Why Donald Trump went after Jeff Bezos and Amazon: Two billionaires across a cultural divide

Donald Trump and Jeff Bezos inhabit very different worlds. The president is a staunch bricks-and-mortar man who made his fortune building towers and dealing with blue-collar workers. The founder of the world's largest store, by contrast, is a space enthusiast who experiments with robots and operates much of the cloud where the new economy's data lives.

Trump's decision in recent days to zero in on Bezos and Amazon.com as his latest Twitter targets has highlighted a severe fracture in American society, a divide between concrete and steel and zeros and ones, a split that is as much philosophical as it is economic, as much about the fraying of communities as it is about the shape of commerce.

Four times over the past week, the president has criticised Bezos for running a company that he says fails to pay its share of taxes, for taking undue advantage of the struggling U.S. Postal Service, and for using the news organisation he owns - this one - to advance his own interests.

Even the manner in which the dispute has played out illustrates the gulf that separates Trump and Bezos, in their personal styles and in their conceptions of the country's present and prospects.

As the president pushes his attack, blaming Bezos for the closing of "fully tax paying retailers . . . all over the country," Amazon's founder remains mute, his company declining to publicly engage a president with a different prism on reality.

Some of Trump's aides and allies say his beef with Amazon, Bezos and The Washington Post, which Bezos owns separately from the behemoth online retailer he created, stems from Trump's lifelong rivalry with billionaires who surpass him on lists of the planet's richest men.

For many years, Trump personally lobbied the editors who craft Forbes magazine's annual estimation of billionaires' wealth, arguing his claim of a higher net worth. In the new list, Bezos for the first time holds the top position, at US$112 billion ($154b); the magazine dropped Trump to No. 766, with a value of US$3.1b, down US$400 million in the past year.

Amazon CEO Jeff Bezos. Photo / AP

But others who have heard Trump rail against Amazon as a "monopoly" say his central complaint is based more on a cultural gap than a financial one, deriving from the fact that the president has never been known to shop online and does not use a computer - and has therefore never experienced what has drawn so many Americans from local storefronts to Amazon and other online retailers.

Trump has told several senior White House officials that his friends complain about Amazon and are "getting screwed" by what he views as the company's monopolistic practices, according to a person who has heard the criticisms.

And Trump believes Bezos is using The Post to damage him politically, even as Amazon benefits from its government contracts with the Postal Service and the Defense Department, according to two advisers who speak to Trump frequently.

Bezos, a principal architect of the new digital economy, is in some ways a perfect foil for the president, a symbol of a technological revolution who has posed enthusiastically with a robot dog. The two serial entrepreneurs represent opposing notions about how the country can build an economy that works for Republican and Democratic strongholds alike.

But Trump's decision to pick a fight with Bezos is not a simple defense of the old economy against the disruptions of the new. After all, Trump is, like Bezos, a classic disrupter; the president has altered American politics by ignoring tradition and breaking long-standing rules, as Bezos did in the retail realm.

Bezos purchased The Post in 2013 for US$250m after being approached by the paper's then-chairman, Donald Graham, who was looking for a new owner with the wherewithal to remake a declining business.

Over the past week, Trump has repeatedly criticized The Post as "fake," alleging that Bezos and Amazon use the newspaper to advance the interests of the owner's far larger principal business.

"People like Trump assume Jeff had these ulterior motives for buying The Post," said Brad Stone, author of a book on the rise of Bezos and Amazon, "The Everything Store." "But it was, for him, a small personal investment, an experiment for his personal approach of long-term thinking and bringing technology to bear on difficult problems. His interests in Washington, like selling computer contracts to the Defense Department, aren't areas where owning The Post is going to help him."

While we are on the subject, it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon. That amounts to Billions of Dollars. The Failing N.Y. Times reports that “the size of the company’s lobbying staff has ballooned,” and that...

— Donald J. Trump (@realDonaldTrump) March 31, 2018

...does not include the Fake Washington Post, which is used as a “lobbyist” and should so REGISTER. If the P.O. “increased its parcel rates, Amazon’s shipping costs would rise by $2.6 Billion.” This Post Office scam must stop. Amazon must pay real costs (and taxes) now!

