business news in context, analysis with attitude

There was some speculation this week that Amazon should invest in a gas station chain, prompting one MNB reader to write:

I see this as a back to the future moment. Rather than having someone bring the contents of your Amazon locker out to your car, they have someone come out, fill up your car, check the oil & top off the wiper fluid while you are inside. Where have I seen that before? I think it might have been the 60’s.

MNB reader Tim McGuire wrote:

I’m not sure why Amazon - or anyone else - would want to invest in gas stations when that sector has already started its inevitable slide to irrelevance as the automotive fleet switches from gasoline and diesel to electric? I recognize that it is still early days for electric vehicles in North America (and I am an early adopter coming up on 4 years and 60,000 miles in my Tesla) but the trend is clear - the number of gas vehicles, and the number of stops for gas, will decline steadily over the next decade and beyond. Once the U.S. has an administration that actually reads the climate science reports before declaring “I don’t believe it” and working to roll back fuel mileage standards, things will move even faster. Many other countries have already declared the date (ranging from 2025 to 2040) when no gas vehicle sales will be allowed. So unless a company has an investment time horizon of ten years or less - and Amazon hardly fits that bill - it better have a model for use of gas stations that doesn’t rely on either the revenue from gas sales or the visit frequency from drivers filling up. Add to that the ongoing decline in tobacco usage - the most important profit centre for the convenience store/gas station channel - and the cost of remediating the land when a gas station closes down, and I’d rather invest in a combined rotary-dial phone and buggy whip factory.

Regarding another Amazon story, one MNB reader wrote:

Just so I understand what you have said. You think it is a good idea for Amazon to place stores in unused malls across America? Kind of like, have a physical footprint in more locations, like say brick and mortar. More rent, more labor, more inventory. All things that drive cost up. I say go for it, they will be leveling the playing field themselves. Maybe I didn't read it correct though.

Actually, I said that Amazon should only do it if it can get the mall space for free … and the design of the 4 Star stores is not exactly heavy on labor. It could be a learning experience, and we know that Amazon is exploring the bricks-and-mortar environment.

On another subject, MNB reader Dennis Meek wrote:

In response to the article concerning the rising acceptance of socialism, I do agree it is something retailers will need to keep an eye on.

Not for signals to change their business strategy, but for survival in general. Our earliest settlers tried socialism after landing at Plymouth Rock and it nearly killed them. Only when the colony's governor granted each family a parcel of land and allowed them to keep the fruits of their labor under free market conditions did they thrive. 

Socialism has been tried time and time again with each new attempt claiming, “If we just tweak it, it will work.” For example, Venezuela was once one of the most prosperous countries in the world. Rich with natural resources and creative citizens. No, it was not perfect, but it was a far cry from what Venezuela is today. Today, after Venezuela’s tweaking and implementation of socialism, it can only be described as hell on earth. 

It’s no surprise that the academics are accepting socialism. The modern academy is one of the few initiations on earth were one can teach a subject with no redeemable value and one that violates common sense at all levels, yet be the highest paid member of the institution. But have they considered the number of academics that were executed by Mao Zedong, Joseph Stalin and Adolf Hitler under socialism. 

My point is this, it doesn’t matter how you tweak it, nor what flavor of socialism you use, global (Mao & Stalin) or national (Hitler). The end is always the same, little to no freedom and a large population of “have not’s” subservient to a small group of “have’s.” 

Consider this, in a capitalist society someone from a poor blue collar family, one with no ties to any power, can work hard, save money, and put themselves through college for a better life. That person could also skip college altogether and start a business that lifts them from poverty. 

My story was the first case. I was able to attend college and earn a technology degree that changed the course of my life. I did that as the first member of my family, either core or extended, to attend college and paid back every dime of the loans I took out. If I would have lived in a socialist system, that would never have been possible. In fact, even in a country that flirts with socialism, such as the United Kingdom, it may not be possible to work yourself out of poverty. 

Ultimately, time will tell. I just hope we don’t become a place where the people eat the zoo animals to survive like the people of Venezuela. Because, if the United States is no longer a land where a poor immigrant can go and better themselves, where else will they go, Venezuela?

From MNB reader Gary Loehr:

Socialism is the best idea that has never worked anywhere it has been tried.  Sounds good in theory, but falls apart in practice.
KC's View: