There’s a storm brewing and tech mega-monsters like Amazon, Google & Facebook know it
Practically since the day that Lina M. Kahn was appointed chair of the FTC, big tech giants have shown that they are worried. Both Amazon and Facebook filed suits asking that she recuse herself almost immediately.
Khan’s famous 2017 article; “Amazon’s Antitrust Paradox“, published in the Yale Law Journal was both the obvious initial catalyst to her becoming chair of the FTC and also Amazon being unhappy that she would be at the helm of the FTC while antitrust actions are being brought against them.
The idea of removing her would have obvious appeal for those that fear her dedication to a new antitrust stance at the FTC, one that no longer allows digital behemoths to skate, monopolize and grow unchecked. But there is likely little chance that they can get her off their metaphorical backs that easily.
As per the Guardian: “Khan does not have any conflicts of interest under federal ethics laws, which typically apply to financial investments or employment history, and the requests [for her recusal] are not likely to go far.”
The speed and seeming ease of the fall of Afghanistan to the Taliban this week shocked the world. First cities around the country fell, one after another, and then, just days later, the nation’s capitol Kabul was ready to go.
“The urgency bordering on panic laid bare how the president’s strategy for ending the 20-year U.S. military effort — leaving Afghan forces to hold off the Taliban for months as negotiators redoubled efforts to hammer out a peace deal — has undergone a rapid dismantling.”
Washington Post
The Kabul airport became virtually the last US controlled zone as scenes reminiscent of the fall of Saigon were broadcast over the weekend, showing the desperate scramble to evacuate remaining personnel.
The social media giant’s powerful targeting tools appear to be part of Ben Shapiro’s success in growing his audience on the platform
Ben Shapiro, co-founder of The Daily Wire, a conservative media company, has mastered Facebook’s complex algorithms like no one else, posting links to stories from his publication that rank among the top 10 best performing posts on Facebook day after day after day.
What’s the key to his success?
As a recent NPR analysis shows, The Daily Wire’s sensationalist headlines garner a ton of engagement on a platform that rewards explosive content. But The Daily Wire is also a sophisticated user of Facebook’s advertising targeting tools to pinpoint users likely to be receptive to its outrage-driven brand of conservative content, The Markup has found.
Using data from our Citizen Browser project, we pulled targeting information from 241 Daily Wire ads that ran on Facebook between April 15 and July 15, 2021. We found that The Daily Wire largely chose to target people whom Facebook had pegged as interested in Fox News, Donald Trump, Rush Limbaugh, and other conservative mainstays, as well as individuals Facebook determined were characteristically or demographically similar to The Daily Wire’s existing audience members. (See our data here.)
Citizen Browser consists of a panel of roughly 1,800 Facebook users across the country who voluntarily share their Facebook news feed data with The Markup—providing a rare, albeit relatively small, window into what different people see on the platform.
By contrast, The New York Times—one of the largest legacy media publications in the U.S.—took a different tack in its Facebook advertising, targeting users according to the topics of the articles. So, for instance, an article about a band could be targeted to Facebook users with “music” listed in their ad interests. (Facebook says it determines users’ interests based on their past activities on the platform but has been somewhat cagey about how exactly this is done.)
Of the two publications, The Daily Wire used interest targeting more frequently than The New York Times did: 39.3 percent of Daily Wire ads versus 23.5 percent of ads from the Times were targeted in this way.
The table below shows the top 10 interests targeted in sponsored posts from both outlets:
While the Times mostly targets topical interests, of the top 20 interests targeted by The Daily Wire, only one (“American Football”) was not directly tied to conservative media or politics.
The Daily Wire also frequently made use of Facebook’s “lookalike audiences” feature to show content to new audiences of users who do not follow the page but share characteristics with those who do. In our dataset, 37.9 percent of Daily Wire posts used this type of targeting. The New York Times also used this targeting type, albeit rarely: Only 3.6 percent of its sponsored posts in our dataset targeted lookalike audiences.
“As you’re looking at this dataset, to me it shows that mainstream media outlets like The New York Times are still approaching the internet as a collective space in which you could potentially learn about anything, from ‘research’ or ‘science’ to ‘family and relationships,’ ” Francesca Tripodi, an assistant professor at UNC School of Information and Library Science at Chapel Hill, said. “But Daily Wire, if you’re saying, ‘We only want to target people who are interested in conservatism in America,’ that creates this bifurcated or dual internet, and that allows for information to circulate unchecked.”
Facebook advertising is designed to use personal data points about its users to guess what sorts of products they might like, she said, but there’s a fundamental difference between a food brand serving ads to people who like potato chips and a news brand serving information to people who like conservatism.
“[Daily Wire] is using the same tactics that these corporate entities are using but to create siloed interests around information,” Tripodi said.
Neither The Daily Wire nor Facebook responded to multiple requests for comment.
Beyond Facebook’s powerful data-gathering system, The Daily Wire amasses its own information on readers and potential readers.
The Markup also scanned Daily Wire ads in the Facebook ad library, which contains a broader range of ads than those seen by Citizen Browser panelists but does not disclose targeting information. Over a three-month period, from May through July, the ad library displayed 47 unique ads from The Daily Wire. Of these, 22 were survey-style ads prompting users to respond to emotive political questions.
Clicking the ad takes users away from Facebook and onto the dailywire.com domain, where they are asked to enter an email address in order to respond.
Over the same time period, no New York Times ads available in the ad library used this technique.
The Daily Wire’s website also contains an unusually high number of data-gathering trackers.
A scan from Blacklight, a website privacy inspector built by The Markup, on Aug. 4, 2021, turned up 41 ad trackers and 117 third-party cookies on the homepage. By contrast, The Markup’s scan of 100,000 of the most popular websites in September 2020 found an average of seven ad trackers and only three third-party cookies per site.
The site also uses Facebook’s bespoke Pixel tracking code to send data back to the social platform about users who have visited the site, which The Daily Wire can use to further tweak ad targeting and build new lookalike audiences.
“What you’ve shown here is clear evidence of the way in which the radicalization of our society is built on many facets of the algorithm, including the tools provided for ad targeting,” said Cameron Hickey, project director for algorithmic transparency at the National Conference on Citizenship.
Questions about the ethics of using data-driven profiling to target political messages are not new. Perhaps most famously, the British political consulting firm Cambridge Analytica purported to create detailed psychological profiles of Facebook users and shared those with the campaign of former president Donald Trump. While profiling has been a part of politics for decades to some extent, figures ranging from former Facebook insiders to Federal Election Commission officials have raised alarms over the kind of microtargeting that social media allows. (The European Commission is also considering including a ban on microtargeting in its landmark Digital Services Act package, which is making its way through the European Parliament and the Council of the European Union.)
That said, The Daily Wire’s targeting choices are widely accepted as routine, its success on Facebook more of a feature of the platform’s workings than a bug in the system, said Katie Joseff, a research fellow at the Center for Media Engagement at the University of Texas at Austin.
“These platforms, when you look at Facebook and YouTube in particular, they want people on there who are engaging their users because then there’s more users and user time overall,” Joseff said. “So [The Daily Wire] is definitely playing into the structure as it was created and doing it well.”
Elon Musk and Jeff Bezos have both recently held the title of the world’s richest person. Currently the two were also in a competition with each other over a contract to design the Human-Landing vehicle for NASA’s up coming moon missions.
NASA had selected SpaceX as the sole contractor for the program, however, Bezos as a way to try to get the contract, offered in an open letter to forgo $2 billion in future payments.
A Tweet by Musk reacting to the news, including what appears to be a deflated prototype by Blue Origin, was also included in the new article by the Observer.
The new NOAA (National Oceanic and Atmospheric Administration) report comes on the heels of the U.N. climate report, released last week, which warned of the “extreme” impacts of climate change, already and continuing to be felt around the globe. The increasing temperatures have been linked to not-so-welcome heatwaves, obviously, but also to the more intense weather systems like hurricanes and droughts.
In a statement to CBS News, NOAA administrator Rick Spinrad commented on the latest alarming record; “July is typically the world’s warmest month of the year, but July 2021 outdid itself as the hottest July and month ever recorded. This new record adds to the disturbing and disruptive path that climate change has set for the globe.”
As wildfires swept through the Italian island of Sicily, fueled by an extreme heatwave, officials in one city recorded a Wednesday recorded what is believed to be the highest temperature ever recorded in Europe.
Local meteorologists in Siracusa reported that temperatures reached 48.8ºC or 119.8ºF, breaking the continent’s previous record of 118.4ºF, which was set in 1977 in Athens.
Today has provisionally seen the highest #temperature ever recorded in #Italy 🌡️ ⚠️
SIAS have confirmed that Siracusa in #Sicily reached 48.8ºC earlier this afternoon and if verified by @WMO, it will become a new European temperature record 📈 pic.twitter.com/0L8Af2lp6r
The World Meteorological Organization still needs to independently confirm the high temperature. Local reports of the new all-time record are in line with the weather extremes that have been seen in the Mediterranean region.
“The climate crisis—I’d like to use this term, and not climate change—the climate crisis is here, and it shows us everything needs to change.”
—Kyriakos Mitsotakis, Greek prime minister
Firefighters in Sicily and Calabria have carried out more than 3,000 operations in the last 12 hours. Thousands of acres of land have burned, and at least one death was reported in Calabria when a 76-year-old man’s home collapsed in flames.
“We are losing our history, our identity is turning to ashes, our soul is burning,” Giuseppe Falcomata, the mayor of the historic city of Reggio Calabria, said in a statement on social media.
Francesco Italia, the mayor of Siracusa, told La Repubblica that the area is “in full emergency.”
“We are devastated by the fires and our ecosystem—one of the richest and most precious in Europe—is at risk,” Italia said.
As Common Dreams reported Wednesday, wildfires driven by extreme heat have devastated other parts of the Mediterranean.
In Algeria, at least 65 people have been killed in wildfires in recent days, including 28 soldiers who had been deployed to battle the flames. Twelve firefighters were also in critical condition in hospitals on Wednesday.
Tunisia recorded its highest temperature ever on Tuesday, registering 49ºC (120ºF).
In Greece, most of the wildfires that have burned through the country this week were under control on Thursday. Surveying the damage, Prime Minister Kyriakos Mitsotakis called the fires “the greatest ecological catastrophe of the last few decades.”
“We managed to save lives, but we lost forests and property,” Mitsotakis said at a Thursday press conference in Athens.
The wildfires started amid an intense heatwave that lasted several days and forced officials to call on firefighters from 24 other countries across Europe and the Middle East to help fight 100 active fires per day.
Mitsotakis did not express confidence that the situation will remain under control in the coming weeks, as the country’s wildfire season continues.
“We are in the middle of August and it’s clear we will have difficult days ahead of us,” the prime minister told reporters.
“The climate crisis—I’d like to use this term, and not climate change—the climate crisis is here, and it shows us everything needs to change,”
In November 2017, with the administration of President Donald Trump rushing to get a massive tax overhaul through Congress, Sen. Ron Johnson stunned his colleagues by announcing he would vote “no.”
Making the rounds on cable TV, the Wisconsin Republican became the first GOP senator to declare his opposition, spooking Senate leaders who were pushing to quickly pass the tax bill with their thin majority. “If they can pass it without me, let them,” Johnson declared.
Johnson’s demand was simple: In exchange for his vote, the bill must sweeten the tax break for a class of companies that are known as pass-throughs, since profits pass through to their owners. Johnson praised such companies as “engines of innovation.” Behind the scenes, the senator pressed top Treasury Department officials on the issue, emails and the officials’ calendars show.
Within two weeks, Johnson’s ultimatum produced results. Trump personally called the senator to beg for his support, and the bill’s authors fattened the tax cut for these businesses. Johnson flipped to a “yes” and claimed credit for the change. The bill passed.
The Trump administration championed the pass-through provision as tax relief for “small businesses.”
Confidential tax records, however, reveal that Johnson’s last-minute maneuver benefited two families more than almost any others in the country — both worth billions and both among the senator’s biggest donors.
Dick and Liz Uihlein of packaging giant Uline, along with roofing magnate Diane Hendricks, together had contributed around $20 million to groups backing Johnson’s 2016 reelection campaign.
The expanded tax break Johnson muscled through netted them $215 million in deductions in 2018 alone, drastically reducing the income they owed taxes on. At that rate, the cut could deliver more than half a billion in tax savings for Hendricks and the Uihleins over its eight-year life.
But the tax break did more than just give a lucrative, and legal, perk to Johnson’s donors. In the first year after Trump signed the legislation, just 82 ultrawealthy households collectively walked away with more than $1 billion in total savings, an analysis of confidential tax records shows. Republican and Democratic tycoons alike saw their tax bills chopped by tens of millions, among them: media magnate and former Democratic presidential candidate Michael Bloomberg; the Bechtel family, owners of the engineering firm that bears their name; and the heirs of the late Houston pipeline billionaire Dan Duncan.
Usually the scale of the riches doled out by opaque tax legislation — and the beneficiaries — remain shielded from the public. But ProPublica has obtained a trove of IRS records covering thousands of the wealthiest Americans. The records have enabled reporters this year to explore the diverse menu of options the tax code affords the ultrawealthy to avoid paying taxes.
The drafting of the Trump law offers a unique opportunity to examine how the billionaire class is able to shape the code to its advantage, building in new ways to sidestep taxes.
The Tax Cuts and Jobs Act was the biggest rewrite of the code in decades and arguably the most consequential legislative achievement of the one-term president. Crafted largely in secret by a handful of Trump administration officials and members of Congress, the bill was rushed through the legislative process.
As draft language of the bill made its way through Congress, lawmakers friendly to billionaires and their lobbyists were able to nip and tuck and stretch the bill to accommodate a variety of special groups. The flurry of midnight deals and last-minute insertions of language resulted in a vast redistribution of wealth into the pockets of a select set of families, siphoning away billions in tax revenue from the nation’s coffers. This story is based on lobbying and campaign finance disclosures, Treasury Department emails and calendars obtained through a Freedom of Information Act lawsuit, and confidential tax records.
