Sen. Ted Cruz (R-Texas) said he was told by a Biden administration staffer that he could not record a video at a Border Patrol facility along the U.S.-Mexico border.
“Please give dignity to the people. Please give dignity to the people. … Please respect the people, the rules,” the so-called staffer told Cruz while blocking the camera with her face, according to a video he showed Fox News.
“So you work for the commissioner, you’re a senior adviser, you were hired two weeks ago and you’re instructed to ask us to not have any pictures taken here because the political leadership at DHS does not want the American people to know it,” Cruz said in response to the official.
She did not disclose her identity, and The Epoch Times has contacted the Department of Homeland Security (DHS) for comment.
The staffer then told him:
“Please don’t treat the people as such,” to which Cruz responded that “your policies are unfortunately trying to hide them.”
“I understand that you were instructed,” Cruz said.
“I respect them, and I want to fix this situation, and the administration that you work for is responsible for these conditions.”
Cruz and more than a dozen Republican senators went to the border last week, with many describing overcrowded and severe conditions in facilities used to hold unaccompanied minors—children who unlawfully enter the country without an adult.
These are the pictures the Biden administration doesn’t want the American people to see. This is why they won’t allow the press.
In recent weeks, Republicans have blamed President Joe Biden’s administration for the surge in illegal immigration, although Biden in a press conference said such surges are routine and blamed the previous administration for the humanitarian conditions on the border.
The senator also posted photos that the “Biden administration doesn’t want the American people to see,” according to a tweet that included images of a crowded illegal immigrant facility in Donna, Texas—near the border.
“This is why they won’t allow the press. This is the CBP facility in Donna, Texas. This is a humanitarian and a public health crisis,” Cruz tweeted.
Journalists will be eventually allowed to go to the border to film Border Patrol facilities after they have been largely denied access, according to White House press secretary Jen Psaki in a Sunday interview.
Some Democrats whose districts lie on the border have said Biden needs to take action immediately to deal with the situation.
Rep. Henry Cuellar (D-Texas) told CBS News on Sunday that numerous family units who crossed the border illegally have been released into the United States without a notice to appear in court.
“They’re supposed to appear, show up, maybe in 60 days, report to an ICE office,” he said. “This is unprecedented.”
The number one thing that terrorizes us in this world and gets in the way of you having a better life… freedom!
Here is JP Sears’ top ten “science-based” reasons why freedom is bad:
1. Freedom requires you to think for yourself (…think the thoughts they hand you… so turn on your TV. It’s like psychological breadline where you can get your very nourishing thought handouts from… and that should be the only place you get them from).
2. Freedom will make you uncomfortable at times.
3. With freedom, no one’s controlling you…
4. Freedom requires self-responsibility.
5. Freedom comes with free speech (99.98% of all speech is hate speech… and hate speech is objectively defined as speech that you subjectively hate which is all speech that represents thoughts that don’t come from the one true source that you get your thoughts from)
6. With freedom you constantly learn and grow.
7. With freedom you can’t just print money when want more of it.
8. With freedom you can protest, but you can’t peacefully protest.
9. With freedom you’re allowed to not trust those who try to control you.
10. Freedom gives you equal opportunity, not equality of outcome(leaving people’s outcomes to what they earn through work and effort levels promotes hate and incentivizes prosperity).
So with all that said, what should we do?
“Communism needs your vote…freedom destroys lives, robs people of their dignity and takes away their birthright of being controlled.”
Officials in Los Angeles County on Thursday voted to increase funding to local law enforcement by $36 million, months after the Los Angeles Police Department’s budget was cut by $150 million.
The Los Angeles County Metropolitan Transportation Authority’s board unanimously agreed to increase funding to its five-year contract with the LAPD, the Long Beach Police Department, and the Los Angeles Sheriff’s Department.
The board includes Los Angeles Mayor Eric Garcetti, a Democrat.
The authority’s CEO, Phillip Washington, said before the vote that he wanted to find a balance between people complaining about law enforcement and those who wanted increased funding.
“Our hope is that of the public and the board understands that we’re trying as a staff to get to a good balance, to get to a good balance here in terms of policing on our system, trying to get to a happy medium here understanding both perspectives,” he said.
“And I do understand both perspectives from a lived experience. And as an African American male, I understand completely what we are saying about policing. But also, as someone who reviews every incident report on the system, I do believe we need some level of security on the system.”
Several members of the public disagreed.
“I don’t think that safety is something that should be balanced. I think when the board votes, they should vote for what they think is the safest thing, whether that’s all ambassadors or all police. We don’t want to look for a balance. I don’t think the public is necessarily the best skill to weigh in on that,” one told board members.
“And I did want to mention, I don’t know if it was mentioned, but the LAPD, I ride the bus and the train and I see them on the bus in the train, and they represent Los Angeles, they look like Los Angeles, they look like me. They look as much like Los Angeles as this board, if not more.”
The decision on the funding increase was originally planned for last month, but the board decided to postpone it. The increase was originally proposed as $111 million. The original contract, approved in early 2017, was $645.7 million. It represented a new approach, bringing on the LAPD and Long Beach police after Metro previously only contracted with the county’s sheriff.
In addition to approving a lower amount than requested, Garcetti and several members amended the motion to direct Metro’s CEO to use at least $40 million in the next budget to invest in transit ambassadors and other alternatives to using law enforcement to police public transportation.
The increase in funding was requested “to cover significant costs incurred … to:
(1) augment outreach services to the unhoused population, address crime trends, sexual harassment; and
(2) enhanced deployments to cover special events, employee, and customer complaints, or other unforeseen circumstances,” according to a board report.
The Los Angeles City Council in July 2020 slashed $150 million in funding from the LAPD, cutting the number of officers by 231. Los Angeles, like most major cities, saw an increase in murders last year.
