The Amazon Business Model is A Job Killer: The Shift Towards E-Commerce. Artificial Intelligence (AI) and 31 Million Jobs Destroyed | Global Research – Centre for Research on Globalization

09-09-18 04:59:00,

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Prominent in the news this past week was the report that Amazon and its CEO, Jeff Bezos, reached record levels of market valuation and wealth. Amazon is now worth more than $1 trillion and Bezos’s personal wealth stands at $165 billion. This of course is largely due to the stock price appreciation of the company, as investors in the US and worldwide pile into purchasing Amazon stock and thereby drive up its stock price, its market valuation and, in turn, Bezos’s share of that in terms of his own net worth.

Why so much investment money is surging into Amazon—and other tech company stocks like Google, Apple, and others—is a story in itself  but left here for another analysis.  Briefly, it has to do with the investor class’s accelerating capital gains from the $1 trillion a year distribution to them from Corporate America’s stock buybacks and dividend payouts. A trillion dollars a year, every year (2011 to 2017) for the past six years in buybacks and dividends by S&P 500 corporations alone. This year, 2018, buybacks and dividend payouts will set a record of more than $1.3 trillion in such distribution to investor-shareholders, pumped up by Trump tax cuts of more than $300 billion in 2018 that are doubling profits of S&P 500 companies.

According to a recent report by Zion Research, for the S&P 500 no less than 49% of their 2018 record profits has been due to the Trump tax cuts—a massive direct subsidy to corporate America without historical precedent in the US. For some sectors, like the telephone companies, 152% of their 2018 profits have been due to the Trump tax cuts.  The massive tax-driven profits are then redistributed to their shareholder-investors via stock buybacks and dividends well exceeding $1 trillion annually. The stockholder-shareholders then plow back the much of the $1 trillion back into the stock market, driving up stock prices further that are already rising due to the record profits and buybacks.  A good part of the ‘plowback’ into stocks has been going into the tech sector. The Apples, Googles, and of course Amazon especially—which leads to the company’s $1 trillion current market valuation and Jeff Bezos’s $165 billion personal net worth.

But to justify this obscene income subsidization of Corporate America by the US government—Trump and Congress—the political ‘spin’ is that it is creating jobs and wages are rising.

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