For those who benefited from the bill’s modifications, the collective millions spent on campaign donations and lobbying were minuscule compared with locking in years of enormous tax savings.
A spokesperson for the Uihleins declined to comment. Representatives for Hendricks didn’t respond to questions. In response to emailed questions, Johnson did not address whether he had discussed the expanded tax break with Hendricks or the Uihleins. Instead, he wrote in a statement that his advocacy was driven by his belief that the tax code “needs to be simplified and rationalized.”
“My support for ‘pass-through’ entities — that represent over 90% of all businesses — was guided by the necessity to keep them competitive with C-corporations and had nothing to do with any donor or discussions with them,” he wrote.
By the summer of 2017, it was clear that Trump’s first major legislative initiative, to “repeal and replace” Obamacare, had gone up in flames, taking a marquee campaign promise with it. Looking for a win, the administration turned to tax reform.
“Getting closer and closer on the Tax Cut Bill. Shaping up even better than projected,” Trump tweeted. “House and Senate working very hard and smart. End result will be not only important, but SPECIAL!”
At the top of the Republican wishlist was a deep tax cut for corporations. There was little doubt that such a cut would make it into the final legislation. But because of the complexity of the tax code, slashing the corporate tax rate doesn’t actually affect most U.S. businesses.
Corporate taxes are paid by what are known in tax lingo as C corporations, which include large publicly traded firms like AT&T or Coca-Cola. Most businesses in the United States aren’t C corporations, they’re pass-throughs. The name comes from the fact that when one of these businesses makes money, the profits are not subject to corporate taxes. Instead, they “pass through” directly to the owners, who pay taxes on the profits on their personal returns. Unlike major shareholders in companies like Amazon, who can avoid taking income by not selling their stock, owners of successful pass-throughs typically can’t avoid it.
Pass-throughs include the full gamut of American business, from small barbershops to law firms to, in the case of Uline, a packaging distributor with thousands of employees.
So alongside the corporate rate cut for the AT&Ts of the world, the Trump tax bill included a separate tax break for pass-through companies. For budgetary reasons, the tax break is not permanent, sunsetting after eight years.
Proponents touted it as boosting “small business” and “Main Street,” and it’s true that many small businesses got a modest tax break. But a recent study by Treasury economists found that the top 1% of Americans by income have reaped nearly 60% of the billions in tax savings created by the provision. And most of that amount went to the top 0.1%. That’s because even though there are many small pass-through businesses, most of the pass-through profits in the country flow to the wealthy owners of a limited group of large companies.
Tax records show that in 2018, Bloomberg, whom Forbes ranks as the 20th wealthiest person in the world, got the largest known deduction from the new provision, slashing his tax bill by nearly $68 million. (When he briefly ran for president in 2020, Bloomberg’s tax plan proposed ending the deduction, though his plan was generally friendlier to the wealthy than those of his rivals.) A spokesperson for Bloomberg declined to comment.
Johnson’s intervention in November 2017 was designed to boost the bill’s already generous tax break for pass-through companies. The bill had allowed for business owners to deduct up to 17.4% of their profits. Thanks to Johnson holding out, that figure was ultimately boosted to 20%.
That might seem like a small increase, but even a few extra percentage points can translate into tens of millions of dollars in extra deductions in one year alone for an ultrawealthy family.
The mechanics are complicated but, for the rich, it generally means that a business owner gets to keep an extra 7 cents on every dollar of profit. To understand the windfall, take the case of the Uihlein family.
Dick, the great-grandson of a beer magnate, and his wife, Liz, own and operate packaging giant Uline. The logo of the Pleasant Prairie, Wisconsin, firm is stamped on the bottom of countless paper bags. Uline produced nearly $1 billion in profits in 2018, according to ProPublica’s analysis of tax records. Dick and Liz Uihlein, who own a majority of the company, reported more than $700 million in income that year. But they were able to slash what they owed the IRS with a $118 million deduction generated by the new tax break.
Liz Uihlein, who serves as president of Uline, has criticized high taxes in her company newsletter. The year before the tax overhaul, the couple gave generously to support Trump’s 2016 presidential campaign. That same year, when Johnson faced long odds in his reelection bid against former Sen. Russ Feingold, the Uihleins gave more than $8 million to a series of political committees that blanketed the state with pro-Johnson and anti-Feingold ads. That blitz led the Milwaukee Journal Sentinel to dub the Uihleins “the Koch brothers of Wisconsin politics.”
Johnson’s campaign also got a boost from Hendricks, Wisconsin’s richest woman and owner of roofing wholesaler ABC Supply Co. The Beloit-based billionaire has publicly pushed for tax breaks and said she wants to stop the U.S. from becoming “a socialistic ideological nation.”
Hendricks has said Johnson won her over after she grilled him at a brunch meeting six years earlier. She gave about $12 million to a pair of political committees, the Reform America Fund and the Freedom Partners Action Fund, that bought ads attacking Feingold.
In the first year of the pass-through tax break, Hendricks got a $97 million deduction on income of $502 million. By reducing the income she owed taxes on, that deduction saved her around $36 million.
Even after Johnson won the expansion of the pass-through break in late 2017, the final text of the tax overhaul wasn’t settled. A congressional conference committee had to iron out the differences between the Senate and House versions of the bill.
Sometime during this process, eight words that had been in neither the House nor the Senate bill were inserted: “applied without regard to the words ‘engineering, architecture.’”
With that wonky bit of legalese, Congress smiled on the Bechtel clan.
The Bechtels’ engineering and construction company is one of the largest and most politically connected private firms in the country. With surgical precision, the new language guaranteed the Bechtels a massive tax cut. In previous versions of the bill, construction would have been given a tax break, but engineering was one of the industries excluded from the pass-through deduction for reasons that remain murky.
When the bill, with its eight added words, took effect in 2018, three great-great-grandchildren of the company’s founder, CEO Brendan Bechtel and his siblings Darren and Katherine, together netted deductions of $111 million on $679 million in income, tax records show.
And that’s just one generation of Bechtels. The heirs’ father, Riley, also holds a piece of the firm, as does a group of nonfamily executives and board members. In all, Bechtel Corporation produced around $2.3 billion of profit in 2018 alone — the vast majority of which appears to be eligible for the 20% deduction.
Who wrote the phrase — and which lawmaker inserted it — has been a much-discussed mystery in the tax policy world. ProPublica found that a lobbyist who worked for both Bechtel and an industry trade group has claimed credit for the alteration.
In the months leading up to the bill’s passage in 2017, Bechtel had executed a full-court press in Washington, meeting with Trump administration officials and spending more than $1 million lobbying on tax issues.
Marc Gerson, of the Washington law firm Miller & Chevalier, was paid to lobby on the tax bill by both Bechtel and the American Council of Engineering Companies, of which Bechtel is a member. At a presentation for the trade group’s members a few weeks after Trump signed the bill into law, Gerson credited his efforts for the pass-through tax break, calling it a “major legislative victory for the engineering industry.” Gerson did not respond to a request for comment.
Bechtel’s push was part of a long history of lobbying for tax breaks by the company. Two decades ago, it even hired a former IRS commissioner as part of a successful bid to get “engineering and architectural services” included in one of President George W. Bush’s tax cuts.
The company’s lobbying on the Trump tax bill, and the tax break it received, highlight a paradox at the core of Bechtel: The family has for years showered money on anti-tax candidates even though, as The New Yorker’s Jane Mayer has written, Bechtel “owed almost its entire existence to government patronage.” Most famous for being one of the companies that built the Hoover Dam, in recent years it has bid on and won marquee federal projects. Among them: a healthy share of the billions spent by American taxpayers to rebuild Iraq after the war. The firm recently moved its longtime headquarters from San Francisco to Reston, Virginia, a hub for federal contractors just outside the Beltway.
A spokesperson for Bechtel Corporation didn’t respond to questions about the company’s lobbying. The spokesperson, as well as a representative of the family’s investment office, didn’t respond to requests to accept questions about the family’s tax records.
Brendan Bechtel has emerged this year as a vocal critic of President Joe Biden’s proposal to pay for new infrastructure with tax hikes.
“It’s unfair to ask business to shoulder or cover all the additional costs of this public infrastructure investment,” he said on a recent CNBC appearance.
As the landmark tax overhaul sped through the legislative process, other prosperous groups of business owners worried they would be left out. With the help of lobbyists, and sometimes after direct contact with lawmakers, they, too, were invited into what Trump dubbed his “big, beautiful tax cut.”
Among the biggest winners during the final push were real estate developers.
The Senate bill included a formula that restricted the size of the new deduction based on how much a pass-through business paid in wages. Congressional Republicans framed the provision as rewarding businesses that create jobs. In effect, it meant a highly profitable business with few employees — like a real estate developer — wouldn’t be able to benefit much from the break.
Developers weren’t happy. Several marshaled lobbyists and prodded friendly lawmakers to turn things around.
At least two of them turned to Johnson.
“Dear Ron,” Ted Kellner, a Wisconsin developer, and a colleague wrote in a letter to Johnson. “I’m concerned that the goal of a fair, efficient and growth oriented tax overhaul will not be achieved, especially for private real estate pass-through entities.”
Johnson forwarded the letter from Kellner, a political donor of his, to top Republicans in the House and Senate: “All, Yesterday, I received this letter from very smart and successful businessmen in Milwaukee,” adding that the legislation as it stood gave pass-throughs “widely disparate, grossly unfair” treatment.
House Ways and Means Committee Chairman Kevin Brady, R-Texas, responded with a promise to do more: “Senator — I strongly agree we should continue to improve the pass-through provisions at every step. You are a great champion for this.” Congress is not subject to the Freedom of Information Act, but Treasury officials were copied on the email exchange. ProPublica obtained the exchange after suing the Treasury Department.
Kellner got his wish. In the final days of the legislative process, real estate investors were given a side door to access the full deduction. Language was added to the final legislation that allowed them to qualify if they had a large portfolio of buildings, even if they had small payrolls.
With that, some of the richest real estate developers in the country were welcomed into the fold.
The tax records obtained by ProPublica show that one of the top real estate industry winners was Donald Bren, sole owner of the Southern California-based Irvine Company and one of the wealthiest developers in the United States.
In 2018 alone, Bren personally enjoyed a deduction of $22 million because of the tax break. Bren’s representatives did not respond to emails and calls from ProPublica.
His company had hired Wes Coulam, a prominent Washington lobbyist with Ernst & Young, to advocate for its interests as the bill was being hammered out. Before Coulam became a lobbyist, he worked on Capitol Hill as a tax policy adviser for Utah Sen. Orrin Hatch.
Hatch, then the Republican chair of the Senate Finance Committee, publicly took credit for the final draft of the new deduction, amid questions about the real estate carveout. Hatch’s representatives did not respond to questions from ProPublica about how the carveout was added.
ProPublica’s records show that other big real estate winners include Adam Portnoy, head of commercial real estate giant the RMR Group, who got a $14 million deduction in 2018. Donald Sterling, the real estate developer and disgraced former owner of the Los Angeles Clippers, won an $11 million deduction. Representatives for Portnoy and Sterling did not respond to questions from ProPublica.
Another gift to the real estate industry in the bill was a tax deduction of up to 20% on dividends from real estate investment trusts, more commonly known as REITs. These companies are essentially bundles of various real estate assets, which investors can buy chunks of. REITs make money by collecting rent from tenants and interest from loans used to finance real estate deals.
The tax cut for these investment vehicles was pushed by both the Real Estate Roundtable, a trade group for the entire industry, and the National Association of Real Estate Investment Trusts. The latter, a trade group specifically for REITs, spent more than $5 million lobbying in Washington the year the tax bill was drafted, more than it had in any year in its history.
Steven Roth, the founder of Vornado Realty Trust, a prominent REIT, is a regular donor to both groups’ political committees.
Roth had close ties to the Trump administration, including advising on infrastructure and doing business with Jared Kushner’s family. He became one of the biggest winners from the REIT provision in the Trump tax law.
Roth earned more than $27 million in REIT dividends in the two years after the bill passed, potentially allowing him a tax deduction of about $5 million, tax records show. Roth did not respond to requests for comment, and his representatives did not accept questions from ProPublica on his behalf.
Another carveout benefited investors of publicly traded pipeline businesses. Sen. John Cornyn, a Texas Republican, added an amendment for them to the Senate version of the bill just before it was voted on.
Without his amendment, investors who made under a certain income would have received the deduction anyway, experts told ProPublica. But for higher-income investors, a slate of restrictions kicked in. In order to qualify, they would have needed the businesses they’re invested in to pay out significant wages, and these oil and gas businesses, like real estate developers, typically do not.
Cornyn’s amendment cleared the way.
The trade group for these companies and one of its top members, Enterprise Products Partners, a Houston-based natural gas and crude oil pipeline company, had both lobbied on the bill. Enterprise was founded by Dan Duncan, who died in 2010.
The Trump tax bill delivered a win to Duncan’s heirs. ProPublica’s data shows his four children, who own stakes in the company, together claimed more than $150 million in deductions in 2018 alone. The tax provision for “small businesses” had delivered a windfall to the family Forbes ranked as the 11th richest in the country.
In a statement, an Enterprise spokesperson wrote: “The Duncan family abides by all applicable tax laws and will not comment on individual tax returns, which are a private matter.” Cornyn’s office did not respond to questions about the senator’s amendment.
The tax break is due to expire after 2025, and a gulf has opened in Congress about the future of the provision.
