Later On

A blog written for those whose interests more or less match mine.

Archive for June 9th, 2020

What Amazon Isn’t Telling Investors, or Congress

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Matt Stoller writes in BIG:

Today I’m writing about:

  • How Amazon’s lack of disclosures to Congress and to investors masks monopoly power.
  • Potential political corruption around the Charles Schwab/TD Ameritrade merger.
  • A Congresswoman striking at internet monopolies through trade agreements.
  • Banking analyst Karen Petrou’s analysis of inequality as a major systemic risk.
  • How private equity firms are juggling insolvencies.
  • A shift in disclosure requirements for mergers.

First, some house-keeping. One, my write-up two weeks ago on cheerleading was featured in the New York Times Dealbook. I’ll have more on Varsity soon. Two, I’ll be speaking at an event on Section 230 of the Telecommunications Act tomorrow at 11am with Congresswoman Jan Schakowsky, put on by my organization the American Economic Liberties Project, as well as the American Prospect. You can RSVP here.

And now…

Amazon’s Disruptive Accounting

The most coveted real estate in online retail is the top left slot on Amazon’s search result page. If you can get your product onto that slot when a customer searches your product category, you are far more likely to be the product that sells. Last week, ProPublica’s Renee Dudley reported on a new tactic Amazon is using to fortify its market power. The corporation preferences its own private label products in that most plum position on its site.

There are an endless set of tactics Amazon uses to undermine small competitors, and this tactic is just one more. These kinds of activities present an interesting question for a corporation like Amazon, as well as its investors. Amazon is a public company, and it has to tell investors about how it operates, including disclosing material information. It’s not just investors, Congressional investigators has also asked Amazon how it makes money. How does Amazon answers these questions about its business? The answer is that Amazon structures its accounting and investor disclosures so as to ensure that investors and enforcers can’t tell how it generates revenue from its activities. And I’m going to show how.

First, let’s talk about this specific tactic. According to Dudley, when some customers do a search through Amazon, Amazon will simply place its own product in the top left slot. According to this story, a search for “ground coffee” tends to return AmazonFresh Colombia and a search for “melatonin” returns the Amazon brand Solimo. A consultant who helps brands navigate the site, Jason Boyce, noted that Amazon used to allow brands to bid for that slot, and his client who sold natural supplements paid up to $6 to Amazon’s advertising business line for a click on its product. But recently, Amazon just gives its own product top billing, no matter what.

“The domino effect of Amazon’s new strategy has demoted competitors’ listings for products including diapers, copy paper, kids’ pajamas, mattresses, trail mix and lightbulbs,” wrote Dudley. “By putting its own private brands in some of the most valuable slots, Amazon is sacrificing short-term ad revenue to build up sales of its private brands over time, consultants said.” Hal Singer, a well-known industrial organizational economist, tweeted these actions are a red flag for antitrust enforcers. Foregoing revenue to capture market share, or “profit sacrifice,” is not necessary to prove a monopolization case, but it certainly helps. Singer also notes that brands have to pay a 15% commission, plus third party merchants often use Amazon’s expensive fulfillment and logistics service, Fulfillment by Amazon, on the hopes they get better placement. Competing with Amazon on these terms is impossible.

To understand what is going on, we have to unwrap different layers of anti-competitive conduct. First there’s the actual manipulation of search results to capture ad revenue. Most customers actually don’t know that many of the results they are seeing are ‘sponsored’ because the font size isn’t big enough, they mostly believe they are getting an organic result from Amazon offering them the best product and the best price. The Federal Trade Commission issued agency guidance in 2013 barring these kinds of deceptive search engine practices, but it’s obvious the FTC doesn’t enforce. And second, there’s the foregoing of this ad revenue to self-preference its own private label products. Third, there’s a tying aspect, of what looks like coercing merchants to use a logistics service to get better marketplace service (though Amazon denies tying these products). That tying has to do with which products are Prime Eligible, which is to say, able to be shipped quickly and for free to Amazon’ Prime customers.