Gun Group At Iowa State University Faces Backlash Over Event About 3D-Printed Weapons
Some Iowa State University students are upset at members of a student organization for promoting an event about 3D-printed guns in the wake of two mass shootings, one in Boulder, Colorado, and the other in Atlanta, according to Ames Tribune.
A schoolwide email sent Tuesday by “Students for 2A” invited students to learn about 3D-printed firearms. The email titled “Do you want to learn about 3D-printed firearms? read:
“Are you curious about 3D-printed firearms? Are you curious about home gunsmithing at all? Are you looking for a new hobby? Join Students for 2A on Monday, the 29th at 7 PM in Carver Hall room 305! We will be presenting on the recent history and legality of homemade firearms, talking about some 3D-printed projects we completed, talking about how you can get started, and, most importantly, answering the questions you have! This presentation has been a year in the making, and if you are interested in firearms, it is not one you want to miss!”
Some students are upset with the pro-Second Amendment rights group, whose email announcement of the event was poorly timed.
An open letter to administrators criticized the email’s timing and had more than 100 signatures, the Iowa State Daily reported.
The letter said members of Students for 2A “did not understand the emotional intensity the events of the past week have taken on students.”
“The University should release a statement condemning the timeliness, insensitivity, and potentially harmful and triggering nature of the email,” the letter said. “The student organization, Students for 2A, should also release a statement acknowledging the harm caused.”
Iowa State spokesperson Angie Hunt said members of Students for 2A followed university protocol in planning the event, adding that the presentation is “not a demonstration of 3D printing or weapons.”
“While not everyone may support the topic, all students have the right to gather and discuss issues that others may feel are controversial or do not align with their values,” Hunt said in a statement. “We understand our students’ concerns, and as a campus community, we mourn with those who have lost loved ones in the recent violent mass shooting tragedies in Boulder and Atlanta.”
According to the Students for 2A’s Iowa State website, the group has 45 members and is affiliated with the National Rifle Association. Under “useful links,” the group links to a website called CTRL+Pew, which appears to be a database of 3D-printed weapons. Digging further into CTRL+Pew, there is an entire library of weapons that anyone can easily download and print.
The timing of the email by members of Students for 2A may have been a little insensitive, considering most colleges are super liberal and don’t tolerate guns. What’s more interesting is that younger generations are intrigued by 3D printers and their ability to print weapons.
Morgan Stanley Asks: Will The Market Move Towards The Fed, Or Will The Fed Shift Its Reaction Function Towards The Market
By Vishwanath Tirupattur, head of Credit Securitized Products Research and Strategy at Morgan Stanley.
A year ago this week, global equities bottomed as jobless claims spiked to all-time highs with the shutdown of the global economy as a result of the pandemic, and gloom started to set in. It was also around this time that massive monetary and fiscal policy intervention began, matching the enormity of the catastrophe. Today, hope is growing for light at the end of the tunnel, and the return of March Madness is a sign that we are on the path back towards normalcy.
Vis-à-vis our 2021 Outlook published in November 2020, the US economy is aligning with our economists’ bull case, to which we assigned a likelihood of 20%. The bull case envisioned stronger growth than their above-consensus base case, with multiple COVID-19 vaccines increasing the speed and size of the roll-out, along with a more proactive US fiscal response than in their base case. This is exactly what we are seeing. The US$1.9 trillion American Rescue Plan was more than double our base-case expectation of 2021 fiscal stimulus, and another US$2+ trillion infrastructure package is in the works. The vaccine roll-out in the US has gathered pace, and the timeline for vaccinations has been brought forward, with 87.3 million people in the US receiving at least one dose of a COVID-19 vaccine and 47.4 million fully vaccinated as of last Thursday, according to the Centers for Disease Control and Prevention. Clearly, progress on the vaccination front has not been uniform globally, as parts of Europe and many emerging market economies lag the US. Still, growth is tracking the bull case narrative in our 2021 Outlook.
In the last six to eight weeks, risk assets have seemed listless. Since early February, the S&P 500 index is more or less unchanged and US investment grade credit spreads have stayed within a narrow range around mid-90bp. On the other hand, interest rates have risen steadily. Benchmark US 10-year Treasury yields have climbed about 60bp over the same period. Here is where fiscal and monetary policy meet face to face, and we need think about monetary policy in relation to fiscal policy. Let us dig into the underlying tensions in this policy confluence.
The conventional response to stronger-than-expected growth coupled with steep declines in headline unemployment would have steered monetary policy towards tightening in anticipation of higher inflation. In fact, the bond market is pricing in a 25bp rate hike at the start of 2023 and two more hikes of that size by the end of 2023. The thesis is that trillions of dollars in stimulus and an accelerating vaccination campaign mean front-end rates cannot stay this low without inflation spiraling out of control.
However, the FOMC’s ‘dot plot,’ Chair Powell’s comments during the post-FOMC meeting press conference last week and subsequent pronouncements by Fed officials have been stridently dovish and notably at odds with the bond market As Ellen Zentner, Matthew Hornbach and colleagues note, “Policy makers did not just ‘double down’ on dovish guidance, they ‘tripled down‘.” They highlight that even though the median FOMC participant now believes core inflation will remain at or above 2% through 2023, that alone is not grounds for thinking about rate hikes because strong labor market conditions consistent with maximum employment take primacy in the Fed’s reaction function. The Fed has not just raised the bar on the timing of future rate hikes. The Chair sounded equally dovish on tapering asset purchases when he stated, “We have said that we would continue asset purchases at this pace until we see substantial further progress, and that’s actual progress, not forecast progress. That’s a difference from our past approach.”