In July, Senate Finance Chair Ron Wyden, D-Ore., proposed legislation that would end the tax cut early for the ultrawealthy. In fact, anyone making over $500,000 per year would no longer get the deduction. But it would be extended to the business owners below that threshold who are currently excluded because of their industry. The bill would “make the policy more fair and less complex for middle-class business owners, while also raising billions for priorities like child care, education, and health care,” Wyden said in a statement.
Meanwhile, dozens of trade groups, including the Chamber of Commerce, are pushing to make the pass-through tax cut permanent. This year, a bipartisan bill called the Main Street Tax Certainty Act was introduced in both houses of Congress to do just that.
One of the bill’s sponsors, Rep. Henry Cuellar, D-Texas, pitched the legislation this way: “I am committed to delivering critical relief for our nation’s small businesses and the communities they serve.”
Originally published on ProPublica by Justin Elliott and Robert Faturechi
LA shook on July 4, 2019 – felt from Vegas to the Pacific in largest quake since Northridge
A large rolling earthquake centered in Searles Velley, CA was felt all the way to LAX. The epicenter was in the vicinity of Ridgecrest, approximately 100 miles from downtown Los Angeles, in San Bernardino County.
Reports of people noticing the quake came from as far away as Las Vegas and all the way to Newport Beach. The tremblor was at first clocked at 6.6, but subsequently downgraded to 6.4 – still the biggest since the infamous Northridge earthquake that all local residents recall. Fortunately this one was centered in an relatively remote area and no significant damage has yet been reported.
Above: Jack Dorsey & Elon Musk – Photo – various / tesla / Twitter / collage Lyxotic
Possibly staged “Twitter feud over BitCoin” leads to portentous upcoming event: “THE talk”
Although both Jack Dorsey, head of both Twitter and Square, and Elon Musk are long standing and staunch BitCoin advocates, a lot of chatter around the internet has painted Musk as having gone soft on the crypto currency.
Th narrative that has been put forth pits his loyalty to Bitcoin as somehow incongruous with his support for DogeCoin, the somewhat less serious AltCoin variant he has openly championed.
Intermingled with this straw-man charade, is the also over-hyped idea that the energy used by BitCoin mining is a factor in global warming and therefore a stain on Musk’s otherwise high profile positive sustainable energy resumé.
While many article have shown this argument to be blown out of proportion at best, apparently the whole world (China, if you’re listening) has seized on this talking point as a way to damage BitCoin’s popularity and pedigree.
The attempt to use this argument to undermine BitCoin’s adoption progress and futuristic pedigree appears to have already backfired, however. For example, at the recent BitCoin conference in Miami, Jack Dorsey announced plans to invest in a sustainable energy powered BitCoin mining facility.
Elon Musk has also stated via his twitter account that Tesla would resume accepting BitCoin payments, as soon as more miners switch to renewable energy. This coming after he had announced, to great fanfare, that Tesla would accept the cryptocurrency and then, in May, reversed the decision after backlash from those who pounced on the issue to try to tarnish Tesla’s sterling reputation as a proponent of the transition to sustainable energy.
Though not yet confirmed 100%, the Twitter exchange between the two titans implied that the “talk” would take place in conjunction with the “The B Word” BitCoin conference, which kicks off on July 21, 2021. Sponsored by Ark Invest, Square and Paradigm, the big name speakers and hype already building, along with the timing, coming on the heels of a huge peak then “crash” in the crypto markets, looks to be a watershed event for Bitcoin and cryptocurrencies in general.
Details on whether the exchange between the two will be live on stage or via video conference have, as of yet, not been revealed.
Twitter and Square CEO Dorsey tweeted Thursday about an upcoming “The B Word” bitcoin event, and Musk responded to it. It’s unclear if the event, which kicks off on July 21, will be virtual or in-person.
The potential for drama as the two discuss a topic on which they, for the most part agree, is a smart way to hype the event, both the conference itself and the monumental meeting for “THE Talk”.
Regardless of any fireworks or revelations coming out of the event and the meeting between these two incredibly influential business leaders, the upshot is that all of the above is a net positive for BitCoins progress toward more widespread adoption and acceptance.
Critical mass may already been achieved for crypto in the US
The overly manic focus on price fluctuations notwithstanding, there is a rapidly growing sense that the #1 cryptocurrency as well as all related coins and activities are reaching the point, in the US, that it will be impossible to return the genie to the bottle.
Any attempt to block or outlaw, in totality, the emerging world of crypto-finance, is likely to fail. Realizing this there appears to be a faint whisper of capitulation on the part of both the government in the US and among the “old guard” establishment, namely Wall Street.
Dorsey’s take, as quoted from his appearance at the BitCoin conference in Miami:
“Governments are trying to block cryptocurrency use to avoid losing hold of power”
“It can’t, and it never will.” — musing on the likelihood of Wall Street controlling bitcoin.
“That’s why we don’t deal with any other currencies or coins — because we’re so focused on making bitcoin the native currency for the internet.” — when asked about payments provider Square’s ambitions for bitcoin.
The full moon that happens in June is often referred to as the strawberry moon. Although, if you look to the sky, the moon will look full starting Wednesday night and into Friday night, the moon will be 100% full starting 2:40 P.M. EDT Thursday, June 24, 2021. This will mark the first full moon after summer solstice and the last supermoon of the year.
Despite the sweet name, the moon will not really resemble any coloring of a strawberry, rather it will have more of a golden color. The reference to the fruit was often used by Native American tribes, like that of the Algonquins to signal the ripening of strawberries that were ready to be harvested.
What makes a full moon a “Supermoon”, according to NASA, occurs when the Moon’s orbit is closest to the Earth at the same time as when the moon is full, making the moon appear much brighter and larger than the usual full moon.
In addition, any full moon that comes within 224.791 miles/ 361,766 km of Earth is categorized as a supermoon. For the Strawberry Supermoon on the 24th, the moon will be 224,662 miles / 361,558 km away from Earth.
More sky news: mercury has gone direct
In an alternate celestial observation, the dreaded retrograde mercury ended when mercury went direct on June 23rd. Astrology buffs always welcome the end of the mercury retrograde periods, known for confusion and, in particular, technological snafus and breakdowns.
Fortunately the full moon due on the 24th / 25th is seen, astrologically speaking, as a highly positive force and should help us all to celebrate the escape from mercury in retrograde and it’s chaos, as we glide smoothly into a more productive phase into July and beyond.
To get additional information on when the moon will rise and set in your area, click on the moonrise and moonset calculator.
Marking the beginning of a new era of Hollywood tech glamour
Somehow it is slightly disconcerting to see iconic and historic movie theaters repurposed or simply demolished. The former is preferred. However, this is not just any renovation, not just any commercial repurposing.
This is a bold and strategic statement that Apple is not just the future of computing but the future of entertainment, enabler of creativity and the beating heart of digital communication.
In renovating, really rescuing the location, Apple has, seemingly, taken the deeper meanings to heart and tried, with a budget befitting the world’s largest company, to do justice to the majestic, historic landmark, even as they transformed it into a temple to all things Apple.
The link to Hollywood’s glory days is not inappropriate or hard to grasp, and there’s a nod to the innovative and pioneering spirit of those early days of film, and an attempt to draw a lane directly to the potential for Apple’s products and services to enhance creativity, entertainment experiences, and, well, life.
There’s also statement lurking in the transition, potentially a permanent one, which sees in-person pleasures like viewing a film on the big screen in opulent surroundings begin to fade into the past and a move into sales and learning nodes for devices and methods we can use to build and inhabit the metaverse.
In the press release from today the sub-head reads: “Historic theater has premiered new technology since 1927” – in an, apparently, heartfelt attempt to build a link between the technology of today and the entertainment marvels showcased at the theater during a bygone era.
The connections to Hollywood are no longer metaphoric
With Apple in the middle of a long transition away from just devices and hardware and into a service and communications company, the importance and multi-layered meaning of this location is unavoidable.
Creativity and communication, and most of all a deep bond with the emerging “creator class” that Apple itself had a huge role in bringing into being, are at the heart of the message they are sending with this location, the lavish and loving renovation and in the press release itself.
Once literally an underdog, first to IBM and later to the “evil empire” of Microsoft’s Kock-offs, Apple is still, oddly, often underestimated and misunderstood, or at least not understood until changes permeate society.
Nothing says, nay screams, that we are approaching a golden age of Apple than the new Apple Tower Theatre complex. That golden age will occur when the world catches up with the potential of having a professional film production studio in your pocket and all the other technical innovations still to come.
The great singularity of the Apple ecosystem
There is a hugely important convergence coming in the galaxy of Apple products, software and services, that is not yet halfway implemented. The next couple of years are bound to see powerful, sometimes confusing, always remarkable advances in the company’s offerings and the way that we interact with them.
And now, with the Apple Tower Theatre in LA, there is also a mecca which can be the end destination for any pilgrimage of the faithful. Also, with Hollywood creative talents literally around the corner, what better location could there be as a reminder for the power brokers that AppleTV+ is here to stay and plans to engage at all levels and intends to seek options on any deal.
Today at Apple Creative Studios will reach out to budding creativity everywhere
Strongly associated with the theater’s launch is also a enlargement and
Today at Apple Creative Studios – the project is a global initiative for “underrepresented young creatives” and is an ongoing part of Today at Apple which is hosted at Apple Stores worldwide.
As per the Apple press release:
“In collaboration with the nonprofit Music Forward Foundation, as well as Inner-City Arts and the Social Justice Learning Institute, Creative Studios LA will provide access to technology, creative resources, and hands-on experience, along with a platform to elevate and amplify up-and-coming talents’ stories over nine weeks of free programming.”
Apple: The overhead dome, which originally depicted scenes full of clouds and cherubs, had been painted over in a previous restoration. It now brightens the space with an atmospheric sky.
“Today at Apple will also offer public in-store sessions at Tower Theatre and virtual sessions hosted by Creative Studios teaching artists and mentors, including photographer and filmmaker Bethany Mollenkof, rapper and producer D Smoke, singer-songwriter Syd, and cellist and singer Kelsey Lu. Noah Humes and his mentor, Maurice Harris, two artists who worked on the mural outside Tower Theatre inspired by the spirit of Creative Studios LA, will also teach a virtual session. Everyone is welcome to register at apple.com/creative-studios-la.”
“Originally home to the first theater in Los Angeles wired for film with sound, the historic Tower Theatre was designed in 1927 by renowned motion-picture theater architect S. Charles Lee. That legacy of technological innovation continues today as the perfect venue to discover Apple’s full line of iPhone, iPad, and Mac, each of which has transformed modern-day filmmaking, photography, and music composition.”
“Upon the closing of its doors in 1988, the space has lain empty and unused. With the same level of care found in previous restoration projects, Apple collaborated with leading preservationists, restoration artists, and the City of Los Angeles to thoughtfully preserve and restore the theater’s beauty and grandeur. Every surface was carefully refinished, and the building has undergone a full seismic upgrade.”
Apple Tower Theatre Opens Thursday at 10 a.m.
The store team will welcome its first customers Thursday, June 24, at 10 a.m. Apple Tower Theatre will be open from 10 a.m. to 8 p.m. from Monday to Saturday, and 11 a.m. to 7 p.m. on Sunday, with team members ready to provide support and service to all visitors. For those wishing to order new products online, customers can get shopping help from Apple Specialists, choose monthly financing options, trade in eligible devices, receive Support services, and elect for no-contact delivery or Apple Store pickup.
Sci-fi sounding, inevitable upgrade for today’s online communications
You might have heard lately about the “metaverse” and yet that can mean a variety of different things to different people. Often, it’s a term that relates back to gaming and 3D augmented reality enhancements of networked communications.
There are even crypto and blockchain related projects using this term and concept. While all of these various factors are welcome, and potentially part of this next phase of convergence of communication via networked technology, there’s something else happening under the surface.
”The pandemic, with its requirements of physical distancing, has brought people into online digital environments for a growing range of shared human experiences.” — Wired UK from “The Metaverse is coming” by David Baszucki
The acceleration in AI application, machine learning, and converging use cases for all communications tech has created a situation where the entry-portal to the emerging metaverse is already here.
One often overlooked aspect of a transition to a more complete digital life is the need for humans to have adapted to the need and potential benefits of the idea. This is what is happening via many routes, including Apple and the constant synergistic upgrade cycles that have just gone into a new, bigger phase with the migration to a unified OS structure built around Apple Silicon.
The gradual increases in iOS functionality and user sophistication are changing how we interact
iOS15, previewed this week at the WWDC2021 is rolling out literally dozens of new features, many based on machine learning, neural networks and AI that propose a new level of highly sophisticated options to communicate with video, photos and text.
While this mixture of “basic” media has been the staple of our current modes of online communication, particularly via social media, the incredibly increased depth of new options and functionality of iOS15 and iPadOS15 and MacOS Monterey will make all modes of communication feel completely new.
In the evolution of online media and enriched communication (OMEC to coin an 80s sounding acronym) the slow and uneven progress is based on many factors. #1 is always user adoption and sophistication.
Second is the quality of the hardware devices and software upgrades each user around the world has access to. In the case of iOS (iPad, iPhone & macOS) the immediate adoption of upgrades is a large factor on the plus side, helping new innovation to arrive in general use more quickly.
The last factor, a huge one, is access to fast ubiquitous internet data connections, and, in the US at least, this is less consistent than ever (or our expectations are rising faster than the build out).
However, particularly in Asia, 5g is beginning to make a dent. Satellite broadband, like Starlink, should also start to be a factor as early as 2022. Government infrastructure build-out funding and subsidies in the US is on the way in 2021.
Augmented 3D features are still growing but will merge with 2D
The upshot of this topic is that “2D” factors and increasingly sophisticated manipulation and interactive features that are already coming in iOS15 will bring us all closer the entry-portal stone-age version of the metaverse.
We all depend more and more on communications and using our devices – work from home, personal, business and hybrid activities (such as the emerging content creator class). Often, as a result, we have fewer options to go offline for “organic” RL (real life) interactions.
