Streetwise Professor

April 16, 2022

Elon v. Twitter: Cognitive Dissonance, Quickly Resolved

Filed under: Economics,Politics,Regulation,Tesla — cpirrong @ 12:40 pm

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:

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:

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.

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  1. ‘(he blocks people who needle him, myself included)’


    Musk strikes me as someone who has received the proverbial ‘green light’ from the establishment, in return for taking on the task of making them rich from electric vehicles and space vehicles. Hence he gets a ‘blind eye’ from the SEC and even gets away with defaming a genuine hero – don’t tell me that case wasn’t rigged.

    So it’s interesting to see what happens when he does something the establishment doesn’t like – the green light turns amber, the SEC wakes up IMMEDIATELY and starts jawboning, etc.

    Musk hinted today that he might make a tender offer to shareholders. So, who/what will win – due process, the rule of law and an ocean of fiat, or the establishment, who have revealed plainly just how important Twitter is for them in shaping and directing the hive-mind?

    Get the popcorn.

    Comment by Ex-Global Super-Regulator on Lunch Break — April 17, 2022 @ 7:19 am

  2. There was an interesting article in this morning’s Telegraph.

    It seems to be be available via

    Comment by dearieme — April 17, 2022 @ 9:01 am

  3. just sharing this gem

    Comment by [email protected] — April 17, 2022 @ 9:17 am

  4. The title of this post is one of your all-time best.

    With today’s sharp decline (April 26th), Tesla stock is now off 19% over the past month. That’s about $224 billion lost in market capitalization, or around 5 Twitters.

    So it goes!

    Comment by Tom Kirkendall — April 26, 2022 @ 8:31 am

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