Musk Buys Twitter

The Daily Escape:

High tide, Bandon, OR – April 2022 photo by Bobbie Shots Photography

The Boston Globe is reporting that Musk is purchasing Twitter.

Musk is one of the great entrepreneurs of the 21st Century. He’s redefining space travel with SpaceX. He’s revolutionized internet communication with his Starlink low-earth orbit satellites, having more than 2,000 satellites in orbit. And he’s made Tesla the global leader in Electric Vehicles. And that has made him very rich.

Now he’s using some of his Tesla money along with a lot of Other People’s Money (Morgan Stanley, Barclays, and Bank of America) to buy Twitter and take it private. Bloomberg says Musk’s pledging $21 billion of his own money. The Banks are going to lend him $12.5 billion, secured by an additional $62.5 billion of his Tesla shares.

The rest of the purchase price will be funded by $13 billion in debt that Twitter will take on. After the deal closes, Twitter will have about $1 billion in interest payments due on the new debt annually. Twitter’s cash flow is projected to be about $1.43 billion this year and $1.85 billion in 2023. So debt payments will now be a huge chunk of Twitter’s future cash.

Since this is America, it’s unlikely that any government agency will stand in the way of the sale, but there are two things wrong with it.

First is how Musk became so fabulously wealthy. As Ranjan Roy points out at Margins, his rapid ascent to wealth is due to his unusual compensation package at Tesla. The package set what appeared to be unrealistic goals for sales and profits.

In early 2018, when the comp package was agreed, there was plenty of doubt whether Tesla could scale its manufacturing capacity. Musk had repeatedly said Tesla was on the verge of bankruptcy, yet over the next few years, Tesla both stabilized and grew. It went from producing around 90k cars/quarter in 2018, to nearly 300k in the last quarter of 2021. Revenue grew from $12 billion to $54 billion. Tesla produced nearly 1 million cars in 2021.

At the same time, Tesla’s stock price went to the moon, making Musk the world’s richest human. Not incidentally, much of that was helped by Musk’s tweeting. Ranjan Roy says:

“…since the Spring of 2013, it was clear Tesla’s business results and Musk’s tweeting could have a self-reinforcing impact, and that…cycle…became more clear in recent years. Shortly after Musk signed his giant package, the really high-volume tweeting began, and the rest is wealth accumulation history.”

Musk realizes that he’s dependent on his Twitter marketing strategy. He has 80+ million Twitter followers, and unfettered access to his account is vital to his current and future business interests. Why? His current Tesla 10-year pay package has nearly hit its maximum targets in just four years.

Musk needs to think about where he gets his next giant gain in wealth.

This is the challenge of today’s capitalism: Boards with little real vision give stupendous compensation packages that turn out to be easily achievable. And the SEC allows entrepreneurs with media savvy to pump up their own stock at little personal risk.

Yes, Musk and Tesla have both paid fines to the SEC for stock manipulation. In a September 2018 settlement, Musk and the SEC agreed that he would step down as Tesla Chair and pay a $20 million penalty. Tesla also had to pay a $20 million fine.

But these were just minor costs of doing business compared to the personal wealth he’s created.

The second problem is that Musk, (and maybe a few on Twitter’s board) think that individual users should decide who and what gets seen and heard online. Musk says he wants Twitter to be an open playing field for competitive speech.

That may be peachy in the abstract. But we all know that every unmoderated platform goes to shit because it only takes a few bad-faith users to make it miserable for everyone.

For now, Twitter has decided that Trump can’t post on its platform. It decides whether to delete a post about vaccines if it deems the post to be misinformation. Most people don’t have the time to learn what’s real and reliable, and history shows how susceptible most are to harmful misinformation campaigns. Expect this to change after Musk buys Twitter.

Scott Galloway says:

“In an unmoderated online forum, all speakers do not play by the same rules or have the same tools. University of Maryland professor David Kirsch has found that automated pro-Tesla Twitter accounts are responsible for 20% of the tweets about Tesla, and that the launching of these bots correlates with increases in the company’s stock price.”

Rupert Murdoch transformed media in order to exercise greater influence over society. Does America need Musk to become another Murdoch? There’s a good chance one of his first acts as the Tweeter-in-Chief will be to re-instate Trump’s account, something that will have very serious political consequences.

