Tag Archives: Smoking

Amazon and Apple: Wall Street’s Trillion Dollar Babies

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By Dean Baker

Source: CounterPunch

Last month Amazon joined Apple, becoming the second company in the world to have a $1 trillion market capitalization. Amazon’s accomplishment didn’t cause quite as much celebration as Apple’s – it pays to be number one – nonetheless this was treated as a milestone that all of us should view as good news.

Actually, the celebratory coverage of both events demonstrated the incredibly ill-informed nature of much economic reporting in the United States. A big run-up in share prices is good news for the people who own lots of stock in the company; it is not especially good news for anyone else.

In principle, the value of a stock is supposed to represent the expected future earnings of the company. I said “supposed” because stock prices fluctuate wildly in response to all sorts of things that are not obviously connected to future earnings, but in the textbook definition, it is the discounted value of future earnings that determine stock prices. To be clear, this is not the socialist textbook, this is the capitalist textbook that is taught in business schools.

What does it mean that Amazon and Apple have market valuations of more $1 trillion? Presumably, it means that investors are now more optimistic about the companies’ future profit potential. It’s difficult to see why the rest of us should celebrate this outcome.

Apple obviously makes products that consumers value, and in that sense, it is contributing to the economy and generating wealth. But, suppose instead of one huge company we had 10 little (or littler) Apples that sold iPhones, computers, and the other items that comprise Apple’s product line? Would we be any poorer as a society in that case, even if the market cap of our leading tech company was just $100 billion?

Or, even with Apple as our dominant tech company, suppose the surge over the $1 trillion barrier was due to a victory in an antitrust case, which would allow Apple to charge higher prices going forward. That’s great for Apple’s stockholders, but what exactly would the rest of us be celebrating? Paying more money for our iPhones?

In the same vein, in the past, Apple has been caught conspiring with other Silicon Valley companies, agreeing not to compete for workers. Apple, along with its co-conspirators, ended up paying a substantial settlement as a result.

Suppose Apple found a legal way to fix wages or bought a judge to make it legal. The prospect of a lower wage bill would also be good for Apple’s stock price, but not especially good news for those of us who are more likely to make our living from working than owning Apple stock. Again, there is not much in this story for most of us to celebrate.

The celebration for Amazon is even more peculiar. Amazon is clearly an innovative company that has sped the development of Internet retailing. It also has specialized in tax avoidance, eliciting investment incentives from state and local governments, and abusive labor practices.

Perhaps the crossing of the $1 trillion threshold was associated with investors’ confidence that Amazon’s CEO had developed a new and more effective tax avoidance scheme. Again, great news for Amazon stockholders, but pretty bad news for the folks who will have to make up the revenue shortfall.

What is notably different about Amazon is that, unlike Apple, the company does not have huge profits. While Apple earned $48.4 billion in after-tax profits in 2017, Amazon’s profit was just over $3 billion. That gives the company an incredible price-to-earnings ratio of more than 300-to-1.

There are two stories we can tell here. One is that investors expect Amazon’s profits to increase enormously. This would be a case where it takes advantage of its market power to increase its profit margins hugely. Ordinarily, this would be the basis for antitrust action, but given the corruption of the political system, it is certainly possible the company could get away with it. Again, is a future of higher prices something the rest of us should really be celebrating?

The other possibility is that Amazon’s stock price is driven by fantasy, like the Internet stocks of the late 1990s or Bitcoin today. Presumably, at some point reality will reassert itself, but should the rest of us celebrate ill-informed investors being taken for ride?

It is striking that so many would see economic or social progress as being in some way captured by stock valuations. In 1953 Jonas Salk developed the polio vaccine. This eventually led to the near eradication of a disease that had killed or crippled tens of millions of people.

Salk didn’t try to patent his invention. A private charity funded the research. But, what if there had been a Salk Inc. that had the patent on a vaccine that could save tens of millions of lives? Surely the market cap would be an order of magnitude larger than either Apple’s or Amazon’s. Was it a loss to society that the vaccine was made available for pennies rather than tens of thousands of dollars a shot?

If we want to talk about value to society, the anti-smoking crusaders of the last four decades have saved tens of thousands of lives and improved the health of millions more by reducing smoking in the United States and around the world. The people who led this fight, most of whom were women, won’t be featured on the covers of business magazines, but they did much more to enhance society’s wealth than Jeff Bezos.

Anyhow, congratulations to Apple and Amazon’s stockholders on their stock gains. They have been fortunate. The rest of us, not so much.

E-Cig Users and Vapers Need to Join Anti-Drug War Movement

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By Tony Newman

Source: Drug Policy Alliance

New Year’s Eve is around the corner and no doubt millions of smokers will make resolutions to quit.

Many smokers would love to give up the habit. But smoking is an incredibly hard addiction to quit. Many heroin users say it is harder to quit smoking than quitting heroin.

Thankfully, there is an exciting new tool that is helping millions give up on smoking: e-cigs and vaping. Stand on the streets of most major U.S. cities for five minutes and you will see people walking by with an e-cig instead of a cigarette hanging from their mouth.

It is encouraging how fast e-cigs and vaping have taken off. Smokers aren’t stupid. When offered a safer alternative, millions have chosen it. The fact that e-cigs can be purchased at most delis and stores makes it easy for those who want to reduce the harms associated with smoking.

Instead of praising the great news that millions have stopped smoking, too many in the health and anti-smoking fields beat the drums against e-cigs and vaping. Opportunistic politicians and anti-smoking lobbyists ignore emerging evidence that vaping is vastly safer than smoking, and instead are trying to equate the two activities.

City after city has passed anti-vaping laws akin to anti-smoking statues. Cities have prohibited where people can vape, and are currently trying to ban flavors that vapers say helps them quit. Legislation is also in the works to raise the age so people under 21 can’t use e-cigs.
E-cig users should be worried and they should be pissed.

They should be worried because people are going make it harder and harder to vape. And vapers should be pissed because these “health” advocates are trying to take away their tools that can literally help save their life.

It is time for smokers and vapers to join the growing anti-drug war movement. Smokers and vapers may not think about it, but they are also drug users and they are being demonized and threatened like other drug users. And vapers may not know it, but they are also harm-reductionists.

Harm reduction is a major philosophy of the drug reform movement. Thanks to harm-reduction activists we have clean syringe programs that have prevented hundreds of thousands of people from getting HIV.  We have passed laws that allow people to call 911 when witnessing an overdose without fear of being arrested.  And have expanded access to naloxone, that reverses overdose.

But there are too many backward-thinking politicians and uninformed folks who have tried to block such programs by using the same flawed logic that it sends the “wrong message.”

E-cigs and vaping is the most mainstream example of harm reduction in our society right now. It’s something that can save more lives than any other harm reduction practice in our society.

But there will be reactionary folks who will try to ban vaping and e-cigs like they tried to ban clean syringes.

Vapers need to fight for their rights and their lives. They need to join our movement and say we are not going to allow misinformed, judgmental folks to take away their e-cigs. There are millions of vapers who could be a powerful political voice.

Ethan Nadelmann, of the Drug Policy Alliance has a powerful message when he talks about the cost of a slow learning curve. It took the U.S. 20 years to get behind syringe exchange programs, even though much of the rest of the world had embraced it and the evidence was crystal clear that syringes reduced HIV while not increasing drug use. Because of this slow learning curve, 100’000’s of people needlessly got HIV and died.

This is our moment to organize and fight for e-cigs and vaping as a life-saving harm-reduction practice.

A slow learning curve is not something we can accept.

Tony Newman is the director of media relations for the Drug Policy Alliance.