— Donald J. Trump (@realDonaldTrump) March 31, 2018

Inside The Post, the notion that Bezos controls or directs news coverage or editorial policy is dismissed as the president's fantasy.

"Trump appears to view ownership of a newspaper as a way to assert influence," said Fred Ryan, The Post's chief executive and publisher.

"Jeff sees the value of a strong, independent press. Jeff has never proposed a story. Jeff has never intervened in a story. He's never critiqued a story. He's not directed or proposed editorials or endorsements. The decisions are made here."

Other companies that Trump has attacked - Carrier and Ford, for example - have responded in the public square, by tweeting, issuing news releases and making TV appearances to push back against Trump's version of reality.

But an Amazon spokesman said neither Bezos nor the company would comment on the president's criticisms. Amazon's stock value declined by more than 5 per cent after the president's recent attacks but has gained ground this week.

White House officials have said that Trump's anti-Amazon tweets have generally followed the appearance of Post stories that particularly bothered the president.

Last summer, hours after The Post published an article revealing that a fake Time magazine cover featuring Trump had been hung on the walls of at least five Trump clubs around the world, the president tweeted that The Post was "fake news."

Similarly, Trump's tweets last week alleging that Amazon pays "little or no taxes to state & local governments" and uses "the Fake Washington Post . . . as a 'lobbyist' " came on the heels of a Post story detailing how Special Counsel Robert Mueller and adult-film actress Stormy Daniels are pressing the president to open the books of the Trump Organization.

In fact, Amazon last year began collecting sales taxes in the 45 states that require it and the company, which initially opposed sales taxes for online purchases, has more recently lobbied for a federal law creating a uniform system for collecting sales taxes online.

Stone, the biographer, said the president's choice of Amazon as a target "seems like a major miscalculation."

"Amazon is one of the country's most respected brands," Stone said. "It's a massive employer, and its workforce is not just coastal - it's in almost every state. It's not an easy company to get a mob incensed by."

The #AmazonWashingtonPost, sometimes referred to as the guardian of Amazon not paying internet taxes (which they should) is FAKE NEWS!

— Donald J. Trump (@realDonaldTrump) June 28, 2017

Stylistically, Trump and Bezos could hardly be more different. Bezos is famously obsessed with process and metrics, basing his business decisions on research and consumer behavior.

Trump has always been skeptical of research, trusting his gut rather than data. Bezos in his early years at Amazon proudly described himself as a nerd; Trump from high school through half a century in business made fun of scholarly types, saying he would rather hang out with his security men than with the executives he derided as bean counters.

But the two men have more in common than first impressions may indicate. Both were raised by immigrant parents, went to Ivy League colleges and built their own businesses.

Both rose to business prominence in part by using the media to boost their public images.

Although Bezos in recent years has given fewer interviews, he was strategic from Amazon's start about making appearances on magazine covers and "60 Minutes" as he launched new products.

Trump, in contrast, opened the media faucet in his 20s and never turned off the gusher.

Both men made mid-career moves into the media world that put them into the national conversation in a new way, Bezos by buying The Post and Trump by taking a 50 per cent stake in 2003 in "The Apprentice," the NBC reality show he also hosted.

And while both billionaires have been accused of using tough tactics to gain advantages in their industries, the two men have sharply different philosophies about how they approach the risks inherent to their work.

Bezos said he seeks to avoid doing things he will later regret. "I want to have lived my life in such a way that when I'm 80 years old, I've minimised the number of regrets that I have," he said on "60 Minutes" in 1999. "A lot of people do that, even if they don't call it something as dorky as a regret-minimisation framework."

Trump, in contrast, has said that even when his behavior generates waves of criticism, it's wrong to express regret, because that sends a message of weakness. "To look back and say, 'Gee whiz, I wish I didn't do this or that,' I don't think that is good, and I don't think in a certain way that is healthy," he told Fox News during the 2016 campaign.

