I am getting tired of talking about a new milestone in inflation. Earlier this week, it was announced that inflation was 9.1 percent, the highest in 41 years.  Where were you 41 years ago?  I was a teenager trying to figure out what I was going to do with my life. This high inflation is not just a concept that economists debate, it’s real and it is hurting all Americans. Congressional Democrats and the Biden administration seem laser-focused on ramming through a zombie Build Back Better that increases spending and taxes at the worst possible time. The administration continues to antagonize the energy industry with rhetoric and red tape. Virtually nothing has been done to reduce tariffs. Democrats, and sadly many Republicans, are playing the antitrust fiddle, explicitly targeting tech companies that provide low cost, even free products and services, while inflation burns red hot. Passing Build Back Better with tax increases is a sure-fire way to make the country’s financial situation worse.

 
Prime Reality Check
 
Ok, full disclosure, I didn’t buy anything during Amazon’s Prime Days this week. I wasn’t making an anti-Amazon statement, I just didn’t need anything. Truth is I love Amazon, but I also love Walmart and their quick delivery of things I need. Many Americans went on the hunt for bargains during Amazon’s famed Prime Day sales event. Many feeling the sting of inflation were undoubtedly excited for the annual event and logged many distracted hours hunting for deals across the retailer’s enormous inventory. Frequently assailed somewhat lackadaisically by pundits and policymakers alike as a “monopoly,” the reality is that Amazon faces growing challenges from competitors and overall market conditions. This is even before considering the various calls for antitrust intervention and other regulations targeting the e-commerce giant. In light of the current antitrust battle playing out in politics these days, its high time for some Prime Day perspective on the state of Amazon and e-commerce broadly.
 
While Amazon quickly shot to, and remains at, the top of total e-commerce retail sales, the fact remains that, for several years now, other companies have been growing faster in the segment, oftentimes much faster. From 2017 through 2020, Amazon was overall just the sixth fastest growing retailer in terms of online sales, trailing established brands Home Depot, Costco, Target, Wayfair, and Walmart at the top. Last year was a little kinder to Amazon, but the firm only ranked third in online retail sales growth and still closely followed by major, rival retailers such as Walmart, Costco, Target, as well as the online marketplace Etsy. Earlier in the year, both Etsy and Walmart’s online sales growth were outpacing Amazon’s. The above figures also just capture US-based companies. Amazon faces some of its most robust competition from Shopify, based in Canada, Japan-based Rakuten, and China’s Alibaba. While Amazon’s overall growth in the segment did recover somewhat, it comes in the context of other troubling trends for the company. While e-commerce continues to grow as a segment of the total retail sector, that growth is slowing, even compared to pre-pandemic levels. In the first three quarters of 2019, online sales grew at 9.5, 11.1, and 14.4 percent, respectively. Growth obviously exploded to off-the-charts levels during the height of the pandemic, but over the last three quarters, Q3 2021- Q1 2022, growth slowed to 9.4, 9.7, and just 6.7 percent, respectively. Last quarter’s sector growth is the slowest on record since 2009. Meanwhile, total retail sales grew faster in Q1 2022, at nearly 8 percent, indicating that many Americans are eager to get back some of the brick and mortar retail experience. Additional context for the relatively slow growth of the e-commerce sector should only add concern for Amazon. As Digital Commerce 360 reported this past May, part of the albeit-slow growth in sales is “attributable to rising prices that continue to plague shoppers.” While sales increased in terms of dollars, there was a corresponding decline in total orders last quarter. The one area of online retail that doesn’t seem to be slowing is also a problem for Amazon, which is the number of companies offering rival sales events to Prime Day. Last year, 313 different retailers reportedly offered competing sales events directly targeting Prime Day. This year is no different and the number has undoubtedly grown. In addition, rival retailers are also offering more-aggressive deals than Amazon. For example, Target is offering some of its customers Prime Day price matching plus an additional 5 percent discount. It’s no wonder the business news giant CNBC is suggesting some shoppers “skip” celebrating Prime Day with Amazon altogether. 
 
While there’s no doubt that Amazon continues to be the market leader in terms of e-commerce sales, the e-commerce retail giant probably feels a little less prime this Prime Day. Any company that can put its name so prominently on the calendars of many Americans is undoubtedly going to attract antitrust scrutiny. Yet it’s clear that the company remains under significant pressure and that such calls for antitrust intervention have gone straight from premature to outdated. Amazon cannot afford to ignore growing competition and concerning economic trends just as many Americans battling inflation cannot afford to miss all the incredible deals offered this week by Amazon and hundreds of rival retailers.
 
