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lestudio1-bernardbujold · 5 years ago

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HOW TO PAUSE THE ECONOMY AND AVOID RUIN?

by The Wall Street Journal

March 30, 2020

-The coronavirus has produced something new in economic history. Never before have governments tried to put swaths of national economies in an induced coma, artificially maintain their vital organs, and awaken them gradually.

Some past societies, such as medieval Europe, abandoned economic activities as people tried to escape plagues, and suffered heavy disruptions to their social order. In other pandemics, such as the flu of 1918, economic interactions continued with only limited quarantine measures, as authorities accepted contagion and deaths as the price of continuity.

Today, many nations are more willing—or feel more able—to try to have it both ways. Their hope is to press pause on the economy, save lives, and then press play again. If it works cleanly, it will be a testament to the flexibility of modern capitalism and the ingenuity of modern government. More likely, much will go wrong.

“We’re in unknown territory. Inevitably there’s a lot of guesswork,” said Simon Tilford, an economist at Forum New Economy, a Berlin think tank.

The problem is that the economy has no pause button. Social-distancing measures, such as telling people to stay home and businesses to close unless essential, can suspend the buying and selling of most goods and services. But many costs keep on running. Households have rent or mortgages to pay, as well as bills for food and other necessities. Businesses have payrolls, debts and other fixed overheads. Banks owe money and so must collect it.

The conundrum of how to pay wages, rents and interest in the absence of sales has three kinds of answer.

People and businesses could live off their savings until the restrictions end. But many don’t have enough reserves. The longer the health emergency lasts, the more people will run out of money.

The private sector could cut its outlays to match the commerce that is still permitted. But that raises the specter of mass unemployment and bankruptcies, the destruction of countless normally viable businesses, the scattering of workforces, and perhaps a lasting depression.

“There’s a clear common societal interest in preserving jobs and companies from this external shock,” said Christian Odendahl, chief economist at the Centre for European Reform, a think tank. “Our economic structure is a very complex machine, and its organization, the match between workers and firms, is difficult to replicate once it’s gone.”

To avoid such armageddon, the government can substitute for sales for a while, sending or lending enough money to cover wages, interest and other fixed costs. In theory, the state could preserve today’s companies and jobs for months on end, provided it can borrow or print enough money and target the aid perfectly, and that people trust normality will return.

In practice, the outcome in many countries is likely to involve a mix of savings, slump and subsidies.

Government packages of fiscal and liquidity support are already huge: $2 trillion in the U.S. and hundreds of billions of dollars in Germany, the U.K. and France. European countries are focusing on subsidizing payrolls so that companies don’t lay off their workers. The U.S. is offering forgivable loans to businesses that hold on to staff, but also expanding unemployment benefits and sending one-time checks to households. Many countries are delaying taxes and encouraging or paying banks to accept late payments on loans.

But politics has inevitably meant disagreement about how to target the aid, and how far to go in subsidizing the private sector. The U.S.’s aid package came too late to avoid a sudden jump in job losses last week.

“We’re seeing unprecedented liquidity support in many countries, but the collapse of private consumption is so big that many firms will go under,” said Mr. Tilford.

In the U.S. and Europe, there is debate over which sectors and companies deserve handouts, which parts of the private sector should be asked to absorb some of the cost themselves, and how to avoid pumping money into ailing companies that would have gone bust anyway.

There is also reluctance in some countries to borrow too much, only a decade after the global financial crisis pushed up public debts. That concern in particularly acute in Italy, which has both the world’s deadliest coronavirus outbreak and fragile finances.

Italy’s fiscal and liquidity measures of around €25 billion ($27.8 billion) are small compared with those of most other big European economies. Yet Italy’s lockdown is among the most stringent outside central China, where the pandemic began, and is already weighing heavily on an economy that never fully recovered from the last financial crisis.

Rome’s cautious economic response reflects its high national debt and fragile bond market, which in bad times relies on investors’ trust that the European Central Bank would intervene to stop a rout. Italy, wanting more protection, is pushing for joint borrowing by eurozone members, but countries led by Germany and the Netherlands reject that.

Bringing economies out of their induced comas will be slow. Countries don’t want resurgent coronavirus outbreaks to force a second bout of lockdowns. Nobody knows yet how many months will pass before normal commercial activity resumes in full. For countries with large tourism sectors, such as Italy and Spain, losing the summer to continued restrictions would be another heavy blow.

If the operation succeeds, there will be the question of what to do about the large additional public and private debts. Forgiving loans to businesses that held on the workers could help the private sector to recover, but add to public costs.

High public debts, however, are nothing new in history. Experience suggests they are usually dealt with in several ways, from central banks buying and sitting on them, to forcing private banks and savers to lend cheaply to the government, to eroding their value through inflation.

A decade ago, European countries tried to pay down high public debts after the financial crisis with fiscal austerity. The economic pain and political backlashes felt around the continent had still not fully subsided when the pandemic struck, making a repeat less likely.

-30-

#coronavirus #world economy

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fullspectrum-cbd-oil · 5 years ago

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US Companies Discover the Dark Side of a COVID-19 Business Boom

Kevin Kelly has discovered the many ways a deadly pandemic can be both a boom and a burden on some U.S. businesses.

