Tag Archive for: ElonMusk’sTwitter

Musk to Build New Chinese Factory, Despite CCP Crimes and Abuses

Estimated Reading Time: 2 minutes

Twitter Inc. has apparently changed its name to the highly unimaginative X Corp., but that, in my opinion, isn’t the most important news this week related to Tesla and Twitter CEO Elon Musk. Musk is once again selling out his supposed pro-free speech humanitarian principles for profit.

If a country’s government is committing genocide and religious persecution, runs a tyrannical censorship regime, demands every major business answer directly to the government, and is openly hostile to your country (the U.S.), would you be worried about doing business there? If you’re Elon Musk, the answer is an emphatic “no.” The Chinese Communist Party’s (CCP) many and ongoing crimes evidently do not disturb Musk, who is planning to expand his Tesla China branch with a huge new factory.

CCP state media outlet Xinhua News excitedly announced on April 9, Easter, that Tesla would be building a new “mega factory” in China to produce Megapack, the company’s huge energy-storage batteries. I guess labor really is a lot cheaper in China. So much for Musk calling himself a “free speech absolutist” and pontificating that he “love[s]” humanity; it’s profit over principles for the Tesla and Twitter CEO.

Musk’s hypocrisy is not shocking, however. Tesla workers were reportedly being forced to work in very inhumane conditions during China’s insane zero-COVID lockdowns in early 2022, and Musk endorsed the CCP’s unjust claims on Taiwan.

Tesla is set to break ground on the new battery plant in 2023’s third quarter, per Xinhua. The plant will then begin production in 2024’s second quarter, according to Tesla representatives at a signing ceremony in Shanghai and Xinhua. All major businesses in China are surveilled by and answerable to the CCP, and the CCP practices “civil-military fusion”–where everything in the economic and tech spheres is accessible to the Chinese military. The CCP is also history’s greatest mass murderer, having killed over 500 million people.

Musk is acting like a greedy traitor. It is time American businessmen started putting principles and patriotism ahead of profit and power.

This article was published by Pro Deo et Libertate and is reproduced with permission.

Twitter’s Extremely Dangerous Attack on Substack

Estimated Reading Time: 4 minutes

Americans woke up on Good Friday 2023 – the first Easter weekend in three years that held out the possibility that it would be somewhat normal – to a grim reality on Twitter. It was consistently blocking all engagement from any post with a link to Substack. I first saw the rumor and then tested it. It was and is true.

This came as a devastating shock to many of our best independent writers and thinkers who have found a home on Substack. They gain followers on Twitter and post their material, which inspires subscriptions and makes it possible for them to have a life and means of support. Without that ability, many careers will be devastated.

The platform of course is newly owned by Elon Musk, a self-described free-speech absolutist. What the algorithms are doing as I wrote is radically inconsistent with this. And maybe indeed it is all a mistake that will be reversed. Or maybe not. We are now at his mercy.

“We’re investigating reports that Twitter embeds and authentication no longer work on Substack,” Substack said. “We are actively trying to resolve this and will share updates as additional information becomes available.”

One theory is that Elon came after Substack for rolling out a Twitter rival called Notes. That seems pretty far-fetched to me. And yet Mashable goes further to say that Twitter is actively going to war against Substack.

Elon has so far (as of this writing) not spoken about the issue. This alone is rather spooky. It is possible that he is just working out a personal grievance but this affects everything and everybody.

If this turns out to be deliberate and Elon sticks with it, the effect on chilling research, writing, and free speech will be even worse than when Elon took over Twitter. It will also seriously hurt Substack too. There are huge businesses that are thriving there. It is one of the few bright spots on the Internet today. A loss of reach here will mean the further cartelization of opinion and ideas.

Over just a few months, the magic combination of Twitter and Substack have created a small zone of freedom in a media/tech system that seems otherwise 90 percent captured by industrial and government interests. With this combination, we’ve seen the rise of a powerful dissident press that offered the world some real hope that we can turn back the fascist tide.

The timing itself is alarming because the very woke ADL just published a big attack on Substack with the usual litany of complaints about how the platform is enabling disinformation.

“The ADL Center on Extremism observed a recent increase in Substack’s popularity, as well as several conspiratorial or extremist influencers either creating their own Substacks or directing their followers to others. A number of these Substack accounts were dedicated to spreading extremist, antisemitic and conspiratorial narratives, and several problematic authors are popular enough to have earned a ‘bestseller’ ranking on the platform.”

The article proceeds along familiar tactics. It lists aggressively hateful sites promoting real hate and anti-Semitism. As the reader warms up to the thesis and sees the point, the article starts including merely partisan material from Libs of TikTok, then goes after poor Steve Kirsch who writes mostly entirely about vaccines, and then even includes eminent scientist Robert Malone, just so we are clear about what is going on here.

The attack here is entirely pointless. The reader can handle egregious sites on Substack by simply not reading or subscribing. By throwing in good scientists with absolute hate-mongers, the article only serves a censorious agenda. I saw this piece only a few days ago and my first thought was: please not let it be so. To be clear, many Brownstone Institute writers are included in the list of bad guys by this woke ADL so it poses a real existential threat.