Now, with all that said, let’s go to the questions that the House Judiciary Antitrust Committee asked Amazon last July about Amazon’s accounting, and how Amazon responded. The committee asked the corporation to break out its revenues, costs, and profit markets for several lines of business . For four lines of business, Amazon simply refused to answer (see questions 14, 41, 59, and 75). It refused to give information on its private label, Advertising, Fulfillment by Amazon, and Prime. These lines of business are precisely what are at issue in the ProPublica article. Chairman David Cicilline asked for revenues, costs, and profit margins, and for all four cases, Amazon said it would not separately break out information about those business lines.

For its private label products, the company said investors should look at its overall retail sales to get a sense of what’s happening there. Similarly, for advertising, the company points to its “other” revenue category. For fulfillment, Amazon gives its entire third party seller category, and for Prime, the company says just look at the overall ‘subscription” category. In other words, Amazon is constantly burying its meaningful lines of business in larger categories, so that no one except insiders can tell what is going on. For instance, in its first quarter investor call, analyst John Blackledge from Cowan asked Amazon’s chief financial officer Brian Olsavsky about the corporation’s advertising business, since the ‘other’ category seemed to be doing well despite a pandemic-related slowdown. Olavsky responded by largely avoiding the question, saying that the ‘other’ category also includes non-advertising revenue.

Now, keep in mind that Amazon is refusing to divulge this information to a subcommittee of Congress. I hope that Congress issues a subpoena, because that’s the only tactic Amazon *might* respond to with disclosure.

But refusing to give basic information to Congressional investigators is not the first run-in the corporation has had with the U.S. government over its accounting for these business segments. In 2018, the Securities and Exchange Commission asked Amazon to provide more information about . . .

Continue reading. There’s much more.

What’s odd is that President Trump, who clearly hates Amazon and Jeff Bezos, has not picked up on this to batter Amazon (preferring instead to tweet fringe-right conspiracy theories that elderly men injured by police did it on purpose). I imagine the reason is that this sort of offense is beyond his limited comprehension: it requires more knowledge and reading ability than he has.

Written by LeisureGuy

9 June 2020 at 1:20 pm

The Police Take the Side of White Vigilantes

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Subtitle: “Over the past week, cops have shown that they share a coherent ideology.” And I’ll add that they enforce it within their own ranks and protect it by taking strong action against any outside threats.

Alex Pareene writes in The New Republic:

Who are the cops for? Over the last week, all across the country, in ways large and small, they’ve shown

In Philadelphia on Monday night, the cops made it fairly explicit on whose behalf they police the streets. As they unleashed tear gas on unarmed protesters marching on Interstate 676, getting caught on camera spraying gas directly into the faces of harmless, seated demonstrators, across town they allowed an actual roving mob of men armed with baseball bats and other improvised weapons to violate curfew and move about with impunity. Or something more than impunity: an endorsement. Residents reported attempting to get the police to arrest or disperse the would-be vigilantes and being mocked and dismissed.

“We don’t take sides,” Philadelphia’s police commissioner said the next day. “Our mission is to always protect all persons.” That is what she is supposed to say. But the untruth of that claim is well documented. Over and over again, cops take sides. They do so in broad daylight and at night, on cell phone–captured video and behind mysteriously nonfunctioning body cameras.

In Chicago last weekend, a man in tactical gear with a long gun brandished it menacingly at protesters. “Open carry” of firearms is illegal in Illinois. The police had a quick chat with him and sent him on his way unmolested. As police departments have everywhere else, this one gassed and beat unarmed demonstrators who were protesting police violence. “We don’t tolerate police misconduct—ever,” the mayor said. But they do. They have tolerated it among Chicago police officers for 100 years.