As the nation clamped down with stay-at-home orders, Kelly said his company, Emerald Packaging Inc. in Union City, Calif, saw demand for the factory’s output explode. Emerald churns out plastic bags for produce, like baby carrots and iceberg lettuce, and Kelly attributed the growth, in part, to the perception that packaged produce is a safer alternative to unwrapped items.

Emerald represents the other side of the current novel coronavirus crisis, which has seen unemployment surge to levels not seen since the Great Depression. The jobless rate hit 14.7% in April. While many companies face a slump, some are rushing to add workers, including delivery services like Instacart. A recent survey by the Atlanta Fed concluded there have been three jobs added to the U.S. economy for every 10 layoffs.

Eric Schnur, CEO of specialty chemical maker Lubrizol Corp., owned by Warren Buffett’s Berkshire Hathaway Corp, said he anticipates “many millions in extra costs associated with responding to COVID-19.” Lubrizol’s business boom includes a three-fold increase in its output of the gelling agent used to make hand sanitizer.

Schnur said the extra costs go beyond stepped up cleaning and safety equipment and includes “significant increases in supply chain and logistics costs as we work to get our materials to those who have the greatest need.”

Another company facing added costs is Calumet Electronics Corp., in Calumet, Mich., which said it has spent $80,000 on everything from soap to mobile desks to keep workers safe through the crisis.

For Emerald, orders surged 150% in March and were up another 7% in April. But there’s a dark side to that surge, both in terms of cost and complexity.

All the steps the company has taken — both to boost output and keep workers safe — are expected to add at least $350,000 to costs by the end of the year. This doesn’t include the lost production time, which adds up to at least an hour each day, that machines have to be shut down for cleaning. Kelly, Emerald’s chief executive officer, said he hasn’t figured out what this will do to his profits, but he expects a big hit to his margins. Emerald is a family-owned business with annual sales of about $85 million.

One of the biggest costs for Emerald was $50,000 Kelly spent on an automated temperature scanner. When the crisis first hit, Emerald implemented a regimen that included workers getting their temperature taken at the start and end of each shift.

But Kelly soon realized there was a problem having 40 people at the start of each shift waiting to be checked, one by one, by someone standing close to each employee as they were screened.

“It also just isn’t comfortable,” he said. “You know it’s a temperature gun, but you basically are holding a gun up to someone else’s head. It just made everyone uncomfortable.”

The new system will be a scanner that flashes a red warning signal if someone walks by with a body temperature over 100.4 degrees.

COVID-RELATED COSTS

Another big-ticket item is the cleaning, which accounts for $75,000 of the added costs. This includes assigning six workers — two on each shift — to constantly scrub and sanitize surfaces and $10,000 for six backpacks that these workers now use to hose floors with cleanser. The company, which was founded in 1963 by Kelly’s father, has added 10 workers to its staff of 240 and is heaping on overtime as well to get the orders out the door.

Even the company’s rag bill exploded. They used to buy 2,000 rags a week. Now it’s 7,000. The cost of that one item has jumped from $300 a month to $1,000, while disposable glove use has tripled.

Michael Rincon, Emerald’s director of operations, says each week brings new twists. For instance, they’ve discovered that having workers constantly wiping surfaces with isopropyl alcohol erodes signs and buttons — but they only realized that after it was too late. On one machine in the factory, the word “danger” printed in bright red has blurred.

Rincon said the faded labels will be repainted. But he’s also had to replace buttons on machines that have had the lettering rubbed away. The cost of a new button isn’t much, but the repairs mean costly shutdowns on lines that run around the clock. Some buttons can be replaced in a few minutes, but others take longer, said Rincon.

Kelly said he even thought about trying to put through a price increase to offset some of these expenses. But a few weeks ago, his biggest customer let him know that was a non-starter. The customer told Kelly he was going to see who else might be able to supply him with produce bags, presumably at a better price.

Besides the costs, there are also plenty of unpredictable management challenges. The company made masks mandatory eight weeks ago, at the very beginning of the crisis, but Kelly and other managers still find workers in the plant who aren’t wearing them or are wearing them incorrectly.

One problem is the nature of their factory, which is dominated by large, noisy machines. The only way to communicate in many parts of the factory is to lean your head right next to your coworker. “I’m constantly walking through the factory — throwing my arms apart — to remind people,” said Kelly.

Emerald has had three false alarms, with workers either calling in sick or falling sick at work and being sent home. However, none tested positive for COVID-19, the illness caused by the novel coronavirus.

Kelly said that in a country that regulates so many things, there’s still no good government guidance beyond general guidelines.

“The toughest thing is that there isn’t much direction from the state or the federal government,” Pallavi Joyappa, Emerald’s chief operating officer, said. “You are kind of making it up as you go along.”

(Reporting by Timothy Aeppel; editing by Diane Craft)

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urbanwronski · 7 years ago

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And it is money that has come out of the pockets of some of the poorest people. It is money that comes from human hardship. These machines are located in pubs and clubs in areas of economic disadvantage deliberately. And that is why we have fought so hard, so hard, to get poker machines out of pubs and clubs in Tasmania. We know they are lethal and toxic machines. Rebecca White Tasmanian Labor leader

Like rabbits caught in the headlights of a juggernaut of pro-pokie Liberal Mad-men, Tasmanians vote, Saturday, mostly to do as they are told. It’s a win for pokies’ owners by pokies’ owners. Bugger the people. Yet it’s not the crushing victory being sold on mainstream media. What is clear by Sunday is the Liberals will stay in power.

Premier Will Hodgman’s government wins 13 of the 25 state lower house seats on Saturday, a loss of two, or down 0.8 %, but still enough for his Liberal Party to govern in its own right in a large late surge over the last month.

Labor’s vote is up 5.4% with 84% of the vote counted Sunday. The Hare-Clark, Robson system means that several seats remain in doubt in contests between candidates from the same party. What is not in doubt is the size of the Liberal war chest which some say is ten times Labor’s. Did wealthy Liberals donors help the party buy its victory?

Bedazzled by bill-boards, newspapers and TV screens, in a saturation ad blitzkrieg, voters succumb to sentimental slogans such as “love your local” and fear of paternalism, the dreaded spectre of Labor-Green despotism.

And the jobs’ lies. “I’ll have to go to the mainland for a hospitality career if Labor gets in,” whinges a teenager on the radio, a model of self-pitying misery and entitlement, already a perfect fit for any career in customer service.

Bad news, kid, the “hospitality industry” is rife with wage theft and exploitation. Better you should stay at school.

“Whether it’s a big, small or medium business, the most common worker is young, unskilled or a migrant so really it’s a hotpot for exploitation. When you put all these things in the mix, people aren’t aware of their rights — people are desperate to work, and it’s a recipe for exploitation,” says Shine Lawyers employment law expert, Will Barsby.

When it comes to wages, Tasmanian workers share the predicament of all Australia’s workers. Wage earners’ share of the national pie has shrunk dramatically to the lowest point since the Australian Bureau of Statistics (ABS) began recording this data in 1959.

Roy Morgan reports that our workforce is 13,410,000 comprised of employed and unemployed, up a whopping 518,000 on a year ago, a context omitted in Scott Morrison’s misleading claim that “2017 was a year of extraordinary jobs growth in Australia, over 400,000 jobs created in the year”.

1.312 million Australians were unemployed (9.8% of the workforce); an increase of 126,000 (up 0.6%) on a year ago, but Morrison chooses to hide this from us in the hope we are all mugs. ScoMo or Michaelia Cash never talk about numbers of unemployed.

Furthermore, despite Liberal shills on ABC and mainstream media who pretend there is some miraculous recovery happening ,Tasmanians are in fact more likely to be out of work or underemployed than workers in any other state.

Tasmania’s unemployment rate is 10.7% while 11.5% of the workforce is under-employment 11.5%. 22.2%, or one in five, Tassie workers have either no work or not enough. Abolishing pokies is not going to cost 5000 jobs – as claimed by Hodgman’s Liberals – when there are only 370 workers in the industry – or about 1000 in gambling overall. And other jobs are likely to be created as a result of money not spent gambling.

The new gaming laws will bring a windfall for casinos reports The Australia Institute, cutting their taxes in half if they are put on the Federal group rate. Taxes for pubs and clubs, on the other hand, will rise by $10 million. Yet, in a typically caring, sharing, token concession to pokies’ toxicity, taxpayers will contribute an extra $1.7 million to the Community Support Levy to counter the costs of problem gambling. The casinos are the big winners while the punter loses out yet again.

The Liberals’ big Tasmania vision is not solution, either, for unlucky punters. Population growth is at its highest rate since the GFC, but that doesn’t “grow” jobs. Nor is it a state economic windfall. It’s the structure of the population that counts. Each year Tasmania has fewer young and more older people compared to the rest of Australia, even when population “booms”.

Will Hodgman has had a population push since 2014. Yet Tasmania has always gained more people over 45 and lost more younger, working, fertile, 19-39 year olds due, mainly, to the state’s lack of employment opportunities.

Older folk create jobs and actively contribute to society and economy, but they also will create increasing demand for government services, such as pensions and healthcare, areas in which Liberals have a poor track record.

The Government has made sweeping job cuts in health, reports ABC Fact check with the Treasurer stating publicly that while the Tasmanian Health Organisations gained 80 full-time equivalent staff, the Health Department shed 200 positions between June 2014 and March 2016.

But bosses and government never gull young people, it’s always unions and greenies who are out to con you.

“Labor and the Greens think you’re stupid. What’s next? Don’t let them tell you what to do”.

This richly allusive Liberal rhetorical campaign gem shrewdly taps Tasmanians’ memory of the unpopularity of its last Labor-Greens coalition cabinet of 2010, a coalition which psephologist, William Bowe, dubs an electoral disaster.

Be it inertia, bewilderment, blind panic, cynical manipulation, disinformation or a toxic cocktail of the lot, in the end, voters elect Will Hodgman’s Libs, a shady cabal of big business, big gambling and Big W, in a result which will further erode Tasmanians’ control of their own lives, expand state power, boost gun-power and feed the canker of poker machine blight, introduced to the Apple Isle by Ray Groom’s, 1993 Liberal government.

Can Tasmania, our most beautiful, most wondrous state, Australia’s own Serendip, now be rotten at the core?

Ministry of Truth, our ABC in its Insiders cosy Sunday hack-chat-show, a forum which artfully evades the real issues, or real depth, says the Liberals win as Tasmanians flock to sunny uplands of neoliberal prosperity. Hodgman’s Liberals, they say, deliver an “economic upturn” a myth based on the island state’s property boom, or bubble.

It’s a tall story which can only grow taller, as the federal Liberals’ spin doctor army toils to turn the result into a vindication of the Turnbull government’s futile attempts to revive neoliberalism’s corpse; its corporate tax cut payola to its donors, and austerity budgeting, a campaign of calculated impoverishment of innocent and vulnerable victims of its policies, which daily widens the gulf of economic inequality, in its war on the poor and elderly.

By Monday, Tassie’s results will become a sign of upturn number 365 in the Turnbull government’s popularity. There is always a reboot, a recovery around every corner.

Yet, apart from real estate sales, any other economic upturn is hard to find. So why the sudden turnaround? A month ago, polls had the two parties neck and neck, on 34% of the vote, but in more recent polls Liberals soar an alarming 12 %. in a shocking corruption of the popular will, which, William Bowe, worries, means,

The election could join federal Labor’s mining tax debacle in 2010 as a cautionary tale about the dangers of taking on deep-pocketed interests in an election campaign.

A key issue at stake is many Tasmanians’ opposition to Federal Hotels’ pokies monopoly. Federal owns all 3500 machines (plus Wrest Point Casino, some luxury wilderness accommodation and the Henry James Hotel). Labor and The Greens’ want to remove pokies from all pubs and clubs by 2023. But end the firm’s half-billion dollar revenue stream?

Also not sitting well with voters is Federal’s breath-taking, back-flipping duplicity. Anti-pokers veteran, Pat Caplice sums up Federal’s hypocrisy.

“The clubs and hotels pushed for pokies back in the ’80s. Federal opposed it totally, used all the arguments about dependency they now deny. Then, when it was being debated in 1993, there was a huge backflip, within days, and Federal itself was gifted a monopoly licence.”

Saturday’s election result ushers in a new “gaming” agreement, an industry euphemism for ripping off unwary, vulnerable, punters. The state will revoke Federal Hotels’ monopoly and gift licences to pokies pubs, in a move which will result in cashed-up Federal and Woolworths buying up dozens of pubs, allowing Woolworths a 30-40% stake in gambling in the state. The result is guaranteed to increase personal misery and social breakdown.

Meanwhile, the pro-pokie promotion create a ruckus that sucks the oxygen out of many other areas of debate.

Protecting what remains of The Tarkine is a huge political issue. Speciality timber logging permits granted in 2014 by Hodgman’s government reduce the area’s reserve to five per cent of its former area. Liberal candidate for Braddon, Adam Brooks’, media release reads “Only the Liberals would stop a Tarkine National Park”.

The Liberal election pledge is an indictment of the party’s senseless environmental vandalism; its contempt for Aboriginal cultural heritage, history and the legacy of shell middens, stone quarries, hut depressions, seal hides and rock carvings that remain and its failure to consult with local Aboriginal people.

17 coupes are still being logged while the 4WD fraternity, bush-bash on expensive temporary road mats. In Hobart, around two thousand people protest the abuse of the unique wilderness, in a gathering led by the Bob Brown Foundation. The group calls for permanent protection for the 447,000 hectares of the Tarkine.

One-armed bandits backers make such a racket they drown out late news that the 45th Tasmanian premier, William Edward Felix Hodgman, promises the quaintly termed sporting shooters and farmers, a hard-nosed gun lobby, an easing of gun control laws, extending licences from five to ten years and permitting automatic weapons.

But if it’s a victory for guns and money, it’s also another stage in the ascent of the corporate oligarchy Woolworths, which, Guy Rundle writes, will wield power over Tasmanians “from controlling prices to suppliers, to selling them their food back as consumers, and taking the cash of people who never quite make it to the shops.”

At the same time, Tasmanians surrender their own say in their own affairs, as Hodgman’s big government proposes major projects legislation and a state-wide planning scheme which shuts out community input.

Tasmania, fruit of the fruit machine, rolls with the dice, as the state’s obscenely powerful gambling lobby pours millions of dollars into Liberal party campaign coffers, vastly outspending the Labor Party. Some estimate a Liberal war chest up to ten times larger. We may never know. The state has the nation’s slackest campaign donation disclosure rules.

What is unique – and refreshing about the Tassie election campaign is the respect between the Liberal and Labor leaders, a tradition that is dead, buried and cremated in federal politics this week when Michaelia Cash suddenly threatens to name young women in Bill Shorten’s office – about whom there have been rumours “for many, many years.” The idea that she should “slut-shame” nineteen women working in Shorten’s office is bizarre, wrong and a sign of an ugly decline in federal politics.

Worse, Cash makes it clear that she proposes to name names and then Shorten will have to prove his innocence. It’s a perversion of legal process and a cheap, demeaning stunt. Worse, it plumbs new depths in character assassination as political strategy.

And it’s part of Liberal team plan: Peter Dutton is soon off the leash on 2GB attacking loose, louche, philandering Bill and two-timing Tony Burke.

“I think we’ve sat here taking a morals lecture from Bill Shorten in relation to Barnaby Joyce over the last few weeks and people know that there’s a history of problems in Bill Shorten’s personal life, Tony Burke’s personal life. And to be lectured by the Labor Party really sticks in the craw.”

As is Dutton’s wont, he is undeterred by being factually incorrect and totally out of order. Labor scrupulously abstained from criticising Barnaby Joyce’s affair with his staffer Vicki Campion.