To be clear, there is no problem at all with the ADL’s posting a brutal attack on opinions they don’t like. But if this turns out to re-trigger the level of censorship we’ve had over 3 years – when government worked directly with social media to cast a single narrative in stone with grave consequences for science and society – it becomes a problem.

This sort of government/tech collaboration is being litigated now. But you can tell just how unafraid the platforms and government of the judgement are by their current behavior. LinkedIn, Google, Facebook, and the rest, are just as captured and controlled as they always have been. They have not relented at all even in the face of litigation that seems like it will be successful, whatever that means in this context.

Elon’s emancipation of Twitter from this machinery of control has been a true blessing for society and freedom. Together with Substack, Epoch Times, and a handful of other sites and institutions such as Brownstone, many have been given hope that the good guys will eventually prevail in this battle for free speech.

If this algorithmic change is for real and not rolled back, many hopes will be dashed. And keep in mind, even if Elon changes his mind or it is a mere mistake, this experience should serve as a warning against all forms of information centralization. There is only one future for freedom in today’s world, and it is entirely decentralized.

This article was published by Brownstone Institute and is reproduced with permission.

FBI Promised ‘No Impediments’ To Data Sharing With Twitter Before 2020 Election, Internal Docs Show

Estimated Reading Time: 2 minutes

The FBI promised that there were “no impediments to information sharing” between itself and Twitter in a Sept. 16, 2020 meeting with Twitter legal executive Stacia Cardille, according to internal documents published by journalist Matt Taibbi Friday.

Cardille reported the promise to then-Deputy General Counsel James Baker — a former FBI lawyer who was instrumental in securing approval for the surveillance of former Trump campaign aide Carter Page using information from the discredited Steele dossier — in an email sent following the meeting, according to Taibbi. Cardille also expressed dismay that Twitter’s Public Policy account tweeted about the meeting without first consulting the legal team.

The policy team’s tweets mention that the collaboration was working with the government to address the impact of COVID-19 on the election — something that Cardille does not mention in her email. Cardille tells Baker that the meetings are soon set to become weekly, but no further tweets from the policy team during that election cycle mention meeting with government agencies.

“The FBI regularly engages with private sector entities to provide information specific to identified foreign malign influence actors’ subversive, undeclared, covert, or criminal activities,” the FBI said in a statement to the Daily Caller News Foundation. “Private sector entities independently make decisions about what, if any, action they take on their platforms and for their customers after the FBI has notified them.”

The relationship between the FBI and Twitter appeared to remain in some capacity as recently as Nov. 10, 2022, when the agency reached out to notify Twitter of four accounts that “may potentially constitute violations of Twitter’s Terms of Service,” according to Taibbi. One of the accounts, @fromMA, which regularly posts anti-Republican and anti-Trump comments, was brought to Twitter’s attention for jokingly reminding Republicans to vote “Wednesday November 9,” while Election Day was actually Nov. 8, Taibbi reported.

Although the @fromMA account remains active, the tweet that caught the attention of the FBI appears to have been deleted. Taibbi noted that all four accounts, including @fromMA, were suspended.

The FBI forwarded the names of 25 accounts to Twitter on Nov. 6, 2022, with Twitter taking action against 17 of them, Taibbi reported. The Twitter account for the pro-Trump Right Side Broadcasting Network and actor Billy Baldwin were the only high-profile accounts on the list, and neither had actions taken against them.

Taibbi’s report comes after Twitter CEO Elon Musk temporarily suspended eight journalists from the platform, amid allegations that they were endangering the safety of him and his family for sharing his location on the platform. Several news outlets whose journalists were suspended disputed these allegations, with the Washington Post’s Executive Editor Sally Buzbee saying in a statement to the Daily Caller News Foundation that the suspensions undermined “Elon Musk’s claim that he intends to run Twitter as a platform dedicated to free speech.”

This article was published by The Daily Caller and is reproduced with permission.

Elon Musk Nukes Scott Kelly Over Wokeness And Dr. Fauci

Estimated Reading Time: < 1 minute

Twitter CEO Elon Musk slammed Scott Kelly, astronaut and the brother of Sen. Mark Kelly (D-AZ) in a tweet Sunday evening after Kelly called out the 51-year-old executive over mocking the use of pronouns.

“Elon, please don’t mock and promote hate toward already marginalized and at-risk-of-violence members of the #LGBTQ+ community,” Kelly tweeted. “They are real people with real feelings. Furthermore, Dr. Fauci is a dedicated public servant whose sole motivation was saving lives.”

Musk responded, “I strongly disagree. Forcing your pronouns upon others when they didn’t ask, and implicitly ostracizing those who don’t, is neither good nor kind to anyone.”

“As for Fauci, he lied to Congress and funded gain-of-function research that killed millions of people,” Musk added. “Not awesome imo.”

