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Amazon's War On The House Of Otto, Germany's $18 Billion Family

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Re: Amazon's War On The House Of Otto, Germany's $18 Billion Family

#81

Post by dllthomas »

refurb wrote: post #73
dllthomas wrote: post #66

Earlier quoted context omitted.

That was my recollection, but looking at plots of real GDP per capita and debt/GDP, I'm not seeing any substantive changes associated with the Thatcher years. Is there any metric where it pops?

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/08/a... It looks like under Thatcher got inflation under control, unemployment rose, then fell (similar to the US during the same time period) and the economy had a run of growth from '81 to '90 that peaked near 5%. Not too shabby when you look at the 10 years prior when inflation was 25% and the economy shrank from '74-76. Britain was regarded as a "sick man of…

Ah, hadn't looked at inflation. That does seem to have shaped up around that time period.

"unemployment rose, then fell"

http://www.wolframalpha.com/input/?i=uk+unemployment+1984+to...

1970-1979, unemployment was mostly below 5%. It was about 7% after it "fell" post-Thatcher, when it started rising again in 1991. It then fell again, finally getting back to pre-Thatcher levels only sometime post 2000 - where it stayed until the 2009 crash.

"[T]he economy had a run of growth from '81 to '90 that peaked near 5%.

"Not too shabby when you look at the 10 years prior when inflation was 25% and the economy shrank from '74-76."

That's pretty cherrypicky. Let's get a slightly broader view:

http://www.wolframalpha.com/input/?i=uk+real+gdp+per+capita+...

The economy shrank from '74-'76; it also shrank '79-'81 and '90-'91. The years '71-'80 peaked in '73 at over 7% growth (for which the '74-'76 slump may well have been a correction). I'm not sure I'd call it shabby, but I'm not sure it's great, especially with the high unemployment rate.

'Britain was regarded as a "sick man of Europe" before Thatcher took office.'

I'm aware of the perception, and the shifts therein. I was curious as to the accuracy of it.

Re: Amazon's War On The House Of Otto, Germany's $18 Billion Family

#82

Post by PythonicAlpha »

nl wrote: post #76
PythonicAlpha wrote: post #67

Earlier quoted context omitted.

Thatcher was highly regarded as role model how profitable it is to go for more privatization. But the result is, that today the UK is in worse state as it was before Thatcher. It was profitable of course! But not for the 99% of the people.

I'm no fan of Margaret Thatcher, but the UK economy in the 1970's was a complete disaster - much, much worse than it is today. For example a combination of very high inflation (above 15% pa for the 4 years between 1974 and 1977[1]) combined with huge strikes by unions led to incidents like the "three day week"[2] (where the conservative UK government rationed electricity to businesses: they could only use it 3 days p…

Have a look at my answer to "refurb".

I also don't want to say that everything was good before Thatcher or that a socialistic approach is always better or even good. But what I wanted to say, that many of the long term results of Thatcherism are hurting the country till today, even when it was brought out of economic decline.

I think, that neither socialism nor pure thinking that capitalism and market will "just make it all right" work in the long run.

The results of "market makes it alright" are visible in the sweat shops of the 3rd world countries. In the western countries we have a long tradition of market regulation and that is our luck -- but it seems we are running out of luck.

Re: Amazon's War On The House Of Otto, Germany's $18 Billion Family

#83

Post by twic »

nl wrote: post #76
PythonicAlpha wrote: post #67

Earlier quoted context omitted.

Thatcher was highly regarded as role model how profitable it is to go for more privatization. But the result is, that today the UK is in worse state as it was before Thatcher. It was profitable of course! But not for the 99% of the people.

I'm no fan of Margaret Thatcher, but the UK economy in the 1970's was a complete disaster - much, much worse than it is today. For example a combination of very high inflation (above 15% pa for the 4 years between 1974 and 1977[1]) combined with huge strikes by unions led to incidents like the "three day week"[2] (where the conservative UK government rationed electricity to businesses: they could only use it 3 days p…

This is certainly the standard story.

It's not at all clear to me that it was Thatcher's amazing economic policies that turned the economy around rather than the boom years of North Sea oil.

Even if Thatcher's policies did stimulate the economy at the time, from where we're sitting now, what is clear is that that stimulus was not sustainable, and that all that privatisation and the Big Bang did was borrow from the future to splash the cash in the then-present.

Re: Amazon's War On The House Of Otto, Germany's $18 Billion Family

#84

Post by nl »

twic wrote: post #83
nl wrote: post #76

Earlier quoted context omitted.

I'm no fan of Margaret Thatcher, but the UK economy in the 1970's was a complete disaster - much, much worse than it is today. For example a combination of very high inflation (above 15% pa for the 4 years between 1974 and 1977[1]) combined with huge strikes by unions led to incidents like the "three day week"[2] (where the conservative UK government rationed electricity to businesses: they could only use it 3 days p…

This is certainly the standard story. It's not at all clear to me that it was Thatcher's amazing economic policies that turned the economy around rather than the boom years of North Sea oil. Even if Thatcher's policies did stimulate the economy at the time, from where we're sitting now, what is clear is that that stimulus was not sustainable, and that all that privatisation and the Big Bang did was borrow from the fu…

Yep, I'm not arguing it was Thatcher that fixed it. Just making the point that the 1970's truly were bad in the UK.

