Streetwise Professor

I am a longtime critic of Elon Musk. I have criticized his rent seeking, most notably his extensive reliance on government subsidies to build his business empire. I have criticized his deceptiveness and self-dealing in the Tesla acquisition of Solar City–which despite all his bloviation about synergies was flatly a bailout of a failing company paid for by Tesla shareholders. I have criticized his numerous misleading statements over the years, most notably his promising the moon and then failing to deliver (e.g., heard of the solar roof lately?).

I am also a longtime critic of Twitter. It is a censorship engine masquerading as a social media company. Its management has, and still does, viewed its mission as enforcing the leftist progressive political narrative, and in pursuit of that mission ruthlessly suppresses all dissenting voices–especially if they gain any prominence.

Therefore, my first reaction to the news of Elon mounting a takeover attempt of Twitter was cognitive dissonance. That soon passed, however. Life is about choices between less than ideal alternatives, and as problematic as he is, Elon still dominates Twitter and its allies, hands down.

He at least talks the talk on free speech, and his criticisms of Twitter are trenchant and largely in agreement with my views. Although one may question how truly committed he is (he blocks people who needle him, myself included) there is considerable option value here. We know Twitter is committed to being the speech police, Musk offers the possibility of a freer and fairer platform.

The hysterical (in both senses of the word) response of Twitter management, employees, and the phalanxes of leftist, statist orthodoxy is wildly entertaining, and suggests that Elon is a real threat to what they viewed as their plaything: they certainly believe he is. There is so much material to choose from here, but Robert Reich’s widely mocked article in the Guardian provides a good summary of the various panicked arguments opposing Musk’s move. This was particularly hysterical (again in both senses of the word):

Elon Musk’s vision for the Internet is dangerous nonsense: Musk has long advocated a libertarian vision of an ‘uncontrolled’ internet. That’s also the dream of every dictator, strongman and demagogue.

Dictators, strongmen, and demagogues have libertarian visions. Who knew?

It is also beyond amusing that those who for years sneeringly dismissed Twitter critics by saying “it’s a private company so it can do what it wants” are now in full psychological meltdown over the prospect that someone might take a company private and do what he wants–because it’s not what they want. Say, here’s an idea: if he takes over Twitter, start your own platform, bitches. That’s what you’ve been telling us for years, isn’t it?

If I had any doubts about whom to support in this battle, two of my other bêtes noires, Gary Gensler (SEC) and the Department of Justice immediately mounted up to ride to Twitter’s rescue:

BREAKING: As @elonmusk offers to buy the rest of @Twitter a legal source tells @FoxBusiness @SECGov and @TheJusticeDept have launched what he described as a "joint investigation" into a myriad of Musk regulatory issues primarily involving @Tesla https://t.co/TDFLED1XuI

— Charles Gasparino (@CGasparino) April 14, 2022

Regardless of whether there are issues at Tesla, they existed before he dropped his bomb on Twitter. But I’m sure the timing of this is just a coinky dink, right?

Like Peruvian General Benavides said: ““For my friends, everything; for my enemies, the law.”

Further proof, moreover, that Twitter is just an appendage of the ruling class.

And the SEC should actually be more focused on corporate governance at Twitter. The company implemented a poison pill defense in order to fend off an offer at a price that Twitter would have no possibility in hell of reaching without it. (NB: it’s stock price is up 8 percent since its IPO.) But it’s OK to screw the shareholders to protect the guardians of the narrative, right?

(Musk has threatened to sue the board over this. Alas, poison pill defenses have survived legal challenges, and in fact thrived. That’s why hostile takeovers are largely a thing of the past. The political economy of American regulators and the judiciary decidedly works in favor of incumbent corporate interests.).

This epic thread is spot on:

Thank you everyone for coming in at such an ungodly hour. The folks at Blackrock have informed me that we need the collective brain trust here urgently to deal with this Elon offer. So – why doesn’t someone tell me what they think is going on here? ? pic.twitter.com/toeCBCKqcT

— Perpetua Hughes (@PerpetuaHughes) April 15, 2022

Seriously. Read the full conversation.

So how will it turn out? Well, it will provide numerous opportunities for schadenfreude. It will reveal the utter hypocrisy of the ruling class. It will reveal how Twitter is really an apparatchik of the ruling class. But I think Elon’s odds of success are low. He will be taking on the ruling class. And very practically speaking, poison pill defenses are extremely hard to overcome. And that will be especially true in this case because Twitter’s board is not using it as a means of extracting a better price: I seriously doubt that there is any price that they would accept if that involved giving control to Elon. But if anyone can beat these odds, it’s likely Elon. The very thing that I have criticized in the past, specifically the lack of any scruple in pursuing what he wants, is exactly what is needed to win a battle like this.