Wrongo is a capitalist, but we’ve always needed rules to reign in the worst of the market’s players. And rules require umpires. Without umpires, anticompetitive and illegal acts go unpunished. Worse, today people insist, in the name of freedom, on their right to shout down all dissenting voices.

In America, underregulated economic winners have funded think tanks. Some have bought politicians. Some, newspapers and cable news stations. Musk is buying Twitter. They’re trying to convince us that the umpire is the enemy.

Musk wants you to live in a Wild West of speech and power. Are you ready for that?

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Monday Wake Up Call – Our Dangerous Future Edition, January 11, 2021

The Daily Escape:

Outside the Capitol, a crowd of thousands cheered the rioters entering the building, January 6, 2021, 2:10 pm. Photo by Ashley Gilbertson/VII, for The New York Times.

Look closely at the size of the crowd in the photo above, because our future may look a lot like that. The GOP has become two Parties, says Timothy Snyder in an excellent article in the NYT. He says that the Republican Party is now two coalitions of politicians and their supporters. One group wants to game the system, while the other wants to break the system.

What this portends for the immediate future, is chilling. The Breakers have moved on from the US Capitol to statehouses. Kentucky.com reported that dozens of heavily armed people gathered on Saturday outside the Kentucky Capitol building, demonstrating against socialism, communism, Sen. Rand Paul (R-KY), and Sen. Mitch McConnell (R-KY), along with Democratic Gov. Andy Beshear:

“Several members of the Kentucky State Police looked on as members of the group, composed of people from self-described “militias,” made speeches interspersed with live performances of country songs. Some in the crowd held flags or wore hats supporting President Donald Trump.”

By Wrongo’s count, that makes 12 state capitols that have seen militia-style demonstrations since the attempted coup at the US Capitol. We’ve entered a period when mobs of angry individuals now feel sufficiently emboldened to just go and break any law they disagree with.

We know that the Republican Party is culpable: By defending Trump’s big lie about a stolen election even after the Jan. 6 attempted coup, they’ve set a precedent: A Republican presidential candidate who loses an election should be appointed to the job anyway. For at least the Breaker branch of the Republican Party, they will operate in the future with two plans in mind: Plan A, to win the election. And Plan B, to lose, but then to win through force.

As with Ted Cruz and Josh Hawley’s objections to the Electoral Votes of certain states, a finding of election fraud isn’t necessary. Breaker Republicans will only need to hear allegations that there was fraud. More from Snyder: (emphasis by Wrongo)

“Post-truth is pre-fascism, and Trump has been our post-truth president. When we give up on truth, we concede power to those with the wealth and charisma to create spectacle in its place. Without agreement about some basic facts, citizens cannot form the civil society that would allow them to defend themselves. If we lose the institutions that produce facts that are pertinent to us, then we tend to wallow in attractive abstractions and fictions. Truth defends itself particularly poorly when there is not very much of it around…”

Snyder says that for the Republican Breaker faction to succeed, they need an angry minority, organized for nationwide violence, ready to add intimidation to an election. It is surprising just how close they are to having all of that in 2021. One more from Snyder:

“Informed observers inside and outside government agree that right-wing white supremacism is the greatest terrorist threat to the United States. Gun sales in 2020 hit an astonishing high. History shows that political violence follows when prominent leaders of major political parties openly embrace paranoia.”

How large is the cohort of Breakers? Wrongo hasn’t seen any estimates. But, a YouGov Direct poll of 1,397 registered voters who knew about Wednesday’s attempted coup found that 62% of voters perceived the mob action as a threat to democracy:

  • Democrats (93%) overwhelmingly see it this way.
  • Most Independents (55%) also agree.
  • 68% of Republicans didn’t think that mob violence to overturn an election was a threat to democracy.

One poll isn’t dispositive, but since Trump got 70 million votes, and 68% of them seemingly condone overturning an election, we’re dealing with nearly 50 million people. Not all of them will take up arms against their government. But if organized, it would be a very large and well-dispersed militia. One that communicates instantly via social media.

There is much to say about the tension between our First Amendment rights, and the use potential coup plotters and their enablers make of social media. Trump was permanently banned from Twitter, while the hard right social platform Parler has lost access to the Apple store and to Amazon’s server platform.