The conventional policy response reflected in the bond market stands in stark contrast to the Fed’s unequivocal message. Will the market move towards the Fed, or will the Fed shift its reaction function towards the market’s conventional thinking? Our global macro strategists Matthew Hornbach and Guneet Dhingra believe in the former, suggesting investors treat the recent technical-driven price action as noise and focus on the Fed’s signal. They recommend an overweight in the belly of the Treasury yield curve via 5s30s curve steepeners. Our economists continue to expect that conditions will be in place for the Fed to raise rates in 3Q23, with balance sheet tapering to start in January 2022.
Clearly, we are in uncharted waters in terms of policy. As my colleagues Andrew Pauker, Michael Wilson and team caution, this policy response may mean that the current economic cycle could run hotter but shorter than the prior three. They posit that risk-asset leadership is already shifting from ‘early-cycle’ to ‘mid-cycle,’ and that investors should position accordingly.
US Believes China “Flirting” With Taiwan Takeover: It’s “Closer Than Most Think”
A weekend report in Financial Times suggests the world is closer than ever to witnessing a major conflict flare up over Taiwan. Multiple alarming quotes from top American defense officials included in the report reveal that Washington fears China is now in the process of planning a takeover of the US-backed democratic island.
Ironically the report was published shortly on the heels of the Chinese Air Force’s largest ever incursion into Taiwan’s air space Friday, which saw a whopping 20 aircraft, including four long-range bombers, breach the country’s southwest defense zone. FT concludes based on the US officials interviewed for the report that the Biden administration now sees Beijing as actively“flirting with the idea of seizing control of Taiwan as President Xi Jinping becomes more willing to take risks to boost his legacy.”
Such a scenario would force Washington’s hand — it would have to decide to either go to war on behalf of its tiny ally halfway across the world against the massive and formidable People’s Liberation Army (PLA) — or sit back and watch from the sidelines somewhat helplessly.
“China appears to be moving from a period of being content with the status quo over Taiwan to a period in which they are more impatient and more prepared to test the limits and flirt with the idea of unification,” one senior US official was cited in the report as saying.
The pessimistic assessment was reportedly based on the Biden admin monitoring Chinese military movements and behavior over the prior two months.
The official stated that Xi sees this as a crucial part of his legacy moving forward. The Chinese president “sees capstone progress on Taiwan as important to his legitimacy and legacy,” the official was quoted further as saying. “It seems that he is prepared to take more risks,” the official said.
The Biden administration has concluded that China “is flirting with the idea of seizing control of Taiwan as President Xi Jinping becomes more willing to take risks to boost his legacy.” https://t.co/pLTPj9qVcR
This appears to also be the assessment of Admiral John Aquilino, who’s been tapped to head US forces in the Pacific. He testified before the Senate Armed Services Committee this past week week that the threat to Taiwan “is much closer to us than most think,” according to CNN.
He told the briefing of Beijing’s hostile intentions for asserting control over Taiwan that it’s now “their No. 1 priority.”
Interestingly, Aquilino actually suggested that the recent prediction of a “within 6 years” takeover timeframe earlier this month stated by outgoing Indo-Pacom commander Adm Philip Davidson was too conservative. “My opinion is that this problem is much closer to us than most think and we have to take this on,” Aquilino said.
And then there’s the assessment of top White House Asia official Kurt Campbell, who concludes, “…nowhere have we seen more persistent and determined activities than the military, diplomatic and other activities directed at Taiwan.” However, it should be noted that FT emphasized that Taiwan’s government and military leadership itself doesn’t share this assessment of any ‘imminent’ invasion threat in the works — or if so they’re at least not willing to state it openly.
Led by Chairman Frank Pallone, the House Energy and Commerce Committee Thursday held a five-hour interrogation of Silicon Valley CEOs entitled, “Disinformation Nation: Social Media’s Role in Promoting Extremism and Misinformation.”
As Glenn Greenwald wrote yesterday, the hearing was at once agonizingly boring and frightening to speech advocates, filled with scenes of members of Congress demanding that monopolist companies engage in draconian crackdowns.
Again, as Greenwald pointed out, one of the craziest exchanges involved Texas Democrat Lizzie Fletcher:
Fletcher brought up the State Department’s maintenance of a list of Foreign Terrorist Organizations. She praised the CEOs of Twitter, Facebook, and Google, saying that “by all accounts, your platforms do a better job with terrorist organizations, where that post is automatically removed with keywords or phrases and those are designated by the state department.”
Then she went further, chiding the firms for not doing the same domestically. asking, “Would a federal standard for defining a domestic terror organization similar to [Foreign Terrorist Organizations] help your platforms better track and remove harmful content?”
At another point, Fletcher noted that material from the January 6th protests had been taken down (for TK interviews of several of the videographers affected, click here) and said, “I think we can all understand some of the reasons for this.” Then she complained about a lack of transparency, asking the members, “Will you commit to sharing the removed content with Congress?” so that they can continue their “investigation” of the incident.
Questions like Fletcher’s suggest Congress wants to create a multi-tiered informational system, one in which “data transparency” means sharing content with Congress but not the public.
Worse, they’re seeking systems of “responsible” curation that might mean private companies like Google enforcing government-created lists of bannable domestic organizations, which is pretty much the opposite of what the First Amendment intended.
Under the system favored by Fletcher and others, these monopolistic firms would target speakers as well as speech, a major departure from our current legal framework, which focuses on speech connected to provable harm.
As detailed in an earlier article about NEC appointee Timothy Wu, these solutions presuppose that the media landscape will remain highly concentrated, the power of these firms just deployed in a direction more to the liking of House members like Fletcher, Pallone, Minnesota’s Angie Craig, and New York’s Alexandria Ocasio-Cortez, as well as Senators like Ed Markey of Massachusetts. Remember this quote from Markey: “The issue isn’t that the companies before us today are taking too many posts down. The issue is that they’re leaving too many dangerous posts up.”
