PolitiFact Wins the “Inception” Award

I’m back again with my fifth look at PolitiFact claims that President Trump is a “pants-on-fire” liar. Again I’m tackling a Twitter statement by President Trump:

“Amazon has a “no-tax monopoly.”
— PolitiFact National on Wednesday, July 26th, 2017

Here is the entire tweet: “Is Fake News Washington Post being used as a lobbyist weapon against Congress to keep Politicians from looking into Amazon no-tax monopoly?”

Disclosure: I believe Amazon provides customers amazing convenience. I just wish three things:

  1. They treated their employees better.
  2. They paid their fair share of the taxes.
  3. They weren’t hurting society by wiping out hundreds-of-thousands of retail jobs through an apparently legal but highly questionable tactic.

My Opinion

I couldn’t help but notice that PolitiFact tweaked President Trump’s words just a little bit. They had him saying that Amazon “has a no-tax monopoly,” when, in fact, the word “has” never appears in the original tweet. Perhaps I’m being a bit too nit-picky here. Perhaps not.

President Trump’s original tweet was a little ambiguous – was he saying that Amazon has a no-tax monopoly or was he saying that Congress should investigate whether Amazon has a no-tax monopoly? In any case, by inserting the word “has” into their headline, it is clear what PolitiFact wanted President Trump to say. No more ambiguity. Thank you PolitiFact for clearing that up.

And now the runway was cleared for PolitiFact’s take-off against President Trump.

But let’s play along with PolitiFact, and let’s pretend President Trump’s tweet really did say, “Amazon has a no-tax monopoly,” because it’s tempting when you put it that way to agree with PolitiFact. After all, Amazon does pay some taxes and is not, technically speaking, a monopoly. But then I thought to myself that the phrase ‘no-tax monopoly’ actually is a pretty good way of describing Amazon. At least it’s more accurate than saying ‘benevolent, patriotic, benefactor of humanity.’ Or even more accurate than saying ‘normal American company just doing its thing,’ which is what PolitiFact would have us believe.

In analyzing messages, PolitiFact encourages readers to look past the literal meaning of the words and to address the underlying message.

So what was the ‘underlying message in President Trump’s tweet? I think everyone knows what it is except PolitiFact. Trump’s message clearly is that, while nobody likes paying taxes, Amazon stretches that position way too far. In fact, Amazon is one of a handful of big companies that truly takes advantage of the complicated U.S. and international tax laws to avoid paying its fair share of taxes. Plus, while Amazon might not fit the classic definition of a monopoly, who is kidding whom: Amazon is causing massive job losses in retail not simply because of its superior technology, but by pursuing a fundamentally unfair business model. Monopoly or not that practice deserves to be looked at.

Does Amazon pay taxes?

Of course Amazon pays taxes. Everyone knows that including President Trump. But Amazon fits into that very special league of U.S. multi-national companies that have lobbied and lawyered their way into paying a ridiculously low amount of taxes. To Amazon, paying taxes is a game. They are on one side, and the U.S. and other international tax agencies are on the other. If Amazon with its horde of in-house and contracted tax attorneys wins, this raises the tax burden on the rest of us. It’s not fair and President Trump is right to call it out.

Here are a few articles that make the point:

  1. How Amazon Saved Billions in Taxes
  2. Revealed: How Project Goldcrest helped Amazon avoid huge sums in tax
  3. Since ’08 Walmart Paid 46x more income tax than Amazon
  4. Amazon is Ordered to Pay Nearly $300 million by EU over ‘Illegal Tax Advantage
  5. Google Responds to the EU Fine with a “What about Amazon?”   (Ok, technically this article was about Google, but I thought it proved my point that EVERYONE knows that Amazon is the poster child for tax evasion, including Google.)
  6. Amazon paid just £15m in tax on European revenues of £19.5bn

So, yes, Amazon pays taxes, and, yes, there is no shame in only paying what you legally owe, but Amazon pushes this philosophy to the extreme. If the entire country acted like Amazon, the U.S. tax code would be thousands of pages longer and still incapable of plugging all the loopholes and gray areas people were trying to exploit.