Freedom of speech is essential to a democracy, but using Twitter, Facebook and the far-right platforms to lie, and to organize armed resistance to our government, brings with it the danger that our democracy could fall to angry, armed people who believe the big lie.

Time to wake up America! We’ve become a pre-coup nation. All of the necessary conditions are in place: vast inequality, growing poverty, a stabbed-in-the-back narrative that a large segment of Republican voters believe, along with the storyline that a right-wing President was the victim of voter fraud.

Remember that the majority of police and members of the military are sympathetic to the right, not to the left. A very smart, would-be dictator who understands the keys to power could work to either freeze the military, or gain their cooperation.

And the Breaker group has several of those smart, ruthless people.

We gotta wake up.

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Facebook Could Destroy Democracy

The Daily Escape:

Pond, Greenville County SC – February 2020 photo by Ninjiteex. It’s rare to see snow in SC

On Facebook, Wrongo mostly reads the posts of friends who are involved in showing dogs at AKC events. People who show dogs skew older and female, and thus, so do Wrongo’s Facebook friends. Many share a constant amount of pro-Trump (dis)information.

So, Wrongo tried a week-long experiment, letting some of those posters know that their posts were factually incorrect. Let’s focus on one, a picture of a very young Bernie Sanders being hauled away by police:

The photo’s caption says:

“In 1963 Bernie Sanders was arrested for throwing eggs at black civil rights protestors. This is the side of Bernie that CNN and the fake news media don’t want you to know”

The picture is real, the caption is false. Sanders was actually protesting police brutality and segregation, and was arrested for “resisting arrest”. Facebook has now taken down the post, but it was up for over a week.

When Wrongo told friends that their posts were false, everyone deflected, and minimized their intent. One, a fervent Trumper, said, “I just wanted to post a picture of him when he was young”. Never mind that this photo is available all over the internet with the simplest of searches, all with the correct reference.

Despite a week’s worth of trying, no one was willing to delete a false post. Many of these people post disinformation six or more times a day, so it was an exercise in futility to try and make these “friends” admit the truth about their posts, much less show any awareness about their biases.

This is a small example of what McKay Coppins wrote in his Atlantic article, “The Billion-Dollar Disinformation Campaign to Reelect the President.” As an experiment, Coppins signed up at many pro-Trump social media sites, and soon was deluged with alternative facts: (emphasis by Wrongo)

“What I was seeing was a strategy that has been deployed by illiberal political leaders around the world. Rather than shutting down dissenting voices, these leaders have learned to harness the democratizing power of social media for their own purposes—jamming the signals, sowing confusion. They no longer need to silence the dissident shouting in the streets; they can use a megaphone to drown him out. Scholars have a name for this: censorship through noise.”

All of this is helped by Facebook’s excellent micro-targeting tools. They allow an advertiser to slice the electorate into narrow and distinct niches and then reach them with precisely tailored digital messages. More from Coppins:

“An ad that calls for defunding Planned Parenthood might get a mixed response from a large national audience, but serve it directly via Facebook to 800 Roman Catholic women in Dubuque, Iowa, and its reception will be much more positive.”

The results can be overwhelming. The Trump campaign runs hundreds of iterations of ads. In the 10 weeks after the House of Representatives began its impeachment inquiry, the Trump campaign ran roughly 14,000 different ads containing the word impeachment.

No one has the bandwidth to sift through all of them, and then call them out.

It gets worse. Coppins says that the Republican National Committee and the Trump campaign have compiled an average of 3,000 data points on every voter in America. They have spent years experimenting with ways to tweak their messages based not just on gender and geography, but on whether the recipient owns a dog or, a gun.

Raw Story quotes former Rep. David Jolly (R-FL) saying that Donald Trump intentionally wants America to be anxious: (emphasis by Wrongo)

“I had a colleague that was in a meeting in the Roosevelt Room and….he heard Trump say, ‘Have you ever seen the nation so divided?’ My colleagues and others said, ‘No, we haven’t.’ Trump said, ‘I love it that way.’’

He thinks this how he’ll be re-elected!

Last Sunday, Walter Schaub, former director of the US Office of Government Ethics had a remarkable tweet thread on this, saying: (emphasis and brackets by Wrongo)

“…we’re in a dangerous new phase of Trump’s war on democracy. What do we do now?