Remember: the last time Congress summed social media CEOs to be interrogated, Sen. @EdMarkey left no doubt about what the demand of Democrats is when doing this: we want you to censor more (and obviously, the content they want censored is from their political adversaries): pic.twitter.com/j64rCdZ82L
These ideas are infected by the same fundamental reasoning error that drove the Hill’s previous drive for tech censorship in the Russian misinformation panic. Do countries like Russia (and Saudi Arabia, Israel, the United Arab Emirates, China, Venezuela, and others) promote division, misinformation, and the dreaded “societal discord” in the United State? Sure. Of course.
But the sum total of the divisive efforts of those other countries makes up at most a tiny fraction of the divisive content we ourselves produce in the United States, as an intentional component of our commercial media system, which uses advanced analytics and engagement strategies to get us upset with each other.
As Matt Stoller, Director of Research at the American Economic Liberties Project puts it, describing how companies like Facebook make money:
It’s like if you were in a bar and there was a guy in the corner that was constantly egging people onto getting into fights, and he got paid whenever somebody got into a fight? That’s the business model here.
As Stoller points out in a recent interview with Useful Idiots, the calls for Silicon Valley to crack down on “misinformation” and “extremism” is rooted in a basic misunderstanding of how these firms make money. Even as a cynical or draconian method for clamping down on speech, getting Facebook or Google to eliminate lists of taboo speakers wouldn’t work, because it wouldn’t change the core function of these companies: selling ads through surveillance-based herding of users into silos of sensational content.
These utility-like firms take in data from everything you do on the Web, whether you’re on their sites or not, and use that information to create a methodology that allows a vendor to buy the most effective possible ad, in the cheapest possible location. If Joe Schmo Motors wants to sell you a car, it can either pay premium prices to advertise in a place like Car and Driver, or it can go to Facebook and Google, who will match that car dealership to a list of men aged 55 and up who looked at an ad for a car in the last week, and target them at some other, cheaper site.
In this system, bogus news “content” has the same role as porn or cat videos — it’s a cheap method of sucking in a predictable group of users and keeping them engaged long enough to see an ad. The salient issue with conspiracy theories or content that inspires “societal discord” isn’t that they achieve a political end, it’s that they’re effective as attention-grabbing devices.
The companies’ use of these ad methods undermines factuality and journalism in multiple ways. One, as Stoller points out, is that the firms are literally “stealing” from legitimate news organizations. “What Google and Facebook are doing is they’re getting the proprietary subscriber and reader information from the New York Times and Wall Street Journal, and then they’re advertising to them on other properties.”
As he points out, if a company did this through physical means — breaking into offices, taking subscriber lists, and targeting the names for ads — “We would all be like, ‘Wow! That’s outrageous. That’s crazy. That’s stealing.’” But it’s what they do.
Secondly, the companies’ model depends upon keeping attention siloed. If users are regularly exposed to different points of view, if they develop healthy habits for weighing fact versus fiction, they will be tougher targets for engagement.
So the system of push notifications and surveillance-inspired news feeds stresses feeding users content that’s in the middle of the middle of their historical areas of interest: the more efficient the firms are in delivering content that aligns with your opinions, the better their chance at keeping you engaged.
Rope people in, show them ads in spaces that in a vacuum are cheap but which Facebook or Google can sell at a premium because of the intel they have, and you can turn anything from QAnon to Pizzagate into cash machines.
While the world is a better place without Donald Trump’s Twitter feed or Facebook page inciting his followers to violently overturn an election, keeping him or other arbitrarily chosen malignant actors off these platforms doesn’t change the incentive for Facebook or other social networks to continue pumping misinformation into users’ feeds to continue profiting off of ads.
In other words, until you deal with the underlying profit model, no amount of censoring will change a thing. Pallone hinted that he understood this a little on Thursday, when he asked Zuckerberg if it were true, as the Wall Street Journal reported last year, that in an analysis done in Germany, researchers found that “Facebook’s own engagement tools were tied to a significant rise in membership in extremist organizations.” But most of the questions went in the other direction.
“The question isn’t whether Alex Jones should have a platform,” Stoller explains. “The question is, should YouTube have recommended Alex Jones 15 billion times through its algorithms so that YouTube could make money selling ads?”
Below is an excerpted transcript from the Stoller interview at Useful Idiots, part of which is already up here. When the full video is released, I’ll update and include it.
Stoller is one of the leading experts on tech monopolies. He wrote the Simon and Schuster book, Goliath: The Hundred Year War Between Monopoly Power and Democracy, and is a former policy advisor to the Senate Budget Committee. His writing has appeared in the Washington Post, the New York Times, Fast Company, Foreign Policy, the Guardian, Vice, The American Conservative, and the Baffler, among others. Excerpts from his responses to questions from myself and Katie Halper are below, edited for clarity:
Matt Taibbi: There’s a debate going on within the Democratic Party-aligned activist world about approaches to dealing with problems in the speech world. Could you summarize?
Matt Stoller: There are two sides. One bunch of people has been saying, “Hey, these firms are really powerful…” This is the anti-monopoly wing. Google and Facebook, let’s break them up, regulate them. They’re really powerful and big, and that’s scary. So, without getting in too deep, there’s the Antitrust subcommittee, that’s been saying, “Hey, these firms are really powerful, and they’re picking and choosing winners.” Usually, they talk about small businesses, but the issue with speech is the same thing.
Then there’s another side, which is, I think, noisier and has more of the MSNBC/CNN vibe. This is the disinformation/misinformation world. This is the Russiagate people, the “We don’t like that Trump can speak” type of people. What their argument is, effectively, is that firms haven’t sufficiently curated their platforms to present what they think is a legitimate form of public debate. They’re thinking, “Well, we need to figure out how to get them to filter differently, and organize discourse differently.”
Ideologically, they just accept the dominance of these firms, and they’re just saying, “What’s the best way for these firms to organize discourse?”
