The past few weeks have not been good for this Seattle-based e- tailer.

In July, president and CEO Joseph Galli quit. In June, Lehman Brothers issued a very negative report questioning the company's ability to ever earn profits. Just a couple of days ago, Amazon revealed that a significant portion of revenue from its most profitable business units is paid in Internet stocks, rather than cash.

And, let's not forget that Amazon lost money on every single new Harry Potter book that it sold, by offering expedited shipping.

It would seem that founder Jeff Bezos wasn't clued in to the first rule of any business: Never be ashamed to make a profit. How hard is it to inflate revenues by selling merchandise at ruinous prices?

But, forget about profits. Their TOTAL SALES are only slightly more than the nearly $3 billion in funding they raised!! Undoubtedly, this is the greatest failure in the history of capitalism. Quite simply, Amazon.com is nothing more than a high-tech Ponzi scheme.

You might recall the story of Charles K. Ponzi. In the summer of 1920, Ponzi and his Boston-based postal coupon enterprise were the talk of the East Coast. Before his investment bubble burst, he had collected $9.5 million from 10,000 investors by selling promissory notes paying "50% profit in 45 days."

Of course, he was paying off early investors with funds taken in from later ones. In theory, there WAS a small profit to be made--given currency valuation differences after World War I--cashing in postal reply coupons, but millions would have to be processed to make the scheme even remotely worthwhile.

Likewise, the notion of selling books over the Internet sounds good, but you still have to process orders, control inventory, and have employees. Books, more than many other products, are intended to be picked up and examined. To be sure, if you already know that you want a specific book, the Amazon approach will suffice. However, much of retail consists in selling items in addition to, or different from, what the customer originally planned to purchase. Even though this phenomenon can be encouraged by the website suggesting other titles based on statistical data, it will never compare to walking past an aisle and suddenly noticing something of interest, in a completely different vein.

All things considered, the savings inherent in not having a conventional retail setting are small, and the disadvantages can be compelling.

While we could debate the notion of criminal intent on Bezos' part, it is clear that the stock run-up on Amazon caused more stock to be purchased. Thus, the business model becomes: Don't worry about selling product, just sell shares! Given the gullible investment community, this plan actually worked for a few years.

Bezos will probably end up selling his enterprise, or just step down in favor of "more experienced management." Basically, he'll walk away with tons of cash.

As for Charles Ponzi, he did time in various prisons, and spent his final days in the charity ward of a Rio de Janeiro hospital, dying on January 15, 1949 at the age of 67.

To add insult to injury, FDR never credited him as the inspiration behind Social Security.