The increasingly sophisticated capabilities available are beginning to make even face to face communications, particularly in work situations, feel “un-enhanced” as we become accustomed to and dependent on the digital enhancements and potential of a full media rich interaction.
This is an example, one could say, of the subtle encroachment of the emerging metaverse onto the “real world” and how the boundaries are blurring and even beginning to disappear.
Rather than a sudden “jump” into a metaverse, similar to the cliché sci-fi plots from films like “Ready Player 1”, what is happening is a nearly imperceptible transition to metaverse-like experiences that will become commonplace, initially in a primitive form, and then eventually become the norm. Similar to the proverbial Frog in pot, with warm water temperatures that increase so slowly that the Frog doesn’t even notice, until it finds that it is swimming in pot that is already boiling.
The misconception that a “killer app” or sudden shift into an online, virtual reality world, is the future, and that a big leap will happen nearly all at once, is harmlessly superimposed on the real transition that has already begun.
When Apple’s 2007 launch of the iPhone changed communication forever: the journey began
The new “Digital Legacy Program”, also announced at WWDC2021, is another hint that we are already living in an extremely primitive version of the metaverse. Our online identity, data, and even behaviors and experiences are so essential and all pervasive that it has become necessary to keep a digital key to access the huge trove of personal data we will leave behind to pass on to our living loved ones, after we are gone.
The metaverse, that means, is not only creating a parallel digital universe for us to live in, in an ever more complete and sophisticated way, but we are also already setting up the eternal storage of our virtual life experiences to be passed down to future generations.
Though nearly invisible while in such a relatively primitive iteration, the concept, an example of overlapping advancements in innovation, is a tiny step towards digital immortality.
The metaverse could help to save us all
It’s not just professional and work related communication that relates to the gradual increase in the depth of networked communication options, but, even more so, casual and leisure communication and interaction is key.
TikTok and other video communication trends are at the forefront of of user evolution and metaverse activity expansion. When people feel motivated to find new and better ways to communicate using richer media and augmented techniques for fun, and to gain more recognition in online societies, that advances digital sophistication.
This process of the evolution of user comfort and sophistication, while existing and interacting in the metaverse, is the fastest way for the augmentation to become more effective.
There’s a mostly unseen benefit and need for this, otherwise seemingly pointless, global development
The challenges that the world faces, encroaching, devastating fallout from global warming and excess carbon in the atmosphere, political corruption and inequality, disinformation and cybercrime, and so on.
Ultimately, unlike at any time in human history, we are facing a challenge. The survival of our species and even the planet are at stake.
In the years and decades to come it will become more and more obvious that there are only two paths possible. One path toward a kind of Utopia, or another one that will lead, inexorably to Oblivion.
Though the metaverse is scary in many ways, and does not always appear as a way to a better life, augmented and enhanced communication is one of the most desperately needed ways that solutions could eventually be discovered and implemented.
And that would put this progression and evolution of tech more in service of Utopia, and could be at the heart of a rescue plan to prevent Oblivion, before it’s too late.
This story was originally published by ProPublica.
ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.
In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.
Michael Bloomberg managed to do the same in recent years. Billionaire investor Carl Icahn did it twice. George Soros paid no federal income tax three years in a row.
ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. The data provides an unprecedented look inside the financial lives of America’s titans, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their income and taxes, but also their investments, stock trades, gambling winnings and even the results of audits.
Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.
Many Americans live paycheck to paycheck, amassing little wealth and paying the federal government a percentage of their income that rises if they earn more. In recent years, the median American household earned about $70,000 annually and paid 14% in federal taxes. The highest income tax rate, 37%, kicked in this year, for couples, on earnings above $628,300.
The confidential tax records obtained by ProPublica show that the ultrarich effectively sidestep this system.
America’s billionaires avail themselves of tax-avoidance strategies beyond the reach of ordinary people. Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by U.S. laws as taxable income unless and until the billionaires sell.
To capture the financial reality of the richest Americans, ProPublica undertook an analysis that has never been done before. We compared how much in taxes the 25 richest Americans paid each year to how much Forbes estimated their wealth grew in that same time period.
We’re going to call this their true tax rate.
The results are stark. According to Forbes, those 25 people saw their worth rise a collective $401 billion from 2014 to 2018. They paid a total of $13.6 billion in federal income taxes in those five years, the IRS data shows. That’s a staggering sum, but it amounts to a true tax rate of only 3.4%.
It’s a completely different picture for middle-class Americans, for example, wage earners in their early 40s who have amassed a typical amount of wealth for people their age. From 2014 to 2018, such households saw their net worth expand by about $65,000 after taxes on average, mostly due to the rise in value of their homes. But because the vast bulk of their earnings were salaries, their tax bills were almost as much, nearly $62,000, over that five-year period.
No one among the 25 wealthiest avoided as much tax as Buffett, the grandfatherly centibillionaire. That’s perhaps surprising, given his public stance as an advocate of higher taxes for the rich. According to Forbes, his riches rose $24.3 billion between 2014 and 2018. Over those years, the data shows, Buffett reported paying $23.7 million in taxes.
That works out to a true tax rate of 0.1%, or less than 10 cents for every $100 he added to his wealth.
In the coming months, ProPublica will use the IRS data we have obtained to explore in detail how the ultrawealthy avoid taxes, exploit loopholes and escape scrutiny from federal auditors.
Experts have long understood the broad outlines of how little the wealthy are taxed in the United States, and many lay people have long suspected the same thing.
But few specifics about individuals ever emerge in public. Tax information is among the most zealously guarded secrets in the federal government. ProPublica has decided to reveal individual tax information of some of the wealthiest Americans because it is only by seeing specifics that the public can understand the realities of the country’s tax system.
Consider Bezos’ 2007, one of the years he paid zero in federal income taxes. Amazon’s stock more than doubled. Bezos’ fortune leapt $3.8 billion, according to Forbes, whose wealth estimates are widely cited. How did a person enjoying that sort of wealth explosion end up paying no income tax?
In that year, Bezos, who filed his taxes jointly with his then-wife, MacKenzie Scott, reported a paltry (for him) $46 million in income, largely from interest and dividend payments on outside investments. He was able to offset every penny he earned with losses from side investments and various deductions, like interest expenses on debts and the vague catchall category of “other expenses.”
In 2011, a year in which his wealth held roughly steady at $18 billion, Bezos filed a tax return reporting he lost money — his income that year was more than offset by investment losses. What’s more, because, according to the tax law, he made so little, he even claimed and received a $4,000 tax credit for his children.
His tax avoidance is even more striking if you examine 2006 to 2018, a period for which ProPublica has complete data. Bezos’ wealth increased by $127 billion, according to Forbes, but he reported a total of $6.5 billion in income. The $1.4 billion he paid in personal federal taxes is a massive number — yet it amounts to a 1.1% true tax rate on the rise in his fortune.
The revelations provided by the IRS data come at a crucial moment. Wealth inequality has become one of the defining issues of our age. The president and Congress are considering the most ambitious tax increases in decades on those with high incomes. But the American tax conversation has been dominated by debate over incremental changes, such as whether the top tax rate should be 39.6% rather than 37%.
ProPublica’s data shows that while some wealthy Americans, such as hedge fund managers, would pay more taxes under the current Biden administration proposals, the vast majority of the top 25 would see little change.
ProPublica is not disclosing how it obtained the data, which was given to us in raw form, with no conditions or conclusions. ProPublica reporters spent months processing and analyzing the material to transform it into a usable database.
We then verified the information by comparing elements of it with dozens of already public tax details (in court documents, politicians’ financial disclosures and news stories) as well as by vetting it with individuals whose tax information is contained in the trove. Every person whose tax information is described in this story was asked to comment. Those who responded, including Buffett, Bloomberg and Icahn, all said they had paid the taxes they owed.
A spokesman for Soros said in a statement: “Between 2016 and 2018 George Soros lost money on his investments, therefore he did not owe federal income taxes in those years. Mr. Soros has long supported higher taxes for wealthy Americans.” Personal and corporate representatives of Bezos declined to receive detailed questions about the matter. ProPublica attempted to reach Scott through her divorce attorney, a personal representative and family members; she did not respond. Musk responded to an initial query with a lone punctuation mark: “?” After we sent detailed questions to him, he did not reply.
One of the billionaires mentioned in this article objected, arguing that publishing personal tax information is a violation of privacy. We have concluded that the public interest in knowing this information at this pivotal moment outweighs that legitimate concern.
The consequences of allowing the most prosperous to game the tax system have been profound. Federal budgets, apart from military spending, have been constrained for decades. Roads and bridges have crumbled, social services have withered and the solvency of Social Security and Medicare is perpetually in question.
There is an even more fundamental issue than which programs get funded or not: Taxes are a kind of collective sacrifice. No one loves giving their hard-earned money to the government. But the system works only as long as it’s perceived to be fair.
Our analysis of tax data for the 25 richest Americans quantifies just how unfair the system has become.
By the end of 2018, the 25 were worth $1.1 trillion.
For comparison, it would take 14.3 million ordinary American wage earners put together to equal that same amount of wealth.
The personal federal tax bill for the top 25 in 2018: $1.9 billion.
The bill for the wage earners: $143 billion.
The idea of a regular tax on income, much less on wealth, does not appear in the country’s founding documents. In fact, Article 1 of the U.S. Constitution explicitly prohibits “direct” taxes on citizens under most circumstances. This meant that for decades, the U.S. government mainly funded itself through “indirect” taxes: tariffs and levies on consumer goods like tobacco and alcohol.
With the costs of the Civil War looming, Congress imposed a national income tax in 1861. The wealthy helped force its repeal soon after the war ended. (Their pique could only have been exacerbated by the fact that the law required public disclosure. The annual income of the moguls of the day — $1.3 million for William Astor; $576,000 for Cornelius Vanderbilt — was listed in the pages of The New York Times in 1865.)
By the late 19th and early 20th century, wealth inequality was acute and the political climate was changing. The federal government began expanding, creating agencies to protect food, workers and more. It needed funding, but tariffs were pinching regular Americans more than the rich. The Supreme Court had rejected an 1894 law that would have created an income tax. So Congress moved to amend the Constitution. The 16th Amendment was ratified in 1913 and gave the government power “to lay and collect taxes on incomes, from whatever source derived.”
In the early years, the personal income tax worked as Congress intended, falling squarely on the richest. In 1918, only 15% of American families owed any tax. The top 1% paid 80% of the revenue raised, according to historian W. Elliot Brownlee.
But a question remained: What would count as income and what wouldn’t? In 1916, a woman named Myrtle Macomber received a dividend for her Standard Oil of California shares. She owed taxes, thanks to the new law. The dividend had not come in cash, however. It came in the form of an additional share for every two shares she already held. She paid the taxes and then brought a court challenge: Yes, she’d gotten a bit richer, but she hadn’t received any money. Therefore, she argued, she’d received no “income.”
Four years later, the Supreme Court agreed. In Eisner v. Macomber, the high court ruled that income derived only from proceeds. A person needed to sell an asset — stock, bond or building — and reap some money before it could be taxed.
Since then, the concept that income comes only from proceeds — when gains are “realized” — has been the bedrock of the U.S. tax system. Wages are taxed. Cash dividends are taxed. Gains from selling assets are taxed. But if a taxpayer hasn’t sold anything, there is no income and therefore no tax.
Contemporary critics of Macomber were plentiful and prescient. Cordell Hull, the congressman known as the “father” of the income tax, assailed the decision, according to scholar Marjorie Kornhauser. Hull predicted that tax avoidance would become common. The ruling opened a gaping loophole, Hull warned, allowing industrialists to build a company and borrow against the stock to pay living expenses. Anyone could “live upon the value” of their company stock “without selling it, and of course, without ever paying” tax, he said.
Hull’s prediction would reach full flower only decades later, spurred by a series of epochal economic, legal and cultural changes that began to gather momentum in the 1970s. Antitrust enforcers increasingly accepted mergers and stopped trying to break up huge corporations. For their part, companies came to obsess over the value of their stock to the exclusion of nearly everything else. That helped give rise in the last 40 years to a series of corporate monoliths — beginning with Microsoft and Oracle in the 1980s and 1990s and continuing to Amazon, Google, Facebook and Apple today — that often have concentrated ownership, high profit margins and rich share prices. The winner-take-all economy has created modern fortunes that by some measures eclipse those of John D. Rockefeller, J.P. Morgan and Andrew Carnegie.
In the here and now, the ultrawealthy use an array of techniques that aren’t available to those of lesser means to get around the tax system.
Certainly, there are illegal tax evaders among them, but it turns out billionaires don’t have to evade taxes exotically and illicitly — they can avoid them routinely and legally.
Most Americans have to work to live. When they do, they get paid — and they get taxed. The federal government considers almost every dollar workers earn to be “income,” and employers take taxes directly out of their paychecks.
The Bezoses of the world have no need to be paid a salary. Bezos’ Amazon wages have long been set at the middle-class level of around $80,000 a year.
For years, there’s been something of a competition among elite founder-CEOs to go even lower. Steve Jobs took $1 in salary when he returned to Apple in the 1990s. Facebook’s Zuckerberg, Oracle’s Larry Ellison and Google’s Larry Page have all done the same.
Yet this is not the self-effacing gesture it appears to be: Wages are taxed at a high rate. The top 25 wealthiest Americans reported $158 million in wages in 2018, according to the IRS data. That’s a mere 1.1% of what they listed on their tax forms as their total reported income. The rest mostly came from dividends and the sale of stock, bonds or other investments, which are taxed at lower rates than wages.
As Congressman Hull envisioned long ago, the ultrawealthy typically hold fast to shares in the companies they’ve founded. Many titans of the 21st century sit on mountains of what are known as unrealized gains, the total size of which fluctuates each day as stock prices rise and fall. Of the $4.25 trillion in wealth held by U.S. billionaires, some $2.7 trillion is unrealized, according to Emmanuel Saez and Gabriel Zucman, economists at the University of California, Berkeley.
