Dana Blankenhorn

Break Up Amazon? Why, Yes!

Last year, after accusing the corporate culture at Amazon.Com of having “a toxic vein running through it,” Tim Bray told The New York Times it should be broken up, its store separated from its cloud.

I want to second the motion. But I think it will make me (and Jeff Bezos) a ton of money.

As I write this, Amazon is valued at about 5 times sales. That’s rich for a retailer. Even Walmart and Costco aren’t worth their sales volume. But it’s super-low for a tech company.

During the first three quarters of this year Amazon had product sales of $145 billion. But it had service sales of about $115 billion. Product sales grew at an annual rate of 32%. Service sales were up 38%.

On January 14 Amazon’s market cap was about $1.58 trillion. How would the value of the pieces compare to the whole?

They wouldn’t not at first.

Internet “Free Speech” is Dead

Extremism in the defense of liberty is a vice, for with extremism there is no liberty.

Moderation in the pursuit of justice is a virtue, for without moderation there is no justice.

Serious efforts to limit what can be posted online are finally underway, following the U.S. Capitol Insurrection on January 6.

As usual, the easy things were done first. The President, and those who wanted to overthrow the Constitution, have seen their use of Twitter, Facebook and other platforms curtailed. Censors are now going through all major platforms, erasing accounts and messages encouraging violence.

The First Amendment is not absolute. Oliver Wendell Holmes famously wrote, “You can’t shout fire in a crowded theater.” At the time theater lights were chemical. Limelight was dangerous. That’s why asbestos curtains were erected. Encouraging panic violated the letter, but not the spirit, of the amendment. It’s incitement. So inciting violence is also not protected.

Platforms have been trying to police limits for years. The question should be what authority can they have, and who will police that authority? Simply eliminating Section 230 of the Communications Decency Act, which protects Facebook from liability for what’s posted (as AT&T is protected from what you say on the phone), will backfire. It would force site owners toward avid censorship. Everything controversial would be taken down. Incitement would move to the “badda-bing” versions, where code words or pictures are used. You take these down and you’re China, where a picture of Winnie the Pooh is considered a criticism of Xi Jinping, and the government seeks to police thought. That’s why creative industries still don’t do well in China.

Something more flexible is called for. Guidelines need to be promulgated, advisors on the guidelines must be hired, and a complex system of notice must be created, for public Web sites. Sites that aren’t scaled generally do a good job of moderation, unless the sites are set up by those who want to break the rules. Larger sites, like Facebook, may face a “tax” on their revenue, to pay for the new bureaucracy.

They’ll be happy to pay because the tax will act as a moat against competitors. They are a barrier to entry for anyone else. They will solidify monopoly. It reminds me of what John D. Rockefeller was reported to have said on a golf course, after being told the Supreme Court had broken up his Standard Oil monopoly. He calmly hit his putt and said, “Buy Standard.” Buy Facebook.

Stop Trumpism by Ending the Gerrymander

I don’t want this to become a political blog again. I have little faith in politics.

But there is a political issue that isn’t being discussed regarding the next two years. It needs to be discussed. It can change the future trajectory of the country.

The issue is redistricting, and gerrymandering.

The word “gerrymandering” refers to Elbridge Gerry (right, from Wikipedia). He signed the Declaration of Independence. He was at the Constitutional Convention. It was years after that, after becoming Massachusetts governor, that he signed the law which made his name, redrawing legislative districts for partisan advantage.  An opposition newspaper published a cartoon showing one district as a strange animal with claws, calling it a “Gerry-mander.”

The point is that gerrymandering is legal. But modern technology has made it scientific. It now takes enormous statewide majorities to overcome a legislative gerrymander.

The Downside of Energy Abundance

The first half of the last decade was marked by an energy gold rush.

Fracking made the USA energy independent for the first time in decades. Outside its impact on the environment, the boom was short-lived.

By 2014 demand was beating supply, and the boom has now turned to dust.

It wasn’t solar and wind power that killed the boom. It was efficiency and technology. LEDs require a lot less power than fluorescent bulbs. Intelligence added to warehouses and stores reduces the need still further. Insulation means you need less electricity for heating. New appliances are more energy efficient. The cloud is super-efficient, and the excess energy can be recycled. Laptop technology means this took less power to write than it would have then.

The oilpatch did its bit to kill the boom, too. There are now huge oilfields off South America and Africa that we didn’t know about before. The eastern Mediterranean gas fields have made Israel independent of Arab energy. Things like fracking and boiling the Alberta tar sands aren’t just environmentally destructive. They’re economically worthless.

All these things have put a thumb down on energy prices. That thumb is getting bigger over time. As I predicted in 2010 (based on Department of Energy research) we have now achieved “crossover,” the point where renewable energy costs less to exploit than fossil fuels. It’s hard today to justify a new natural gas plant. Soon, solar will cost less than gas fired in an existing burner.

The result is going to be another energy boom, this time a renewable energy boom.

But this one, too, has a sell-by date.