Accuracy in Media

NBC News says President Trump is obsessed with Amazon.

But it looks like NBC News is so obsessed with protecting Amazon from the president’s criticisms that it’s willing to do a little lackluster reporting of its own.

On Thursday, the NBC News website carried a story under the headline, “Donald Trump is going after Amazon and Jeff Bezos, again,” with a subhead that read, “President Donald Trump on Thursday tweeted about his desire to regulate Amazon, the e-commerce giant run by CEO Jeff Bezos.”

It quotes the president’s tweet: “I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business.”

NBC News reported the tweet came a day after a story appeared in Axios, an e-newsletter for Washington insiders, that said Trump had been ‘obsessed’ by the company, particularly how it is taxed and how it uses the U.S. Postal Service to deliver its packages.

“Meanwhile, Trump has not shown signs of interest in the ongoing Facebook controversy that linked user data from 50 million members of the social network with a data analysis firm used by his 2016 campaign, Cambridge Analytica, Axios reported.”

Those matters are related only in the minds of mainstream media.

Taxing internet sales has been a vexing problem for governments since the dawn of the Internet. Local store owners argue that price difference involved in the tax gives internet sellers an advantage over brick-and-mortar merchants who hire residents, fund community initiatives and serve local public.

Congress has considered legislation on the matter over the years, and a case dealing with internet taxation has reached the Supreme Court.

As for the Postal Service, Trump claimed the deal it made to deliver Amazon packages is a money loser and that the Postal Service should charge it more.

NBC News says this is way off base.

“Amazon ships millions of packages around the U.S. each year, but Trump’s claims that the retailer is unfairly using the United States Postal Service and causing ‘tremendous loss’ is incorrect.”

It says the USPS is losing money, which is true – it has lost $5 billion in the last year and $55 billion since 2007 – but that “delivering packages has been the bright spot in its annual financial report.” Overall volume declined by 5 billion pieces the previous year, but packages increased by 589 million, it pointed out.

They have this cool system, NBC News reports, where Amazon “relies on its network of fulfillment and sortation centers to get everything ready and then deliver the parcel to the post office that is closest to the customer. The postal service then takes care of the last mile or so, making sure the order gets into the hands of the customer.”

Only, the more packages the Postal Service delivers for Amazon, the more money it loses.

The Wall Street Journal, citing a study by Citigroup, found the Postal Service spends $3.46 per package to deliver for Amazon but receives only $2 from the company for doing so. The Postal Service now delivers two-thirds of Amazon’s packages.

It operates Sunday package delivery – in which employees can get up to triple their hourly rate if a holiday is involved – almost solely to serve Amazon. It spent $200 million three years ago to purchase handheld scanners to process Amazon honors and $5 billion on 190,000 delivery vehicles designed to better suit the needs of Amazon.

Since 2007, the Postal Service has been required to allocate 5.5 percent of its fixed costs – those for the trucks, buildings, employees, etc. – to package delivery and to reflect this in the price. Only, with Amazon increasingly taking advantage of a deal unavailable to any of its competitors, the Postal Service now spends 25 percent of its resources on package delivery.

Trump is right: The balance sheet would look much worse if the Postal Service was candid about this spending and much better if it quit taking these losses for Amazon.

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