Is Amazon a Monopoly?

In its article, PolitiFact quoted an anti-trust expert who stated that Amazon did not fit the legal definition of a monopoly. I believe him. But I also believe that definition might be out-of-date in the internet age. Here are five articles taken off the first page of a Google search:

  1. Stores Are Closing at a Record Rate as Amazon Chews Up Retailers (Bloomberg)
  2. Is Amazon Killing Small Businesses (Forbes)
  3. What Retail Stores Are Closing Most Locations Due to Amazon? (Money)
  4. Amazon is Going to Kill More American Jobs Than China Did (MarketWatch)
  5. Amazon is Killing these Seven Companies (Business Insider)

All of these articles point to the fact that Amazon is killing hundreds of thousands of jobs in America. You might think that Amazon is succeeding simply because it is providing a better service, and therefore its success is to be praised. But if you thought that you would be wrong. Yes, Amazon, does a lot of things right. No question about that, but, in my opinion, they are building their business based on two highly unfair tactics.

First, Amazon gets a lot of its business from people who stroll through local retail stores, check out the products there and then buy them at a cheaper price on Amazon. Is that fair? Of course not. But, you might say, that’s not Amazon’s fault. Well, it is. Customers buy from Amazon instead of the local store because Amazon’s prices are lower. Thanks to the retail stores doing its job for them, Amazon doesn’t have to pay for a salesperson or for store rent, and that saves money. But that’s not enough for Amazon. It also uses every trick in the book to pay far lower taxes than its retail competition. And all this added together allows Amazon to undercut its competitors’ prices.

Since the days of the Phoenicians, companies have needed to make a profit in order to stay in business. But Amazon has found an ingenious way of getting around that heretofore inviolable rule. Amazon deliberately keeps its profits small in order to: A) not pay taxes, which helps it to B) keep its pricing below that of the brick and mortar stores it is putting out of business.

Normally, neither the market nor investors would tolerate such a low-profit strategy. First, investors wouldn’t invest in a company that made such small profits for its size and didn’t even pay dividends on its stock. And, second, a company that didn’t make a profit simply couldn’t/wouldn’t stay in business. Yes, a company could undercut the competition’s prices for a short time, but eventually they would run out of money.

So, what makes Amazon so different? Why are its investors so tolerant? I don’t know of another company in America where the investors have been so patient. Amazon doesn’t even pay a dividend to stockholders. The answer is that everyone knows, including President Trump, including me, and including everyone I’ve ever talked to that had half a brain, and, I suspect, including PolitiFact, that Amazon will only keep its low-profit strategy long enough to wipe out the brick and mortar retailers and then it’s going to sock-it-to its customers. And that is exactly what President Trump meant when he called them a monopoly. Amazon is teeing itself up to be a monopoly. What should the U.S. government do? – wait until all the retail jobs are gone before it does anything about it?

Amazon and Sales Tax

PolitiFact defended calling President Trump a liar because, didn’t he know, Amazon pays sales tax. I’m not making this up. That really was one of PolitiFact’s big arguments. This is what it wrote:

“Nonetheless, Trump is wrong to say they’ve avoided tax collectors altogether.

At the state level, Amazon, which launched online in 1995, long resisted charging a sales tax. But by 2012, it was collecting and paying sales tax in California, Texas and Pennsylvania, and elsewhere.

Today, the company collects taxes in all states where state sales taxes exist, plus Washington, D.C. (all states except Alaska, Delaware, Montana, New Hampshire and Oregon collect sales tax). Henchman noted that taxes apply to all of Amazon’s own sales, but not the large percentage of sales by other sellers using the Amazon platform…

While Amazon takes advantage of tax breaks and loopholes, it pays federal corporate tax, and charges sales taxes in 46 U.S. jurisdictions.”

I love the way, in the second paragraph above, PolitiFact gives Amazon credit for collecting AND paying sales tax. Note to PolitiFact: Amazon collects sales tax; it doesn’t pay sales tax. The people who buy the products pay the sales tax.