Kelly’s comments were in response to a tweet that Musk posted early Sunday morning, in which he stated, “My pronouns are Prosecute/Fauci,” an hour after another tweet warning that things were about to “get spicy.”

Musk’s latest tweets could suggest damning information might soon be revealed about Fauci, the government virologist whose advice set COVID policies — including school lockdowns, economic shutdowns, and mask and vaccine mandates — under two administrations.

Fauci’s defenders have elevated him to god-like status over the last three years, with yard signs saying “In Fauci We Trust” and votive candles bearing his image. But a growing chorus of critics blame the octogenarian head of the National Institute of Infectious Diseases and current chief medical adviser to President Joe Biden for blocking investigation into the possibility thaCOVID leaked from a Chinese lab, where his office had funded dangerous bat virus research, as well as his heavy-handed advice to close schools and businesses during the pandemic.

This article was published by The Daily Wire and is reproduced with permission.

Twitter Execs Didn’t Have a Good Explanation for Censoring Hunter Biden’s Laptop, New Emails Reveal

Estimated Reading Time: 6 minutes

After Twitter CEO Elon Musk teased a massive reveal Friday afternoon, journalist Matt Taibbi released a Twitter thread revealing the confusion at the social media company after it censored the New York Post’s Hunter Biden laptop story in the lead-up to the 2020 presidential election.

Taibbi’s Twitter thread, which Musk retweeted, revealed that Twitter’s top executives didn’t have a good explanation for censoring the story, but stuck with the decision, anyway. It also showed that Republican and Democratic congressional staff weighed in against the move.

Taibbi recounted that Twitter took “extraordinary steps” to suppress the Post’s Oct. 14, 2020, story reporting on emails from Hunter Biden’s laptop implicating Joe Biden in his son’s foreign business dealings. The social media company even went so far as “removing links and posting warnings that it may be ‘unsafe.’ They even blocked its transmission via direct message, a tool hitherto reserved for extreme cases, e.g. child pornography.”

Twitter locked then-White House press secretary Kaleigh McEnany out of her account for tweeting about the story. Taibbi shared an email from then-President Donald Trump’s reelection campaign staffer Mike Hahn, who noted that all McEnany did was “cite the story and firsthand reporting that has been reported by other outlets and not disputed by the Biden campaign.”

“I need an answer immediately on when/how she will be unlocked,” Hahn added. “At least pretend to care for the next 20 days,” he added, referencing the election.

Taibbi next shared a message from public policy executive Caroline Strom, who asked her coworkers, “Are you able to take a closer look here?”

An analyst responded that “the user was bounced by Site Integrity for violating our Hacked Materials Policy.”

Yet it remains unclear what sparked the initial decision to censor the story, according to Taibbi.

“Although several sources recalled hearing about a ‘general’ warning from federal law enforcement that summer about possible foreign hacks, there’s no evidence—that I’ve seen—of any government involvement in the laptop story,” he wrote. “The decision was made at the highest levels of the company, but without the knowledge of CEO Jack Dorsey, with former head of legal, policy and trust Vijaya Gadde playing a key role.”

Taibbi quoted one former employee, who said of the decision, “They just freelanced it.”

“Hacking was the excuse, but within a few hours, pretty much everyone realized that wasn’t going to hold. But no one had the guts to reverse it,” the employee reportedly added.

Taibbi shared a few messages illustrating the confusion. Communications staffer Trenton Kennedy wrote: “I’m struggling to understand the policy basis for marking this as unsafe, and I think the best explainability argument for this externally would be that we’re waiting to understand if this story is the result of hacked materials. We’ll face hard questions on this if we don’t have some kind of solid reasoning for marking the link unsafe.”

“By this point ‘everyone knew this was f—ed,’ said one former employee, but the response was essentially to err on the side of … continuing to err,” Taibbi added.

Yoel Roth, Twitter’s then-safety chief, cited “hacked materials” as the policy rationale, but noted that “this is an emerging situation where the facts remain unclear. Given the SEVERE risks here and lessons of 2016, we’re erring on the side of including a warning and preventing this content from being amplified.”

Brandon Borrman, then Twitter’s vice president of global communications, asked, “can we truthfully claim that this is part of the policy?”

Jim Baker, then-deputy counsel, wrote that “caution is warranted.” He suggested Twitter “assume” that the materials “may have been” hacked, even as he noted that “some facts” indicated “that the computer was either abandoned and/or the owner consented to allow the repair shop to access it for at least some purposes.”

Taibbi noted that some Twitter staffers seemed not to understand the basic tenets of the First Amendment and Supreme Court jurisprudence on it.

He cited an exchange between Rep. Ro Khanna, D-Calif., who alerted Twitter to the “huge backlash” this move had been generating among members of Congress on the issue of “speech,” as in free speech.

Gadde replied, noting that McEnany’s account “was not permanently suspended—we requested that she delete the tweet containing material that is in violation of our rules and her account is restricted until she complies.”

Gadde noted that Twitter “put out a clarifying threat of Tweets earlier this evening to explain our policy around the posting of private information and linking directly to hacked materials,” as if this policy would resolve any free speech concerns.