….the greatest threat we face is despondency. The enemies of democracy…want you drowning in hopelessness. A hopeless populace is a helpless one. To that end, a hostile foreign power set up an infrastructure to weaponize social media against you.

Compounding the assault on your senses, he [Trump] also wields a corrupted government, which follows his lead in disseminating lies to sow confusion…

In the face of this psychological warfare, our most urgent mission—our civic duty—is to reject despondency. Everyone has a bad day, so we may need to take turns leading the charge. But our job as citizens is to resist the temptation to spread defeatism on social media.”

You said it, Walter!

We gotta keep hope alive.

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Alex Jones Spews Fake News. Should He Be On Facebook?

The Daily Escape:

Nizina Glacier, Wrangell-St. Elias National Park and Preserve, Alaska. Melting ice formed a lake in 2000. 2018 photo by Nathaniel Wilder for Smithsonian Magazine

Should fake news be protected under the First Amendment? Should private companies be able to ban the toxic stuff that people like Alex Jones spew? Spew like his denial that the Newtown shootings happened, or his speculation that Brennan Gilmore, a former State Department official who attended last summer’s violent far-right rally in Charlottesville, VA was really with the CIA.

Earlier this week, Facebook, Google, Apple, Spotify and Pinterest, within hours of each other, banned Alex Jones and his Infowars web site. Does losing his place on these platforms abridge his freedom of speech?

When someone says that something we otherwise believe is fake, it stirs deep emotions. Consider the immunization scam when Andrew Wakefield published in the Lancet that the measles, mumps, and rubella (MMR) vaccine may predispose to autism in children. Although false medical science, it circulated widely, and was widely believed. Today, communities are at risk, because kids are not being vaccinated by their parents, and regional outbreaks of these diseases which were largely extinct, are occurring again. So, despite the best efforts by the medical community to educate parents that the MMR vaccine is safe, the fake news outran any efforts to contain the lie.

Each day 100 million+ stories hit the internet, so we can’t possibly vet even a fraction of them. Fake news will get through, and spread. In the midterm elections, and in the presidential election in 2020, technology will build on what was learned in the 2016 presidential campaign: (brackets by Wrongo)

Trump ran 5.9 million different versions of ads during the presidential campaign and rapidly tested them [and]…spread those that generated the most Facebook engagement…. Clinton ran 66,000 different kinds of ads in the same period.

The next iteration of the technology will bring each of the 156 million registered voters in the US a stream of personalized messages. That’s because nearly everyone has a social media presence, and their information and preferences will be shared by the platform companies with the campaigns.

People who have influence on social media utilize these new technologies extremely well. Alex Jones uses it well, and is on the toxic end of the fake news spectrum. And there’s Trump, master of the continuous Twitter falsehood. He turns the lie around, accusing his detractors of spreading fake news. With the GOP in power, there will not be any government crackdown on misinformation. Here’s why: the Daily Beast reports on a disturbing poll by Ipsos:

43% of self-identified Republicans said that they believed “the president should have the authority to close news outlets engaged in bad behavior”…..48% of them said they believed “the news media is the enemy of the American people”.

If you trust what Alex Jones says, fine. But now, your ability to amplify his toxic brand of fake news has been hampered by the platform companies throwing him off. Parsing what is considered free speech is a slippery slope, and we won’t know just how slippery it is, until we start sliding down.

Case law says we’re able to protest, saying whatever we want, within some limits. We used to do that in town squares. A big question is: Are Facebook, Google, Instagram and Twitter the town squares of today?

That’s a question that hasn’t yet been decided. It is why who gets to sit on the Supreme Court is so damn important, particularly if Republicans agree that the president should decide which news outlets are allowed to publish.

Democracy requires conflicting opinions. Anybody can build a platform, and appeal to a niche audience. Today, you can spew falsehoods, like Alex Jones or Trump, who do just that every day.

We live in an era of doublespeak. Automobiles that get higher mileage kill their drivers. Fires are raging in California because there’s not enough water. When the president is an unreliable source of information, fake news carries the same importance as real news. But, legal scholars remind us that:

false news doesn’t serve the public interest in the way that true speech does.

Social media holds the potential of democratizing information, making it universally available. OTOH, fake news spread on social media has been proven to have a bigger impact, and to spread further and faster than real news.