Buffett has famously held onto his stock in the company he founded, Berkshire Hathaway, the conglomerate that owns Geico, Duracell and significant stakes in American Express and Coca-Cola. That has allowed Buffett to largely avoid transforming his wealth into income. From 2015 through 2018, he reported annual income ranging from $11.6 million to $25 million. That may seem like a lot, but Buffett ranks as roughly the world’s sixth-richest person — he’s worth $110 billion as of Forbes’ estimate in May 2021. At least 14,000 U.S. taxpayers in 2015 reported higher income than him, according to IRS data.
There’s also a second strategy Buffett relies on that minimizes income, and therefore, taxes. Berkshire does not pay a dividend, the sum (a piece of the profits, in theory) that many companies pay each quarter to those who own their stock. Buffett has always argued that it is better to use that money to find investments for Berkshire that will further boost the value of shares held by him and other investors. If Berkshire had offered anywhere close to the average dividend in recent years, Buffett would have received over $1 billion in dividend income and owed hundreds of millions in taxes each year.
Many Silicon Valley and infotech companies have emulated Buffett’s model, eschewing stock dividends, at least for a time. In the 1980s and 1990s, companies like Microsoft and Oracle offered shareholders rocketing growth and profits but did not pay dividends. Google, Facebook, Amazon and Tesla do not pay dividends.
In a detailed written response, Buffett defended his practices but did not directly address ProPublica’s true tax rate calculation. “I continue to believe that the tax code should be changed substantially,” he wrote, adding that he thought “huge dynastic wealth is not desirable for our society.”
The decision not to have Berkshire pay dividends has been supported by the vast majority of his shareholders. “I can’t think of any large public company with shareholders so united in their reinvestment beliefs,” he wrote. And he pointed out that Berkshire Hathaway pays significant corporate taxes, accounting for 1.5% of total U.S. corporate taxes in 2019 and 2020.
Buffett reiterated that he has begun giving his enormous fortune away and ultimately plans to donate 99.5% of it to charity. “I believe the money will be of more use to society if disbursed philanthropically than if it is used to slightly reduce an ever-increasing U.S. debt,” he wrote.
So how do megabillionaires pay their megabills while opting for $1 salaries and hanging onto their stock? According to public documents and experts, the answer for some is borrowing money — lots of it.
For regular people, borrowing money is often something done out of necessity, say for a car or a home. But for the ultrawealthy, it can be a way to access billions without producing income, and thus, income tax.
The tax math provides a clear incentive for this. If you own a company and take a huge salary, you’ll pay 37% in income tax on the bulk of it. Sell stock and you’ll pay 20% in capital gains tax — and lose some control over your company. But take out a loan, and these days you’ll pay a single-digit interest rate and no tax; since loans must be paid back, the IRS doesn’t consider them income. Banks typically require collateral, but the wealthy have plenty of that.
The vast majority of the ultrawealthy’s loans do not appear in the tax records obtained by ProPublica since they are generally not disclosed to the IRS. But occasionally, the loans are disclosed in securities filings. In 2014, for example, Oracle revealed that its CEO, Ellison, had a credit line secured by about $10 billion of his shares.
Last year Tesla reported that Musk had pledged some 92 million shares, which were worth about $57.7 billion as of May 29, 2021, as collateral for personal loans.
With the exception of one year when he exercised more than a billion dollars in stock options, Musk’s tax bills in no way reflect the fortune he has at his disposal. In 2015, he paid $68,000 in federal income tax. In 2017, it was $65,000, and in 2018 he paid no federal income tax. Between 2014 and 2018, he had a true tax rate of 3.27%.
The IRS records provide glimpses of other massive loans. In both 2016 and 2017, investor Carl Icahn, who ranks as the 40th-wealthiest American on the Forbes list, paid no federal income taxes despite reporting a total of $544 million in adjusted gross income (which the IRS defines as earnings minus items like student loan interest payments or alimony). Icahn had an outstanding loan of $1.2 billion with Bank of America among other loans, according to the IRS data. It was technically a mortgage because it was secured, at least in part, by Manhattan penthouse apartments and other properties.
Borrowing offers multiple benefits to Icahn: He gets huge tranches of cash to turbocharge his investment returns. Then he gets to deduct the interest from his taxes. In an interview, Icahn explained that he reports the profits and losses of his business empire on his personal taxes.
Icahn acknowledged that he is a “big borrower. I do borrow a lot of money.” Asked if he takes out loans also to lower his tax bill, Icahn said: “No, not at all. My borrowing is to win. I enjoy the competition. I enjoy winning.”
He said adjusted gross income was a misleading figure for him. After taking hundreds of millions in deductions for the interest on his loans, he registered tax losses for both years, he said. “I didn’t make money because, unfortunately for me, my interest was higher than my whole adjusted income.”
Asked whether it was appropriate that he had paid no income tax in certain years, Icahn said he was perplexed by the question. “There’s a reason it’s called income tax,” he said. “The reason is if, if you’re a poor person, a rich person, if you are Apple — if you have no income, you don’t pay taxes.” He added: “Do you think a rich person should pay taxes no matter what? I don’t think it’s germane. How can you ask me that question?”
Skeptics might question our analysis of how little the superrich pay in taxes. For one, they might argue that owners of companies get hit by corporate taxes. They also might counter that some billionaires cannot avoid income — and therefore taxes. And after death, the common understanding goes, there’s a final no-escape clause: the estate tax, which imposes a steep tax rate on sums over $11.7 million.
ProPublica found that none of these factors alter the fundamental picture.
Take corporate taxes. When companies pay them, economists say, these costs are passed on to the companies’ owners, workers or even consumers. Models differ, but they generally assume big stockholders shoulder the lion’s share.
For some of the nation’s wealthiest people, particularly Bezos and Musk, adding corporate taxes to the equation would hardly change anything at all. Other companies like Berkshire Hathaway and Walmart do pay more, which means that for people like Buffett and the Waltons, corporate tax could add significantly to their burden.
It is also true that some billionaires don’t avoid taxes by avoiding incomes. In 2018, nine of the 25 wealthiest Americans reported more than $500 million in income and three more than $1 billion.
In such cases, though, the data obtained by ProPublica shows billionaires have a palette of tax-avoidance options to offset their gains using credits, deductions (which can include charitable donations) or losses to lower or even zero out their tax bills. Some own sports teams that offer such lucrative write-offs that owners often end up paying far lower tax rates than their millionaire players. Others own commercial buildings that steadily rise in value but nevertheless can be used to throw off paper losses that offset income.
Michael Bloomberg, the 13th-richest American on the Forbes list, often reports high income because the profits of the private company he controls flow mainly to him.
In 2018, he reported income of $1.9 billion. When it came to his taxes, Bloomberg managed to slash his bill by using deductions made possible by tax cuts passed during the Trump administration, charitable donations of $968.3 million and credits for having paid foreign taxes. The end result was that he paid $70.7 million in income tax on that almost $2 billion in income. That amounts to just a 3.7% conventional income tax rate. Between 2014 and 2018, Bloomberg had a true tax rate of 1.30%.
In a statement, a spokesman for Bloomberg noted that as a candidate, Bloomberg had advocated for a variety of tax hikes on the wealthy. “Mike Bloomberg pays the maximum tax rate on all federal, state, local and international taxable income as prescribed by law,” the spokesman wrote. And he cited Bloomberg’s philanthropic giving, offering the calculation that “taken together, what Mike gives to charity and pays in taxes amounts to approximately 75% of his annual income.”
The statement also noted: “The release of a private citizen’s tax returns should raise real privacy concerns regardless of political affiliation or views on tax policy. In the United States no private citizen should fear the illegal release of their taxes. We intend to use all legal means at our disposal to determine which individual or government entity leaked these and ensure that they are held responsible.”
Ultimately, after decades of wealth accumulation, the estate tax is supposed to serve as a backstop, allowing authorities an opportunity to finally take a piece of giant fortunes before they pass to a new generation. But in reality, preparing for death is more like the last stage of tax avoidance for the ultrawealthy.
University of Southern California tax law professor Edward McCaffery has summarized the entire arc with the catchphrase “buy, borrow, die.”
The notion of dying as a tax benefit seems paradoxical. Normally when someone sells an asset, even a minute before they die, they owe 20% capital gains tax. But at death, that changes. Any capital gains till that moment are not taxed. This allows the ultrarich and their heirs to avoid paying billions in taxes. The “step-up in basis” is widely recognized by experts across the political spectrum as a flaw in the code.
Then comes the estate tax, which, at 40%, is among the highest in the federal code. This tax is supposed to give the government one last chance to get a piece of all those unrealized gains and other assets the wealthiest Americans accumulate over their lifetimes.
It’s clear, though, from aggregate IRS data, tax research and what little trickles into the public arena about estate planning of the wealthy that they can readily escape turning over almost half of the value of their estates. Many of the richest create foundations for philanthropic giving, which provide large charitable tax deductions during their lifetimes and bypass the estate tax when they die.
Wealth managers offer clients a range of opaque and complicated trusts that allow the wealthiest Americans to give large sums to their heirs without paying estate taxes. The IRS data obtained by ProPublica gives some insight into the ultrawealthy’s estate planning, showing hundreds of these trusts.
The result is that large fortunes can pass largely intact from one generation to the next. Of the 25 richest people in America today, about a quarter are heirs: three are Waltons, two are scions of the Mars candy fortune and one is the son of Estée Lauder.
In the past year and a half, hundreds of thousands of Americans have died from COVID-19, while millions were thrown out of work. But one of the bleakest periods in American history turned out to be one of the most lucrative for billionaires. They added $1.2 trillion to their fortunes from January 2020 to the end of April of this year, according to Forbes.
That windfall is among the many factors that have led the country to an inflection point, one that traces back to a half-century of growing wealth inequality and the financial crisis of 2008, which left many with lasting economic damage. American history is rich with such turns. There have been famous acts of tax resistance, like the Boston Tea Party, countered by less well-known efforts to have the rich pay more.
One such incident, over half a century ago, appeared as if it might spark great change. President Lyndon Johnson’s outgoing treasury secretary, Joseph Barr, shocked the nation when he revealed that 155 Americans making over $200,000 (about $1.6 million today) had paid no taxes. That group, he told the Senate, included 21 millionaires.
“We face now the possibility of a taxpayer revolt if we do not soon make major reforms in our income taxes,” Barr said. Members of Congress received more furious letters about the tax scofflaws that year than they did about the Vietnam War.
Congress did pass some reforms, but the long-term trend was a revolt in the opposite direction, which then accelerated with the election of Ronald Reagan in 1980. Since then, through a combination of political donations, lobbying, charitable giving and even direct bids for political office, the ultrawealthy have helped shape the debate about taxation in their favor.
One apparent exception: Buffett, who broke ranks with his billionaire cohort to call for higher taxes on the rich. In a famous New York Times op-ed in 2011, Buffett wrote, “My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.”
Buffett did something in that article that few Americans do: He publicly revealed how much he had paid in personal federal taxes the previous year ($6.9 million). Separately, Forbes estimated his fortune had risen $3 billion that year. Using that information, an observer could have calculated his true tax rate; it was 0.2%. But then, as now, the discussion that ensued on taxes was centered on the traditional income tax rate.
In 2011, President Barack Obama proposed legislation, known as the Buffett Rule. It would have raised income tax rates on people reporting over a million dollars a year. It didn’t pass. Even if it had, however, the Buffett Rule wouldn’t have raised Buffett’s taxes significantly. If you can avoid income, you can avoid taxes.
Today, just a few years after Republicans passed a massive tax cut that disproportionately benefited the wealthy, the country may be facing another swing of the pendulum, back toward a popular demand to raise taxes on the wealthy. In the face of growing inequality and with spending ambitions that rival those of Franklin D. Roosevelt or Johnson, the Biden administration has proposed a slate of changes. These include raising the tax rates on people making over $400,000 and bumping the top income tax rate from 37% to 39.6%, with a top rate for long-term capital gains to match that. The administration also wants to up the corporate tax rate and to increase the IRS’ budget.
Some Democrats have gone further, floating ideas that challenge the tax structure as it’s existed for the last century. Oregon Sen. Ron Wyden, the chairman of the Senate Finance Committee, has proposed taxing unrealized capital gains, a shot through the heart of Macomber. Sens. Elizabeth Warren and Bernie Sanders have proposed wealth taxes.
Aggressive new laws would likely inspire new, sophisticated avoidance techniques. A few countries, including Switzerland and Spain, have wealth taxes on a small scale. Several, most recently France, have abandoned them as unworkable. Opponents contend that they are complicated to administer, as it is hard to value assets, particularly of private companies and property.
What it would take for a fundamental overhaul of the U.S. tax system is not clear. But the IRS data obtained by ProPublica illuminates that all of these conversations have been taking place in a vacuum. Neither political leaders nor the public have ever had an accurate picture of how comprehensively the wealthiest Americans avoid paying taxes.
Buffett and his fellow billionaires have known this secret for a long time. As Buffett put it in 2011: “There’s been class warfare going on for the last 20 years, and my class has won.”
The online giant bans products related to drugs, spying and weapons, but we found plenty for sale; one of the items bought on the site left a grim trail of overdoses
By: Annie Gilbertson and Jon Keegan
Eric Falkowski said he made an easy living working a few hours a week making counterfeit prescription opioids before some two-dozen people overdosed and the authorities caught up with him.
He mixed fentanyl with active ingredients from Xanax and Tylenol and pressed the compound into pills that looked like Percocet, he said, down to the exact color and markings.
Where did he get the equipment? According to federal court records and Falkowski himself: Amazon.com.
