"It's Destroying Jobs And Destroying Value" - Former Walmart US CEO Explains Why Trump Is Right About Amazon

Once again, despite the flurry of so-called experts who were quoted in the financial media saying President Trump has no idea what he's talking about when he tweeted that Amazon "are putting many thousands of retailers out of business", somebody with experience running one of the world's largest retailers shocked a handful of financial journalists on CNBC when he said Friday afternoon on "the Closing Bell" that, actually, Trump has a point...

As Bill Simon, former CEO of Walmart US, said Congress should look into splitting up Amazon.

"They're not making money in retail, and they're putting retailers out of business," Simon told CNBC.

Simon said Amazon has operated its retail segment at a loss while relying on more profitable business segments - like Amazon Web Services - to offset these losses. The company's explicit goal is to drive its competitors out of business before seizing their market share.

It's because of this type of behavior that the government should intercede.

"It's anti-competitive, it's predatory, and it's not right," said Simon. "It's not going to hurt the big ones. Walmart can adjusted. It'll be there. Costco will continue to thrive.

"It'll hurt small retailers, and it'll hurt specialty chains," he said. "You see what's happened to Toys R Us and department stores. JC Penney is in trouble. And it's because Amazon sells below cost and continues to do that," Simon said.

"It's destroying jobs and it's destroying value in the sector."

Trump published his controversial tweet early Friday, reigniting the selling pressure on Amazon's share price.

The battle over whether Amazon should pay more taxes centers on a 1992 Supreme Court decision which ruled that states couldn't collect sales taxes gathered by mail-order catalog unless the business is physically located in that state.

As one might imagine, this ruling - issued a year before the consumer-Web revolution began in earnest - is at the center over the battle over whether e-commerce businesses should pay more in local and state taxes.

And as Gerald Storch told CNBC the ruling is "an antiquated decision."

But its existence means that the Supreme Court, not the president, must be the driving force in upending the status quo.

Comments

yomutti2 FreeEarCandy Fri, 03/30/2018 - 18:37 Permalink

 Apparently today's marching orders for the Russian state propaganda apparatus is to trash the leading American tech companies. Hence, we get three separate ZH articles trying to drive customers away from Facebook, Amazon, and Google. What's the matter guys, nothing on Apple? Still busy translating that article from the original Russian?

 

 

In reply to by FreeEarCandy

jmack yomutti2 Fri, 03/30/2018 - 18:46 Permalink

you are an idiot if you dont know the evils associated with facebook, amazon, and google.  You dont need russians to tell you that.

 

   Amazon and google have some, SOME, saving graces, but facebook is just stone cold evil. Amazon and Google are very much involved in some of the same stuff.

 

    A russian developed Telegram, they know the value of privacy, no tech company in america is interested in defending privacy, and if they are, they mysteriously get sent to jail on various charges... https://en.wikipedia.org/wiki/Joseph_Nacchio

In reply to by yomutti2

exlcus 11b40 Fri, 03/30/2018 - 19:58 Permalink

They make all their money off their Amazon Web Services to the CIA. That's why they need a second headquarters in the DC area.

Just goes to show you how few people are making money in this economy except those with govt contracts. Free markets my ass. 

The federal budget alone is 22% of GDP. Then throw in all the black ops stuff. Then throw in state and local govt budgets. 

In reply to by 11b40

Manipuflation Whoa Dammit Sat, 03/31/2018 - 01:49 Permalink

WMT feeds the zeroes through Feeding America.  Encouraging MOAR breeding is a good idea?  As management, I never respond to those walkie calls for it to be approved.  I don't approve.  It's not even a tax write-down for the store.  It's more along the lines of we didn't have to pay to throw it away.  

I'll be fired for not being "culturally diverse".  Never mind that Mr's M is Russian.  

Speaking of Russians, none of my co-workers are aware of who my wife is or where she is from.  Mrs. M and her co-workers are my spies.  I have a personal Russian spy and she is coming to my WMT for evaluation.  She knows what to do.   