Should the platform companies be able to ban someone, or some messages, even if they do not reflect a clear and present danger? Maybe. Jones and his ilk have other outlets for their spew. And they can build others, and their followers will find them.

This is the beginning of a pushback against fake news, and it’s only the beginning of a revitalized free speech debate pitting the main stream media against those who spew fake news.

If you only want to look at kittens online, go for it. It shouldn’t be all that our Constitution allows, but, where should we draw the line?

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What Is Free Speech In the Domain of Social Media?

The Daily Escape:

Sunrise with full moon over mountains at Morillion, France – 2018 photo by osg28

Can we justify taking away a person’s First Amendment right of free speech because of its content? Suppose it is hate speech? In the US, we hear people say: “I hate what you say, but I’ll defend your right to say it“. Is that an inviolable default position?

Wrongo has been following this issue as it plays out in Europe. From the Columbia Journalism Review:

A toxic combination of misinformation, hate speech, and online harassment is pushing several European countries to take action against social networks like Facebook, Twitter, and YouTube. But some believe their actions—however well-intentioned—run the risk of stifling free speech and putting dangerous restrictions on freedom of the press.

France, Germany, and the UK are all either discussing, or are already in the process of implementing requirements for social networks to take measures to remove, or block online hate speech, and/or harassment.

Germany in particular is a laboratory for these issues. The Guardian reports that social media firms must remove hate speech, or face fines under a law that went into force on January 1st. The law is known as NetzDG. Under the law, online platforms face fines of up to $60 million if they do not remove “obviously illegal” hate speech and other postings within 24 hours of receiving a notification. A New Year’s Eve tweet by a far-right politician was the first post to be taken down. From the Economist: (emphasis by Wrongo)

‘WHAT the hell is wrong with this country?’ fumed Beatrix von Storch to her 30,000 Twitter followers on December 31st: ‘Why is the official police page in NRW [North Rhine-Westphalia] tweeting in Arabic?’ The MP for the hard-right Alternative for Germany (AfD) party detected in the force’s multilingual new-year greeting a bid ‘to appease the barbaric, Muslim, rapist hordes of men’. The next day her tweet—and, for 12 hours, her entire account, vanished from Twitter.

In Germany, freedom of speech is considered an “inalienable human right”, and is protected under Article 5 (1) of the German constitution:

Everyone has the right freely to express and to disseminate his opinion by speech, writing and pictures and freely to inform himself from generally accessible sources. Freedom of the press and freedom of reporting by radio and motion pictures are guaranteed. There shall be no censorship.

From the Economist:

Germany’s memories of the Gestapo and the Stasi undergird its commitment to free speech. “There shall be no censorship,” decrees the constitution. Even marches by Pegida, an Islamophobic and anti-immigrant movement founded in 2014, receive police protection. But the country of Kristallnacht and the Holocaust also takes a punitive attitude to what it deems “hate speech”. Inciting hatred can carry a prison sentence of up to five years…Irmela Mensah-Schramm, a Berlin pensioner who spray-paints over swastikas and other racist graffiti, is a national hero.

The debate in Germany is whether the NetzDG law should be repealed or modified. How practical is it in an age when a tweet, Facebook post, or YouTube video can spread around the world in minutes?

But the largest question is how can countries balance the people’s legitimate right to free speech with others’ desire to be protected against harmful material? In another German case, Israeli flags were burned in Berlin in response to Trump’s recognition of Jerusalem as the country’s capital. Even with accompanying chants of “Israel, murderer of children”, local police said the act was covered by freedom of speech legislation, and was thus protected.

But should a Muslim immigrant anti-Semite in Germany be allowed to use hate speech that a native German cannot?

Facebook and Twitter have added German-fluent moderators and a few features for flagging controversial content. They have trained their moderators to cope with the NetzDG Act.

Another question is why should the giant social media firms have to regulate free speech? Is it acceptable that private US companies act as a brake on freedom of opinion and the press in Germany?

And how do we “equalize” enforcement of the Free Speech laws in the physical and cyber domains? And where does free expression cross the line between a viewpoint and hatred and incitement to violence?

Should we be ceding control of Free Speech to poorly-paid (and possibly poorly-educated) Facebook and Twitter moderators?

Finally, how will private firms create a tool that grades how hateful a Twitter post is? Who decides that something is beyond say, a seven on the scale, has crossed into hate territory, and must be deleted?

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