Amazon has come to the swamp
At George Washington's inauguration in April of 1789, New York was our new Republic's capital. Less than a year later, a deal was struck by Jefferson, Madison, and Hamilton to move the capital to the mouth of the Potomac. The North would benefit by having Congress assume the States' debts, and the South would have a capital closer to home.
The only problem was, this new capital would be built on a parasite-infested swamp. It still is. Five years earlier in a letter, George Washington had applauded the region for farming as it "contains an inexhaustible supply of manure." It still does.
Even before Pierre Charles L'Enfant began draining the swamp to build the capital, land speculators had swept in, and deals of every kind were brokered for proximity to the new power center and hopes of future profit.
Fast-forward to today. In the Oscar-nominated film The Post, a Washington, D.C. newspaper owner and an editor are trying to choose whether to publish a story. Their decision is complicated by the fact that both are close to a number of leading politicians. Perhaps too close.
Katharine Graham struggles to decide whether to publish a story and betray her longtime friend, former defense secretary Robert McNamara. They run in the same circles and go to the same parties, often thrown by Graham herself. Her editor is used to vacationing on President Kennedy's yacht. But these are just facts of nature in the nation's capital. In "the swamp," the well connected enjoy a level of protection most people don't.
Jeff Bezos, founder of Amazon.com, and one of the richest people in America, now owns the Washington Post, and he's eager to play the happy host. "What he's going to do is revive the legacy of Kay Graham and her great socializing – bringing smart, interesting people together in a social context," his friend Jean Case tells Washingtonian magazine. Another friend says the same thing. "It's a bit of a mystery to me – whether he has political ambitions or thinks he needs to be on the right side of Washington, for Amazon." This friend tells the Washingtonian that "Bezos is attracted – like a moth to light – to Washington." And naturally, for anyone looking for business opportunities, being active in Washington is a big plus.
But as Alan Greenspan once said, "crony capitalism is essentially a condition in which ... public officials are giving favors to people in the private sector in payment of political favors." This is where the problem lies.
As the Wall Street Journal explains, the federal government is a big Amazon customer, and it's only growing bigger. "GBH Insights, a research firm, predicts that Amazon's government business will grow to $2.8 billion in 2018 and $4.6 billion in 2019, up from less than $300 million in 2015," the Journal reported this year. "Other company analysts say those projections are optimistic, but not implausible."
In fairness, Bezos already had many friends in high places even before hosting the best dinner parties in the nation's capital. He's a member of something called the Alfalfa Club, where the powerful from all walks of life cross paths. From senators to soldiers, it is an ideal way to mingle with the sort of people who can help throw billions of dollars' worth of federal spending to Amazon.
The Washingtonian goes on to note that the Pentagon has acknowledged that defense secretary James Mattis "receives individual advice from Bezos from time to time. Mattis's regulatory sway over Bezos's rocket company, Blue Origin – which plans to pursue national-security launch contracts – was important enough for Bezos to host him in Seattle last year." Amazon is also seeking a Defense Department contract that could be worth $10 billion over a decade. It's also working to change the law so government employees can buy more things directly from Amazon.com.
Jeff Bezos is considering putting Amazon's HQ 2 in the D.C. area. Three of the 20 competing bids are around the Beltway. That would give him and his company even more influence over federal policy.
Cronyism is easy to see but difficult to prove. Perhaps Amazon is earning all its government contracts on a level playing field. Perhaps Bezos was simply looking for a nice place to live, one with a renowned local newspaper he could buy. But that's not how it looks. Amazon has come to the swamp, where the inexhaustible supply of manure still permeates the air.
Matt Fitzgibbons is a prominent digital marketing guru based in Connecticut and founder of LibertyWebMarketing.com. He is also an award-winning singer-songwriter and publisher of PatriotMusic.com.