Khanna replied, “But this seems a violation of the 1st Amendment principles. If there is a hack of classified information or other information that could expose a serious war crime and the NYT [The New York Times] was to publish it, I think the NYT should have that right.”

“A journalist should not be held accountable for the illegal actions of the source unless they actively aided the hack,” the congressman added. “So to restrict the distribution of that material, especially regarding a Presidential [sic] candidate, seems not in the keeping of the principles of [the 1964 Supreme Court case] NYT v. Sullivan.”

Khanna continued, “I say this as a total Biden partisan and convinced he didn’t do anything wrong. But the story now has become more about censorship than relatively innocuous emails and it’s become a bigger deal than it would have been.”

Carl Szabo of the research firm NetChoice sent Twitter staffer Lauren Culbertson an email with the results of a quick poll involving congressional staffers. The survey suggested that a “blood bath” would await the company in congressional hearings, and that nine Republican staffers said, “this is a tipping point. It’s just too much.”

One staffer said the scandal represented “tech’s ‘Access Hollywood’ moment and it has no Hillary to hide behind.” Another said, “tech is screwed and rightfully so.”

Meanwhile, Democratic staffers suggested the censorship hadn’t gone far enough.

“In their mind, social media … doesn’t moderate enough harmful content so when it does, like it did yesterday, it becomes a story. If the companies moderate more, conservatives wouldn’t even think to use social media for disinformation, misinformation, or otherwise.”

Szabo added, “When pushed on how the government might insist on [more tech moderation], consistent with the First Amendment, [the Democratic staffers] demurred: ‘the First Amendment isn’t absolute.”

Taibbi noted that Twitter’s Hunter Biden move followed an increasing censorship trend. While “some of the first tools for designing speech were designed to combat the likes of spam and financial fraudsters,” outsiders started “petitioning the company to manipulate speech.”

He cited an exchange between Twitter executives, where one sent a list of items “to review from the Biden team,” and the other would reply, “handled these.” (Micah Lee, a blogger at The Intercept, noted that the tweets in the particular list Taibbi included contained revenge porn.)

Although Twitter received and honored requests from both team Trump and team Biden, “the system wasn’t balanced” but rather “based on contacts,” and Twitter’s staff leaned heavily Democratic. Indeed, Twitter staff long have leaned left, with 99% of their donations going to Democrats in the 2022 midterms, as they did in previous years.

“Today’s revelations demonstrate once again that Big Tech is an ideological monopoly policing Americans’ speech,” Kara Frederick, director of The Heritage Foundation’s Tech Policy Center, said in a prepared statement about Taibbi’s reporting. “Big Tech’s control of information and access to the digital space undermines free speech, interferes in our elections, and jeopardizes U.S. national security.” (The Daily Signal is The Heritage Foundation’s news outlet.)

“Musk has done what lawmakers should have already accomplished: exposing Big Tech companies as foot soldiers of the progressive Left,” Frederick added. “When Americans believe the 2020 presidential election outcome would have changed given information deliberately hidden by the Left with the help of Big Tech, apologies from former Silicon Valley executives will not cut it.”

Although it is impossible to know what would have happened had Twitter not suppressed the Post’s reporting on the contents of Hunter Biden’s laptop, a Media Research Center poll conducted in the days after the 2020 election found that 36% of self-described Biden voters said they were not aware of the evidence behind claims that Joe Biden was personally involved in his son Hunter’s business deals with China, a claim bolstered by emails found on Hunter’s laptop. Thirteen percent of those voters (4.6% of all Biden voters in the sample) said that if they had known the facts, they would not have voted for Biden.

Such a shift away from Biden would have given Trump the election, according to the Media Research Center’s analysis of the election results. Had the Biden-China story seen the light of day, Trump would have won the election with 289 electoral votes, the analysis claimed.

Twitter also banned conservatives, including a Heritage Foundation expert, shortly before the 2022 midterms.

Frederick added that “Americans should not have to rely on billionaires to deliver this necessary transparency,” and that elected officials should “constrain Big Tech’s pernicious practices. It is past time for aggressive reforms and proper oversight to ensure that Big Tech is held accountable.”


This article was published in The Daily Signal and is reproduced with permission.

Twitter Suspends Jordan Peterson for ‘Misgendering’ Transgender Actor

Estimated Reading Time: < 1 minute

Twitter suspended well-known clinical psychologist and author Jordan Peterson for “misgendering” actor Elliot Page on Wednesday.

The tweet that got Peterson suspended read “Remember when pride was a sin? And Ellen Page just had her breasts removed by a criminal physician.”

Peterson’s daughter, Mikhaila, announced the suspension on her own Twitter, tagging Elon Musk and adding that the site is “Definitely not a free speech platform at the moment.”

Peterson used Page’s birth name and the “her” pronoun, but the Canadian actor now goes by Elliot and identifies as a man.

Twitter informed Peterson that his comments violated their rule against hateful conduct, which bars users from “promoting violence” against other people for, among other things, “gender identity.”