It was, in fact, Malcolm Turnbull who took it upon himself to deliver a finger-wagging moralising, which was backed up with what can only have been a National to Liberal Party hand-ball leaking of the name of a woman who is bringing case of sexual harassment or serious misconduct against Joyce to the National Party – from whom we have heard nothing further.

Above all it’s not Joyce’s dangerous liaisons that are the critical issue – not his fidelity or his personal morality but how he could create or cause to be created not one but three jobs for his (non-partner) paramour Vicki Campion. And his boondoggle inland rail. Plus his Murray Darling basin water for rich cotton irrigator National party mates scandal.

As the week closes, it is clear that the Coalition’s mud-slinging will continue as part of the Kill Bill strategy – but also as a splendid diversion from any alleged peculation, nepotism or misuse of public funds including travel allowances, a net which seems to be closing rapidly on Julie Bishop, whose non-partner, David Panton, is somehow able to travel at taxpayers’ expense.

The situation is clarified late in the week when Bishop changes her mind; agrees the two have been partners for six months. At least that’s cleared that up. Will Panton now repay his trip to the UN or any other trips he took with her prior to that period? At least it’s not “a grey area” as Barnaby Joyce calls his paternity.

A new tune to add to his brilliant riffs on playing the innocent victim, Joyce tells media that everyone assumed he was the father of Vikki Campion’s child. He may not be. The Daily Tele never asked, despite there being an email from the paper to Joyce asking that very question according to Fairfax.

Now it seems Barnaby and non-partner Vikki were mostly geographically apart with some togetherness during the putative conception date of the unborn child, whom Barnaby, nobly, says he will love anyway. And no. He has no intention of taking any paternity test. Perhaps it may turn out to be an immaculate conception.

In Tassie this week, the Liberals win by throwing buckets of their sponsors, the gambling mob’s – (wrongly dignified as an industry)- money at advertising promoting fear and loathing of Labor, while, in the senate, Michaelia Cash dishes the dirt as a diversion from her own alleged collusion with the AFP to contact media to help her conduct a witch hunt in an illegal raid on the Melbourne office of the AWU, a union Michael Keenan says gave a donation to Bill Shorten’s campaign – as it is perfectly entitled to do.

The AWU has not yet been charged with a single criminal offence. Probably because none has been committed. In the meantime, politicians from Tasmanian to the nation’s capital compete this week, as Hamlet almost says, stewing in corruption, honeying and making love – while tipping buckets of excrement over their opponents in a debauched, degenerate, parody of a competitive party political system which was once based however loosely around policies and reasoned argument and rational rebuttal.

The nation moves beyond policy, principle or even the fan-club of identity politics to savage character assassination, innuendo and vituperative personal attack. Each day we draw closer to the politics of Trump’s USA, the nation our PM wishes to sedulously ape and not only in tax cuts for corporations but in health and welfare, too.

One-armed bandits rob Tassie election while Cash loses plot and Barnaby finds paternity a grey area. And it is money that has come out of the pockets of some of the poorest people.

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bcpreneur-summit-blog · 7 years ago

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FEATURED ENTREPRENEUR FOR SEPTEMBER 19th, 2017

“What consumerism really is, at its worst is getting people to buy things that don't actually improve their lives.” - Jeff Bezos - Entrepreneur, Business Leader (1964–) Read more at: - https://www.brainyquote.com/quotes/quotes/j/jeffbezos449981.html

American entrepreneur Jeff Bezos is the founder and chief executive officer of Amazon.com and owner of 'The Washington Post.' His successful business ventures have made him one of the richest people in the world.

Who Is Jeff Bezos?

Entrepreneur and e-commerce pioneer Jeff Bezos was born on January 12, 1964, in Albuquerque, New Mexico. Bezos had an early love of computers and studied computer science and electrical engineering at Princeton University. After graduation he worked on Wall Street, and in 1990 he became the youngest senior vice president at the investment firm D.E. Shaw. Four years later, he quit his lucrative job to open Amazon.com, a virtual bookstore that became one of the internet's biggest success stories. In 2013, Bezos purchased The Washington Post in a $250 million deal. His successful business ventures have made him one of the richest people in the world.

Early Life and Career

Jeff Bezos was born on January 12, 1964, in Albuquerque, New Mexico, to a teenage mother, Jacklyn Gise Jorgensen, and his biological father, Ted Jorgensen. The Jorgensens were married less than a year, and when Bezos was 4 years old his mother re-married, to Cuban immigrant Mike Bezos.

As a child, Jeff Bezos showed an early interest in how things work, turning his parents' garage into a laboratory and rigging electrical contraptions around his house. He moved to Miami with his family as a teenager, where he developed a love for computers and graduated valedictorian of his high school. It was during high school that he started his first business, the Dream Institute, an educational summer camp for fourth, fifth and sixth graders.

Bezos pursued his interest in computers at Princeton University, where he graduated summa cum laude in 1986 with a degree in computer science and electrical engineering. After graduation, he found work at several firms on Wall Street, including Fitel, Bankers Trust and the investment firm D.E. Shaw. It was there he met his wife, Mackenzie, and became the company's youngest vice president in 1990.

While his career in finance was extremely lucrative, Bezos chose to make a risky move into the nascent world of e-commerce. He quit his job in 1994, moved to Seattle and targeted the untapped potential of the internet market by opening an online bookstore.