“I purchased two pill presses on there. I also purchased the pill press dies, which are the molds to shape the pills and imprint them with whatever number they need be,” Falkowski said in a phone interview from prison, where he is serving a 22-year sentence for crimes connected to his counterfeit drug business.
“You search under the code on the pill … and it’ll just come up,” he added. “It really wasn’t that complex.”
Two people died after taking Falkowski’s pills, and another woman was found dead from an overdose on the property where he kept his makeshift lab, according to officials, law enforcement documents, and autopsy reports. More than 20 others were sickened by the pills but survived.
“Someone could wipe out a whole town” with these “poisonous pills,” said Derrick Helton, a former sheriff’s deputy for Rutherford County, Tenn., where the mass overdose took place. One of the fatalities was his sister Tiffanie Scott, a 33-year-old mother of a young daughter.
Amazon bans pill presses used to make prescription drugs. They’re included among 38 pages of third-party seller rules and prohibitions for its U.S. marketplace.
Yet an investigation by The Markup found that Amazon fails to properly enforce that list, allowing third-party sellers to put up and sell banned items.
Alongside its third-party marketplace, Amazon sells products to consumers directly, and The Markup found it was also selling banned items itself, revealing cracks in the largely automated purchasing system that feeds its massive product catalog.
We found nearly 100 listings for products that the company bans under its categories of drugs, theft, spying, weapons and other dangerous items, a virtual back alley where mostly third-party sellers peddle prohibited goods, some of which are used for illicit and potentially criminal activities.
Amazon’s Choice?
The Markup filled a shopping cart with a bounty of banned items: marijuana bongs, “dab kits” used to inhale cannabis concentrates, “crackers” that can be used to get high on nitrous oxide, and compounds that reviews showed were used as injectable drugs.
We found two pill presses and a die used to shape tablets into a Transformers logo, which is among the characters that have been found imprinted on club drugs such as ecstasy. We found listings for prohibited tools for picking locks and jimmying open car doors. And we found AR-15 gun parts and accessories that Amazon specifically bans.
Almost three dozen listings for banned items were sold by third parties but available to ship from Amazon’s own warehouses. At least four were listed as “Amazon’s Choice.”
The phrase “ships from and sold by Amazon.com” appeared beneath the buy button of five of the banned items we found, which two former employees confirmed means those products are, in fact, sold by Amazon. In addition, one of the sellers we were able to reach also confirmed it sold the items to Amazon.
Many of the items we found had been up for sale for months, some with positive reviews showing they had been sold, including some of the items sold directly by Amazon.
And Amazon led us right to the prohibited listings. When we typed “bong” into the website’s search bar, autocomplete suggestions included “bongs for smoking weed.” When we typed “pill press,” autocomplete suggested “pill press for making pills xanax.”
In a written statement to The Markup, Amazon spokesperson Patrick Graham said the company has “proactive measures in place to prevent suspicious or prohibited products from being listed,” and that the company stopped more than six billion “suspected bad listings” from posting last year, repeating the company’s remarks to Congress earlier this year.
“If products that are against our policies are found on our site, we immediately remove the listing, take action on the bad actor, and further improve our systems,” he said.
Graham did not respond directly to many of our specific questions, including how many of the banned items that The Markup found had been sold, why the company had not noticed some of them for months, why some were listed as Amazon’s Choice, and why many were stored in Amazon’s warehouses for shipment.
He did not respond at all to questions about why Amazon itself had offered banned items for sale.
Most of the banned listings we reported to Amazon have been removed, although at least three have popped back up.
The company removed the six specific terms that we mentioned from autocomplete, according to Graham, who said that feature is informed by “similar searches by other customers.” He wouldn’t say whether the company also removed all other banned items from autocomplete.
Graham also declined to explain why the company chose to allow 13 listings for banned items that we reported to the company to remain for sale. These products were specifically named as banned in Amazon’s rules, met the U.S. Department of Justice’s definition of drug paraphernalia, or were confirmed by two weapons experts to be a gun part or tool. Two of them were items that Amazon sells itself.
In addition to the nearly 100 listings for banned items we found for sale in the U.S. marketplace, we found several pill presses for sale on Amazon’s Canadian marketplace that were available for shipment to the United States. Amazon took them down after we reported them to the company, including a $4,100 TDP 5 Desktop Tablet Press, one of the models Falkowski used.
“Almost dead”
Michael “Shane” Shipley, 39, a native of Rutherford County, Tenn., was one of the people who died after taking Falkowski’s fake pills. He’d worked his entire adult life operating machinery at a local factory.
“I couldn’t even tell you what my dad’s death has done to my family,” his daughter Brittany Conway said in an interview.
Within a day of her father’s death, Conway said, she woke up in a hospital bed herself. She didn’t realize her father had slipped the counterfeit pills into his prescription bottle of Percocet at home and, distraught with grief, she had taken what she thought was a safe medication to help her relax.
“I went from up, talking—to almost dead,” Conway said.
Graham said Amazon’s policies allowed pill press sales when Falkowski was making counterfeit drugs in 2016. He declined comment on the overdoses and said, speaking in general, that the company is not responsible for harm from third-party product sales.
“We are not liable for those products because we do not make, distribute, or sell those products,” he said. He said that also applies to third-party products that are fulfilled by Amazon, which charges sellers to store and ship their items.
The company has successfully shielded itself from legal liability for harm caused by third-party products sold on its website by invoking Section 230 of the federal Communications Decency Act, which states websites are not responsible for third-party content that appears on their sites.
Last year, one federal appeals court ruled that Amazon may shoulder liability for a customer’s injuries from a defective product sold on its site, in part because the company “enables third-party vendors to conceal themselves from the customer, leaving customers injured by defective products with no direct recourse to the third-party vendor.”
Three million third parties from across the globe are now selling on Amazon’s platforms, according to e-commerce intelligence firm Marketplace Pulse. And third-party sellers have fueled the company’s explosive growth for years, according to a 2019 report to shareholders. Last year, Amazon third-party sales reportedly topped $200 billion—a sum that rivals the annual GDP of New Zealand.
Will It “Kill Someone?”
Multiple current and former employees, most of whom asked not to be named for fear of retaliation, said the company struggles to oversee that army of independent sellers.
“Because sellers have the ability to upload items themselves to the website, it makes it very difficult to police all of that without hindering the ability to do business,” said a former member of the product safety team who left the company in 2018. “Amazon knows there’s tons and tons and tons of stuff that shouldn’t be on the website.
“We basically would categorize risks based on their severity,” the former employee added. “Will this product injure or kill someone? Is it high legal risk?”
An Amazon executive acknowledged in the statement to Congress earlier this year that “bad listings” get through but said the company is working to shore up the slippage of “counterfeits, unsafe products, and other types of abuse” by requiring sellers of certain items to be preapproved, partnering with brands to pull counterfeits, and enhancing “proactive” tools to spot problems.
Yet Amazon’s sellers’ tools sometimes help, rather than hinder, the listing of banned items, The Markup found.
When we opened a new seller account and started listing a bong for sale, Amazon suggested we list it as a vase in home decor. We never posted it.
Last month, we successfully listed two banned items for sale: an AR-15 10-round magazine and an AR-15 armorer’s wrench. We removed them within minutes of confirming they had posted. We were able to evade detection by Amazon’s automated filters by purchasing a universal product code for the magazine and by both avoiding specific keywords and miscategorizing the items.
The listings went up even though we had no seller history and had already twice been prohibited from listing the same items using more precise descriptions.
Graham declined to comment on why we were able to post these items but said Amazon’s sellers’ tools “suggest listing categories to help sellers easily categorize their products, but sellers are responsible for choosing the correct category, as they know their products best.” He also declined to comment on why the tools suggested an incorrect product category for listing bongs.
Other media have exposed Amazon’s lax product controls, including three reports just last year: a CNN investigation that documented dangerous child car seats, a CNBC report that revealed Amazon was shipping expired food and baby formula, and a Wall Street Journal investigation that found thousands of unsafe, banned, and deceptively labeled products on the site.
Graham said Amazon investigated these “with urgency” and sought to improve systems when needed but gave no specifics.
Consumer advocates say the company isn’t doing enough to protect the public, and regulators need to step in.
“It’s clear there’s not a major prioritization or investment in resources in policing the terms of service or ensuring that prohibited products are not sold,” said Lori Wallach, a director at the nonprofit organization Public Citizen. “It may be more profitable to have the ‘wild, wild west’ of sales, but it’s also much more dangerous for consumers.”
“We categorically disagree with this claim,” Graham replied.
Automating Enforcement
When Rachel Johnson Greer joined Amazon in 2010 as a product safety program manager, she said she found many problematic products for sale, from unapproved treatments of erectile dysfunction to illegal police radar jammers.
“They were up for sale and selling happily away on Amazon,” Greer said.
She said some troubling products were sold directly by Amazon itself, which she and others said relies on a mostly automated purchasing process.
“Ships and sold by Amazon is Amazon. This is how it all started,” said Greer, who worked for the company until 2017. “They built algorithms to figure out which books they needed to buy and then how much.”
It was Greer’s job to put an end to sketchy sales, she said. Her team wrote programs to flag undesirable products and amassed a universe of terms to feed an automated policing system. She said the tool eventually could scan billions of line items in the catalog in about five minutes.
But it proved flawed, she said. The system by its nature was confined to known threats—things it had seen before. Greer said new problems emerged all the time and slipped right through initial safeguards, only to be flagged by customers after something went wrong.
“The biggest problem with Amazon’s system to begin with is that nearly everything is reactive,” she said. “The reality is when you have a system that relies on finding defects per million, that means that there will always be defects.”
She said some third-party sellers devised “clever, tricky ways to list products. And these rules couldn’t catch it because they hadn’t been written by a human who was thinking in clever, tricky ways.”
One current employee of the restricted products team wearily put it like this: “No matter how much we remove, there’s always more.”
Graham did not directly respond to these descriptions of the company’s difficulties in keeping restricted items off the site. Instead, he said more generally that Amazon strives “to make sure that all products in our store are safe” and “we continuously monitor the products sold in our stores.”
Yet we found an unproven treatment to fight cancer with electromagnetic frequencies that is banned by Amazon’s policies—a rife machine—had been on the site for five years. The listing was removed after we contacted Amazon.
While most of the specific banned listings we brought to Amazon’s attention were removed, similar items that we did not report to the company remained live, including some listings by the same third-party sellers.
Many of the sellers of the banned items that we found continued to sell banned products, including Lead and Steel, which sold gun accessories, and another company, which sold a compound that reviewers said they used as injectable drugs. When we asked Amazon about this in follow-up questions, those storefronts disappeared from Amazon.com.
Graham denied that injectable drugs were sold on its platform, saying they were not sold for that purpose but rather marketed for “research” in the listing. Of the two compounds we found, the World Anti-Doping Agency designates one, TB-500, as a “prohibited substance,” and the U.S. Anti-Doping Agency warned athletes about the risks of the second one, BPC-157, as not approved for human use. Customer reviews on the listing showed people were injecting the product.
Graham said the company removed the listings and would add them to its banned product list “out of an abundance of caution.” But as of publication, both compounds could be found for sale by other sellers on Amazon.com.
Amazon isn’t the only online retailer that has had to grapple with policing the unruly world of third-party e-commerce, where just about anybody can sell just about anything. Falkowski said he bought some of his drug-making supplies on another site.
Some marketplaces are known for thoroughly reviewing products before they go up.
Apple, which offers mobile apps from third-parties, checks the code before any app or update appears in the App Store, for instance. According to its site, Apple uses a combination of automated systems and hundreds of human experts speaking a total of 81 languages to review them before posting.
“We take responsibility for ensuring that apps are held to a high standard for privacy, security, and content,” Apple’s website states, “because nothing is more important than maintaining the trust of our users.”
Amazon’s users appear to know exactly what they’re buying, even when banned products are lightly disguised.
Lead and Steel listed a gunsmithing tool for an AR-15 as a “paperweight desk organizer,” posting a photo of the vise block holding paper clips and erasers.
Customers joined in on the ruse in reviews. “Helps when you need to do a hands free clean up of your desktop,” wrote one. “Locks items solidly into place, will Load plenty of paper clips or tacks.”
Another customer retorted, “Sorry. I’m not playing along. I can buy AR-15 parts all day on Amazon.”
To go along with the vise block, Amazon’s “frequently bought together” tool suggested other gunsmithing tools, showing at least one of Amazon’s automated systems received signals that it was not an office product.
Graham, the Amazon spokesperson, declined to explain why the items were still for sale, even though the “frequently bought together” tool seemed to recognize they were related to firearms.
Lead and Steel, which declined to be interviewed for this story, had sold at least four dozen vise blocks from that posting since it went up in December, according to reviews, until we reported it to Amazon, which pulled the listing.
On the Hunt for Honey Oil Equipment
Vic Massenkoff, a retired fire investigator from Contra Costa County, Calif. said he tried years ago to get Amazon to take down dangerous equipment—but said he was frustrated by what he sees as the company’s inaction.
He said he’d seen too many fires caused by the process of extracting highly potent hash oil, or “honey oil,” from marijuana using butane and in 2013 decided to investigate where the equipment could be found for sale. He said he found it on Amazon.com.
“There it was lined up, everything from the extraction tubes, to the grams digital scales, to the silicone pads, the silicone containers, to the digital thermometers,” Massenkoff said. “Everything you would need to set up shop.”
When he clicked on a listing for the glass tubes, Amazon’s recommendation engine suggested he buy the other items needed to make and use hash oil. He kept screenshots of the suggestions.
“There is no safe way to make butane honey oil,” he said in an interview.
He said he emailed Amazon from his work email to alert the company to the danger. He still remembers the reply: “Thanks for bringing this to our attention. We have assigned it to someone on our staff to research this.”
He said he got one other email from Amazon and then heard nothing.
Graham, the Amazon spokesperson, declined to say how the company handled Massenkoff’s complaint, for which he said The Markup had provided no “evidence.”