Re: Amazon's War On The House Of Otto, Germany's $18 Billion Family

#85

Post by PythonicAlpha »

twic wrote: post #83
nl wrote: post #76

Earlier quoted context omitted.

I'm no fan of Margaret Thatcher, but the UK economy in the 1970's was a complete disaster - much, much worse than it is today. For example a combination of very high inflation (above 15% pa for the 4 years between 1974 and 1977[1]) combined with huge strikes by unions led to incidents like the "three day week"[2] (where the conservative UK government rationed electricity to businesses: they could only use it 3 days p…

This is certainly the standard story. It's not at all clear to me that it was Thatcher's amazing economic policies that turned the economy around rather than the boom years of North Sea oil. Even if Thatcher's policies did stimulate the economy at the time, from where we're sitting now, what is clear is that that stimulus was not sustainable, and that all that privatisation and the Big Bang did was borrow from the fu…

That is exactly what I wanted to point out. Oftentimes such privatization is buying short time benefits from the future. In my opinion, Britain has sold to much of its assets and is carrying a huge burden today.

Re: Amazon's War On The House Of Otto, Germany's $18 Billion Family

#86

Post by refurb »

matthewmacleod wrote: post #80
refurb wrote: post #63

Earlier quoted context omitted.

So you're saying if someone need $100 right now and has terrible credit, that's it's better that they can't get the $100 at all, rather than pay a high interest rate?

That's not really the problem, though. The issue comes when those loans can be rolled over, and when the borrower ends up with multiple stacked payday loans, and can't make any headway into the capital because an increasingly large proportion of their income is taken up by interest payments. It's literally usury, and close to loan-sharking.

No I understand that, but the point remains, if you got rid of payday loans, you'd leave a lot of people with no options. It's not like they can walk into a bank and get a line of credit.

Re: Amazon's War On The House Of Otto, Germany's $18 Billion Family

#87

Post by sudomal »

TrainedMonkey wrote: post #3

Moral of the story is - people like their goods to be cheap, quickly delivered, and convenient to order. Amazon encompasses all of that and it seems that Otto's companies do not. I applaud his effort to put people ahead of profits, but unless he changes his business model amazon will continue to eclipse his empire.

Different retailers target different sectors of the market and those sectors have varying levels of profit and growth. To me, Amazon seems to be aiming at the lower end, i.e. they focus on price rather than ethics, so they experience high growth in sales and relatively low profits.

I don't think everyone should copy them. It's like telling Apple to copy Acer or Samsung.

Re: Amazon's War On The House Of Otto, Germany's $18 Billion Family

#88

Post by toomuchtodo »

samplonius wrote: post #50
toomuchtodo wrote: post #19

Earlier quoted context omitted.

I'm aware. I have more faith in the German government protecting its citizens compared to the US government.

Based on what? The Otto Group is battling unions in Hermes, like Amazon is battling unions in their warehouses. Is there any difference at all? I know Europe like to view US as a big monster to scare kids: you better behave or big mean US will eat you! But is there anything objective that the German gov't is going to help anyone anymore than the US gov't? Maybe healhcare?

> But is there anything objective that the German gov't is going to help anyone anymore than the US gov't? Maybe healhcare?

A substantial social safety net? Sane workplace hours and practices?

Re: Amazon's War On The House Of Otto, Germany's $18 Billion Family

#89

Post by nl »

PythonicAlpha wrote: post #85
twic wrote: post #83

Earlier quoted context omitted.

This is certainly the standard story. It's not at all clear to me that it was Thatcher's amazing economic policies that turned the economy around rather than the boom years of North Sea oil. Even if Thatcher's policies did stimulate the economy at the time, from where we're sitting now, what is clear is that that stimulus was not sustainable, and that all that privatisation and the Big Bang did was borrow from the fu…

That is exactly what I wanted to point out. Oftentimes such privatization is buying short time benefits from the future. In my opinion, Britain has sold to much of its assets and is carrying a huge burden today.

Saying that without also acknowledging the problems of the 1970's is just as bad as saying "the 1980's were great for Britain - look how profitable companies became".

Many things Thatcher did were terrible, but at the same time (for example) it's difficult to argue that a national government should be in the business of running road transport for the country[1]. There's a reasonable argument that some utilities work best in state ownership in some cases, but many of the other things that were run by the government prior to Thatcher were complete disasters.

[1] http://en.wikipedia.org/wiki/British_Transport_Commission

Re: Amazon's War On The House Of Otto, Germany's $18 Billion Family

#90

Post by eru »

this_user wrote: post #53

What isn't mentioned in that article is that two other high profile German mail order companies ("Quelle" and "Neckermann") declared bankruptcy over the last couple of years and were mostly liquidated, because their business models had become unsustainable. Otto so far is the last of those former giants standing and probably profiting from the death of its direct competition. An acquaintance of mine actually works fo…

My money is firmly on Amazon. But that might be because I have seen how the sausage is made at Zalando, and don't have that insight on Amazon.
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