Taibbi: By conceding the inevitability of these firms, they’re making that concession, but saying they want to direct that power in a direction that they’d like better.
Stoller: That’s right. I mean, there’s a lot of different reasons for that. Some of them are neoliberal. A lot of the law professors are like, “Oh, this is just the way of technology, and this is more efficient.” Therefore, the question is, “How do you manage these large platforms?” They’re just inevitable.
Then there are people who are actually socialists who think, “Well, the internet killed newspapers. The internet does all of these things. Also, there’s a bunch of them that never liked commercial press in the first place. A lot of well-meaning people were like, “We never liked advertising models to begin with. We think everything should be like the BBC.”
So, those are the two groups that accept the inevitability thesis. It’s really deep-rooted in political philosophy. It’s not just a simple disagreement. Then there are people like us who are like, “No, no. Actually, technology is deployed according to law and regulation, and this specific regulatory model that we have, the business structures of these firms, the way they make money from advertising, those are specific policy choices, and we can make different ones if we want.”
Katie Halper: When you say socialist, some may identify as socialists, but that there’s a general group of people who just believe, “We oppose hate speech and White supremacy,” and so we have to make these companies that are evil, and give them moral authority and a content moderation authority, which is an inherent contradiction/wishful thinking/inconsistent paradox.
In other words, you’re saying leftists, right? Leftist, not liberals, not neo-liberals, not even liberals, but people who are really would identify as left.
Stoller: Yes. There’s a part of the socialist world that’s like, “What we really want is egalitarianism in the form of a giant HR compliance department that tells everyone to be tolerant.” Right? Then there are most people who are like, “No. I just don’t like wall street and I want people to be equal and everyone should have a little bit over something,” and they both call themselves socialists.
Taibbi: You and the American Economic Liberties Project have said, there’s a reason why taking Trump off Twitter isn’t going to fix the problem, because you’re not fixing those incentives. Can you talk about what those incentives are, and why they cause the problems?
Stoller: Google and Facebook, they sell ads, right? They collect lots of information on you and they sell ads and ads are valuable for two reasons. One, you’re looking at them. Two, if they know who you are and they know information about you, then they can make the ad more valuable. A random ad space isn’t worth very much, if you’re showing it to some undefined person. An ad space you’re showing to a 55-year-old man who’s thinking of buying a luxury car, somebody will pay a lot for that ad space, if you know who that person is and you know that that person has actually been browsing luxury car websites and reading the Wall Street Journal about how best to liquidate their portfolio or something to buy a luxury item.
Google and Facebook want to sell that advertising particularly on their properties, where they get to keep 100% of the profits. If Google sells an ad on YouTube, they get to keep the money. Facebook sells an ad on Instagram or Facebook, they get to keep the money. So, their goal is to keep you using their sites and to collect information on you.
Taibbi: What methods do they use to keep you on the sites?
Stoller: They have all sorts of psychological tricks. Engagement is the way that they talk about it, but it’s like if you go and you look for something on YouTube, they’re going to send you something that’s a little bit more extreme. It’s not necessarily just political. It’s like if you’re a vegetarian, they’ll say, or if you look at stuff that’s like, “Here’s how to become a vegetarian,” they’ll say, “Well, about becoming a vegan?” If you look at stuff that suggests you’re a little bit scared of whether this vaccine will work, if you search for, “I would want to find safety data on this vaccine,” eventually, they’ll move you to like serious anti-vax world.
So, the question that we have to ask is whether you should block crazy people from saying things, or do something else… Like Alex Jones, for example, is crazy person or an entertainer, he says things that I don’t particularly like or agree with. The question, though, isn’t whether Alex Jones should have a platform. We’ve always allowed people to go to the corner of the street and say whatever they want or to write pamphlets or whatever.
The question is, should YouTube have recommended Alex Jones 15 billion times through its algorithms so that YouTube could make money selling ads? That’s a different question than censorship.
Taibbi: Conversely they’re not recommending other material that might discourage you from believing Alex Jones.
Stoller: Right. The other thing is, it’s not just that they want to create more inventory so they can sell ads. It’s also the kinds of ads that they’re selling. So, you can sell an ad based on trust. The New York Times or the Wall Street Journal — I hate using them as examples — they have an audience and people. They built that audience by investing in content, and then they sell ads to that audience, and the advertiser knows where that advertising is going and it’s based on trust.
The alternative model which we have now is simply based on clickbait. It’s just, “Generate as many impressions as possible, and then sell those impressions wherever the person is on the web.” That creates a kind of journalism, which is designed to get clicks or not even journalism. It’s just you’re creating content just to get engagement and not actually to build trust.
So, what this business model does, we call it surveillance advertising, but it’s an infrastructure player, a communications player manipulating you so that they could put content, engage content in front of you. What that does is it incentivizes a low trust form of content production. It both kills trusted content producers, a.k.a. local newspapers, because you no longer need to be able to put advertising in the Pittsburgh Post-Gazette, or whatever. You can just geotarget those people through Google and Facebook. You can get some Eastern European to falsify stories and people will click on that.
So, it kills legitimate newspapers and it creates an incentive for low trust content, fraudulent content, defamatory content, whatever it is that will keep people engaged and is often fraudulent. It hits really local newspapers and niche newspapers the most, so Black-owned newspapers and also newspapers having to do with hobbies. The actual issue is more about niche audiences themselves, and the kind of low-trust content that we’re encouraging with our policy framework, versus what we used to do, which we would encourage higher trust forms of content.
Taibbi: How would you fix this problem, from a regulatory perspective?
Stoller: The House Antitrust Subcommittee had a report where they recommended what we call regulated competition. That would say, “Okay. You break up these platforms in ways that wouldn’t interfere with the efficiency of that particular network system.” So, Google and YouTube don’t need to be in the same company, you could separate them out.
There are ways that you’d have to handle the search engine. You couldn’t split Facebook into five Facebooks, because then you wouldn’t necessarily be able to talk to your friends and family, but you could separate Instagram and Facebook easily. You could force interoperability and then split up Facebook if you want to do that. So, you could separate those things out and then ban surveillance advertising for a starter.
Taibbi: What would that do to content if you ban surveillance advertising? ANd how would that work?
Stoller: It would force advertisers to go back to advertising to audiences. So, they would no longer be able to track you as an individual and say, “We know this is what you’re interested in.” They would go to what’s called contextual advertising, and they would say, “Okay. If you’re on a site that has to do with tennis, then we’ll advertise tennis rackets on that site because we assume that that people are interested in tennis rackets.”
That’s called contextual advertising, versus the current system: you read an article about tennis in a tennis magazine and the platforms say, “Oh, that’s expensive to buy an ad there, so we’ll track you around the web and when you’re on Candy Crush, we’ll show you a tennis racket ad.” That’s the surveillance advertising model we have. That pulls all the power to Google and Facebook who are doing all the tracking, versus the contextual ad where the power is actually with the tennis racket site that has the relationship with the people interested in tennis.
Taibbi: So, the idea would be you would create a sort of a firewall between the utilitarian functions of a site like Facebook or Google, that provide a service where either you’re searching for something or you’re communicating with somebody, and they wouldn’t be allowed to take that data from that utility-like function to sell you an ad?
Stoller: That’s right. Germany is hearing a court case saying that you can’t combine advertising from Facebook, Instagram, and WhatsApp, and then third parties to create a super profile of someone and show them ads. They were saying that’s an antitrust violation. There’s a court hearing on that, but, more broadly, that’s what you have to do.
Ultimately, what we would want is we would want to have subscription-based communication networks paying for services. This is something that’s worked for thousands of years. I give you something in value, you give me money. It’s an honest way of doing business. If I don’t value it enough to give you money, then I won’t get it.
If people are like, “Oh, I don’t want to pay for Facebook, or I don’t want to pay for YouTube,” or whatever it is, that makes no sense. You’re already paying. You’re either paying with a Friday night you spend surfing YouTube, where they sell a bunch of ads and you give up your Friday night — or you pay with money, and it’s an honest transaction, and it’s in the long run, a lot cheaper and more honest method of payment.
For more of this interview, check out UsefulIdiots.Substack.Com in the next days. For Stoller’s writings on the subject, see here.
Traders Brace For More Turmoil After Archegos Forced Liquidations
Yesterday, in the aftermath of Friday’s bizarre, furious liquidation which saw a dramatic plunge in the price of various Chinese tech stocks…
… as well as a collapse in the price of media giants such as ViacomCBS and Discovery…
… which wiped out $33BN of value off all the companies involved as Goldman Sachs and Morgan Stanley sold blocks of shares worth $20BN at discount prices throughout the day, we pointed to Tiger Cub Bill Hwang’s Archegos Capital Management family office and asked if “This Was The Fund That Sparked The Massive Media Stock Liquidations.”
Today, both the FT and Bloomberg confirm that it was indeed Hwang responsible for the forced unwinds that shook the market on Friday.
Archegos Capital, a private investment firm, was behind billions of dollars worth of share sales that captivated Wall Street on Friday — a fire sale that has left traders scrambling to calculate how much more it has to offload, according to people with knowledge of the matter. The fund, which had large exposures to ViacomCBS and several Chinese technology stocks, was hit hard after shares of the US media group began to tumble on Tuesday and Wednesday.
As we speculated, the initial plunge in media names prompted a margin call from one of Archegos’ prime brokers, which in turn then prompted a cascade of similar cash calls from other Prime Brokers said FT sources. According to Bloomberg, Morgan Stanley traded about $13 billion, including Farfetch, Discovery, Baidu and GSX Techedu, while Goldman Sachs sold $6.6 billion worth of shares of Baidu, Tencent Music Entertainment Group and Vipshop Holdings. That sale was followed by the sale of $3.9 billion of shares including ViacomCBS Inc. and iQiyi, a Goldman email to clients said.
At the same time, traders buying the large blocks of stock – which were being intermediated by such firms as Goldman Sachs – were told the share sales had been prompted by a “forced deleveraging” by a fund.
Meanwhile, adding insult to injury, a handful of completely clueless sellside “analysts” who had no idea a fund was forced to dump its positions and were scrambling to explain the price action, rushed to downgrade companies such as ViacomCBS – because on Wall Street, price dictates fundamentals apparently – and only added to the liquidation frenzy even though their arguments were completely false (just as they had been on the upside when these same clueless penguins rushed to upgrade the companies).
In any case, Archegos is now finished: as the FT reports, “the firm’s website is no longer available and the company did not return multiple requests for comment. The fund’s head trader in New York hung up the phone when contacted by the Financial Times.”
Not surprisingly, this is not the Hwang’s first forced unwind: the New York-based asset manager previously ran the Tiger Asia hedge fund but he returned cash to investors in 2012 when he admitted wire fraud relating to Chinese bank stocks. Hwang paid $44MM in fines to settle illegal trading charges with the SEC in 2012, and in 2014 he was banned from trading in Hong Kong.
While the forced liquidations at Archegos – which describes itself as a “purposeful community of investment industry professionals” whose core values are “Excellence, Integrity, Learning/Doing/Teaching, Caring/Sharing” and others according to an archived version of its now deleted website – only hit its own P&L as it does not manage outside money, there is plenty of “outside money” invested in the names that got hit on Friday as countless shareholders were crushed.
