I feel that America is in the midst of a new gilded age; instead of Standard Oil, we have Amazon.
Like the late 1920s, we saw losses in purchasing power of the average American, the collection of wealth among the top 1%, and disruption of our civic spaces as a result. I think the thing that many Americans aren't aware of was just how violent that time in US history was[1].
The US economy isn't just about how comfortable the average US citizen is, it is also a measure of how much cushion there is in our society between us being frustrated looking at a job board and being angry and armed in the streets. The teachers strikes in Oklahoma, Florida, and W. Virginia are showing the rise of Unions (much like in the gilded age as well). Protest and civic engagement must be our response, we should take signs like the wealth of Bezos as a cautionary tale, rather than something to simply marvel at.
Except we actually had a functioning federal government during the last gilded age, so we ended up with things like the Sherman Antitrust Act, and eventually the New Deal.
I doubt we'll be so lucky this time around. Things are about to get absolutely brutal for the 90%.
I think Bezos is a bad argument for us being in a new guilded age.
When you look at Rockefeller, Carnegie, Ford, and perhaps even Gates, they had near total control over some aspect of the American Economy. And they used that control to make incredible profits.
Amazon is trying to do the same, but they haven't done so yet. Their retail business is not wildly profitable (if at all). They haven't monopolized online retail (and may never be able to do so).
Amazon may be the next Walmart, but they're not the next Standard Oil. And the market has priced in huge expectations that Amazon will eventually have to meet, or investor exuberance will wane.
> I feel that America is in the midst of a new gilded age; instead of Standard Oil, we have Amazon.
Except that Standard Oil probably had real oil (asset) and Amazon now has an inflated valuation based on potential future earnings.
Apple to Oranges in my opinion.
> The US economy isn't just about how comfortable the average US citizen is
If people are comfortable, they'll accept whatever. Look at the middle-easter countries (Dubai, Qatar, Kuwait). Look at the American people pre-2008 crisis.
The people of America are being squeezed by relentless financial predators (like banks), expensive wars that they have to fight and support (or maybe not but they are paying the price), globalization, expensive bureaucracy, etc...
The silver lining of this interpretation is that it implies our current trajectory to be cyclical, and not exponential. We may have to re-learn some lessons the hard way in the meantime, though.
Even though teachers are woefully underpaid here like most other state workers other than those who write laws or live in the governor's mansion there hasn't been a teachers strike in Florida for some time. See, for ex., http://news.wfsu.org/post/its-been-50-years-florida-teachers...
Why not golden instead of gilded? Per capita incomes are at an all time high, in real terms, and growing; violent crime per capita a historical low; and life expectancy high, though it could be higher. We are on the verge of tremendous technological advances in propulsion, AI, biology and energy. And more people are educated enough to wonder at those advancements than ever before.
> When I worked at Amazon we had to run around the warehouse, bc if our pick rate fell below a certain number we stopped getting paid. There were bottles & bins full of piss at odd points, bc you were penalised for toilet breaks. A co-worker attempted suicide on-site bc of the stress
Hardly. He’s a pauper compared to John D. Rockefeller who died in 1937. At the time of his death his assets equaled 1.5% of America’s total economic output.
With a $20T GDP that would be a $300B net worth in today’s dollars or around 200% what Bezos is worth.
Don’t worry. This second gilded age that we are living in is on track to ensure we have a trillionaire in short order.
In my opinion, the biggest risk to Bezos' wealth is the same thing that drew me into the service to begin with. In the mid-to-late 2000s it was easy to go to Amazon, search for "thing I want" and blindly purchase the 4.5-5 star item with enough reviews to appear legitimate. I could do this and expect to get a great product _every_ time. Now, I find myself spending an hour screwing with the filters and reading reviews to figure out which listings are noise with fake reviews and which ones are for real. And even then with many products fulfilled by Amazon, you end up having to read reviews to figure out which seller to buy from to get the real item and not a counterfeit.
This combination of fake reviews and counterfeiting is what I think threatens Amazon's position. I don't make many large purchases on Amazon any more as a result of the risk, and those that I do make are fulfilled by the manufacturer so I know what I'm getting is legitimate.
If modern history goes back to the 1900s though, Rockefeller still has Bezos beat by more than double:
"By the time of his death in 1937, estimates place his net worth in the range of US$300 billion to US$400 billion in adjusted dollars for the late 2000s (decade)."
> "Gates would have had a net worth of more than $150 billion if he’d held onto assets that he’s given away, largely to the Bill & Melinda Gates Foundation."
Sorry Bezos, you've still got some catching up to do. Lifetime earnings are what really count, even if you give it all away to charity.
