Monday, July 29, 2013

Amazon in government imposed death embrace.

Today I saw Amazon was hiring a ton of people. Which should have made me happy. Self I said - how can Amazon be hiring thousands of people when they just reported a loss. Who does that! How can you have so much business that you need so many extra people and then take a loss? What kind of business model is that?

Then I saw the President Money Bags was going to visit one of their new plants. Which of course made me sure that Amazon will continue to suffer. Almost every business that guy visits turns to dust. Now Amazon is a big corporation, so it won't happen right away. But really this is what you get when you make a deal with the devil.

All of this is happening because California sued Amazon to force it to collect sales tax. Even though Amazon didn't have a presence in this state. The rule used to be that if a company didn't have a building here, they didn't have to collect tax. It looked like Amazon would actually win against the State, and all of a sudden they caved. And you can see why! Amazon got a sweetheart corporate welfare deal. When they agreed to build two warehouses in central California, the government apparently agreed to share with Amazon up to 75% of the tax windfall from the warehouses. Here. Seriously!

Part of the settlement with the State also included Amazon hiring 10,000 people. So suck on that Amazon! It's no surprise they are logging losses.

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