Launching Amazon.com

Bezos set up the office for his fledgling company in his garage where, along with a few employees, he began developing software. They expanded operations into a two-bedroom house, equipped with three Sun Microstations, and eventually developed a test site. After inviting 300 friends to beta test the site, Bezos opened Amazon.com, named after the meandering South American River, on July 16, 1995.

The initial success of the company was meteoric. With no press promotion, Amazon.com sold books across the United States and in 45 foreign countries within 30 days. In two months, sales reached $20,000 a week, growing faster than Bezos and his start-up team had envisioned.

Amazon.com went public in 1997, leading many market analysts to question whether the company could hold its own when traditional retailers launched their own e-commerce sites. Two years later, the start-up not only kept up, but also outpaced competitors, becoming an e-commerce leader.

Bezos continued to diversify Amazon’s offerings with the sale of CDs and videos in 1998, and later clothes, electronics, toys and more through major retail partnerships. While many dot.coms of the early '90s went bust, Amazon flourished with yearly sales that jumped from $510,000 in 1995 to over $17 billion in 2011.

In 2006, Amazon.com launched its video on demand service; initially known as Amazon Unbox on TiVo, it was eventually rebranded as Amazon Instant Video. In 2007, the company released the Kindle, a handheld digital book reader that allowed users to buy, download, read and store their book selections. That same year, Bezos announced his investment in Blue Origin, a Seattle-based aerospace company that develops technologies to offer space travel to paying customers.

Bezos entered Amazon into the tablet marketplace with the unveiling of the Kindle Fire in 2011. The following September, he announced the new Kindle Fire HD, the company's next generation tablet designed to give Apple's iPad a run for its money. "We haven't built the best tablet at a certain price. We have built the best tablet at any price," Bezos said, according to ABC News.

Buying 'The Washington Post'

Bezos made headlines worldwide on August 5, 2013, when he purchased The Washington Post and other publications affiliated with its parent company, The Washington Post Co., for $250 million. The deal marked the end of the four-generation reign over The Post Co. by the Graham family, which included Donald E. Graham, the company's chairman and chief executive, and his niece, Post publisher Katharine Weymouth.

"The Post could have survived under the company's ownership and been profitable for the foreseeable future," Graham stated, in an effort to explain the transaction. "But we wanted to do more than survive. I'm not saying this guarantees success, but it gives us a much greater chance of success."

In a statement to Post employees on August 5, Bezos wrote: "The values of The Post do not need changing. ...There will, of course, be change at The Post over the coming years. That's essential and would have happened with or without new ownership. The internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs. There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment. Our touchstone will be readers, understanding what they care about—government, local leaders, restaurant openings, scout troops, businesses, charities, governors, sports—and working backwards from there. I'm excited and optimistic about the opportunity for invention."

Amazon Prime & Amazon Studios

In early December 2013, Bezos made headlines when he revealed a new, experimental initiative by Amazon, called "Amazon Prime Air," using drones—remote-controlled machines that can perform an array of human tasks—to provide delivery services to customers. According to Bezos, these drones are able to carry items weighing up to five pounds, and are capable of traveling within a 10-mile distance of the company's distribution center. He also stated that Prime Air could become a reality within as little as four or five years.

Bezos oversaw one of Amazon's few major missteps when the company launched the Fire Phone in 2014; criticized for being too gimmicky, it was discontinued the following year. However, Bezos did score a victory with the development of original content through Amazon Studios. After premiering several new programs in 2013, Amazon hit it big in 2014 with the critically acclaimed Transparent and Mozart in the Jungle. In 2015, the company produced and released Spike Lee's Chi-Raq as its first original feature film.

In 2016, Bezos stepped in front of the camera for a cameo appearance playing an alien in Star Trek Beyond. A Star Trek fan since childhood, Bezos is listed as a Starfleet Official in the movie credits on IMDb.

In July 2017, Bezos briefly surpassed Microsoft founder Bill Gates to become the richest person in the world, according to Bloomberg. Gates, who was the richest person in the world since 2013, made $90.7 billion, shy of Bezos' worth of $90.9 billion, which rose with a surge in Amazon.com Inc. shares. However, by the close of the market, Gates' net worth climbed to $90 billion while Bezos' had a net worth of over $89 billion.

#jeffbezos #entrepreneur #entreprenuership #entreprenuerlife #smallbusiness #smallbiz #british columbia #keynote

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eromart · 3 years ago

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newstfionline · 8 years ago

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As Economy Grows, North Korea’s Grip on Society Weakens

By Choe Sang-Hun, NY Times, April 30, 2017

SEOUL, South Korea--Despite decades of sanctions and international isolation, the economy in North Korea is showing surprising signs of life.

Scores of marketplaces have opened in cities across the country since the North Korean leader, Kim Jong-un, took power five years ago. A growing class of merchants and entrepreneurs is thriving under the protection of ruling party officials. Pyongyang, the capital, has seen a construction boom, and there are now enough cars on its once-empty streets for some residents to make a living washing them.

Reliable economic data is scarce. But recent defectors, regular visitors and economists who study the country say nascent market forces are beginning to reshape North Korea--a development that complicates efforts to curb Mr. Kim’s nuclear ambitions.

Even as President Trump bets on tougher sanctions, especially by China, to stop the North from developing nuclear-tipped missiles capable of striking the United States, the country’s improving economic health has made it easier for it to withstand such pressure and to acquire funds for its nuclear program.