In reply to by Whoa Dammit

GeezerGeek Citxmech Fri, 03/30/2018 - 21:33 Permalink

Wal-Mart was also rather good at putting the screws to its suppliers, too. I worked (in IT) for one a decade back and remember how the sales folks worried every year how to satisfy W-M's price requirements. It was, in a way, amusing inasmuch as the company was one of the earliest firms using China to make cheap stuff. Wal-Mart didn't just squeeze its competitors, but the whole supply chain leading to it.

According to other IT people I knew, W-M was one of the leading companies and early adopters of just-in-time supply chains. Now they're in danger of being removed from the supply chain themselves.

In reply to by Citxmech

bonin006 GeezerGeek Fri, 03/30/2018 - 21:55 Permalink

I have noticed lately that both Walmart and Amazon are using their low price reputation and extensive web presence to price gouge on industrial oriented products. These are items that they do not stock or even take delivery of, They just use their good search results to get an unwary customer to order from them, at a much higher price than you can get the product directly from the actual supplier. The actual supplier ships directly to you.

I just ordered a dual 12 inch bubble wrap dispenser with built in cutters from FastPack Packaging for $188.63 Amazon is selling a single arm version for $186.75  " Ships from and sold by Fastpack Packaging. "

A few months ago I bought some acetic acid from a place called Duda Diesel. While searching for it, Walmart came up with the same product at twice the price, with the same sort of notice about sold and ships from Duda Diesel.

People need to do their homework before buying stuff. The "Low Cost Leaders" are out to fuck you.

In reply to by GeezerGeek

jmack bonin006 Fri, 03/30/2018 - 22:24 Permalink

It is resellers,  walmart and amazon dont pay people to post all those products,  random people do it, drop ship it from the OEM, and mark it up, it can get a bit scammy  so yea, do your homework, or become the reseller, some of those pricks make a lot more than flipping burgers at mcdonalds.

In reply to by bonin006

Adahy bonin006 Sat, 03/31/2018 - 03:10 Permalink

Case in point:  I was looking for an item this week.  WallMart is, of course, the first several searches.  No items in store, but they offer to ship it to the store for pickup in a week.  Price - $139
Found the exact same item direct from the producer, shipped to my door in 2 days with free shipping and actual decent customer service.  Price - $115 and I don't have to wait or make a trip to that shithole walmart.  No-brainer.  Do your homework people.

In reply to by bonin006

PN7 bonin006 Sat, 03/31/2018 - 05:02 Permalink

Right. Do your homework.  "Natural Selection and Social Theory" by Robert Trivers sells for $87.44 + s&h on Amazon.  A bit high, I thought.  So I decided to buy another Trivers' book for less.  I bought "The Folly of Fools" after checking the Author's page.

On the same author's page I found "Natural Selection and Social Theory" for $59.  So Amazon was selling the exact same book for much less than I first saw.

Both copies of the book have the same six customer reviews as each other.

I tried to post a review, pointing out to customers that they can get the same book from Amazon for less money.  My review was turned down for not meeting Amazon's review guidelines.  

In reply to by bonin006

Kidbuck Citxmech Sat, 03/31/2018 - 06:53 Permalink

Walmart and Amazon aren't crushing anyone or anything. If they didn't appeal more to their customers than the customer's next best option they would never have gotten started and they would never have grown. Blame lies squarely with the customers for exercising their freedom to choose and the replaced businesses for not giving the customer something more appealing.

Only rich snobs think its their business to denigrate other people's shopping choices. 

In reply to by Citxmech

Koba the Dread Déjà view Fri, 03/30/2018 - 21:44 Permalink

Bezos didn't "skim" anything. His wealth is determined by the stock price at any given moment times the number of shares he holds. That's why his wealth varies. It depends on the price of the stock at any moment.

As an officer of the Amazon corporation, his stock is called lettered stock. If he sells shares, there is a public notice that an officer of the corporation is selling. If he sells too much of the stock, it crashes the value of the stock itself.

