Convenience Big Store: Nothing boring about the book business and tech companies in the dock

Conservatives are eroding the freedom to read

The book business is growing more fraught, with bans, regulations and lawsuits making an already marginal business even less profitable.

Texas school districts ranked second in the nation in book bans, prohibiting 625 books from classrooms and libraries in the 2022-23 school year, according to PEN America. (Disclosure: I am a member of the free speech group.) Florida beat Texas by banning 1,406 books.

"Overwhelmingly, book bans target books on race or racism or featuring characters of color, as well as books with LGBTQ+ characters," PEN reported. "And this year, banned books also include books on physical abuse, health and well-being, and themes of grief and death."

Even if, by some miracle, some parent somewhere does not object to a title, delivering the book to a school is now more difficult for small Texas booksellers thanks to a new state law. Republicans in the Legislature earlier this year required bookstores to rate every book they sell to schools based on their content.

An Austin-area federal judge determined the law "misses the mark on obscenity with a web of unconstitutionally vague requirements. And the state, in abdicating its responsibility to protect children, forces private individuals and corporations into compliance with an unconstitutional law that violates the First Amendment."

The conservative Fifth Circuit Court of Appeals in New Orleans, however, decided Texas can enforce the law until a trial and all appeals are exhausted.

Conservatives also want to see if the conservative U.S. Supreme Court will make defamation lawsuits easier to win. They are testing laws banning SLAPPs, which stands for Strategic Lawsuits Against Public Participation. Deep-pocketed people and corporations use SLAPPs to keep critics from publishing their complaints.

Lawyers representing Bridgewater, one of the world's largest hedge funds, sent threatening letters to discourage St. Martin's Press/Macmillan from publishing a book called "The Fund: Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend."

One of Bridgewater's attorneys also represents conservative billionaire Ken Griffin and Citadel Securities. They threatened Sony Pictures with a "substantial legal penalty" for defamation if they release their film, "Dumb Money," about the meme stock craze.

Luckily, the Texas Citizens Participation Act prohibits SLAPPs and forces plaintiffs to pay costs and punitive damages if they lose. But that's the only bright spot at a time when conservative forces are doing their best to silence voices they don't like.

Chris Tomlinson, Business Columnist

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What I'm Reading

Must Read: Texas is among the most attractive states for wealthy millennials (Houston Chronicle and San Antonio Express-News)

Should Read: Texas school districts ban 625 books from classrooms, libraries in 2022-23 school year (Houston Chronicle and San Antonio Express-News)

Interesting Read: "Stop Making Sense" and the Transformative Power of Collaboration The Talking Heads' concert film is one my favorite of all time. (The New Yorker)

Technical Read: The Labor Market Returns to Delaying Pregnancy Unplanned pregnancies halt women's career progression and result in income losses of 20% five years after an initial contraceptive failure. (Becker-Friedman Institute, University of Chicago)

Fun Read: Restoring Gulf Coast Barrier Reefs One Oyster Shell at a Time Restaurants along the Texas shore recycle patrons' discarded shells to build future habitat. (Texas Highways)

Question of the Week

Do you have a favorite banned book? Reply directly to this email and tell me your thoughts.

Mailbag

Last Week's Question: Have you ever paid or had someone demand a bribe?

"When I was in the Army stationed in Panama, I was caught w/ a buddy leaving an off-limits establishment by a two-man patrol of one U.S. military police and one Panamanian police. They separated us; I got the MP. He said, 'If you got some cash, I will let you go.' I didn't like it, but paid $10. My buddy only had a $20. About two weeks later, we were caught again. This time, we glanced at each other and took off running in different directions and got away. I was really disgusted by being extorted by a fellow G.I." – Bob Vollmer, Boerne

"A friend and I were driving from Florida to our home state of New York for summer break. Soon after we crossed into South Carolina, we were stopped by a state trooper. I forgot the pretense for stopping us, but his pitch was we could pay a fine on the spot or follow him to the nearest court a great distance away. We paid him the ten dollars he demanded. When I got home, I related the story to my Dad, a policeman, who schooled me to these scams that targeted out-of-state drivers, young single girls, and college students." – Linda Thomsen, Houston

"When I was younger, a tip was given at the end of a meal or a service, but often now, it's demanded at the beginning, when you order and pay. You have no idea how long it will be before you get your food, how good the food will be, or if it will even be what you ordered. You certainly don't want someone handling it who is angry with you for not tipping. I'd call that a bribe." – Jane Thompson, Katy

"I asked my wife if she would fry some fresh Gulf shrimp for me. She asked if I would give her a raise. Shrimp was delicious, raise pending." – Wilton Smith, Round Rock Texas.

The Takeaway

One of the first questions an early investor will ask about a new company is about the moat. How deep, how wide and how many alligators?

Moats are a metaphor, of course, for how easily a competitor may copy your idea, service or product. Do you have patents or copyrights? Do you have skills no one else can replicate? Do you have a major head start? A company with a unique, uncopyable product that solves big problems can make a lot of money.

Established companies also rely on moats to maintain or expand their market share. Moats, though, can violate antitrust laws.

President Joe Biden has appointed an aggressive Federal Trade Commission to drain the biggest moats and encourage greater competition. The latest lawsuit targets Amazon, accusing the company of punishing merchants for offering lower prices elsewhere and compelling them to use its logistics service if they want their goods to appear in Amazon Prime.

The FTC and the Justice Department have also brought suits against Google and Apple for the moats they use to fend off competition. The Biden administration is using antitrust laws in ways not seen since the 1970s to make business more competitive.

To me, the billionaire class is the most evident proof of a market failure due to unfair moats. Builders of better mousetraps should collect rewards for their innovation, but entrepreneurs who use their wealth to lock out competition and accumulate billions, well, that's why antitrust law exists.