Added Bonus question: Guess which company is the biggest corporate lobbyist in Washington?

Yes, you are right. It’s Amazon. From a Fox Business article:

“According to the New York Times, Amazon has increased its lobbying staff to 83 members this year compared to 60 members last year, making it one of the biggest corporate lobbying shops in town. To top it off, the company is also on its way to surpassing its previous high for lobbying spending last year, which was $11.3 million.

“The paper reported that Amazon has already spent $6.2 million during the first two quarters of this year, far surpassing companies like Exxon (XOM) and Walmart (WMT), which spent $3.6 million during the same period.” Amazon is now biggest corporate lobbyist 

My Conclusion: I’m starting to see a pattern here. PolitiFact’s main goal is to make President Trump look like an idiot. Whatever it takes. If they have to add words to what he said, they’ll do that. If they have to ridiculously misconstrue what he said, they’ll do that. If they have to skip over what he actually said, they’ll do that. If they have to defend the indefensible, that’s ok too. Slightly changing what he said is also fair game. In the case of President Trump’s Amazon tweet, they also chose to ignore the obvious underlying truth of his message.

For this blatant missing of President Trump’s underlying message, I award PolitiFact the “Inception” award, named after the intriguing 2010 Leonardo DiCaprio movie that was filled with underlying messages.

In my next post, I will look at PolitiFact for the sixth time. President Trump tweeted that CNN’s ratings were way down. PolitiFact calls that a ridiculous lie. We shall see.

“CNN’s ratings are “way down.”
— PolitiFact National on Monday, July 3rd, 2017


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PolitiFact Wins the “Golden Shovel” Award

Donald Trump:  “Study what General Pershing of the United States did to terrorists when caught. There was no more Radical Islamic Terror for 35 years!”  — PolitiFact National on Thursday, August 17th, 2017

Disclosure: I’m not a big fan of President Trump’s tweets. I prefer my presidents to be more in the Abraham Lincoln mold. But, on the other hand, in this age of social media and the 24-hour news cycle, maybe Trump is a more skillful communicator than he is given credit for. Scott Adams, the author of Dilbert, one of my favorite newspaper cartoons, has commented on this in a very insightful blog post titled, “Persuading Terrorist Cowards.” It’s worth reading.

PolitiFact’s Argument

This is my fourth look at a PolitiFact pants-on-fire claim against President Trump. And here is the exact tweet that PolitiFact takes issue with: “Study what General Pershing of the United States did to terrorists when caught. There was no more Radical Islamic Terror for 35 years!”

PolitiFact rates this as a pants-on-fire lie for the following reasons:

  1. There is no evidence that General Pershing shot Muslim insurgents with bullets dipped in pig’s blood.
  2. Trump got the idea from a popular culture myth.
  3. In fact, President Trump got it wrong about the harshness of General Pershing’s tactics. Pershing put a lot of effort into ‘winning the hearts and minds’ of the Muslim insurgents on Moro.
  4. It’s highly unlikely that any Muslim would be deterred by pig’s blood.
  5. After Pershing’s 4-year tour as governor of the mainly Muslim Moro province in the Philippines, the violence didn’t stop for the next 25 or 35 years as President Trump said. It remained a place of unrest. The violence there continued for some time after 1913, the year Pershing left.