In reply to by Déjà view

PT CriticalUser Sat, 03/31/2018 - 07:19 Permalink

Are you new here????  Okay, I'll bite:

1.  Why is there only one Facebook?  That Facebook even exists is proof alone that evil is in control.  What is unique about Facebook?  NOTHING!!!  Any computer programmer should be able to spit out a Facebook program as a first year project.  There should be a billion competitors keeping it honest based on that fact alone.  Why not?  HUGE red flag, WHERE ARE ALL THE COMPETITORS????

2.  But the whole model is wrong.  Why on earth is FB centralized?  A non-corrupt FB would exist as something assembled by a billion programmers, constantly modified at will, and totally decentralized.  The average Joe Public can not figure out what they are missing out on here, but any computer programmer worth their salt knows exactly what I am talking about.  There is absolutely no need for the centralized FB model unless complete control / domination is your goal.  In fact a decentralized FB model would provide tremendous advantage to real users so why does it not exist?  Oh, but you need a centralized FB if you want to sell advertising, or you want to sell data to the world etc

3.  ...which brings about point 3.  You think your "privacy" settings mean anything?  Can you prove it?  Have you read the code to prove it?  No.  The whole system relies on TRUST.  A complete stranger who lives thousands of miles away has access to all the information you provide on FB and indeed over the internet and, possibly as far as we KNOW, on your computer.  That complete stranger sells information to anyone who wants to buy it.  Now whose preferences do you think TAKE PRIORITY?  Answer honestly now, I've tolerated this much of your feigned ignorance, I see no reason to entertain downright stupid.

4.  You obviously haven't read any of the FB articles over the last few years or else you would be able to answer your own question.
Click farms.
Income.
Expenditure.
P/E/Growth.
Political censorship / spy agency collusion. - Why wouldn't they?  Both FB and the dumb public made it waaaaaaaaay too easy for them.

The people grew up in a soft and fluffy world so they naively accepted FB.  In return, one day FB is going to teach them a VERY painful lesson.  It is a lesson that their ancestors warned them about, but hey - that's just old fogey talk, right?

In reply to by CriticalUser

LibertarianMenace PT Sat, 03/31/2018 - 08:50 Permalink

Old fogeys tend to be ahead of the curve. Trouble is, they're also nearly out of gas. The world controllers depend upon this phenomenon for their continued controlling - those that are aware of their existence, and that might cause them trouble, are genocided rather than accumulate in numbers, by natural causes! Facefu*k will never be recognized for the privacy threat it is. The concept of "free" is often way too seductive to resist for those that have seen less of life.

In reply to by PT

Jacuzzi PT Sat, 03/31/2018 - 09:32 Permalink

"1.  Why is there only one Facebook?...What is unique about Facebook?  NOTHING!!!"

It's got one unique feature: to the best of my knowledge, they got there first.  Just as eBay, Amazon, etc., etc. got there first.  If you will look you will find other eBay's on the Internet, but they don't get any business because the original eBay got there first.  Microsoft may have gotten there first, but Apple came out with the completely different Mac, so they are still around.  

You want to get rich?  Never mind thinking about what's out there now.  Come up with the next eBay, Amazon or Facebook.  

 

 

 

In reply to by PT

PT Jacuzzi Sat, 03/31/2018 - 10:13 Permalink

We have quite a few different car-rental companies.  Anyone can start up a car rental company.  It's easy.  Get some cars and rent them out.  So it is a cut-throat industry.

Anyone can start up a hamburger shop.  Sure, they can't do it as cheap as McDonalds but they make up for it by selling quality.  You even get some gourmet burger chains.

Anyone can start up a taxi service.  Errr, except the taxi cartels took control of that and totally destroyed all competition until Uber came along.  Even so, why did anyone need Uber before they could start their own taxi service?  Buy car, place ad on local flea-market website.  What more do you need?