Amazon’s current rules ban the sale of equipment to make hash oil; we were able to find it on the site.
Look to the sky for a solar show that will create a stunning glow…
Stargazers and skywatchers are in for another treat, which come about two weeks after the lunar eclipse, also referred to as the “Super Flower Blood Moon”. Tonight and into Thursday, June 10th, an annular solar eclipse called “ring of fire” will be visible. Any discussion of all things lunar, blood moons and eclipses would certainly be congruent with a taste of the astrological perspective.
Unfortunately this time around, no parts of the United States will get to see the full eclipse, however some metropolitan areas like Toronto, Philadelphia and New York will be able to view a partial eclipse a little after the sunrise on Thursday morning.
Getting to see a partial eclipse looks kind of like the sun has a portion taken out of it. In total, this eclipse will last around 1 2/3 hrs (approximately 100 minutes) as it starts at sunrise in Ontario, Canada.
If you aren’t exactly clear on what a solar eclipse is, an annular eclipse occurs when the Moon is farthest from Earth. And because the Moon is far away it appears smaller. The Moon does not block the entire view of the Sun and thus creates the appearance of a ring around the Moon.
The word annular comes from the Latin word for ring. Since the Moon covers the sun’s center and what is left forms a ring, hence the name “ring of fire”.
If you are one of the lucky folks situated along the East Coast and Upper Midwest and want to catch a glimpse at the partial eclipse, it is strongly recommended to use solar eclipse glasses and to not look directly into the sun as it may cause permanent damage to your eyes.
Don’t fret if you aren’t able to experience the upcoming solar eclipse. This summer we have a couple more opportunities to gaze above. There is set to be a Supermoon June 24, a Meteor Shower on July 28, and the Blue Moon come August 22.
We have a couple years until the next total solar eclipse in the United States, in April 8, 2024, weather permitting.
The bonds between fathers and sons, as seen through the eye of their mothers
The Duchess of Sussex, Meghan Markle, already holds so many titles: she is a wife, a mother, feminist, activist, and now will be adding author to her list of accomplishments. Just a few days ago, the couple announced the birth of their daughter, with reference to both grandmother and great-grandmother naming her Lilibet “Lili” Diana Mountbatten-Windsor.
Fittingly, today, June 8th, 2021, marks the the release of Markle’s first children’s book.
The Duchess sweetly dedicates the book to “the man and the boy who make my heart go pump-pump”. “Lili” also holds a special place in her heart as her own mother Doria Ragland gave her the childhood nickname “Flower”. The Lilly flower happens to signify happiness and rebirth which gives their daughter name lots of symbolism and meaning to royal family’s newest (‘lil) addition.
The inspiration for the Duchess of Sussex’s first book started from a poem Megan wrote for Prince Harry after their son Archie was born for Father’s day. The poem then evolved into a story, the book will capture the special bond and relationship between fathers and sons from all walks of life, as described by mothers.
As news relating to the upcoming release of Markle’s debut book, reports began to surface speculating potential plagiarism with another children’s book “The Boy on the Bench” by Corrinne Averiss. The only real similarity between the two titles is they both have the word “bench”, aside from this, Averiss took to Twitter to defend the Duchess stating “I don’t see any similarities”.
“The Bench” includes illustrations by Christian Robinson, a Caldecott Award winner, who has worked with both Pixar and Sesame Street Workshop. Markle and Robinson worked together to make sure the final product was inclusive and shared a universal message every kind of family could relate to.
In a statement from Random House Children’s Books, Markle said “Christian layered in beautiful and ethereal watercolor illustrations that capture the warmth, joy, and comfort of the relationship between fathers and sons from all walks of life,” and continued to say “This representation was particularly important to me, and Christian and I worked closely to depict this special bond through an inclusive lens.
My hope is thatThe Bench resonates with every family, no matter the makeup, as much as it does with mine.”
— Random House Children's Books (@randomhousekids) May 4, 2021
“The Bench” will mark the latest venture for the Duchess after stepping back from the Royal Family and moving to the United States in 2020. Prince Harry and Meghan have also launched a podcast in partnership with Spotify Archewell Audio. The two also have plans to work on a Netflix documentary based on the Invictus Games which the Prince founded back in 2014.
Multi-talented author and political force of nature
Hearing the name Stacey Abrams, you’d likely think of a woman who ran for governor in 2020 in Georgia, or the role she played in registering hundreds of thousands of voters and becoming a Democratic power broker. You might be surprised to learn that before she was well known in the political realm, Stacey Abrams wrote romance novels, under the nom de plume “Selena Montgomery”.
Abrams has also written non-fiction, including “Lead from the Outside” and Our Time is Now“. And now, in an interesting departure from previous works, her newest book is a political thriller. This is her 11th book, under her various names, but it is the first work of fiction published under her real name.
Recently the news broke that her novel is going to be adapted for a TV series to be produced by NBC Universal International Studios.
We provide a look at “While Justice Sleeps“, by Stacey Abrams, below, along with a description, provided courtesy of the Bookshop (and the publisher), along with some links for a variety of purchasing options.
Avery Keene, a brilliant young law clerk for the legendary Justice Howard Wynn, is doing her best to hold her life together–excelling in an arduous job with the court while also dealing with a troubled family.
When the shocking news breaks that Justice Wynn–the cantankerous swing vote on many current high-profile cases–has slipped into a coma, Avery’s life turns upside down.
She is immediately notified that Justice Wynn has left instructions for her to serve as his legal guardian and power of attorney. Plunged into an explosive role she never anticipated, Avery finds that Justice Wynn had been secretly researching one of the most controversial cases before the court–a proposed merger between an American biotech company and an Indian genetics firm, which promises to unleash breathtaking results in the medical field.
She also discovers that Wynn suspected a dangerously related conspiracy that infiltrates the highest power corridors of Washington. As political wrangling ensues in Washington to potentially replace the ailing judge whose life and survival Avery controls, she begins to unravel a carefully constructed, chesslike sequence of clues left behind by Wynn. She comes to see that Wynn had a much more personal stake in the controversial case and realizes his complex puzzle will lead her directly into harm’s way in order to find the truth.
While Justice Sleeps is a cunningly crafted, sophisticated novel, layered with myriad twists and a vibrant cast of characters. Drawing on her astute inside knowledge of the court and political landscape, Stacey Abrams shows herself to be not only a force for good in politics and voter fairness but also a major new talent in suspense fiction.
Although a hit ‘The Bomber Mafia’ is less known than previous Gladwell bestsellers
With “Blink” (2007) and “The Tipping Point” as well as “Outliers” Malcolm Gladwell burst onto the scene with a new kind of popular non-fiction. Rather than being another single minded academic focused on a particular specific niche, it was in choosing what phenomena to study, and then taking his now patented unique approach, that he was able to excite and inspire the minds of millions of readers.
Drilling down into the exact aspects of his chosen topics to focus on just what made him choose them in the first place, and doing so with an excited air of adventure and discovery, Gladwell continues to delight, and for some, his entire body of work consists of one page-turner after another. Even his titles, like outliers and the tipping point, though in usage before, after he nailed them into more expansively defined concepts, were brought into more popular use and the widespread level of understanding to a whole new level.
Below we feature a broad selection, including his latest, for fan and the curious alike.
To make it easier they are featured front and center, below, along with descriptions, provided courtesy of the Bookshop (and the various publishers), and with some links for a variety of options of where to purchase.
The Bomber Mafia: A Dream, a Temptation, and the Longest Night of the Second World War
In The Bomber Mafia, Malcolm Gladwell weaves together the stories of a Dutch genius and his homemade computer, a band of brothers in central Alabama, a British psychopath, and pyromaniacal chemists at Harvard to examine one of the greatest moral challenges in modern American history. Most military thinkers in the years leading up to World War II saw the airplane as an afterthought. But a small band of idealistic strategists, the “Bomber Mafia,” asked: What if precision bombing could cripple the enemy and make war far less lethal?
In contrast, the bombing of Tokyo on the deadliest night of the war was the brainchild of General Curtis LeMay, whose brutal pragmatism and scorched-earth tactics in Japan cost thousands of civilian lives, but may have spared even more by averting a planned US invasion. In The Bomber Mafia, Gladwell asks, “Was it worth it?” Things might have gone differently had LeMay’s predecessor, General Haywood Hansell, remained in charge.
Hansell believed in precision bombing, but when he and Curtis LeMay squared off for a leadership handover in the jungles of Guam, LeMay emerged victorious, leading to the darkest night of World War II. The Bomber Mafia is a riveting tale of persistence, innovation, and the incalculable wages of war.
Talking to Strangers: What We Should Know about the People We Don’t Know
How did Fidel Castro fool the CIA for a generation? Why did Neville Chamberlain think he could trust Adolf Hitler? Why are campus sexual assaults on the rise? Do television sitcoms teach us something about the way we relate to one another that isn’t true? Talking to Strangers is a classically Gladwellian intellectual adventure, a challenging and controversial excursion through history, psychology, and scandals taken straight from the news.
He revisits the deceptions of Bernie Madoff, the trial of Amanda Knox, the suicide of Sylvia Plath, the Jerry Sandusky pedophilia scandal at Penn State University, and the death of Sandra Bland–throwing our understanding of these and other stories into doubt. Something is very wrong, Gladwell argues, with the tools and strategies we use to make sense of people we don’t know.
And because we don’t know how to talk to strangers, we are inviting conflict and misunderstanding in ways that have a profound effect on our lives and our world. In his first book since his #1 bestseller David and Goliath, Malcolm Gladwell has written a gripping guidebook for troubled times.
David and Goliath: Underdogs, Misfits, and the Art of Battling Giants
Three thousand years ago on a battlefield in ancient Palestine, a shepherd boy felled a mighty warrior with nothing more than a stone and a sling, and ever since then the names of David and Goliath have stood for battles between underdogs and giants. David’s victory was improbable and miraculous. He shouldn’t have won.
Or should he have? In David and Goliath, Malcolm Gladwellchallenges how we think about obstacles and disadvantages, offering a new interpretation of what it means to be discriminated against, or cope with a disability, or lose a parent, or attend a mediocre school, or suffer from any number of other apparent setbacks.
Gladwell begins with the real story of what happened between the giant and the shepherd boy those many years ago. From there, David and Goliath examines Northern Ireland’s Troubles, the minds of cancer researchers and civil rights leaders, murder and the high costs of revenge, and the dynamics of successful and unsuccessful classrooms—all to demonstrate how much of what is beautiful and important in the world arises from what looks like suffering and adversity.
In this stunning book, Malcolm Gladwell takes us on an intellectual journey through the world of “outliers”–the best and the brightest, the most famous and the most successful. He asks the question: what makes high-achievers different?
His answer is that we pay too much attention to what successful people are like, and too little attention to where they are from: that is, their culture, their family, their generation, and the idiosyncratic experiences of their upbringing.
Along the way he explains the secrets of software billionaires, what it takes to be a great soccer player, why Asians are good at math, and what made the Beatles the greatest rock band. Brilliant and entertaining, Outliers is a landmark work that will simultaneously delight and illuminate.
The Tipping Point: How Little Things Can Make a Big Difference
The tipping point is that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire.
Just as a single sick person can start an epidemic of the flu, so too can a small but precisely targeted push cause a fashion trend, the popularity of a new product, or a drop in the crime rate.
This widely acclaimed bestseller, in which Malcolm Gladwell explores and brilliantly illuminates the tipping point phenomenon, is already changing the way people throughout the world think about selling products and disseminating ideas.
Clickbait is not exclusive to smaller news organizations, apparently
With titles like “Long Awaited UFO Report is Here” major news outlets are blowing up a leak, sighting “senior administration officials briefed on the findings” of the as yet unreleased report.
Taking a subject, already shrouded in mystery and intentionally misleading readers is not particularly professional but , unfortunately, par for the course when it comes to this subject.
The report is referred to universally as “highly anticipated”, which, yes, it is. That would also appear to be the incentive to relabel a round-up of mainly already reported facts and quotes as definitive.
What is, somewhat, new is the confirmation, again by those senior administration officials briefed on the findings, that there are no secret U.S. government technologies responsible for the Unidentified Aerial Phenomena (U.A.P.) or UFO incidents. However, that is only said to be true of the “vast majority” of the more than 120 incidents.
As published in prior articles, including by Lynxotic, there are three “likely” potential sources for the unexplained phenomena:
secret U.S. technology,
an adversary’s spy vehicle
something otherworldly
To break down what these initial leaks quoting the as yet to be released report have on these three would basically be as follows. As quoted above “the vast majority” (thought apparently not all) did not originate from secret U.S. technology.
Although there is known research being done in “hypersonic”, mainly by Russia and China, and there is a “worry” that this could be one explanation, if true it would mean that those countries technology is not only a well kept secret, but also far beyond any current U.S. capability.
As for the third option, the leaks emphasized that though “difficult to explain” there is no proof that aliens are responsible.
Not all outlets are making light or obfuscating, but struggling with what can be stated as fact
The New York Times story on what is as of yet known of the contents of the report, likely the source for others quoted above, and that article has a clearer title and “spin” on the situation:
radio transmission “Whoa, got it — woo-hoo!” “Roger —” “What the expletive is that?” “Did you box a moving target?” “No, I took an auto track.” “Oh, OK.” “Oh my gosh, dude. Wow” “What is that man?” “There’s a whole screen of them. My gosh.” “They’re all going against the wind. The wind’s 120 knots from west.” “Dude.” “That’s not — is it?” “inaudible” “Look at that thing.”
If all of this is broken down, there is very little that is new or noteworthy in the revelations other than a kind of preview of the stance the report is likely to take.
Talking about this à laRumsfeld with the patter boiling down to terms like “known unknowns” and “Unknown unknowns” is not the reason, obviously, that the report is “highly anticipated”. This is where the reality of this tricky category of information enters the discussion.