Wow. Since Amazon's IPO in 1997 (21 years ago), that's like earning $227/sec, $13k/min, $817k/hr, $19m/day, 7.2b/year, and, 150b/21 years. To put it differently, you could either hire jeff bezos for a year, or 60k "highly" paid software engineers. He's richer than God. (yes I know these comparisons are useless since it's based on valuation based on a single point in time, but it does give it more perspective)
Comparing both in terms of wealth is not fair and square.
First. They might have different purchasing power. Bezos can't liquidate $150bn of AMZ stock without slippage. If he could, then there must be another party willing to put $150bn of cash. Not many such parties in this world have that kinda cash laying around.
Second. They have different volatilities. $100 in cash is worth roughly $98 by next year. $100 in xyz asset might be $50 or $200.
Third. Holding an asset might have unrealized tax positions. I don't know the fiscal laws of America. But I think bezos will have to pay a significant portion of the liquidated asset since he is going to make profit. If you have $100 in cash, you don't have to pay anything. You already "realized" whatever profit.
But sure Bloomberg and Forbes would like to make headlines. That's their business.
What I'm trying to say is that this number is meaningless. Literally. Some asset management company has $6trillion under their management. That's x40 times more $$ power than bezos. But the bosses of these companies don't get as many headlines. Have you heard of BlackRock?
Asset management is not the same as owning the assets so I don't really understand that point. If you were to write up a balance sheet to measure the net worth of an Asset management company, you wouldn't really count other companies assets as their own.
I don't see how the wealth of one person, who's wealth is mainly shares in probably the most successful company in the US right now, indicates that we are in a bubble.
I've moved many of my tech investments into Amazon b/c of the steady track record and stable trajectory of good decision making and execution.
If the economy tanks, it makes Amazon's review data and free shipping even more valuable. If I'm strapped for cash I'm less likely to walk into a retailer and pay top dollar for something with no reviews.
Who really thinks that stock price has anything to do with ownership? Since no one can actually buy Amazon, it's "market" price is purely speculative. In both senses.
What are you talking about? A share represents a literal 1/485320000 ownership stake in Amazon and the market price of a share is definitely not speculative as I can go out and easily purchase shares at a given price.
If Walmart or Alibaba or some other sufficiently large enough company wanted to buy Amazon, they absolutely could. And they'd probably pay a premium over Amazon's current market cap!
In theory, If you are a CEO, and you knew your stock is in bubble, could you have leverage it and borrow as much as you could for low rate, say $200B or more for 2%, and use that buy whatever business when the bubble burst?
OT: I've always wondered, if some multi-billionaire became personally offended by some lesser multi-billionaire and decided to destroy them, what could they do? Assume that they don't want to do anything illegal enough to get themselves into serious trouble.
For example, suppose Bezos decided he really hated Rupert Murdoch ($15B). If Bezos decided he could happily live on a mere $100B, that would leave him $50B for the "Destroy Murdoch" project. Might not be able to actually destroy Murdoch for that, but could probably make his life very annoying.
Adjusted for inflation John D. Rockefeller is still the richest man in modern history. Today his fortune would have equaled 340 Billion dollars. More than twice Jeff Bezos current net worth.
It's not inconceivable that Amazon's market cap could double over the next 10 years. They still have a long way to grow and they're involved in so many markets...
That's crazy.
Let's say the average home price in the U.S. is $200K. If this was cash, he could buy 750,000 houses. There's about 250 million people over 18 in the U.S. so Bezos could buy a house for roughly 1 in every 330 adults in the U.S.
> And all his riches couldn't stop the planets demise from a insane economical concept, who's crazy ess he took to the next level.
I think this is an interesting point. Has Amazon grown industrial production and shipping and therefore increased net CO2?
Possible counterclaims:
- more informed purchasing leads to fewer discarded items
- centralized shipping is more efficient than driving your car to the store
It does seem like in the limit Amazon could have a profoundly positive effect on the net carbon of our products. It doesn’t seem like they are optimizing for that right now. Although and optimal strategy there would probably be growth first and then carbon efficiency when the growth levels off.
AMZN was $1,010 on 2017-Jul-17. Right now it's $1,813. That's a ~80% increase, so it's extremely plausible that his net worth went up by 50% (in fact, I'm surprised it didn't go up by more).
It went up by 50%, not 150. You do that by having most of your net worth in a high performing stock. Of course, in 3 weeks we may see an article about how bezos lost $50B in one day due to the same reason.
There is more money in circulation and it needs somewhere to go. Investors put it in stocks. This is part of the reason the entire market has risen, amzn is just at the front of it.
He's going to be many times over the richest person in history before long. This has been clear for a long time if you look at the rate of growth of his wealth. But it's not bad news. Bezos has an unmatched ability to create infrastructure that works well and is low cost.
E-commerce is a very competitive market and yet Amazon grows every day. Why? Because consumers trust Amazon's reviews and return policy. It's way better than what most retailers offer. The reviews are unparalleled and offer consumers tremendous power against firms that try to rip them off.