United States President Donald Trump. Photo / AP

Trump's critique of Amazon has focused in part on the contention that the company has profited from a sweetheart deal with the Postal Service, which Amazon uses for "last mile" delivery - the final step in getting a package from one of the company's sorting centers to a customer's home.

The president has received several briefings on the Postal Service's troubled finances, and no one in those sessions has argued that Amazon is the cause of the agency's problems, according to two people familiar with the briefings.

But Trump has repeatedly said that Amazon is the problem "and really seems to believe that is true," one of the people said, declining to be named for fear of retaliation.

Trump often says that Amazon is running a "Post Office scam" in which the Postal Service "will lose US$1.50 on average for each package it delivers for Amazon."

That idea comes from a study that Citigroup conducted last year, arguing that the price the Postal Service charges Amazon and some other e-commerce companies for deliveries "has been maintained at artificially low levels, creating . . . a government-enforced taxpayer subsidisation" and putting FedEx and United Parcel Service at a competitive disadvantage.

But the study also notes, as others have, that package delivery is vital to the Postal Service, as Americans now send 40 per cent less personal mail than they once did. The Postal Service gives Amazon and other major shippers a discount because their business supplies the service with a steady, large volume of packages - and revenue that keeps its fleet of delivery trucks on the road.

The Postal Service's profits are difficult to measure because of its fixed costs - such as labor, pensions and the requirement that it serve hard-to-reach communities. The Postal Regulatory Commission, which governs the service's rates, concluded last week that contracts such as Amazon's generated US$7b in profit for the Postal Service last year.

Although the accuracy of Trump's statements about Amazon and the Postal Service has been called into question by Wall Street analysts and journalists, the president's tweetstorms may nonetheless pose difficulties for the company.

A Wells Fargo analysis concluded that although "the arguments made by the president against Amazon have been undermined by third-party fact checkers . . . the president's actions [could stir] additional scrutiny of Amazon beyond the federal government."

The Post has been a steady target of Trump's attacks on the news media. But although the president has repeatedly linked Amazon and Bezos to The Post's coverage of his administration, Ryan, the publisher, said he is not concerned about damage to The Post's reputation. "Most everybody recognises it's Trump fiction," Ryan said. "He has this obsession despite knowing what the facts are."

The newspaper's executive editor, Martin Baron, said Bezos plays no role in decisions about what stories get covered or how they are written.

Baron said that he and other Post executives have a conference call with Bezos every other Wednesday but that the conversations focus on corporate matters such as technology and subscription pricing, not on coverage or editorial decision-making.

"Most ideas for stories come from reporters and their editors," Baron said. "I haven't received any ideas from Jeff."

The closest Bezos has come to making a coverage suggestion, Baron said, was when he wondered whether The Post might want to have a columnist specialising in gender issues.

"We said, 'Yes, that's a good idea,' " Baron said, and The Post plans to add such a position.

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!

— Donald J. Trump (@realDonaldTrump) March 29, 2018

Stone, the biographer, said that although "it sounds like Trump would be directing news coverage if he owned a paper, Jeff has taken the opposite approach from Day One. He's made it clear that The Washington Post should operate independently."

But Politico media critic Jack Shafer argues that Trump is right to connect Amazon, Bezos and The Post, because the retailer's wealth made Bezos's purchase of the paper possible.

"If Amazon didn't exist, it's unlikely the Washington Post would exist in its current form," wrote Shafer, whose wife, Nicole Arthur, is The Post's travel editor. Shafer rejected the notion that The Post is lobbying on behalf of Amazon but said that by linking The Post to Amazon and driving down Amazon's stock price, Trump had found a way to try to punish a news organisation that he otherwise couldn't harm.

Post executives rejected Trump's accusation that The Post has supported Amazon's interests. "The reality is he didn't present any evidence that we were lobbying for Amazon," Baron said. "The reason is because there is no evidence."

Post editors said Bezos asked them to cover his other enterprises just as they would any other business, and Baron said that is what The Post has done.

