This is the second rebuttal to my criticism of the President’s effort to use his influence and power to harm Amazon. I’m very impressed with it, but I have to give a rationalizations alert, for there are several evoked here, including, a few versions of #1, Everybody does it,” #2 A. Sicilian Ethics, or “They had it coming,” #3. Consequentialism, or  “It Worked Out for the Best” #39. The Pioneer’s Lament, or “Why should [He] be the first?,” #45. The Unethical Precedent, or “It’s Not The First Time,” and probably others.

Here is Greg’s Comment of the Day on the #2 in “Morning Ethics Warm-Up, 4/4/2018: Baseball Lies, A Presidential High Crime, And A Judge Makes A Panty Raid”:

There is nothing wrong, much less anything impeachable, about the President making valid, policy-based attacks that target specific companies, even though the attacks may “suppress the companies’ stock values.” Attacks on Standard Oil were justified, even though stockholders in Standard Oil may have suffered. Trump’s comments about Amazon are fair. In any case, there is no reason to think that his remarks were intended to drive down Amazon’s stock price and very little reason to think that they will cause any particular harm to Amazon or its stock.

Trump’s recent tweets have made three points about Amazon, all of which he has made many times before: (1) Amazon benefits from a sales tax loophole that unfairly costs states money and disadvantages brick-and-mortar retailers, (2) Jeff Bezos uses the Washington Post to lobby for the continuation of this advantage and (3) the US Postal Service undercharges Amazon and should negotiate higher rates.

Trump has been making the first two points since at least 2015. He made them repeatedly during his campaign in tweets, in interviews and in speeches. Here’s the earliest reference that I found: https://www.washingtonpost.com/news/the-fix/wp/2015/12/07/donald-trump-called-out-jeff-bezos-on-twitter-then-bezos-called-his-bluff/?utm_term=.8573b4279b6d.

Trump has continued to make both points since he became president. Here’s just one example: https://www.bloomberg.com/news/articles/2017-08-17/trump-s-bruising-tweet-highlights-amazon-s-lingering-tax-fight. His Treasury Department has been studying the sales tax issue for over a year, http://thehill.com/policy/finance/343972-mnuchin-trump-administration-is-examining-online-sales-tax-issue, and his Justice Department last month filed an amicus brief in South Dakota v. Wayfair, a case currently before the Supreme Court, arguing that the Court should close the sales tax loophole that benefits Amazon and other online retailers.

Trump has been making the third point (about USPS rates) since at least December last year. http://fortune.com/2017/12/29/trump-amazon-post-office.

None of those previous statements and actions by Trump and his administration caused Amazon’s stock price to fall. Trump could not have expected that thisweek’s tweets, repeating exactly the same points that he has made many times before, would have any effect on Amazon’s stock price.

Moreover, Trump’s tweets haven’t made any threats against Amazon and he doesn’t seem to have any intention of taking any unilateral action to hurt Amazon. To the extent that his tweets may have affected Amazon’s stock price, they most likely did that by drawing investors’ attention belatedly to genuine issues regarding Amazon’s business model, in particular the possibilities that the Supreme Court might actually close Amazon’s sales tax loophole and that the USPS might actually negotiate a better deal with Amazon. If his tweets have pointed out concerns that investors previously hadn’t given proper weight, then he has done a valuable service for the markets. If these concerns turn out to be unjustified, then Amazon’s stock price will soon recover and Trump’s tweets will have done no harm. Continue reading →