My Opinion

  1. PolitiFact rated President Trump’s August 17, 2017 tweet as ‘pants-on-fire’ because they flat-out don’t believe his story about Muslim terrorists being executed by General Pershing with bullets dipped in pig blood, or that that practice brought peace to the land.
  2. As an alert reader, I’m sure you’ve already noticed that President Trump doesn’t mention pig’s blood or executions in his tweet. So where does PolitiFact get this from?
  3. For its argument, PolitiFact assumed President Trump was referencing something he said a year earlier on February 16, 2016, and to which comment PolitiFact had already attached its ‘pants-on-fire’ label. PolitiFact  
  4. We could discuss all day whether PolitiFact should be writing up duplicate ‘pants-on-fire’ claims for the same statement, and then double-counting them when they publish their aggregate number of pants-on-fire claims against President Trump. But let’s ignore that for the present.
  5. We could also discuss all day the ethics of PolitiFact ‘mind reading’ President Trump and presuming they knew exactly what he was referring to in his August 2017 tweet about General Pershing’s handling of terrorists in the Philippines. In his tweet, President Trump invited people ‘to study’ what General Pershing did. Maybe President Trump read PolitiFact’s 2016 pants-on-fire claim on the subject and has since studied up on the subject himself and learned something new. Maybe not. We don’t know, and neither does PolitiFact. But let’s also ignore that for the present.
  6. For the present, let’s go back to President Trump’s February 2016 statement about Muslim insurgents being deterred from terrorism by the fear of being executed by a bullet smeared with pig’s blood. Where in heck did President Trump get that from? PolitiFact thinks it’s a ridiculous urban legend with no basis in fact.
  7. In fact, the essence of the story was first told in 2002 by Florida Democratic Senator Bob Graham, then chairman of the Senate Intelligence Committee. Is President Trump to be called a liar because he repeated a story told by the chairman of the Senate Intelligence Committee? Of course not. And if the terrorist/pig story is false, shouldn’t Democratic Senator Graham have been the target of PolitiFact’s accusations and not President Trump.
  8. To review:
    1. In August 2017, PolitiFact wrote an entire ‘pants-on-fire’ accusation against President Trump, not based on what he wrote in a tweet, but based on combining what he wrote in that tweet with something he’s said the year before and for which they had already labeled him a liar.
    2. The story in question was first told by the Chairman of the Senate Intelligence Committee in 2002. President Trump was simply repeating the story, albeit a somewhat exaggerated version.
  9. PolitiFact’s final point is a rather subjective one. They are positive that whatever General Pershing did in the Philippines, it certainly didn’t bring peace to the land for 35 years. Well, the history books say that the Muslim Moro province rebellion lasted from 1899 to 1913. In other words, the rebellion stopped in 1913, the year that Pershing left.

Here is where PolitiFact got its story wrong:

General Pershing did take extraordinary and controversial steps to control Islamic Terrorism when he was fighting Muslim insurgents during the Philippine war. And he believed those steps were effective.

Below, are a series of quotes. The first quote, strangely, comes from PolitiFact. It was used in the PolitiFact article to support their claim against President Trump, but it seems to me PolitiFact missed an important point in their own quote. Major Bell is offering his support to Pershing in maintaining a practice that Pershing already had been enforcing. From PolitiFact:

…the editor of the 2013 edition, John T. Greenwood, cited a letter about the incident from Maj. Gen. J. Franklin Bell, the commander of the Philippines Division, to Pershing: “Of course there is nothing to be done, but I understand it has long been a custom to bury (insurgents) with pigs when they kill Americans. I think this a good plan, for if anything will discourage the (insurgents) it is the prospect of going to hell instead of to heaven. You can rely on me to stand by you in maintaining this custom. It is the only possible thing we can do to discourage crazy fanatics. PolitiFact: Trump retells story

This next quote is from an August 17, 2017 article in the Washington Examiner:
“The story is highly controversial because it suggests that the government has used a deliberate form of religious discrimination as a successful anti-terror tactic. A 2009 biography of Pershing by Jim Lacey, a military analyst for the Institute for Defense Analyses, claimed to confirm that Pershing did use the tactic. Washington Examiner: Trump repeats story

“Until now the historical verdict is that this was a vicious rumor and while it may have happened in occasion, Pershing neither knew about it nor, given his humane outlook, would have condoned such an action. That verdict is wrong as Pershing’s own unpublished autobiography states,” Lacey wrote in Pershing: A Biography, published by PalGrave MacMillan.

The book then cites an unpublished letter by Pershing: “These juramentado attacks were materially reduced in number by a practice the Army had already adopted, one that the Mohammedans held in abhorrence: The bodies were publicly buried in the same grave with a dead pig. It was not pleasant to have to take such measures but the prospect of going to hell instead of heaven sometimes deterred the would-be assassins.”

