that difference would amount to about $1.46 per parcel, which might serve as the basis for Trump’s $1.50 figure. An op-ed penned in July by Josh Sandbulte in the Wall Street Journal cited that analysis in arguing the Postal Service’s estimate of costs for delivering packages should be revised. In response, US Postal Service executive Joseph Corbett wrote that the op-ed provided an “inaccurate and unfair account,” and that the Postal Regulatory Commission has determined each year that the service is covering its costs for package deliveries. Sandbulte is co-president of Greenhaven Associates, a money management firm that owns FedEx common stock. Corbett asserted the Postal Service’s financial insolvency is the result of its inability to overcome “systemic financial imbalances caused by legal and other constraints,” such as a price cap on revenue-producing products that doesn’t take changes in delivery volumes and costs into account. The Postal Service’s biggest money problem is that it has billions in retirement obligations to its workers that it can’t afford. Amazon pays the US Post Office to deliver packages to customers’ doors, including on Sundays, and because Amazon ships so many packages though the post office, it’s charged at a lower rate than most customers. But Amazon does not receive a special rate; it pays the rate that the post office charges other bulk shippers. Neither Amazon nor the post office has disclosed the details of its agreement, but the Postal Service says the deal is mutually beneficial. On Thursday, Trump tweeted another accusation about Amazon not paying “taxes to state & local governments” and “putting many thousands of retailers out of business.” Amazon collects sales tax in every state that charges one and remits it to the states, which is nearly every state. Amazon also pays local property taxes on its distribution centers as well as on the Whole Foods stores it purchased last year. Amazon maintains it helps small businesses in a tough retail climate, helping vendors reach a mass audience. This isn’t the first time Trump has accused The Washington Post of being a lobbying arm of Amazon. While both companies are owned by Jeff Bezos, Amazon does not have a stake in The Washington Post.