While North Korea remains deeply impoverished, estimates of annual growth under Mr. Kim’s rule range from 1 percent to 5 percent, comparable to some fast-growing economies unencumbered by sanctions.

But a limited embrace of market forces in what is supposed to be a classless society also is a gamble for Mr. Kim, who in 2013 made economic growth a top policy goal on par with the development of a nuclear arsenal.

Mr. Kim, 33, has promised his long-suffering people that they will never have to “tighten their belts” again. But as he allows private enterprise to expand, he undermines the government’s central argument of socialist superiority over South Korea’s capitalist system.

There are already signs that market forces are weakening the government’s grip on society. Information is seeping in along with foreign goods, eroding the cult of personality surrounding Mr. Kim and his family. And as people support themselves and get what they need outside the state economy, they are less beholden to the authorities.

“Our attitude toward the government was this: If you can’t feed us, leave us alone so we can make a living through the market,” said Kim Jin-hee, who fled North Korea in 2014 and, like others interviewed for this article, uses a new name in the South to protect relatives she left behind.

After the government tried to clamp down on markets in 2009, she recalled, “I lost what little loyalty I had for the regime.”

Kim Jin-hee’s loyalty was first tested in the 1990s, when a famine caused by floods, drought and the loss of Soviet aid gripped North Korea. The government stopped providing food rations, and as many as two million people died.

Ms. Kim did what many others did to survive. She stopped showing up for her state job, at a machine-tool factory in the mining town of Musan, and spent her days at a makeshift market selling anything she could get her hands on. Similar markets appeared across the country.

After the food shortage eased, the market in Musan continued to grow. By the time she left the country, Ms. Kim said, more than 1,000 stalls were squeezed into it alongside her own.

Kim Jong-il, the father of the North’s current leader, had been ambivalent about the marketplaces before he died in 2011. Sometimes he tolerated them, using them to increase food supplies and soften the blow of tightening sanctions imposed by the United Nations on top of an American embargo dating to the Korean War. Other times, he sought to suppress them.

But since 2010, the number of government-approved markets in North Korea has doubled to 440, and satellite images show them growing in size in most cities. In a country with a population of 25 million, about 1.1 million people are now employed as retailers or managers in these markets, according to a study by the Korea Institute for National Unification in Seoul.

Unofficial market activity has flourished, too: people making and selling shoes, clothing, sweets and bread from their homes; traditional agricultural markets that appear in rural towns every 10 days; smugglers who peddle black-market goods like Hollywood movies, South Korean television dramas and smartphones that can be used near the Chinese border.

At least 40 percent of the population in North Korea is now engaged in some form of private enterprise, a level comparable to that of Hungary and Poland shortly after the fall of the Soviet bloc, the director of South Korea’s intelligence service, Lee Byung-ho, told lawmakers in a closed-doorbriefing in February.

This market activity is driven in part by frustration with the state’s inefficient and rigid planned economy. North Koreans once worked only in state farms and factories, receiving salaries and ration coupons to buy food and other necessities in state stores. But that system crumbled in the 1990s, and now many state workers earn barely a dollar a month. Economists estimate the cost of living in North Korea to be $60 per month.

“If you are an ordinary North Korean today, and if you don’t make money through markets, you are likely to die of hunger,” said Kim Nam-chol, 46, a defector from Hoeryong, a town near the Chinese border. “It’s that simple.”

Before fleeing in 2014, Mr. Kim survived as a smuggler in North Korea. He bought goods such as dried seafood, ginseng, antiques and even methamphetamine, and he carried them across the border to sell in China. There, he used his earnings to buy grain, saccharin, socks and plastic bags and took it back to sell in North Korean markets.

He said he had paid off border guards and security officers to slip back and forth, often by offering them cigarette packs stuffed with rolled-up $100 or 10,000-yen bills.

“I came to believe I could get away with anything in North Korea with bribes,” he said, “except the crime of criticizing the ruling Kim family.”

Eighty percent of consumer goods sold in North Korean markets originate in China, according to an estimate by Kim Young-hee, director of the North Korean economy department at the Korea Development Bank in the South.

But Kim Jong-un has exhorted the country to produce more goods locally in an effort to lessen its dependence on China, using the word jagang, or self-empowerment. His call has emboldened manufacturers to respond to market demand.

Shoes, liquor, cigarettes, socks, sweets, cooking oil, cosmetics and noodles produced in North Korea have already squeezed out or taken market share from Chinese-made versions, defectors said.

Regular visitors to Pyongyang, the showcase capital, say a real consumer economy is emerging. “Competition is everywhere, including between travel agencies, taxi companies and restaurants,” Rüdiger Frank, an economist at the University of Vienna who studies the North, wrote recently after visiting a shopping center there.

A cellphone service launched in 2008 has more than three million subscribers. With the state still struggling to produce electricity, imported solar panels have become a middle-class status symbol. And on sale at some grocery stores and informal markets on the side streets of Pyongyang is a beverage that state propaganda used to condemn as “cesspool water of capitalism”--Coca-Cola.

When Kim Jong-un stood on a balcony reviewing a parade in April, he was flanked by Hwang Pyong-so, the head of the military, and Pak Pong-ju, the premier in charge of the economy.