For those other investors, the question – as we asked earlier – is whether the fire sales are over. Some traders say the pattern of recent selling, which ran for several days but reached a peak on Friday, suggests the bulk has been completed. Others think the scale of leverage that Archegos appears to have used means billions of dollars’ worth of positions could still remain to be sold.
now that the entity liquidating media/Chinese tech stocks is know, will the market
I) keep pressing them lower to hurt Hwang’s “idea dinner” pals, or
ii) ramp them as no more selling pressure
According to the FT, Archegos’ name is a biblical Greek word meaning chief, leader, or prince, used in relation to Jesus. In a 2018 YouTube video, Hwang said his investments were “not all about money”, adding that “God certainly has a long-term view”.
“We love seeing in our little eyes what God is doing through investing and capitalism and how . . . it can be done better.”
But while Hwang may believe he is God, or at least Jesus (and certainly would love to have his money) others don’t have that kind of patience, and asBloomberg writes this morning, global traders are bracing for what’s shaping up to be “one of the most anticipated opens for U.S. equities in months” following an extraordinary $20 billion wave of block trades Friday that rattled investors worldwide.
Sharif Farha, a Dubai-based portfolio manager at Safehouse Global Consumer Fund, said ViacomCBS and Discovery may actually recover on Monday and noted that the market’s fundamentals remain intact.
“The correction was not structural,” he said, and he is right: anyone who bought at Friday’s lows on the forced selling is likely set to make a killing in the coming days.
While Farha expects benign price action to start the day, but anticipation for Monday’s open remains high: “Traders everywhere know the story and will be glued to their screens,” he said.
To be sure, the possibility of additional block trades – either at Hwang or other funds that have similar exposure – looms over the market, while the traditional end-of-quarter volatility which we discussed last week may contribute to sharper swings on high-flying stocks. ViacomCBS and Discovery have rallied this year.
Then again, what has soared higher may just come down and stay down: “What most people appear to have missed is that both of these companies have seen their share prices almost quadruple since October last year,” CMC Markets analyst Michael Hewson said in a note on Sunday, referring to ViacomCBS and Discovery.
It didn’t help that last Monday ViacomCBS reported an offering of $2 billion in shares after closing at a record high. The stock fell 9.1% the following day. On Friday, a downgrade by Wells Fargo and the large block trades compounded the selling pressure. it has since wiped out more than half its value in just the past 5 days!
Meanwhile, as Bloomberg notes Viacom and Discovery shares are also echoing volatility in a host of companies that soared on lockdown trades, including Zillow Group and Peloton and to some degree the entire blank-check SPAC space. Earlier this month, data compiled by Susquehanna showed that volatility futures expiring three months from now were hovering 20% above the average level or prior instances when the VIX traded at 20.
“We have seen an increase in volatility in equities capital markets, tech, working-from-home names with retail stepping back and more rotation to value in the last few weeks,” said Barclays strategist Emmanuel Cau. “It may have hurt a number of funds that were overly exposed to these trades.”
“The markets could start trading in a friendly manner at the beginning of the week,” said Andreas Lipkow, Comdirect Bank strategist, echoing what we said in “Brace For A Frenzy Of Stock Buying On March 29.” He added that “although there is currently some major profit-taking and unusual block trade activities, these market asymmetries can currently still be processed well.”
But perhaps just as remarkable as the Archegos liquidation, was the elephant in the room, namely the action in the last minutes of trading on Friday. U.S. equities notched their biggest gain in three weeks on Friday which saw the S&P 500 explode 1.7% higher after trading in the red for much of the day, as the bull market celebrated its first anniversary since hitting pandemic-era lows.
We hope that this is not what the Fed has in mind when it talks about “price stability.”
Philanthropy among the elite class in the United States and the United Kingdom does more to create goodwill for the super-wealthy than to alleviate social ills for the poor, according to a new meta-analysis.
A group of U.K. researchers reviewed 263 journal articles, books and studies on elite philanthropy to better understand the role it plays in this new age of inequality. In the United States, the wealth gap between richest and poorer families has more than doubled since the 1980s, and in the United Kingdom, the incomes of the richest fifth are 12 times as much as the incomes of the poorest fifth.
The researchers’ paper, published in a special issue of the International Journal of Management Reviews, lays out how on the whole, the elite class mainly donates to causes that provide themselves with some type of benefit. The researchers defined “elite philanthropy” as “the preserve of wealthy individuals and close family members” who became rich through entrepreneurship, either by starting a new business or expanding an inherited one. These individuals generally have extensive local, national and international business networks, the researchers said, and occupy positions with the “field of power,” a social space at the top of society that allows them to impact policy and practice.
Until recently, philanthropy hadn’t been taken seriously as part of mainstream management and organizational research, but Newcastle University professor Charles Harvey said it’s important that academia moves in this direction as many of the wealthiest philanthropists have entrepreneurial backgrounds.
“In the last decade, we’ve seen tech and finance money finding its way into philanthropic funding led by people like Bill Gates and Christopher Hohn,” said Harvey, one of the paper’s authors. “But entrepreneurship has enabled philanthropy for centuries so it’s important to understand how the philanthropic sector supports the economic sector.”
Many people mistakenly view elite philanthropy as a benign force for good rather than an avenue for the super-wealthy to translate economic capital into social and cultural capital, according to the researchers. Elite philanthropy, the study argues, is transactional, as there are also material benefits in addition to the cultural capital. In 2017, the United States increased the proportion of income that can be deducted from 50% to 60%, which directly benefits the elite; and in the United Kingdom, efforts to reduce philanthropic tax relief fell through in 2012 after pushback from wealthy philanthropists.
Households in the top 0.1% reduced the share of their income they donated by half from 1980 to 1990 after changes to the tax code reduced the amount of money they could deduct from charitable contributions, according to a study published in Cambridge University Press. That trend continued in future decades: In 2018, the 20 richest Americans donated $8.7 billion to charity, which is just .8% of their net worth as a group.