What would lead a police department—not a few misbehaving officers but every officer on the street, in this instance—to dismiss a heavily armed man as no threat (to either their own safety or the safety of the community) in one case, while, in another, viewing an unarmed local activist as so much of a threat that multiple cops decided to surround and brutally beat him with batons?

The incidents in Chicago and Philadelphia are evidence that American police across the country share a coherent ideology. Armed white boys don’t code as a threat to them; “anarchists” and angry black people do (even if the protesters are the ones at least attempting to engage in constitutionally protected behavior, while the roving white gangs are flagrantly violating the law). That disconnect, the galling image of watching the law so obviously tossed aside under certain circumstances, highlights a fundamental truth about what’s happening across the United States. The police are not using brutality to enforce “the law.” They’re using the law to enforce something else: a particular social order that is, to them, worth fighting for.

The words “white supremacy” make some people shut their brains off (especially when so many cops are indeed black and so many people they’re brutalizing during these clashes are white), but the order, and the ideology, that these police departments, from Kansas City to Minneapolis to Philadelphia, are enforcing is one that dates back to the beginning of our country’s history, one that relies on the domination and subjugation of particular classes and groups, often out of the fear that, if given power, they would turn around and return the favor. That is what makes the response to these protests so brutal, so urgent, for the police: In town after town, they seem to ignore any course of action that might de-escalate tensions in favor of the ones that only serve to prolong the conflict.

Make no mistake: Cops have allowed other demonstrations, even very large ones, to play out with minimal or no interference. Heavily armed right-wingers marched on statehouses last month decrying measures to arrest the spread of Covid-19, and the police universally treated them as peaceful and lawful demonstrators, even as they threatened lawmakers and burned at least one governor in effigy. There were no violent crackdowns, no curfews, no brawls on the streets, no kettling or mass arrests. There was no tear gas. No major George Floyd–inspired protest has received the same courtesy, as far as I can tell. Fifty cops decked out in full riot gear descended on 14 quietly protesting students in Hoover, Alabama, on Tuesday, and arrested them all.

A few weeks ago, in Huntington Beach, a city in Orange County, California, thousands were allowed to . . .

Continue reading.

Written by LeisureGuy

9 June 2020 at 12:21 pm

Posted in Daily life

The Police Have Been Spying on Black Reporters and Activists for Years.

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American police departments seem too often to be armed enclaves of racism — certainly not always, but disturbingly often, and police culture is to a certain extent sealed off from the general culture and is strongly enforced by threats and violence (cf. Serpico). Thus encysted, it has proved immune to normal social pressure. And the degree to which some police departments — including some large police departments — have grown rogue is increasingly clear. These departments take direct and aggressive action against anyone who would attempt to rein them in (cf. this post — two cops blatantly and without provocation shoved the 75-year-old man to the pavement (who was hospitalized after striking his head on the pavement), then lied about it (saying he tripped), and then were suspended whereupon 57 cops resigned from the unit in a petulant but aggressive statement: “We will not be subject to control!”).

Lord Acton observed that power corrupts, and the greater the power, the greater the corrupting effect. Police departments have a lot of power, and I fear that it’s gone to their head.

Wendi C. Thomas reports in ProPublica:

On Aug. 20, 2018, the first day of a federal police surveillance trial, I discovered that the Memphis Police Department was spying on me.

The ACLU of Tennessee had sued the MPD, alleging that the department was in violation of a 1978 consent decree barring surveillance of residents for political purposes.

I’m pretty sure I wore my pink gingham jacket — it’s my summer go-to when I want to look professional. I know I sat on the right side of the courtroom, not far from a former colleague at the city’s daily newspaper. I’d long suspected that I was on law enforcement’s radar, simply because my work tends to center on the most marginalized communities, not institutions with the most power.

One of the first witnesses called to the stand: Sgt. Timothy Reynolds, who is white. To get intel on activists and organizers, including those in the Black Lives Matter movement, he’d posed on Facebook as a “man of color,” befriending people and trying to infiltrate closed circles.

