Why Wall Street can’t quit Amazon

Once again, the web retail giant reports a loss – and the stock market cheers anyway. An expert reacts

Topics: , , , , ,

Why Wall Street can't quit AmazonAmazon CEO Jeff Bezos (Credit: Reuters)

Web retail and warehouse giant Amazon revealed Thursday that it had notched $17.09 billion in third-quarter revenue while losing $41 million. As the New York Times’ David Streitfeld noted, that “followed a familiar script” for the company: “it sold vast quantities of things, lost money while doing so, and investors were delighted.” What gives?

“I think we have seen repeatedly that the stock market can be highly irrational,” economist Dean Baker told Salon in a Friday email. “The tech bubble was not very long ago. All sorts of nonsense companies had market values of hundreds of millions or even billions. When social media was really hot Groupon was worth 12 billion – that’s for selling coupons on the web – novel idea.”

Forrester Research analyst Sucharita Mulpuru told the Times that Amazon was “the teacher’s pet of Wall Street,” because no other company in the world “has the consistently abominable rate of profitability they do and yet has the stratospheric valuation they do.”

Amazon did not immediately respond to a request for comment. In a Thursday statement touting the $17 billion and noting (further down) an expected net negative profit, Amazon founder and CEO Jeff Bezos ticked off a series of highlights from the company’s past “busy few months.” Those ranged from “brought 8 million square feet of fulfillment center capacity online” to “signed up millions of new Prime members,” to “announced Kindle MatchBook, Login & Pay, and nine new original TV pilots…”

But Baker, the co-director of the progressive Center for Economic and Policy Research, declared himself a “serious skeptic” on the company’s potential to reap big future profits. While noting he couldn’t rule out the possibility, Baker cited the coming “end of their sales tax subsidy,” as increasing numbers of states will charge the same tax on Amazon purchases as other retail. “In a state like California,” said Baker, “that’s 8 percent off the top.”

Baker told Salon that Amazon’s economic impact has been “mixed”: on the one hand, “It has accelerated the move to the web” and “really broke through to create a user-friendly web reader.” On the other, “it has put many small retailers out of business – in part because of its sales tax subsidy. It has also cost state and local governments tens of billions in tax revenue.”



Amazon has also come under increased scrutiny in recent years for the labor conditions in its quickly expanding network of “fulfillment centers.” Amazon warehouse workers told the The Morning Call in 2011 that they “were forced to endure brutal heat” and “were pushed to work at a pace many could not sustain” and that firings of workers who didn’t keep up “encouraged some workers to conceal pain and push through injury…” Former workers told The Seattle Times in 2012 that “there was pressure to manage injuries so they would not have to be reported to OSHA,” and some “said that in its relentless push for efficiency, Amazon was quick to shed workers who, regardless of tenure, could no longer measure up.” Amazon touts its warehouse jobs as better-paying than traditional retail and safer than department store work.

“Amazon is growing rapidly, but they’re not creating good jobs,” labor historian Nelson Lichtenstein told Salon in July. “They’re creating insecure, temporary, attenuated jobs, which are reproducing all the pathologies of a two-tier labor market and a world of inequality – that’s what they’re creating.” Lichtenstein, the author of “Retail Revolution: How Wal-Mart Created a Brave New World of Business,” added that Amazon was “a fabulously successful company with a new technology that could create a solid working class, but they chose to instead create something that looks like it’s out of the 19th century.”

In order for that success to translate into profit, would Amazon have to drive more competitors out of business? “I’m sure that Amazon is betting on getting some serious market power,” said Baker, “which is a necessary basis for its profitability.”

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 11
  • Close
  • Fullscreen
  • Thumbnails

    Ten spectacular graphic novels from 2014

    Beautiful Darkness by Fabien Vehlmann & Kerascoët
    Kerascoët's lovely, delicate pen-and-watercolor art -- all intricate botanicals, big eyes and flowing hair -- gives this fairy story a deceptively pretty finish. You find out quickly, however, that these are the heartless and heedless fairies of folk legend, not the sentimental sprites beloved by the Victorians and Disney fans. A host of tiny hominid creatures must learn to survive in the forest after fleeing their former home -- a little girl who lies dead in the woods. The main character, Aurora, tries to organize the group into a community, but most of her cohort is too capricious, lazy and selfish to participate for long. There's no real moral to this story, which is refreshing in itself, beyond the perpetual lessons that life is hard and you have to be careful whom you trust. Never has ugly truth been given a prettier face.

    Ten spectacular graphic novels from 2014

    Climate Changed: A Personal Journey Through the Science by Philippe Squarzoni
    Squarzoni is a French cartoonist who makes nonfiction graphic novels about contemporary issues and politics. While finishing up a book about France under Jacques Chirac, he realized that when it came to environmental policy, he didn't know what he was talking about. "Climate Changed" is the result of his efforts to understand what has been happening to the planet, a striking combination of memoir and data that ruminates on a notoriously elusive, difficult and even imponderable subject. Panels of talking heads dispensing information (or Squarzoni discussing the issues with his partner) are juxtaposed with detailed and meticulous yet lyrical scenes from the author's childhood, the countryside where he takes a holiday and a visit to New York. He uses his own unreachable past as a way to grasp the imminent transformation of the Earth. The result is both enlightening and unexpectedly moving.

    Ten spectacular graphic novels from 2014

    Here by Richard McGuire
    A six-page version of this innovative work by a regular contributor to the New Yorker first appeared in RAW magazine 25 years ago. Each two-page spread depicts a single place, sometimes occupied by a corner of a room, over the course of 4 billion years. The oldest image is a blur of pink and purple gases; others depict hazmat-suited explorers from 300 years in the future. Inset images show the changing decor and inhabitants of the house throughout its existence: family photos, quarrels, kids in Halloween costumes, a woman reading a book, a cat walking across the floor. The cumulative effect is serene and ravishing, an intimation of the immensity of time and the wonder embodied in the humblest things.