I am seeing minimal decentralization in the computer world.  I guess LinkedIn would be a boutique type of Facebook, but I don't trust them either.  There's a better way of doing things out there but it is just not happening.

In reply to by Jacuzzi

LibertarianMenace PT Sat, 03/31/2018 - 14:46 Permalink

"I am seeing minimal decentralization in the computer world."

 

The device itself is inimical to dispersion: hell, the reason it's sought out is for the opposite purpose: centralization and consolidation. No surprise really, that its characteristics rub off on the industry that produces the damned thing.

In reply to by PT

jmack HowardBeale Fri, 03/30/2018 - 20:11 Permalink

   yea, I know but was trying to keep it pithy, its pretty much every "tech" company in America, just go down the list, but the fangs buy so many of them that most of them are actually fang companies.  att and verizon are just as bad, there is an underlying theme, that being that the deep state is guiding and shaping and picking winners, and those winners meet a certain profile.

In reply to by HowardBeale

swmnguy jmack Fri, 03/30/2018 - 21:29 Permalink

Consolidation of US industry of all kinds is no new trend.  Dates back to about the '70s.  And about that time, the deep-pockets companies bought off all regulation, in the name of freedom and preserving the Constitutional rights of corporations of course.  

It's not "The Deep State" picking the winners and losers.  It's The Deep Pockets.  Reagan and every President since has done as bidden;with next to no disagreement, much less opposition.

In reply to by jmack

jmack swmnguy Fri, 03/30/2018 - 21:56 Permalink

"Consolidation of US industry of all kinds is no new trend. Dates Back to about the '70's."  lol

 

   Really?  you really think it dates back to the 70's?  oh, maybe you mean the 1870's?  or  did you mean the 1770's?  Well that is problematical because most "US industries" in the 1770's  were actually British or Dutch or some other european industry. The point being that the action is a part of human nature, your cherry picking a certain time period is reflective of your ignorance of other time periods, or your politcal bias.  It's just human nature bro.  The key is constructing, AND MAINTAINING,  a system that combats this natural human nature of consolidation, while taking into consideration several other important factors. Namely National defense. but once you start introducing in qualifications, your are taking a step down a slippery slope and before you know it, you are supporting fascist control of the means of production for all things, so to my mind, I would rather risk a little national security to maintain a non-hitler 2.0 friendly state. but that is just me.

 

     Why dont you read about Theodore Roosevelt and the trust busting, or Rockefeller who really struck a cord from your comment, considering that standard oil was founded in 1870 (da 70's were a great decade, cant wait for 2070).

 

Standard Oil Co. Inc. was an American oil producing, transporting, refining, and marketing company. Established in 1870 by John D. Rockefeller as a corporationin Ohio, it was the largest oil refinery in the world of its time.

 

Standard Oil was the Microsoft, or Google if you like, of it's day, I guess the microsoft of the day could be considered the railroads.   The only difference is that people back then fought him eventually, now they languish in ignorance while these companies pen them up in metaphorical plantations that may never be escaped.

 

from the wikipedia article (https://en.wikipedia.org/wiki/Standard_Oil):

By 1911, with public outcry at a climax, the Supreme Court of the United States ruled, in Standard Oil Co. of New Jersey v. United States, that Standard Oil of New Jersey must be dissolved under the Sherman Antitrust Act and split into 34 companies.[45][46] Two of these companies were Standard Oil of New Jersey (Jersey Standard or Esso), which eventually became Exxon, and Standard Oil of New York (Socony), which eventually became Mobil; those two companies later merged into ExxonMobil.

In reply to by swmnguy

LibertarianMenace jmack Fri, 03/30/2018 - 22:14 Permalink

"It's just human nature bro.  The key is constructing, AND MAINTAINING,  a system that combats this natural human nature of consolidation,"

It was once known as competition. Don't hear about it much anymore, these days. Billionaires aren't really bad people after all, as long as they're kept at each other's throats. A billion dollars is still alot of money, they need to be made to earn it.

 

In reply to by jmack