Is Free Speech Back?
There are days when you just want to shout: Thank goodness for the market!
It seems like one of the few institutions remaining that actually tells the truth in a world of lies. It checks governments, ideologues, central banks, preening elites and delusional intellectuals and finally tells the world what is true.
The message is not always obvious and clear but the trajectory is. It’s about all we have remaining to push the pause button on insanity. Thank goodness!
The most obvious and recent example concerns Twitter. The crazed board, plus midlevel management, with its brutal censorship out of deference to fanatics in government, was clearly driving the company into the ground.
Users were aching under the strictures, and furious at seeing their friends banned and their accounts throttled. But nothing could shake the ideological fanaticism that had become deeply embedded.
In other words, it was an undervalued company by any standard, so mismanaged that it actually ran off its founder and CEO. It was ripe for a takeover. Elon Musk loved the technology, but gradually over the last couple of years came to realize that something had gone very wrong.
He decided to deploy his personal, financial and reputational capital to do something about it (to learn what really makes Elon Musk tick, I suggest you watch this fascinating interview).
Nearly the entire planet Earth was thrilled by the incredible drama surrounding his takeover of Twitter. And the payoff is already very obvious. The markets love it!
And the markets love it because most users are going nuts with excitement that the schoolmarmish and censorious ways of moderation seem to be the stuff of history.
Of course a tiny group is furious and threatening to leave. Good riddance. Their influence has always been baneful, not only in terms of content but also in valuation. And they have exercised wildly outsized influence on corporate America for years!
What drove the deal to make it possible? Elon made his every move public. Forget backroom deals. He appealed to the public, to logic and to the stockholders, and ironically he did so via Twitter.
He directly attacked the board, citing their tiny ownership stake in the company. He made a high offer that put money into every stockholders’ bank account. At that point, the company deployed a poison pill, as if to prove everything that Elon was saying all along.
Then the dam broke. What is the point of a major corporation when it is being run in a way that deliberately degrades its stock valuation? Hey, if the company is privately held and there are weirdos running the show, that’s their business.
A New Age of Takeovers?
But a public company is a different matter. If you invite the world to share in ownership, you have to be ready to defer to their judgment over how the company is run, should the opportunity arrive.
No takeover bid in history has been so openly discussed and advertised, landing on the front page of most newspapers in the world. And Elon won it all! The signal that it sends to the corporate world is extremely powerful.
It says to many companies that they need to be very afraid. And it gives ideas to moneybags the world over to start going shopping.
In other words, this could inaugurate a new age of takeovers.
Yes, there are a gazillion government regulations in place that favor entrenched management. There is a regulatory bias against this type of thing left over from the 1980s, when corporate raiders were the fashion. But this signals that it could all come back. At least there could be a real check on crazy people and their ideologically driven antics!
There’s another issue here that is just as large. It concerns the status of free speech in America, which is hugely under fire and has been for a long time.
The top technology companies effectively became departments of government during the lockdowns and they continue to function that way. You can’t find anything on YouTube now that the government wants suppressed.
And keep in mind that this is easily the largest video platform in the world owned by the largest search engine.
Most colleges have followed this model in banning speech that offends precious sensibilities. And they expect students to continue coughing up to be preached at with ideologically driven propaganda in every class and with every off-campus speech.
This is clearly unsustainable, at least one would hope. What the Twitter takeover has revealed is that free speech is actually valued by the marketplace.
Today, for the first time, we are seeing what the opening of Twitter is starting to look like. This is merely because part of the takeover deal meant locking down changes to the platform and apparently that led to some element of liberalization.
People were discussing therapeutics like ivermectin and HCQ for the first time in a year. It was actually startling. It’s easy to forget what freedom feels like.
The Threats Begin Anew
The very day of the takeover, Biden press secretary Jen Psaki went public to demand more government oversight of social media platforms and then threatened antitrust action against them. This is an overt violation of the First Amendment of course because it puts government directly in the position of regulating what speech is and is not allowed.
What the elites absolutely dread is a future in which raiders are unleashed on business to help companies discover that serving customers and stockholders is better than serving intellectuals and government.
Michael Ryall of the University of Toronto writes:
Corporate “diversity, inclusion and equity” bureaucracies have proliferated throughout the corporate world. Not only are these appendages to the human resources department costly, but their “anti-racist” training programs most commonly increase racial tensions and lower organizational morale (Coca-Cola faced a backlash when its call for employees to “be less white” went public). Beyond DIE, the stakeholder capitalism and corporate social responsibility movements encourage managers to serve interests other than those of their shareholders.
All in all, a substantial amount of shareholder value is being bled away by executives who are boldly self-righteous in justifying these unprofitable — and, hence, anti-shareholder — acts. Why are managers doing it? I conjecture that virtue signaling is the new coin of the realm among our executive elite as they vie for status.
In Need of a Dramatic Shakeup
But perhaps that will now change. The executive elite all wish today that they had the fame, glory and riches of Musk. He has shown the world that defying an entrenched establishment can make you money and make you a hero.
What’s next? Is it Facebook? Netflix? Will Disney’s stockholders revolt? Will all publicly traded corporations now face pressure to stop with the silliness and get back to doing business?
Whatever the case, this is a big and important move and a harbinger of things to come. The entire corporate world is in need of dramatic shakeup. And not only that: politics too.
It is now a common assumption that the Democratic Party is going to be pummeled come November, and not only the House but the Senate and governors’ races and all over the country. It could be mightier than 1994 or 1980. We shall see.
Then it will be the Republicans’ turn to screw up.
Money and Finance
On the same day that Musk raided Twitter, Fidelity defied the regulators and propagandists to offer Bitcoin custody in its 401(k) accounts. No question that millions of people will take advantage of this, especially in these times when money is searching so hard for a return that is not robbed by inflation.
Keep in mind that government officials at all levels and in all lands have been putting down Bitcoin and crypto generally for 10 years. Now we see this large manager of this large pool of wealth in the world taking the opposite position.
I was speaking to a friend last night and he whispered a point to me with which I concur. The last two years have been unspeakably horrible for prosperity, security and liberty. And yet look at the backlash. It is on the verge of becoming beautiful. The trend is toward remaking the world without these annoying and coercive “experts” managing our lives.
Give it time to unfold: The future could be bright indeed.
for The Daily Reckoning