California Schemin’

Los Angeles County, with a median household income of $91,000, is looking to have taxpayers build a broadband network. That proposal has received pushback from local groups who contend that Los Angeles County should use existing infrastructure and leverage federal, state, and local tax dollars already allocated to broadband to connect all residents. Los Angeles County published a report last year offering three different approaches to helping bridge the digital divide (although BroadbandNow reports that divide is very small in the area, with just 1 percent of residents lacking access). The first approach would leverage existing infrastructure and incoming broadband tax funds to connect all residents. The other two options would task Los Angeles County with creating its own networks. One approach involves a wireless network at an estimated cost of $1.4 billion and the other would extend county-owned fiber to every home in the county at a cost of untold billions of dollars. Los Angeles County opted to establish a pilot project for the wireless network and study the option for fiber. Neither has seen much movement. While the county has initiated requests for proposals for the wireless pilot project, it hasn’t announced a construction partner; and there has been no movement on the fiber study.

Plenty of local groups, as well as private providers, have urged county leaders to focus on the first option. A band of groups that include the Boys & Girls Clubs, Korean American Coalition, and Latino Equality Alliance sent a letter to the Los Angeles County Board of Supervisors that asked the board to “choose a solution that prioritizes the allocation of funding towards immediately connecting our most vulnerable communities.” The groups said the county should facilitate subsidized access to existing infrastructure with fast and reliable speeds rather than try to build its own duplicative network. Those groups, in fact, made the same arguments that the Taxpayers Protection Alliance (TPA) has repeatedly made on its website Broadband Boondoggles and 2020 report “GON with the Wind: The Failed Promise of Government-Owned Networks” that municipal broadband almost always proves to be a wasteful exercise by local bureaucrats.
 
The Alliance for Quality Broadband launched a website to focus on this issue, offering a petition for residents to encourage local leaders to focus on the issues of adoption and digital literacy instead of building another broadband network. Instead of stringing unnecessary fiber, “our Los Angeles County Board of Supervisors has a historic opportunity to use federal funding to invest in the right solutions to close the right gaps that will bridge the digital divide for the long  term,” the website states. As home to some of the wealthiest people in the country, TPA hopes that Los Angeles County leaders heed the thoughts espoused by some of the most vulnerable minority groups in the area. Los Angeles County needs digital education, not more fiber – and certainly not a new network that will saddle taxpayers with wasteful costs for decades.
 
BLOGS:
   
Monday: TPA Sends Letter to Senate Finance Health Subcommittee on Partisan Drug Pricing Bill
 
Tuesday: TPA Sends Coalition Letter Urging Congress to Consider Costly F-35 Program
   
Wednesday: Government Watchdog Responds to Highest Inflation in 40 Years
 
Thursday: Watchdog Slams U.S. Postal Service for Stamp Price Hikes
  
Friday: U.S. Virgin Islands Power System on the Precipice
 
 
MEDIA:
 
July 8, 2022: Patrick Hedger joined NBC Austin (Austin, TX.) to discuss current antitrust bills in Congress.
 
July 11, 2022: WBFF Fox45 (Baltimore, Md.) interviewed me about stadium subsidies.
 
July 11, 2022:  I appeared on 55KRC Radio (Cincinnati, Ohio) to talk about the Postal Service and the FDA.
 
July 11, 2022:  The Center Square ran TPA’s op-ed, “States embracing tax cuts, but Congress headed in wrong direction.”
 
July 11, 2022:  The Epoch Times quoted TPA in their story, “Bipartisan Bill Would Ban Lawmakers From Making Fundraising Calls When Congress Is in Session.”
 
July 12, 2022:  Real Clear Policy ran TPA’s op-ed, “SCOTUS Decision Should Scuttle Another FCC Net Neutrality Push.”
 
July 12, 2022:  Townhall.com ran TPA’s op-ed, “Prime Day Perspective Shows Antitrust Unnecessary.”
 
July 12, 2022:  Responsible Statecraft mentioned TPA in their story, “Watchdogs urge Congress to pump the brakes on new F-35 engine.”
 
July 12, 2022:  Inside Sources ran TPA’s op-ed, “Public Health’s Misinformation Against Vaping Is Eroding Its Credibility.”
 
July 12, 2022:  WBFF Fox45 (Baltimore, Md.) quoted TPA in their story, “JFX speed cameras to start issuing fines at midnight.”
 
July 12, 2022: The Georgia Virtue (GA Statewide) ran TPA’s op-ed, “States Embracing Tax Cuts, But Congress Headed In Wrong Direction.”
 
July 13, 2022: Filtermag.org ran TPA’s op-ed, “The EU’s Bizarre Plan to Beat Cancer by Protecting Cigarette Sales.”
 
July 13, 2022: Defense Daily mentioned TPA in their story, “Groups Question Investment in F-35 AETP Engine.”
 
July 13, 2022: Patrick Hedger joined 'Inside Sources' with Boyd Matheson on KSL News Radio 102.7FM to discuss Prime Day and antitrust.  
 
July 14, 2022: WBFF Fox45 (Baltimore, Md.) interviewed me about inflation.
 
July 14, 2022: The Telegraph ran TPA’s piece, “Public health’s misinformation against vaping is eroding its credibility.”
 
July 14, 2022: National Review | Capital Matters ran TPA’s op-ed, “Online Anti-Tech Push Exposes Antitrust Hypocrisy.”
 
July 14, 2022: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about inflation.


Have a great weekend!