Where wealthy elites donate their money is shaped by where they can have the most influence on a local, national and international level, researchers said; maintaining their “field of power,” which allows them to use their business ties to influence the political sphere, is also a motivating factor in their philanthropy. For example, one study of 194 elite philanthropists in the United States found that 104 of them actively worked to sway public policy by funding research and advocacy organizations.
Because elite philanthropy affords a higher degree of influence to a select group of people, it’s important to examine its benefits and pitfalls more thoroughly, the researchers argue. While investments in philanthropy are beneficial to society at large, the current state of investments has only a moderate redistributive effect between the rich and the poor. Most of the money has not only been kept within developed countries but also within elite circles, rather than going to causes that impact a larger share of the world’s population such as disease prevention in developing nations.
Universities and colleges such as Harvard and Oxford, which already boast large endowments, are by far the largest beneficiaries of elite philanthropy. Money is also shared to arts and culture organizations and environmental causes, but in most fields accounts for only a small portion of nonprofit organizations’ income. In this way, wealthy people’s charity serves to support institutions that have directly benefited them, all while giving them the goodwill to influence other sectors of society, according to Harvey.
The researchers present four types of elite philanthropy that are distinguished by a focus in either developed or developing countries. Institutionally supportive philanthropy supports organizations and causes in developed countries, while developmental philanthropy focuses on developing nations. These two are more customary forms of philanthropy. The other two types take a newer, more entrepreneurial approach: Market-oriented philanthropy uses market-reinforced solutions to help developed nations; and transformational philanthropy seeks to invest in solutions that will not only combat social problems but also create wealth in developing countries.
Someone practicing customary philanthropy might donate a large sum of money to a nonprofit focused on eliminating child hunger, while an example of entrepreneurial philanthropy would be Facebook founder Mark Zuckerberg investing $24 million in a startup that trains and recruits software developers in Africa.
Contrary to popular belief, though, donations and investments in developing countries make up only a small proportion of elite philanthropy, and investments like these have only become more popular in the last decade or so, according to Harvey.
“As the differentials between the rich and poor get wider, you might expect the rich to give more as a percentage of income but the opposite is true. It’s really just a few percentage points, a small amount relative to the amount of wealth that these people hold as a class,” Harvey said. “That’s not to say that there aren’t some super generous people within that class, but the class as a whole is not generous.”
Internationally, the biggest givers are actually governments. Between 2013 and 2015, governments of developed nations provided $462 billion in overseas aid while philanthropists contributed $24 billion, according to data from the Organization for Economic Co-operation and Development.
The research isn’t intended to dissuade wealthy philanthropists from donating or to make the argument that no good comes from the investments they do make, said Mairi Maclean, a professor at the University of Bath.
“Individually there are some very impressive people helping important causes,” she said, recalling conversations she’s had with philanthropists who work on prison reform and disease prevention, among other causes. “But we’re looking at this systematically and on that level, a lot of improvements can be made.”
The study “Elite philanthropy in the United States and United Kingdom in the new age of inequalities,” published Feb. 21 in the International Journal of Management Reviews, was authored by Mairi Maclean, University of Bath; Charles Harvey and Ruomei Yang, Newcastle University; and Frank Mueller, Durham University.
Metadata: The Digital Fingerprint You Had No Idea Is Attached To Every Photo You Take
In a day and age where everyone is walking around carrying a portable GPS/supercomputer in their pockets, it should be of no surprise that location data can help track you at almost any given point in the day.
But while this may be semi-expected, one way in which people may not know they’re offering up information is through photographs.
Such was the topic of a new BBC report, which delved into exactly how much information people are offering up with their photo metadata – the digital “fingerprint” that’s attached to every digital photo you take.
Metadata became a national issue when comparisons of two photographs of former President Trump at Walter Reed Medical Center were scrutinized closely to try and determine whether they were staged or not, BBC notes. Metadata also led to authorities being able to detain John McAfee in 2012, after a photograph’s location data revealed he was in Guatemala at the time.
This data “automatically and parasitically burrows itself into every photo you take,” BBC notes. And while it’s not impossible to get rid of, most people don’t even realize that it’s there before widely sharing their photographs on social media. And while some platforms remove sensitive information, like where a photo was taken, others don’t.
The tool has become useful for police investigations, who often use it to place criminals at a scene. But the data can clearly be a slippery slope and be used for nefarious purposes, as well.
And as the BBC notes, it’s not just the metadata hidden in your photos. They also contain a “unique personal identifier linking every image you capture to the specific camera used”. The report goes on to describe how unique imaging sensors are, and how that data is stored:
To understand what this identifier is, you first have to understand how a photo is captured. Central to every digital camera, including those inside smartphones, is its imaging sensor. This is composed of a grid of millions of silicon “photosites”, which are cavities that absorb photons (light). Due to a phenomenon known as the photoelectric effect, the absorption of photons causes a photosite to eject electrons a bit like a nightclub bouncer.
…
The different sensitivities of the photosites creates a type of imperceptible image watermark. Although unintentional, it acts like a fingerprint, unique to your camera’s sensor, which is imprinted onto every photo you take. Much like snowflakes, no two imaging sensors are alike.
The good news, however, is that the data can also be used to help identify fake photographs. This can be helpful in a day and age where even deepfake video, let alone faked photographs, are starting to look flawless. Hany Farid, a professor in electrical engineering and computer sciences at the University of California, said that photo fingerprinting can “have positive and negative uses”.
Jessica Fridrich of Binghamton University in New York state, for example, has patented a photo fingerprinting technique, which has subsequently “been officially approved for use as forensic evidence in court cases in the United States.”
And how can one avoid sending out their personal data when just trying to take a couple of photos of the family bar-b-que? BBC notes there’s plenty of tools – like EXIFTool – that can help you access, and scrub, metadata.