The formation was symbolic of Mr. Kim’s byungjin policy, which calls for the parallel pursuit of two policy goals: developing the economy and building nuclear weapons. Only a nuclear arsenal, Mr. Kim argues, will make North Korea secure from American invasion and let it focus on growth.

Mr. Kim has granted state factories more autonomy over what they produce, including authority to find their own suppliers and customers, as long as they hit revenue targets. And families in collective farms are now assigned to individual plots called pojeon. Once they meet a state quota, they can keep and sell any surplus on their own.

The measures resemble those adopted by China in the early years of its turn to capitalism in the 1980s. But North Korea has refrained from describing them as market-oriented reforms, preferring the phrase “economic management in our own style.”

In state-censored journals, though, economists are already publishing papers describing consumer-oriented markets, joint ventures and special economic zones.

It is unclear how much of recent increases in grain production were due to Mr. Kim’s policies. Defectors say factories remain hobbled by electricity shortages and decrepit machinery while many farmers have struggled to meet state quotas because they lack fertilizer and modern equipment.

More broadly, the economy remains constrained by limited foreign investment and the lack of legal protections for private enterprise or procedures for contract enforcement.

Plans to set up special economic zones have remained only plans, as investors have balked at North Korea’s poor infrastructure and record of seizing assets from foreigners, not to mention the sanctions against it.

But there is evidence that the state is growing increasingly dependent on the private sector.

Cha Moon-seok, a researcher at the Institute for Unification Education of South Korea, estimates that the government collects as much as $222,000 per day in taxes from the marketplaces it manages. In March, the authorities reportedly ordered people selling goods from their homes to move into formal marketplaces in an effort to collect even more.

“Officials need the markets as much as the people need them,” said Kim Jeong-ae, a journalist in Seoul who worked as a propagandist in North Korea before defecting.

Ms. Kim fled North Korea in 2003 but has kept in touch with a younger brother there whom she describes as a donju, or money owner.

Donju is the word is what North Koreans use to describe the new class of traders and businessmen that has emerged.

Kim Jeong-ae said that her brother provided fuel, food and crew members for fishing boats, and that he split the catch with a military-run fishing company.

“He lives in a large house with tall walls,” she added, “so other people can’t see what he has there.”

Called “red capitalists” by South Korean scholars, donju invest in construction projects, establish partnerships with resource-strapped state factories and bankroll imports from China to supply retailers in the marketplaces. They operate with “covers,” or party officials who protect their businesses. Some are relatives of party officials.

Others are ethnic Chinese citizens, who are allowed regular visits to China and can facilitate cross-border financial transactions, and people with relatives who have fled to South Korea and send them cash remittances.

Whenever the state begins a big project, like the new district of high-rise apartment buildings that Kim Jong-un unveiled before foreign journalists in April, donju are expected to make “loyalty donations.” Sometimes they pay in foreign currency. Sometimes they contribute building materials, fuel or food for construction workers.

“Kim Jong-un is no fool,” said Kang Mi-jin, a defector who once ran her own wholesale business. “He knows where the money is.”

Donju often receive medals and certificates in return for their donations, and use them to signal they are protected as they engage in business activities that are officially illegal.

They import buses and trucks and run their own transportation services using license plates obtained from state companies. Some donju even rent farmland and mines, working them with their own employees and equipment, or open private pharmacies, defectors said.

“Donju wear the socialist hide, operating as part of state-run companies,” Ms. Kang said. “But inside, they are thoroughly capitalist.”

Before Kim Jong-un took power, the government made a last attempt to rein in donju and control market forces. It called on citizens to shop only in state stores, banned the use of foreign currency and adopted new bank notes while limiting the amount of old notes that individuals could exchange.

The move wiped out much of the private wealth created and saved by both donju and ordinary people. Market activity ground to a near halt. Prices skyrocketed, and protests were reported in scattered cities.

The government eventually retreated and is believed to have issued an apology when officials convened villagers for their weekly education sessions. It also executed the country’s top monetary official, Pak Nam-gi.

The crisis is widely considered the moment when the government concluded it could no longer suppress the markets. A year later, Pak Pong-ju, a former prime minister who had been ousted for pushing market-oriented policies, was restored to power. He now manages the economy under Mr. Kim.

As the markets develop, growing numbers of North Koreans will see the vastly superior products made overseas and perhaps question their nation’s backward status.

“Thanks to the market, few North Koreans these days flee for food, as refugees in the 1990s did,” said the Rev. Kim Seung-eun, a pastor who has helped hundreds of defectors reach South Korea. “Instead, they now flee to South Korea to have a better life they learned through the markets.”

Jung Gwang-il, who leads a defectors’ group in Seoul called No Chain, said that with more North Koreans getting what they needed from markets rather than the state, their view of Mr. Kim was changing.

“North Koreans always called Kim Jong-un’s grandfather and father ‘the Great Leader’ or ‘the General,’” Mr. Jung said. “Now, when they talk among themselves, many just call Jong-un ‘the Kid.’ They fear him but have no respect for him.”

“They say, ‘What has he done for us?’” Mr. Jung said.

#North Korea #North Korean economy #Kim Jong-un

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eromart · 4 years ago

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eromart · 4 years ago

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eromart · 5 years ago

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eromart · 5 years ago

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eromart · 5 years ago

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eromart · 5 years ago

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eromart · 5 years ago

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eromart · 5 years ago

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