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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

October 26, 2011 at 1:00 PM

Jeff Bezos occupies Wall Street

What’s more subversive to the destructive, self-serving capital markets than thousands of protesters on Wall Street? Maybe a chief executive who says, essentially: We’re building a company for the long haul — if you’re on board with that vision, please invest; if you want quick profits for the short-term, look elsewhere.

That’s exactly what Amazon.com’s Jeff Bezos is telling Wall Street, as the Seattle company’s earnings continue to “disappoint” the Street, but is making investments in distribution and technology that will continue to make it a world-beater. The Wall Street boyz would like nothing better than for Amazon to put itself up for sale or become distracted with large, doomed-to-fail mergers (can you say, Hewlett Packard, etc.). Bezos has a different idea.

Over the past 30 years, Wall Street has become more corrupted by a focus on short-term earnings, however much they kill long-term performance, and mergers that kill jobs and eliminate the competition that is essential to a healthy free market. Too many CEOs, handsomely compensated for it, and industries have been happy to play along.

One I know quite well: Newspaper chains, which went public and promised Wall Street unsustainably high returns. The result was disaster, as the companies were afraid to invest in new technologies and business models for fear of upsetting the short-term playerz. I remember asking the chief executive of one large chain why he didn’t just go to Wall Street and say, “enough.” He said it was impossible. That chain no longer exists.

Bezos’ isn’t the only strategy for the long-term. Paccar, F5 Networks and Expeditors International all focus on delivering productive enterprises, rather than playthings for the capital markets. The region is fortunate to have them. Wall Street would love to destroy Microsoft; fortunately, its management and long-term shareholders aren’t on board.

I’ve had my gripes with Bezos’ (perfectly legal) tax dodge and intimidation strategies. But in this case he’s right. Amazon shares lost about 13 percent of their value today. Big deal. They’re still well above where they stood a year ago. And they will deliver long-term value to those who want to be citizen-shareholders, who actually own and believe in a company. The gamblers can go elsewhere.

Well played, sir.

And Don’t Miss: What is it about “simpler taxes” that Republicans don’t understand || The Atlantic

Today’s Econ Haiku:

Here on “wealth island”

Seattle is doing well

Don’t get voted off

Comments | More in Amazon.com

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