    Ten spectacular graphic novels from 2014

    Kill My Mother by Jules Feiffer
    The legendary Pulitzer Prize-winning cartoonist delivers his debut graphic novel at 85, a deliriously over-the-top blend of classic movie noir and melodrama that roams from chiaroscuro Bay City to Hollywood to a USO gig in the Pacific theater of World War II. There's a burnt-out drunk of a private eye, but the story is soon commandeered by a multigenerational collection of ferocious women, including a mysterious chanteuse who never speaks, a radio comedy writer who makes a childhood friend the butt of a hit series and a ruthless dame intent on making her whiny coward of a husband into a star. There are disguises, musical numbers and plenty of gunfights, but the drawing is the main attraction. Nobody convey's bodies in motion more thrillingly than Feiffer, whether they're dancing, running or duking it out. The kid has promise.

    Ten spectacular graphic novels from 2014

    The Motherless Oven by Rob Davis
    This is a weird one, but in the nervy surreal way that word-playful novels like "A Clockwork Orange" or "Ulysses" are weird. The main character, a teenage schoolboy named Scarper Lee, lives in a world where it rains knives and people make their own parents, contraptions that can be anything from a tiny figurine stashable in a pocket to biomorphic boiler-like entities that seem to have escaped from Dr. Seuss' nightmares. Their homes are crammed with gadgets they call gods and instead of TV they watch a hulu-hoop-size wheel of repeating images that changes with the day of the week. They also know their own "death day," and Scarper's is coming up fast. Maybe that's why he runs off with the new girl at school, a real troublemaker, and the obscurely dysfunctional Castro, whose mother is a cageful of talking parakeets. A solid towline of teenage angst holds this manically inventive vision together, and proves that some graphic novels can rival the text-only kind at their own game.

    Ten spectacular graphic novels from 2014

    NOBROW 9: It's Oh So Quiet
    For each issue, the anthology magazine put out by this adventurous U.K.-based publisher of independent graphic design, illustration and comics gives 45 artists a four-color palette and a theme. In the ninth issue, the theme is silence, and the results are magnificent and full of surprises. The comics, each told in images only, range from atmospheric to trippy to jokey to melancholy to epic to creepy. But the two-page illustrations are even more powerful, even if it's not always easy to see how they pertain to the overall concept of silence. Well, except perhaps for the fact that so many of them left me utterly dumbstruck with visual delight.

    Ten spectacular graphic novels from 2014

    Over Easy by Mimi Pond
    When Pond was a broke art student in the 1970s, she took a job at a neighborhood breakfast spot in Oakland, a place with good food, splendid coffee and an endlessly entertaining crew of short-order cooks, waitresses, dishwashers and regular customers. This graphic memoir, influenced by the work of Pond's friend, Alison Bechdel, captures the funky ethos of the time, when hippies, punks and disco aficionados mingled in a Bay Area at the height of its eccentricity. The staff of the Imperial Cafe were forever swapping wisecracks and hopping in and out of each other's beds, which makes them more or less like every restaurant team in history. There's an intoxicating esprit de corps to a well-run everyday joint like the Imperial Cafe, and never has the delight in being part of it been more winningly portrayed.

    Ten spectacular graphic novels from 2014

    The Shadow Hero by Gene Luen Yang and Sonny Liew
    You don't have to be a superhero fan to be utterly charmed by Yang and Liew's revival of a little-known character created in the 1940s by the cartoonist Chu Hing. This version of the Green Turtle, however, is rich in characterization, comedy and luscious period detail from the Chinatown of "San Incendio" (a ringer for San Francisco). Hank, son of a mild-mannered grocer, would like to follow in his father's footsteps, but his restless mother (the book's best character and drawn with masterful nuance by Liew) has other ideas after her thrilling encounter with a superhero. Yang's story effortlessly folds pathos into humor without stooping to either slapstick or cheap "darkness." This is that rare tribute that far surpasses the thing it celebrates.

    Ten spectacular graphic novels from 2014

    Shoplifter by Michael Cho
    Corinna Park, former English major, works, unhappily, in a Toronto advertising agency. When the dissatisfaction of the past five years begins to oppress her, she lets off steam by pilfering magazines from a local convenience store. Cho's moody character study is as much about city life as it is about Corinna. He depicts her falling asleep in front of the TV in her condo, brooding on the subway, roaming the crowded streets after a budding romance goes awry. Like a great short story, this is a simple tale of a young woman figuring out how to get her life back, but if feels as if it contains so much of contemporary existence -- its comforts, its loneliness, its self-deceptions -- suspended in wintery amber.

    Ten spectacular graphic novels from 2014

    Through the Woods by Emily Carroll
    This collection of archetypal horror, fairy and ghost stories, all about young girls, comes lushly decked in Carroll's inky black, snowy white and blood-scarlet art. A young bride hears her predecessor's bones singing from under the floorboards, two friends make the mistake of pretending to summon the spirits of the dead, a family of orphaned siblings disappears one by one into the winter nights. Carroll's color-saturated images can be jagged, ornate and gruesome, but she also knows how to chill with absence, shadows and a single staring eye. Literary readers who cherish the work of Kelly Link or the late Angela Carter's collection, "The Bloody Chamber," will adore the violent beauty on these pages.

  • Recent Slide Shows

Comments

Loading Comments...