For example: If the kind of ultra advance technology had any of the above three sources would these realities actually be released and admitted to in an unclassified report?
Gov speak will always echo Rumsfeld
Imagine the report confirming the existence of aliens, even the strong likelihood of the same? Panic and a host and variety of potential public responses would be enough to justify keeping that classified. And if it was U.S. technology? That would be an obvious example of something that could not be leaked or admitted, unless there was a desire to use it for saber rattling or other political strategy.
And if it was true that this ultra advanced capability was to be in the hands of a potential foreign adversary? Cue the panic and consternation once more.
So what could be divulged? Apparently there is a desire to confirm publicly and in this unclassified report just what can not be said – that these numerous instances are with 100% certainty an illusion or malfunction of our people or measurement technology.
That, once again, is certainly something. For example, if it were to be admitted that there were flaws or limitations to our various high tech mechanisms to observe and measure flying objects, that would, in and of itself, be an admission of failure and lack of functionality of the devices and systems.
As the NYT subheading states: “A new report concedes that much about the observed phenomena remains difficult to explain, including their acceleration, as well as ability to change direction and submerge.”
If the “difficulty” to explain these parameters, observed by pilots and aircraft recording systems on multiple occasions (and apparently with increased frequency) is due to the lack of sophistication of our abilities to observe and measure, that is already an admission that, while this phenomena is “real” to the best of our knowledge, we do not, as of yet, possess the ability to see or record it in a way that can explain what it is.
The end and beginning of the future
And voilà! We are back to the definition of UAP and UFO: Unidentified.
And, as frustrating as all of this can be, somehow there is, under layers of caution and reticence, an admission of something here. The admission that, whatever these sitings are of, it would be in our interest to try and find out, and to take the effort to study these incidents seriously from now on, not just make jokes and relegate these questions to some kind of “anti-science” fantasy from a fictional story.
If nothing else, it is that revelation, that there is a strong, solid reason for this report to even be ordered and carried out, that moves us forward into a new era that might well, eventually, reveal some astounding information on these craft. Very fast, very nimble and very mysterious UAP craft.
There’s a joke somewhere in here but it’s hard to see it through the tears
Woody Allen’s onscreen counterpart, Alvy Singer, complaining about Hollywood Award Shows in “Annie Hall” remarked that a category of award for “Greatest Fascist Dictator” would not surprise him, and that Adolf Hitler would probably win.
Amazon, viewed from some neutral future date or by aliens from another planet would surely win the award for “Greatest Company to Amass Wealth & Power by Intentionally Losing Money” award. Or maybe just “World’s Biggest Ponzi Scheme”.
For now the fawning books and articles on the greatness of “Bezos’ Behmouth” continue to pile up.
An exception to the fawning fan fiction is “Monopolized: Life in the Age of Corporate Power” by David Dayen. The author also commented cogently on the current situation with Amazon and MGM. His thoughts shed much needed light on the simple and yet sadly overlooked truth about Amazon: its core mission is to monopolize not just online sales but all transactions that take place in the economy where a “cut” of those transactions can be extracted.
What’s with all these awards? They’re always giving out awards. Best Fascist Dictator: Adolf Hitler. — Alvy Singer
This viewpoint, it would seem, can be traced back to a rare case where Jeff Bezos let his guard down and accidentally explained a core concept of the Amazon business model.
He said, simply: “Your margin is my opportunity”.
With this seemingly innocuous and widely misinterpreted phrase he unleashed the dogs of hell on the world of commerce. The MGM deal, according to Dayen, who is also editor of The American Prospect, is yet another attempt to gut an industry with techniques designed to use predatory pricing strategies to crush all rivals.
The sub-head from his article states: “The company wants to control pricing on everything, and funnel as many transactions to itself as possible.”
Meanwhile, somehow, this statement is finally being generally understood in its real context.
Yet what is astounding is that this is not a supposition or an accusation, but rather is a stated fact, and how this company has behaved and operated for decades.
Putting 2+2 together, the common interpretation that there is an “innocent” pro-customer meaning possible, is finally being seen for the absurdity that it is.
Simple, Effective and Disgusting: Selling below cost or at a loss to harm competition
We’ve seen how that goes. In this case, since Amazon does not make any data available on the profitability of various business segments, using nearly $9 billion to enhance its “free with Prime” business creates yet another loss-leader opportunity to destroy the margins of all other streaming platforms, who, like other businesses actually have to make a profit or at least break even, unlike Amazon due to its cross-subsidization of products and services.
Amazon wants to control all economic activity in the United States and the world. It wants a cut of every transaction. — D. Dayen
Amazon as “cross-subsidized content devourer” is how Dayen described the inevitable outcome of the deal in his article.
He also succinctly argues that by using its virtually unlimited power and resources to devour an ever larger share of the market, ultimately the result will be to drive up costs for competitors (for I.P., production and star power) and achieve the goal of squeezing the already slim margins for those poor schmucks (or rich schmucks like Disney, HBO, Netflix, etc.) that don’t have an unlimited budget for intentional losses.
The playbook is so obvious and familiar that it’s almost laughable. That is, if not for the death and destruction that always follow in the next chapters of this plot schema.
They pick on an established industry where no one will have sympathy for the rich victims – did anyone feel sorry for Borders or other large book retailers? Does anyone cry over the loss of Diapers.com or Quidisi? When Birkenstock complains does anyone listen?
How can gutting the streaming industry or unassailable giants like Disney and HBO be bad? Isn’t it just capitalism at its finest? Should we start preparing the award now for “Greatest Consolidator of Content in History”?
But what about the “loss leader” system? What about the ultimate outcome of less competition and higher prices overall, an obvious harm to consumers, regardless of how stupid and convoluted the route is to get there?
By moving the market in a way that will make streaming a terrible business for any company that has to compete with this, “oughta be illegal” script, margins will, if the gambit succeeds, face a similar fate to the one that anyone who used to be in the retail book industry, or any of the other entire industries that Amazon has received kudos for destroying, knows all too well.
Dayen also makes the point that, once this thinly veiled ploy is seen for what it is, the harm, not only to Amazon’s competitors but to the general public, should be obvious and impossible to ignore.
Citing the similarities with the recently brought antitrust action by the Washington, DC attorney general, it is exactly this kind of pernicious practice, that Amazon has not only gotten away with for decades, but Bezos has been lionized for “inventing”.
That lawsuit, which deals with an Amazon clause in 3rd party marketplace terms and conditions (since altered to disguise its true intent) that 3rd party sellers must sell anywhere outside Amazon’s marketplace at the same or higher price that they have listed on Amazon, is a sign of a gradual shift toward seeing the real meaning of Amazon’s behavior.
Since there are massive, exorbitant fees added to every transaction for all 3rd party sellers, the only way for them to make any profit at all is to tack on the cost of those fees, meaning artificially higher prices.
Amazon has ways to retaliate through “dark patterns” of its own special stripe, by manipulating buyers behaviors on its web site, making sure that sellers that don’t toe the line will get, essentially, zero sales.
For Amazon this kind of bullying and blackmail is a “win-win-win”. They see and have tattooed into their DNA all pain, suffering and loss for anyone other than the company (AMZN) as a gain for them.
3rd party sellers caught in hell trying to survive while paying fees up to 43% or more without recourse to try and recoup by selling anywhere else at lower prices?
Amazon congratulates themselves. Sellers undercutting each other, in spite of those fees in an effort to behave like a “mini-Amazon” and getting into a race to the bottom death match with each other? Yippee! Great for Amazon, when they are dead, there are always new victims waiting in line to enter the cage.
How about sellers that obtain goods illegally, counterfeit, illegal imports, stolen products, remainders and aftermarket overstock? They are GREAT for Amazon because they put even more pressure on the individual, honest sellers to immolate themselves trying to survive (and eventually die via pricing suicide) while Amazon can claim to be offering lower prices!
Oh, and when they “do their best” to stop all those illegal sellers, albeit at a snails pace, they are bailed out by section 230 and can point to their “partners in crime”, the counterfeiters, the knockoffs from China, the illegal imports and the stolen and aftermarket goods and say: “We tried our best, these are just a few bad apples” laughing all the way through every board meeting.
“Your margin is my opportunity”, indeed.
Above: Photo Collage by Lynxotic
There are no mitigating factors here. There is no “good guy” or customer obsessed hero. Just evil and the dead or dying. Wake the fuck up, America.
The praise and adulation continues, even as the $400 million yacht is being prepared for its maiden voyage
It’s as if Bezos is given award after award for the “genius” of selling 1$ bills for .75 cents. Championed for using a strategy that masquerades short term margin destruction as “customer obsession”, pretending that the dumping levels of pricing won’t in the long run flip into price gouging and the destruction of competition.
Somehow the massive detriment to consumers and the society at large is overlooked amid all the parties celebrating the “genius”.
But have the chickens finally come home to roost? Is anyone seeing a pattern of systematic use of the same tactics over and over, applied to each and every sector that Amazon chooses to “disrupt”? They didn’t get the nickname “grim reaper” for nothing. The problem is that it was meant as a compliment.
It is a sea change in the antitrust orientation, a sea change that is desperately needed, and with Lina Kahn and Columbia Law School professor Tim Wu, it might be just over the horizon. Could even have a chance to come about.
That change, so long overdue, could finally begin the process of dismantling the damage wrought and and still to come, if there is no interdiction.
The worm will eventually turn. When? After decades of obvious abuse and criminal behavior, completely and willfully ignored (too complicated to see).
Will there eventually be so many victims that they will outnumber the duped and the sycophants? Stay tuned.
This is a world where four major banks control most of our money, four airlines shuttle most of us around the country, and four major cell phone providers connect most of our communications. If you are sick you can go to one of three main pharmacies to fill your prescription, and if you end up in a hospital almost every accessory to heal you comes from one of a handful of large medical suppliers.
Over the last forty years our choices have narrowed, our opportunities have shrunk, and our lives have become governed by a handful of very large and very powerful corporations.
Today, practically everything we buy, everywhere we shop, and every service we secure comes from a heavily concentrated market.
Dayen, the editor of the American Prospect and author of the acclaimed Chain of Title, provides a riveting account of what it means to live in this new age of monopoly and how we might resist this corporate hegemony.
Through vignettes and vivid case studies Dayen shows how these monopolies have transformed us, inverted us, and truly changed our lives, at the same time providing readers with the raw material to make monopoly a consequential issue in American life and revive a long-dormant antitrust movement.
Disney’s prequel to show a whole different side to the well-known evil character
Oscar winner Emma Stone is playing as the new role of villain- Cruella de Vil in the upcoming live-action version of the Disney’s iconic “101 Dalmatians”. Glen Close, who played the same role back in the 1990’s version to the cartoon is also on the scene, this time as producer.
The first official trailer has been launched and by the looks of it, there is a dark punk feeling as fans get a sneak behind the back story of a younger Cruella.
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According to Disney, the synopsis for the 2021 version: “In 1970s London, young fashion designer Estella de Vil becomes obsessed with dogs’ skins, especially Dalmatians, until she eventually becomes a ruthless and terrifying legend known as Cruella.”
“Cruella” is scheduled for theatrical release on May 28, 2021.
Above: Photo Credit Lynxotic collage with Photo by Sadman Sakib on Unsplash
Visible in the Western U.S. states early Wednesday
This kickoff to the Lunar eclipses for the year will be the fantastically named “Super Flower Blood Moon”. Although the visibility during the eclipse will vary across the nation, the west coast will have a great, bright vantage, where clear skies oblige.
Also, unlike solar eclipses the Lunar variety is completely safe to view with the naked eye. Just watch your forecast as clouds vs. clear skies will be the determining factor when it comes to visibility.
The “flower” moniker is perhaps less significant than it sounds, but no less poetic. Call the flower moon due to that simple fact that it occurs in late May, coincident with the spring bloom.
Although there were four penumbral lunar eclipses in 2020, they were less spectacular that what is anticipated for the one we will get on May 26th. That’s because this month’s total lunar eclipse will have a more obvious darkening phases as the moon passes through the umbra, Earth’s inner, darker shadow.
The eclipse will be at least partly visible in the Americas, Australia, New Zealand and Asia, while the total phase will only be seen from some of these locations. In the case of North America, the eclipse’s total phase, the time during which the moon turns orange or red in color, will only be seen from the western U.S., British Columbia, Alaska and parts of western Mexico.
Alternatively, if the full Super Flower Blood Moon has got you curious but you are not in the ideal spot to view from your backyard, livestreams will be hosted by observatories and astronomers around the world.
The west coast is the best coast for this moon
The rest of North America will only see the first part of the eclipse before the moon will set in the western sky. There will still be something worth seeing but it will be a partial view of the entire event.
If you are in the Los Angeles area Wednesday morning these are points worth noting:
Total duration: 4 hours, 6 minutes
Penumbral begins: 1:47 a.m. Wednesday
Partial begins: 2:44 a.m. Wednesday
Full begins: 4:11 a.m. Wednesday
Maximum: 4:18 a.m. Wednesday
Full ends: 4:25 a.m. Wednesday
Moonset: 5:52 a.m. Wednesday
If you are a photographer please be aware that the moon, at any time, is hard to capture without powerful telephoto lenses. A cell phone will retrieve an image but the distant orb will be far more visible with magnification.
The moon has many meanings and astrologically the event is significant also
Any discussion of all things lunar, blood moons and eclipses would certainly be congruent with a taste of the astrological perspective. We have it on good authority that this will be a Sagittarius full moon. There haas been prognostication that this will be a very challenging and “difficult” full moon eclipse, there are also signs that it will mark triumphs for some in the career dept., even accolades and awards.
A “major project” could be coming to a happy conclusion. As is always the case with Full moon lunar eclipses, if things are unclear and seem oddly incomplete, waiting 30 days can often bring the resolution that you are awaiting.