Peterson rose to international prominence in part because he opposed Canadian Government Bill C-16 on free speech grounds, which he argued would open up the floodgates for prosecuting people who refuse to use a transgender person’s preferred pronouns.

Peterson “quit Twitter” in May after what he called an ‘endless flood of vicious insults’ that he has not received anywhere else, but ostensibly had returned to the site since then.

Twitter did not respond to The Daily Caller News Foundation’s request for comment.


This article was published by The Daily Signal and is reproduced with permission.

The Economist Whose Theory Predicted Today’s Calls for Censorship in the 1970s

Estimated Reading Time: 4 minutes

Nobel Prize-winning economist Ronald Coase wrote a paper in 1974 that implicitly predicted the increasing popularity of censorship among the intellectual class.


After Elon Musk’s offer to purchase Twitter was accepted, the Department of Homeland Security unveiled plans for a “disinformation” governance board. Musk’s purchase is not final, and the governance board is now paused, but the reaction to these events has been telling.

One might expect professionals in the market for ideas would be concerned by a government agency policing speech. Curiously, many groups who historically have defended free speech against interference seem slow (or absent) in response.

Members of the journalism industry have reacted negatively to Musk’s vocal support of free speech. His purchase is “dangerous,” and his commitment to free speech will lead to people being “silenced”.

Meanwhile, the Associated Press attacked Musk for wanting free speech, claiming that this desire was inconsistent with the fact that he has criticized people in the past.

This claim by the AP confused many, as criticism is obviously compatible with free speech.

Time magazine voiced opposition to Musk from another angle, trying to disparage his “tech bro” obsession with free speech

CNN writers crafted the suggestive headline, “Twitter has been focused on ‘healthy conversations.’ Elon Musk could change that”.

At The Conversation, Filippo Menczer, a professor of informatics and computer science at Indiana University, argues John Milton’s idea of the uncensored marketplace of ideas is outdated and calls for “refereeing” of social media. And of course, this refereeing isn’t censorship. Why would you think that?

Another professor writing for The ConversationJaigris Hudson, argues Elon Musk’s free speech push will make speech less free because if harsh language is allowed some people will stop talking. This article when set next to this Washington Post piece and the AP tweet underscores a consistent theme of mistaking free speech for freedom from criticism.

Head bureaucrat of the government’s “paused” disinformation board, Nina Jankowicz, also wishes Twitter would move in another direction. Jankowicz wonders, why not allow verified accounts to edit the Tweets of people using free speech too dangerously?

Although it isn’t uncommon for high-level military bureaucrats like Jankowicz to desire censorship, academics and journalists have long been stalwart defenders of the importance of an uncensored marketplace for ideas. For a long time, universities and newspapers were seen as places where controversial means and ends could be debated publicly. “The truth will out” was the final defense of these institutions against calls for censorship.

This defense of the marketplace of ideas was so universal among the professional intellectual class that it inspired Nobel Prize-winning economist Ronald Coase (1910-2013) to write a paper trying to explain why this was so. And, using this same paper, we can see Coase implicitly predicted the increasing favorability of censorship among the professional intellectual class.

In a 1974 paper, Coase, the Clifton R. Musser Professor of Economics at the University of Chicago Law School, mused over an interesting puzzle. Professional intellectuals focus tremendous effort in highlighting why the market for goods and services requires regulation. Meanwhile, those same intellectuals often argued that the market for ideas should be free from regulation.

So, why the asymmetry?

To answer this puzzle, Coase first dismissed two popular but wrong explanations for this paradox.

The first explanation is that markets for goods and services can have market failures. For example, if gasoline buyers and sellers don’t have to pay for the pollution gasoline generates, they will buy and sell too much at the expense of those who experience pollution.

However, the problem with this explanation is obvious. There can also be failures in the market for ideas. Even if it’s correct that the best idea will win, it’s obvious that the best idea won’t always win immediately. Pollution in the market for ideas, such as disinformation, is also possible.

In other words, the market for ideas also has market failures. On this criteria, both types of markets should be regulated–or neither.

The second wrong explanation for why professional intellectuals defend the market for ideas from regulation is that unregulated speech is necessary for a functioning democracy. This explanation sounds okay at first, so what’s wrong with it?

Well, the market for goods and services is also necessary for a functioning democracy. As Coase puts it,

For most people in most countries (and perhaps in all countries), the provision of food, clothing, and shelter is a good deal more important than the provision of the “right ideas,” even if it is assumed that we know what they are.

So good ideas being necessary for a functioning democracy can’t be an explanation for why the market for ideas should be unregulated, since professional intellectuals favor regulation for goods and services which are also necessary for a functioning democracy.

The asymmetry remains.

Coase finishes his essay by solving the paradox. Why do professional intellectuals defend the market for ideas against regulation but not the market for goods and services?

The market for ideas is the market in which the intellectual conducts his trade. The explanation of the paradox is self-interest and self-esteem. Self-esteem leads the intellectuals to magnify the importance of their own market. That others should be regulated seems natural, particularly as many of the intellectuals see themselves as doing the regulating.