Reminder: Qaddafi was worth $200b[1] at the time of his death, and that was in liquid assets. Not an unsellable position in one speculative stock. Other notable heads of state that probably blow Bezos away: Putin, bin Salman, and probably Xi.
[+] [-] Endama|7 years ago|reply
Like the late 1920s, we saw losses in purchasing power of the average American, the collection of wealth among the top 1%, and disruption of our civic spaces as a result. I think the thing that many Americans aren't aware of was just how violent that time in US history was[1].
The US economy isn't just about how comfortable the average US citizen is, it is also a measure of how much cushion there is in our society between us being frustrated looking at a job board and being angry and armed in the streets. The teachers strikes in Oklahoma, Florida, and W. Virginia are showing the rise of Unions (much like in the gilded age as well). Protest and civic engagement must be our response, we should take signs like the wealth of Bezos as a cautionary tale, rather than something to simply marvel at.
[1]https://en.wikipedia.org/wiki/Ludlow_Massacre
[1]https://en.wikipedia.org/wiki/Battle_of_Matewan
[1]https://en.wikipedia.org/wiki/1920_Alabama_coal_strike
[1]https://en.wikipedia.org/wiki/Battle_of_Blair_Mountain
[+] [-] aphextron|7 years ago|reply
I doubt we'll be so lucky this time around. Things are about to get absolutely brutal for the 90%.
[+] [-] nostromo|7 years ago|reply
When you look at Rockefeller, Carnegie, Ford, and perhaps even Gates, they had near total control over some aspect of the American Economy. And they used that control to make incredible profits.
Amazon is trying to do the same, but they haven't done so yet. Their retail business is not wildly profitable (if at all). They haven't monopolized online retail (and may never be able to do so).
Amazon may be the next Walmart, but they're not the next Standard Oil. And the market has priced in huge expectations that Amazon will eventually have to meet, or investor exuberance will wane.
[+] [-] csomar|7 years ago|reply
Except that Standard Oil probably had real oil (asset) and Amazon now has an inflated valuation based on potential future earnings.
Apple to Oranges in my opinion.
> The US economy isn't just about how comfortable the average US citizen is
If people are comfortable, they'll accept whatever. Look at the middle-easter countries (Dubai, Qatar, Kuwait). Look at the American people pre-2008 crisis.
The people of America are being squeezed by relentless financial predators (like banks), expensive wars that they have to fight and support (or maybe not but they are paying the price), globalization, expensive bureaucracy, etc...
[+] [-] vlunkr|7 years ago|reply
[+] [-] _bxg1|7 years ago|reply
[+] [-] eezurr|7 years ago|reply
https://en.wikipedia.org/wiki/Strauss–Howe_generational_theo...
[+] [-] howard941|7 years ago|reply
[+] [-] throwaway37585|7 years ago|reply
Do you have data to back that up?
[+] [-] JumpCrisscross|7 years ago|reply
Why not golden instead of gilded? Per capita incomes are at an all time high, in real terms, and growing; violent crime per capita a historical low; and life expectancy high, though it could be higher. We are on the verge of tremendous technological advances in propulsion, AI, biology and energy. And more people are educated enough to wonder at those advancements than ever before.
[+] [-] 0xmohit|7 years ago|reply
> When I worked at Amazon we had to run around the warehouse, bc if our pick rate fell below a certain number we stopped getting paid. There were bottles & bins full of piss at odd points, bc you were penalised for toilet breaks. A co-worker attempted suicide on-site bc of the stress
Source: https://twitter.com/OwennnThomas/status/1007957414577090560
> Workers at Amazon warehouse in Minnesota say they've suffered exhaustion, dehydration, injuries while working without air conditioning.
Source: https://apnews.com/1d62290004b340feac5c359d59b86823
[+] [-] godzillabrennus|7 years ago|reply
With a $20T GDP that would be a $300B net worth in today’s dollars or around 200% what Bezos is worth.
Don’t worry. This second gilded age that we are living in is on track to ensure we have a trillionaire in short order.
[+] [-] twodave|7 years ago|reply
This combination of fake reviews and counterfeiting is what I think threatens Amazon's position. I don't make many large purchases on Amazon any more as a result of the risk, and those that I do make are fulfilled by the manufacturer so I know what I'm getting is legitimate.
[+] [-] josephjrobison|7 years ago|reply
"By the time of his death in 1937, estimates place his net worth in the range of US$300 billion to US$400 billion in adjusted dollars for the late 2000s (decade)."
https://en.wikipedia.org/wiki/List_of_wealthiest_historical_...