He provided a list of articles The Post has published that have raised questions about Amazon's practices and products, including an analysis that argued that Amazon's Prime membership program may not be worth the fee the company charges, a column that concluded that Amazon's dominance of some retail markets "might not be in the public interest," and a product review that dismissed Amazon's initiative to allow delivery agents to enter people's unoccupied homes to drop off packages as "creepy."

Unlike many news-organization owners, who often play a defining role in setting the outlet's editorial opinions, Bezos has not imposed his views on The Post's editorials, said Fred Hiatt, editor of the editorial department, which operates separately from the Post newsroom.

"He doesn't give us instructions," Hiatt said. "Our editorial policies and the fundamental principles The Post stands for haven't really changed. Nobody has ever once tried to get me to use the page for either the business advantage or the political advantage of the owner."

Hiatt said his biweekly conversations with Bezos often focus on strategy and ways to engage more readers. "He is very committed to the idea of an opinion section with true ideological diversity," Hiatt said. "He's allowed us to add a lot of new voices."

Amazon is doing great damage to tax paying retailers. Towns, cities and states throughout the U.S. are being hurt - many jobs being lost!

— Donald J. Trump (@realDonaldTrump) August 16, 2017

Bezos' own politics remain a mystery to many at The Post; Ryan and Baron said they have no idea what the owner's views are. Stone, the biographer, said that he was unable to crack that nut either; he concluded that Bezos decided early on in his career that there was no upside to expressing political opinions when running a large company with employees from a broad range of perspectives.

Bezos has responded to Trump's criticism a couple of times. He hit back in late 2015, after candidate Trump accused him of owning The Post as a way to reduce Amazon's tax bill. Bezos, who owns a space exploration business, tweeted: "Finally trashed by @realDonaldTrump. Will still reserve him a seat on the Blue Origin rocket. #sendDonaldtospace"

Later in the campaign, Trump complained that "every hour, we're getting calls from reporters from The Washington Post asking ridiculous questions, and I will tell you, this is owned as a toy by Jeff Bezos." Trump said Amazon was using The Post "as a tool for political power against me. . . . We can't let him get away with it."

Trump (left) and Satya Nadella, Chief Executive Officer of Microsoft (center) listen as Bezos speaks during an American Technology Council roundtable in the State Dinning Room of the White House. Photo / AP

Bezos responded at a Post-sponsored technology conference, saying that Trump's threats were "not an appropriate way for a presidential candidate to behave."

Six months later, after Trump's victory, Bezos struck a different tone: "Congratulations to @realDonaldTrump. I for one give him my most open mind and wish him great success."

Efforts to glean Bezos' politics have focused mainly on his donations. Some friends have described him as a libertarian, and he donated US$100,000 in 2010 to a successful campaign to defeat an initiative in Washington state that would have created a new income tax on the state's richest residents. He has also given money to the foundation that publishes the libertarian magazine Reason.

He has also donated to social causes, including a US$2.5m gift in 2012 from Bezos and his wife, MacKenzie, to a drive in Washington state to legalise same-sex marriage.

Washington state does not register voters by party, and Bezos has not stated an affiliation with either party. Bezos is an infrequent voter, according to King County records. He voted in nine of the 38 elections held between 1996 and last year; he generally votes in presidential-year general elections but not in primaries or state and local elections.

Bezos and his wife are among the largest donors to Amazon's own political action committee, giving US$20,000 in 2016 and US$10,000 in this year's cycle. That PAC gave a large majority of its 2016 donations to Republicans, with the largest gifts going to Speaker Paul Ryan, R-Wis., and committees supporting him.

Amazon PAC gave its biggest donations that year to members of Congress from the company's home state and to Senate Minority Leader Chuck Schumer, D-N.Y., Rep. Jason Chaffetz, R-Utah, and Rep. Gerald Connolly, D-Va.

The PAC's donations to political candidates' PACs went overwhelmingly to Republican-affiliated groups in 2016 and the current cycle. Amazon PAC gave equally to the Democratic and Republican congressional campaign committees, but most of its gifts to individual candidate PACs went to groups supporting Republicans, such as Sen. Marco Rubio, Fla., Sen. Rand Paul, Ky., and Rep. Patrick McHenry, N.C.