So, the market for ideas is the market controlled by intellectuals. They see their market as a higher and more important calling. The market for goods and services, in their view, is both less important and more corrupted.

So how does Coase’s explanation here predict the increasing calls for censorship in the market for ideas?

Remember the explanation Coase gave. Professional intellectuals considered the market for ideas as above regulation because they controlled the market.

But times have changed since Coase wrote his article in 1974.

The internet has revolutionized the landscape of the market for ideas. It’s no longer the case that the well-credentialed have the most sway in the ideas market. Recent years have been characterized by creators on YouTube, podcasts, and, most recently, Substack dominating the market for ideas.

Now that the market for ideas is no longer dominated by academia and the journalism industry, members of those groups no longer have the same incentives to stop industry regulation.

In fact, as in many industries, it may be in incumbents’ best interest to regulate competition. After all, if people get their new commentary from Joe Rogan and not CNN, that hurts CNN’s bottom line.

So, although Coase did not foresee the decentralization of the market of ideas in his piece, the logic of his paper gives a clear prediction. If the ones who hold the reins to the market for ideas lose their grip, calls for regulation are sure to follow. And this is exactly what we’re seeing.

This article was published by FEE, Foundation for Economic Education and is reproduced with permission.

A Musk Inspired Anti-ESG Takeover Wave?

Estimated Reading Time: 5 minutes

It’s fun to see memes suggesting that Elon Musk should buy Alphabet, Amazon, Coca Cola, Disney, Meta, Netflix, YouTube, and so forth, but of course he cannot afford all that. But we can. By we, I mean value investors. Musk’s purchase of Twitter has validated my critiques (see hereherehere, and here) of ESG-based investment (environment, social, governance), which despite its weak financial record currently constitutes about $2.7 trillion globally. And it has demonstrated the potential power of anti-ESG funds, which I have called Friedman Funds, after Milton.

An anti-ESG Friedman Fund would, firstly, short companies overvalued due to capricious or government-dictated ESG metrics and buy companies undervalued due to said metrics, and, secondly, buy controlling interests in potentially valuable companies that are going broke, or at least earning less than they could, because they went woke, as Musk and his investors recently did.

The goal of the fund would be to earn above-average risk-adjusted returns, period.

The effect of the fund would be to increase financial market efficiency and economic productivity by punishing deviations from rational valuations and rational business decision-making processes.

The first approach is widely called value investing. Although understood in general terms by investors since at least the 18th centuryBenjamin Graham popularized and quantified the approach in the first half of the 20th century. The gist is to buy stocks when their market price falls below their rational value and to sell or short them when their market price exceeds their rational value. Value investors tend to buy and hold, ignoring daily price gyrations so long as the market price remains near rational value, the price toward which the stock will gravitate in anything approaching an efficient market.

A stock’s price might deviate somewhat from its rational value because investors like or hate the company because of what it makes, or how it makes it, or who runs it, or something its executives say or do. In other words, the shares of presumably “good” companies can gain from a “halo effect,” while shares of allegedly “bad” companies sometimes languish due to a “devil’s horn effect.” Some investors overestimate the importance of those various soft factors on other investors, causing them to value the stock higher (halo) or lower (horn) than the rational investor does.

ESG funds and ESG ratings – given regulatory teeth by the Securities and Exchange Commission directly, or indirectly through bond rating agencies – could produce significant halo/horn effects that value investors could exploit for their own gain while reducing financial system fragility in the process. Because ESG represents politicized and largely subjective concepts, ESG ratings can diverge significantly from reality. Unless checked by value investors, they could easily lead to bubbles (too much investment in certain assets, like dotcoms or mortgage-backed securities) or anti-bubbles (too little investment in certain assets, like fossil fuels). 

ESG bubbles could be particularly costly because the overinvestment might go into companies that actually hurt the environment or the downtrodden. As scholars like Ozzie Zehner, author of Green Illusions, have been arguing, and as Michael Moore tried to explain to fellow progressives in his 2019 documentary Planet of the Humans, very few “green” technologies provide net environmental benefits because they are inefficient, rely on tax subsidies, need rare earth metals to work, have major environmental side effects, and so forth. Similarly, as recently pointed out by Harvard Business Review, ESG ratings are not correlated with better environmental or labor regulatory compliance! 

Moreover, many social justice initiatives at major corporations, like many government programs, aid Democrat politicians but do little or nothing to help American Indians, blacks, Hispanics, women, or the poor. Once exposed, ESG darlings could become dogs overnight, hurting investors and potentially sparking a financial crisis.

The second approach that a Friedman Fund could take is typically frowned upon. According to the so-called Wall Street Rule, investors who do not like management decisions should sell instead of raising a stink. It’s a good rule of thumb because corporate management is usually well-entrenched. Most stockholder proposals fail because managers dominate corporate elections due to their control of the proxy mechanism and employee-owned shares.

