All Financial Wisdom
Trump against Amazon: Only One Will Be Left Standing
President Trump’s political and legislative intentions are portrayed in short lines of 140 characters, while he does not hesitate to openly confront whoever is needed, sometimes even answering tweets in a quasi-personal tone that has little to do with state matters. This time, Amazon has been the company that has been in the eye of the hurricane, and has been the target of criticism of the tweets of the White House magnate. Now that the dust has settled, let’s take a closer look at the implications here.
It is no secret to anyone that President Trump intended to make America great again, as one of his most recurring electoral slogans “Make America Great Again” declared ad nauseum. This declaration of intent has always had, as one of its fundamental pillars, to bring back those jobs that left the country with globalization in a show of attacking that “single enemy” so clearly omnipresent in Trump’s election campaign.
We already wrote how repatriation of production may not create so many jobs, and how Trump’s plans to re-create all these jobs that globalization has taken may not give the fruits expected by his administration and by himself.
A little over a year and a half ago, Trump and Bezos already starred in a heated exchange of tweets that, like poisoned darts, plowed through the twittosphere. On that occasion, in which Trump was not yet president, Bezos answered Trump personally, in a half-serious half-jocular tone. With Trump already in the White House, we do not know that Bezos dared to put again to the now and president in orbit, proposing to mount it again in a rocket to throw it to the outer space.
But…Why Amazon is at the center of Trump’s target?
Why does Trump continue to attack Amazon when Amazon is growing spectacularly and creating thousands of jobs. The answer is that not everything is passionate and ideological in politics. (Sometimes) there is also a logical sense in the statements of our politicians, although they often look rather for their own interest and/or that of their party. The reason why Trump charged Amazon is quite logical, and I’ll explain why.
The reasoning is that Trump is not going to be able to recover the jobs that left the country, and one of the main reasons is because the US is one of the world meccas of automation and robotization. “Work” as a raw concept that can be repatriated from other countries will not return largely in the form of human jobs, but rather work done by robots and automated systems. Folks in the Trump administrations have already realized this and that it has already been endorsed by some real data.
Without going any further, in the manufacturing sector, which has been hit hardest by relocation to other countries, activity in the United States has in fact recovered the bullish trend since 2010, ending the decline that characterized the past decade. But the decisive fact is that this positive trend has not been translated by far into a corresponding creation of jobs in this productive sector. This revealing fact has not been overlooked by Trump and his advisers, especially when this subject is one of the pillars of his mandate, his choice, and what his voters most expect of him.
So if we assume as true that Trump already knows that robotization and automation of the country’s productive fabric hardly allows the generation of new jobs, what can be going through the mind of the president as a candidate with the potential to be the new public enemy number one? Think about it, which company worldwide is one of the standards of robotization and digitization both in its powerful logistics chain and in its commercial channels?
But this question is not the only one I’m pondering. One also wonders: which company is the world’s largest digitization of business activity, and provides powerful and disruptive tools in the cloud that replace human workers in millions of offices?
Yes, we are talking about Amazon’s cloud division, that Amazon Web Services (or AWS) that has gone from being a promising business to bringing significant benefits to its parent’s bottom line. We see then how Amazon may seem in the eyes of Trump doubly responsible that those jobs are not returning anytime soon.
But was Trump right? and what is more: Is this the right approach?
The truth is that the data also indicate that Amazon is also behind the decline of retail stores in the United States, both in employment and figures. However, it is not so much a question of whether Amazon is absorbing activity without creating as much employment as it destroys in brick and mortar sales, but rather, the issue is whether it makes sense to demonize the innovation of the Bezos company, and try to stop the progress and the process of migrating human labor to the cloud.
Would it have made sense to hinder production of the first automobile manufacturers so that the equine sector would not enter into crisis? How about the industrial revolution? Firearms? Weapons manufacturers? IT? etc…
I do not think I need to answer any of these questions. I will simply say that in this globalized world, it is totally useless to try to stop progress.