Further, an August 17, 2017 New York Daily News articles quoted Lacey again:

There is evidence that he committed what we would call war crimes, chopping off heads and burying insurgents in pig skin, and that’s from his own autobiography,” told the Daily News. Lacey said that he discovered the admission, missing from other accounts of the general’s life, for work on his own biography of Pershing. He added that the story was out of character for the general, who he described as a model for the “nation-building” strategy in U.S. foreign military engagements.”

This final quote below shows that President Trump was not just repeating an urban legend. He was repeating a story told by the chairman of the Senate Intelligence Committee.

“Senate Intelligence Committee Chairman Bob Graham (D-Fla.) cited as an example a dinner he attended last week with people who work on intelligence issues and have connections to the intelligence community. The dinner conversation ranged in part on how U.S. military commander “Black Jack” Pershing used Islam’s prohibition on pork to help crush an insurgency on the southern Philippine island of Mindanao after the Spanish-American War at the turn of the last century. In one instance, Graham explained in an interview, U.S. soldiers captured 12 Muslims. They killed six of them with “bullets dipped into the fat of pigs.” After that, Graham said, the U.S. soldiers wrapped the Muslim rebels in funeral shrouds made of pigskin and “buried them face down so they could not see Mecca. Then they poured the entrails of the pigs over them. The other six were forced to watch. And that was the end of the insurrection on Mindanao,” Graham noted.”   LA Times: Trump

Now let’s go back and judge the original PolitiFact pants on fire claims against President Trump:

  1. PolitiFact: There is no evidence that General Pershing’s men shot Muslim insurgents with bullets dipped in pig’s blood. My opinion: Agreed. They used pig’s fat not pig’s blood. Though truth be told, I’m not sure how you smear something with pig’s fat and not get a little blood mixed in there too. And let’s also not lose sight of the fact that President Trump’s 2017 tweet said nothing about shooting Muslim terrorists with bullets of any kind.
  2. PolitiFact: Trump got the idea from a popular culture myth. My opinion: False. The basic facts behind the story were told by Senator Bob Graham, chairman of the Senate Intelligence Committee.
  3. PolitiFact: In fact, President Trump got it wrong about the harshness of General Pershing’s tactics. My opinion: False. Letters and Pershing’s own autobiography clearly show he used pig’s skins, and more, to discourage rebels.
  4. PolitiFact: It’s highly unlikely that any Muslim would be deterred by tactics involving pigs, etc. My opinion: False. Reports from ‘boots on the ground’ clearly show Pershing and other officers thought the method effective.
  5. PolitiFact: After Pershing’s 4-year tour as governor of the mainly Muslim Moro province in the Philippines, the violence didn’t stop for the next 25 or 35 years as President Trump said. It remained a place of unrest. The violence there continued for some time after 1913, the year Pershing left. My opinion: False. The war ended in 1913. However, according to the historical record, some minor violence did continue periodically in Moro province in the decades after Pershing. However, was there a recurrence of the Radical Islamic Terror that President Trump referred to? I honestly don’t know. I couldn’t find any reference to it in my research. And neither could PolitiFact. Certainly, Muslim combatants fighting for their independence is not the same as Radical Islamic Terror.


My ruling: For this ill-advised attempt to label President Trump a liar, I award PolitiFact the “Golden Shovel” award. Next time they need to dig deeper. When I research something all I have is Google. Surely, the PolitiFact reporters working for the Tampa Bay Times have access to more research databases than I have. How come I could find that additional information on Pershing and Senator Graham and they couldn’t?

Given the sheer number of ‘pants-on-fire’ statements PolitiFact has attributed to President Trump, there is no doubt that PolitiFact is ‘on a mission.’ But wow! Couldn’t they find ‘lies’ that were, well, actual lies. Apparently not. Or at least not so far. Four down, seventeen PolitiFact statements to go! Maybe PolitiFact will get the next one right.

In my next post, I will tackle PolitiFact’s assertion that President Trump lied when he said: Amazon has a “no-tax monopoly.”  on Wednesday, July 26th, 2017



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