A few simple rule changes, like cumulative voting, secret ballots, proxy mechanism reform, and larger board member and executive stock holdings, would make it easier for individual shareholders and institutional investors to pressure management to maximize long-run stockholder returns by making more rational business decisions, like not alienating their median customer to please vocal extremists.

Until then, Friedman Funds have to be willing to purchase underachieving companies like Twitter through stock market purchase of controlling stakestender offers, or proxy votes. Yes, such tactics are often derided as “corporate raiding” but the poor state of corporate governance can render such raids economically necessary. In the 1980s and 1990s, the takeover of poorly performing corporations by funds led by corporate raiders like Carl Ichan and leveraged buyout firms like Kohlberg, Kravis, Roberts reinvigorated the US economy by forcing rational changes at stagnating or inefficient companies.

It was no accident that the classic film on corporate takeovers, Other People’s Money, hit theaters in 1991. Its famous climax pitted Lawrence “Larry the Liquidator” Garfield (played by Danny DeVito) of Garfield Investments against Andrew Jorgenson (played by Gregory Peck), head of the failing New England Wire and Cable Company, the biggest employer in a small Rhode Island town. At the company’s annual stockholder meeting, Jorgenson argued, like every other adherent of the “stakeholder” theory of the corporation, that “a business is worth more than the price of its stock. It’s the place where we earn our living, where we meet our friends, dream our dreams.”

After being derided by Jorgenson as a greedy, big-city corporate raider who “builds nothing” and is basically committing “murder,” Garfield retorted:

This company is dead. I didn’t kill it. Don’t blame me. It was dead when I got here. It’s too late for prayers. For even if the prayers were answered, and a miracle occurred, and the yen did this, and the dollar did that, and the infrastructure did the other thing, we would still be dead. You know why? Fiber optics. New technologies. Obsolescence. We’re dead alright. We’re just not broke. And you know the surest way to go broke? Keep getting an increasing share of a shrinking market. Down the tubes. Slow but sure.

You know, at one time there must’ve been dozens of companies makin’ buggy whips. And I’ll bet the last company around was the one that made the best goddamn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company? You invested in a business and this business is dead. Let’s have the intelligence, let’s have the decency to sign the death certificate, collect the insurance, and invest in something with a future. …

Me. I’m not your best friend. I’m your only friend. I don’t make anything? I’m makin’ you money. And lest we forget, that’s the only reason any of you became stockholders in the first place. You wanna make money! You don’t care if they manufacture wire and cable, fried chicken, or grow tangerines! You wanna make money! I’m the only friend you’ve got. I’m makin’ you money.

Take the money. Invest it somewhere else. Maybe, maybe you’ll get lucky and it’ll be used productively. And if it is, you’ll create new jobs and provide a service for the economy and, God forbid, even make a few bucks for yourselves. And if anybody asks, tell ’em ya gave at the plant.

Granted, Musk’s play on Twitter is somewhat different. Unlike buggy whips, microblogging isn’t a doomed industry yet. But clearly Twitter, despite its sizable first mover advantage, was losing market share to direct competitors like Parler, as well as newer “social media” concepts like Clubhouse and Mastodon, because it was alienating many customers with its over-the-top censorship of demonstrably true “misinformation” and opaque account shutdowns and throttling. That is what Musk meant when he told Twitter’s board that he could unlock the platform’s value in his offer letter. And it turns out that Twitter was overstating the number of its users by over a million, too!

Many other companies also appear to underperform their potential in the name of progressive politics. When executives and board members earn big salaries but own little stock, they have strong incentives to downplay the importance of share prices while catering to tiny but vociferous and even vicious progressive cabals. If incentives cannot be better aligned between management and stockholders from within, then somebody from the outside, like Larry the Liquidator, Musk the Magician, or Friedman Funds, must step in so that the economy doesn’t suffer the large costs associated with underutilized assets.

Thanks to occupational licensing rules (e.g., Series 65), sundry regulations, and other startup costs, I cannot start a Friedman Fund myself. But I can, and would, invest in an ably led one, as would many others interested in making Adam Smith proud by reducing economic irrationality by profiting from it.

This article was published by AIER, American Institute for Economic Research and is reprinted with permission.

Incensed By Elon Musk’s Twitter Takeover, The Left Won’t Even Pay Lip Service To Free Speech

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There was a time not long ago when liberals at least pretended to support free speech. Those days are gone, and never coming back.


If you want to know how insane our disinformation discourse is right now, consider this: on Wednesday, just two days after Elon Musk secured a $44 billion deal to purchase Twitter — triggering apoplectic doomsaying from his critics on the left — news broke that the Department of Homeland Security has created a “Disinformation Governance Board” to combat misinformation ahead of the 2022 midterms.

Testifying before the House Appropriations Subcommittee, Homeland Security Secretary Alejandro Mayorkas said the new entity would address the “threat” of so-called targeted misinformation campaigns among minority communities. Hours later, Politico reported the DHS board would also focus on illegal immigration and Russia, and would be led by Nina Jankowicz, a former disinformation fellow at the Wilson Center and an advisor to the Ukrainian Foreign Ministry, who also happens to be a Russia collusion truther.

