Once again, Amazon.com posted strong revenues but disappointing profits. As the Seattle Times’ Amy Martinez reported, the second-quarter results were the sixth straight quarter in which Amazon’s profit has declined on a year-over-year basis. Were shareholders disappointed? Amazon’s stock price was up more than 7 percent this morning.
CEO Jeff Bezos may not be the best Seattle civic steward and he may be a 21st century John D. Rockefeller, but his strategy harkens back to an older and to my mind more sustainable model of management. He’s reinvesting most of the company’s earnings into building the business. This is something that has been steadily lost since the 1980s, as companies were rewarded for squeezing every penny into short-term results in hopes of raising the stock price. Then, the hope was a merger, damaging communities and competition, R&D and innovation.
Amazon is in a particularly strong position to be the contrarian as it builds a business that keeps taking market share from more established rivals. But it’s a model that would build a stronger America than the short-term looting we’ve seen. What do you think?
Read on for the best links of the week and the haiku:
The Week’s Links:
- A Fed governor wants tougher rules || Simon Johnson/NYT
- Kill the euro now? || Worthwhile Canadian Initiative
- The Wal-Mart model and the human cost of our cheap goods || The Guardian
- Who should be paying for government spending || Econospeak
- Evidence that oil limits are leading to limits in GDP growth || The Oil Drum
- The greatest trick Obama ever pulled: Convincing the world he’s a socialist || The Atlantic
- The U.S. economic policy debate is a sham || Bloomberg
- Inflation might be our friend || LA Times
- A closer look at middle-class decline || NY Times
- Why the poor are on the hook for the housing crisis || Next New Deal
- James Howard Kunstler on why technology won’t save us || Rolling Stone
- Yes, government did invent the Internet || Slate
- How Finland keeps its head above the eurozone crisis || The Guardian
- The four factors that explain why what we’re doing isn’t working || EconoMonitor
Today’s Econ Haiku:
Go on, Seattle
Blow a great arena deal
Bellevue gets the score