Projected onto a giant screen in the courtroom was a screenshot of people Reynolds followed on Facebook.

My head was bent as I wrote in my reporter’s notebook. “What does this entry indicate?” ACLU attorney Amanda Strickland Floyd asked.

“I was following Wendi Thomas,” Reynolds replied. “Wendi C. Thomas.”

I sat up.

“And who is Wendi Thomas?” Floyd asked.

She, he replied, used to write for The Commercial Appeal. In 2014, I left the paper after being a columnist for 11 years.

It’s been more than a year since a judge ruled against the city, and I’ve never gotten a clear answer on why the MPD was monitoring me. Law enforcement also was keeping tabs on three other journalists whose names came out during the trial. Reynolds testified he used the fake account to monitor protest activity and follow current events connected to Black Lives Matter.

My sin, as best I can figure, was having good sources who were local organizers and activists, including some of the original plaintiffs in the ACLU’s lawsuit against the city.

In the days since cellphone video captured white Minneapolis police officer Derek Chauvin squeezing the life out of George Floyd, a black man, residents in dozens of cities across the country have exercised their First Amendment rights to protest police brutality.

Here in Memphis, where two-thirds of the population is black and 1 in 4 lives below the poverty line, demonstrators have chanted, “No justice, no peace, no racist police!”

The most recent protests were sparked by the killings of Floyd and of Breonna Taylor, a black woman gunned down in her home by Louisville, Kentucky, police in March. But in Memphis, like elsewhere, the seeds of distrust between activists and police were planted decades ago. And law enforcement has nurtured these seeds ever since.

A Long History of Spying

In the mid-1960s, the MPD launched a domestic intelligence unit to spy not just on activists, but also on teachers’ meetings, a college black student union and labor organizers. That included Martin Luther King Jr., who came to Memphis in the spring of 1968 to stand in solidarity with underpaid and mistreated black city sanitation workers.

The police surveillance wasn’t conducted just with wiretaps and long lenses, but with snitches planted within local organizations, including spies planted by then-Mayor Henry Loeb, an anti-union segregationist, among sanitation workers who wanted to join a union.

In the iconic photo taken just moments after a gunman shot King on the Lorraine Motel balcony, several people are seen pointing in the direction from which the bullet came. Crouched over King’s body is a man holding a towel to the gaping wound on King’s face. The man, rarely identified in photos, is Marrell “Mac” McCollough, a Memphis cop who was assigned to infiltrate a militant activist group hated by Memphis police. There’s no evidence he was involved with King’s assassination.

Some, including members of King’s family, have long speculated that the assassination was not the work of a lone gunman but orchestrated by federal law enforcement agencies (the FBI famously monitored and harassed King). Both a U.S. House committee independent review in 1979 and a Department of Justice review in 2000 found no basis for this. Still, in 2002, the National Civil Rights Museum, which sits where the motel was, added to its permanent exhibits “Lingering Questions,” which contains hundreds of pieces of evidence, including the bullet plucked from King’s body. One of the questions (that the exhibit does not definitively answer): “Was the Memphis Police Department part of the conspiracy?”

In 1976, . . .

Continue reading.

Written by LeisureGuy

9 June 2020 at 12:10 pm

The Enchanted Castle is as spellbinding and wonderful as I recalled

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I’m so glad to have found it. It’s from Wikisource, which has it available for download in PDF, EPUB, and MOBI formats. I downloaded the EPUB version and used Calibre to translate it to Kindle format.

I highly recommend the book, which is (as they say) suitable for all age — not only suitable, but enthralling.

Written by LeisureGuy

9 June 2020 at 11:53 am

Posted in Books

Shameless in Iowa

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Republicans simply do not want people to vote. Judd Legum reports in Popular Information (scroll down — it’s the third report at the link):

Iowa’s Republican Secretary of State, Paul Pate, sent absentee ballot applications to every registered voter in the state in advance of the June primary. The result was record participation in the election, even though it took place during a global pandemic. In Iowa’s Linn County, for example, “nearly 85% of all votes cast came in via absentee.”