In addition to spreading the false story that former President Donald Trump was put in office as part of a nefarious Kremlin plot, Jankowicz once claimed armed Trump supporters would show up to the polls to intimidate voters. In the runup to the 2020 election, she spread the false narrative that Hunter Biden’s laptop was a Russian influence operation.

Indeed, the choice of Jankowicz to head a DHS office targeting election misinformation ahead of the midterms tells you everything you need to know about what the Biden administration means when it uses terms like “misinformation,” and sets up a board at DHS to “combat” it. The point of the board is to suppress any information or news that runs counter to the administration’s political aims and policy agenda. Understood in this light, the new DHS board amounts to a Soviet-style Ministry of Truth, a propaganda operation designed to quash speech and hide information from voters ahead of national elections — the exact opposite of its stated purpose.

News of this Disinformation Governance Board should snap the entire Musk-Twitter saga into focus. The unintentionally hilarious freak-outs from corporate media and left-wing blue checks about the end of democracy if Musk takes control of Twitter are not, according to the left’s point of view, overreactions.

For them, the purpose of Twitter is not to facilitate free speech or the salutary exchange of ideas or even robust debate. They care as much about all that as, say, Mayorkas and Jankowicz care about disinformation ahead of the midterms. Nor do they care all that much about hateful speech or targeted harassment on Twitter. So long as the targets of hate and harassment are on the right, it’s fine by them.

When they decry Musk’s takeover and lament that it will threaten democracy, what they mean is that they fear losing control over the platform, which, although smaller than some other social media companies, is a remarkably powerful tool for controlling narratives, shaping political discourse, and influencing news coverage. For them, “free speech” means speech they allow, that falls within boundaries they themselves have set and can change as needed. None of the people who now claim Musk’s ownership of Twitter is a huge problem saw any problem at all with Twitter’s suppression of the Hunter Biden laptop story ahead of the 2020 presidential election — a major case of actual misinformation that arguably affected the outcome of the election.

You cannot get them to admit this, though, in part because they will not admit it to themselves. Epistemic closure on the left makes it impossible for someone like The Atlantic’s Adam Serwer, for example, to understand the Musk takeover of Twitter as a potential victory for authentic free speech. For Serwer, the entire debate about free speech on Twitter is a canard, “a disingenuous attempt to frame what is ultimately a political conflict over Twitter’s usage as a neutral question about civil liberties, but the outcome conservatives are hoping for is one in which conservative speech on the platform is favored and liberal speech disfavored.”

That pretty much sums up what the left is telling itself about all this. Allowing conservatives to speak their minds on Twitter about, say, transgenderism or abortion or critical race theory, can’t possibly be considered “free speech.” To them, it’s just “hateful conduct” conservatives engage in as part of a power dynamic, which in turn warrants censorship.

Same goes for raising concerns about last-minute changes to voting rules ahead of the 2020 election, or questions about the origins of Covid-19 and the efficacy of the vaccines. None of it counts as free speech, according to the left. Mention any of that, and you’re liable to get locked out of your Twitter account. (Believe me, I know whereof I speak.)

For the left, this isn’t only right and just, it’s necessary to “protect democracy.” Consider the recent remarks from former President Barack Obama — the living, breathing avatar for this mode of thinking. During a speech at Stanford University, Obama said censoring speech online is necessary to thwart disinformation that could hoodwink people into believing falsehoods or losing trust in their leaders, and of course we can’t have that. “Once they lose trust in their leaders, in mainstream media, in political institutions, in each other, in the possibility of truth, the game’s won,” he said.

It never occurs to Obama, or to his rapt audience at Stanford, that our leaders richly deserved to be distrusted, as do the mainstream media and our political institutions. The important thing, for Obama and those with his mindset, is not that these people and institutions prove themselves actually trustworthy, only that they be seen as such. If that means a little more online censorship, then so be it.

It was not always so. There was a time not long ago Obama himself at least made it sound like he thought free speech was important. Speaking at the United Nations in 2012 just weeks after the terrorist attack on the U.S. Embassy in Benghazi that killed Chris Stevens, the U.S. ambassador in Libya, along with three other Americans, Obama mounted a spirited defense of free speech. (Set aside, for the moment, that he did so under the false pretense that the Benghazi attack came about as a result of spontaneous protests of an anti-Muslim video, and not, as everyone at the time knew, a coordinated assault by Islamic militants affiliated with Al Qaeda.)

The reason the United States protects free speech, Obama said, is “because in a diverse society, efforts to restrict speech can quickly become a tool to silence critics and oppress minorities,” and because, “given the power of faith in our lives, and the passion that religious differences can inflame, the strongest weapon against hateful speech is not repression, it is more speech.”

Efforts to suppress free speech, he went on, are doomed to fail because “in 2012, at a time when anyone with a cell phone can spread offensive views around the world with the click of a button, the notion that we can control the flow of information is obsolete.”

What a difference a decade makes.


This article was published by The Federalist and is reproduced with permission.