[+] [-] dgacmu|7 years ago|reply
An earlier major technical university endowed by the richest person of the time is a pretty awesome place... (he says with no bias whatsoever. :-)
https://en.wikipedia.org/wiki/Andrew_Carnegie
[+] [-] whack|7 years ago|reply
Sorry Bezos, you've still got some catching up to do. Lifetime earnings are what really count, even if you give it all away to charity.
[+] [-] nsx147|7 years ago|reply
[+] [-] gnarcoregrizz|7 years ago|reply
[+] [-] ryanmercer|7 years ago|reply
[+] [-] avip|7 years ago|reply
[+] [-] csomar|7 years ago|reply
Let's say someone has $100. Cold Cash.
Let's say someone has $100. In xyz Asset.
Comparing both in terms of wealth is not fair and square.
First. They might have different purchasing power. Bezos can't liquidate $150bn of AMZ stock without slippage. If he could, then there must be another party willing to put $150bn of cash. Not many such parties in this world have that kinda cash laying around.
Second. They have different volatilities. $100 in cash is worth roughly $98 by next year. $100 in xyz asset might be $50 or $200.
Third. Holding an asset might have unrealized tax positions. I don't know the fiscal laws of America. But I think bezos will have to pay a significant portion of the liquidated asset since he is going to make profit. If you have $100 in cash, you don't have to pay anything. You already "realized" whatever profit.
But sure Bloomberg and Forbes would like to make headlines. That's their business.
What I'm trying to say is that this number is meaningless. Literally. Some asset management company has $6trillion under their management. That's x40 times more $$ power than bezos. But the bosses of these companies don't get as many headlines. Have you heard of BlackRock?
[+] [-] WilliamEdward|7 years ago|reply
[+] [-] delecti|7 years ago|reply
[+] [-] mi100hael|7 years ago|reply
[+] [-] flyGuyOnTheSly|7 years ago|reply
[+] [-] superfrank|7 years ago|reply
[+] [-] olfactory|7 years ago|reply
If the economy tanks, it makes Amazon's review data and free shipping even more valuable. If I'm strapped for cash I'm less likely to walk into a retailer and pay top dollar for something with no reviews.
[+] [-] xkjkls|7 years ago|reply
[+] [-] markhahn|7 years ago|reply
[+] [-] mi100hael|7 years ago|reply
If Walmart or Alibaba or some other sufficiently large enough company wanted to buy Amazon, they absolutely could. And they'd probably pay a premium over Amazon's current market cap!
[+] [-] ksec|7 years ago|reply
[+] [-] tzs|7 years ago|reply
For example, suppose Bezos decided he really hated Rupert Murdoch ($15B). If Bezos decided he could happily live on a mere $100B, that would leave him $50B for the "Destroy Murdoch" project. Might not be able to actually destroy Murdoch for that, but could probably make his life very annoying.
[+] [-] axiomdata316|7 years ago|reply
[+] [-] chrisco255|7 years ago|reply
[+] [-] JustSomeNobody|7 years ago|reply
That's just unfathomable.
[+] [-] conanbatt|7 years ago|reply
[+] [-] erikpukinskis|7 years ago|reply
> And all his riches couldn't stop the planets demise from a insane economical concept, who's crazy ess he took to the next level.
I think this is an interesting point. Has Amazon grown industrial production and shipping and therefore increased net CO2?
Possible counterclaims:
- more informed purchasing leads to fewer discarded items
- centralized shipping is more efficient than driving your car to the store
It does seem like in the limit Amazon could have a profoundly positive effect on the net carbon of our products. It doesn’t seem like they are optimizing for that right now. Although and optimal strategy there would probably be growth first and then carbon efficiency when the growth levels off.
[+] [-] ValleyOfTheMtns|7 years ago|reply
https://en.wikipedia.org/wiki/List_of_wealthiest_historical_... https://www.celebritynetworth.com/articles/entertainment-art...
Bezos is less than half the wealth of the people at the top of those lists. Puts this into context.
[+] [-] marknadal|7 years ago|reply
(Edit: up 50%, sorry you are right, I meant 150% of his previous net.)
[+] [-] adtac|7 years ago|reply
[+] [-] oh_sigh|7 years ago|reply
[+] [-] beaner|7 years ago|reply
[+] [-] no_one_ever|7 years ago|reply
[+] [-] non_sequitur|7 years ago|reply
[+] [-] ggm|7 years ago|reply
[+] [-] adamnemecek|7 years ago|reply
[+] [-] olfactory|7 years ago|reply
E-commerce is a very competitive market and yet Amazon grows every day. Why? Because consumers trust Amazon's reviews and return policy. It's way better than what most retailers offer. The reviews are unparalleled and offer consumers tremendous power against firms that try to rip them off.
[+] [-] frockington|7 years ago|reply
[+] [-] CiPHPerCoder|7 years ago|reply
[+] [-] kolbe|7 years ago|reply
[1] http://www.businessinsider.com/qaddafi-200-billion-richest-2...