Now, Iowa Republicans in the state legislature want to make sure it doesn’t happen again. They have attached a “30-page amendment” to a “one page bill dictating the use of county seals.” Among other provisions, the amendment would bar the Secretary of State from sending absentee ballot applications to anyone who did not specifically request one. That means Pate could not send ballots to every voter before the November general election.

Trump has been arguing that mail-in voting facilitates widespread fraud. “There is NO WAY (ZERO!) that Mail-In Ballots will be anything less than substantially fraudulent. Mail boxes will be robbed, ballots will be forged & even illegally printed out & fraudulently signed,” Trump tweeted last month.

This is contradicted by the data, as the Washington Post reported Monday:

[A] Washington Post analysis of data collected by three vote-by-mail states with help from the nonprofit Electronic Registration Information Center (ERIC) found that officials identified just 372 possible cases of double voting or voting on behalf of deceased people out of about 14.6 million votes cast by mail in the 2016 and 2018 general elections, or 0.0025 percent.

The figure reflects cases referred to law enforcement agencies in five elections held in Colorado, Oregon and Washington, where all voters proactively receive ballots in the mail for every election.

A database maintained by the right-wing Heritage Foundation, which opposes expanding mail-in voting, shows 204 instances of potential absentee ballot fraud over the last 20 years. During that time, more than a quarter-billion ballots were cast by mail. That is “one six-millionth of one percent of all votes.” To put that in perspective, “[o]n a 100-mile road, a six-millionth of a percent is less than half an inch.”

There is no evidence any fraud occurred during Iowa’s June primary. But . . .

Continue reading.

Written by LeisureGuy

9 June 2020 at 11:31 am

Two park sculptures that change with the season

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The sculpture above is in the Lost Gardens of Haligen, and at the link you’ll find photos of the sculpture in other seasons. Victoria has its own copy (though the hand and forearm suffered in translation) in Beacon Hill Park, not far from me.

Written by LeisureGuy

9 June 2020 at 10:56 am

Posted in Art, Daily life

Another source of good lather: Otoko Organics

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The lather discussions reminded me of Otoko Organics, whose very good lather comes from unusual ingredients:

Jojoba extract
• Deionized water
Proprietary no-ionic surfactants derived from soy and corn
Aloe vera

This is a change from their original formula:

Made from 100% organically grown natural coconut, palm, soy and jojoba oil with aloe vera and pear essence, Otoko Organics contain only cold pressed organically grown plant extracts and the highest quality plant essences. Otoko Organics Wet Shave Essentials provides a certified organic way to deeply clean and soften your skin while lifting and softening your hair follicles before shaving. A rich soft lather with no harsh chemicals helps resist skin irritations and shaving burn. Vitamin E and aloe vera soothe and protect your skin. Anti-allergens and perfume free to safe guard from allergic reactions. Naturally occurring astringents penetrate pores to remove excess sebum, oils, skin impurities and dead skin cells. Our naturally rich foaming formula removes air pockets allow the razor to glide smoothly across the skin, resisting cuts and skin rash. Foam levels can be individually tailored to suit your skin type.

My tub is fairly old and uses the original formula — and the pear essence in particular imparts a nice fragrance. (The fragrances comes purely from the ingredients since no fragrance oil or essential oils are included.)

The lather is an interesting consistency — a bit stiffer than traditional lather — and it works quite well. With the Rockwell Model T shown, I easy got a very smooth and easy shave. The Rockwell Model T is comfortable and efficient, though I admit that I do like razors that use the three-piece design. Still, if you like adjustables, this is a good one.

A splash of 4711 aftershave, which has a traditional aftershave fragrance (and formula), and the day begins.

Written by LeisureGuy

9 June 2020 at 9:47 am

Posted in Shaving

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