Crony Capitalism

“How Twitter Pushed Stakeholders under the (Musk) Bus”

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Here.

Abstract:

This paper provides a case study of the acquisition of Twitter by Elon Musk. Our analysis indicates that when negotiating the sale of their company to Musk, Twitter’s leaders chose to disregard the interests of the company’s stakeholders and to focus exclusively on the interests of shareholders and the corporate leaders themselves. In particular, Twitter’s corporate leaders elected to push under the bus the interests of company employees, as well as the mission statements and core values to which Twitter had pledged allegiance for years.
 
Our analysis supports the view that the stakeholder rhetoric of corporate leaders, including in corporate mission and purpose statements, is mostly for show and is not matched by their actual decisions and conduct (Bebchuk and Tallarita (2020)). Our findings also suggest that corporate leaders selling their company should not be relied upon to safeguard the interests of stakeholders, contrary to the predictions of the implicit promises and team production theories of Coffee (1986), Shleifer-Summers (1988) and Blair-Stout (1999).

There is tension between the interests of owners and those of other “stakeholders”, which is why the interests of non-owner stakeholders require justification as in the linked article. The authors beg the question — they assume stakeholder interests are comparable to owner interests — then find a problem because Musk values his ownership interest in Twitter above the interests of the people he bought out and of the company’s non-owner employees. So what should Musk get in exchange for the $billions he spent? Arguments for more stakeholder rights are arguments for less property rights.

A Grand Puzzlement

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There are certain things that I just don’t “get”. No matter how hard I try and wrap my mind around the topic, it just stubbornly refuses to engage, sitting in a little sullen lump in the corner and obstinately saying “No.” Because of this, the higher mathematic fields have always been closed to me, either through natural disinclination or having been traumatized in getting blind-sided by the New Math in the third grade. Wisely, I stuck to the simpler, practical methods to do with numbers, and left esoteric maths to those who had a bent for them. I have other talents.

That being admitted and perhaps in relation to such an inability, I could never quite grasp the method and appeal of bitcoin.

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When the Rule of Law Fails: A Reprise Post

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So, reading the story of this numbskull (link found through Instapundit) bloviating on MSNBC about the fierce urgency of abolishing the police reminded me of a long post that I did some years ago about what happens in a lawless, politically corrupt, violence-plagued city when the otherwise upright and law-abiding citizens get fed to the teeth with lawlessness, corruption and violence, and decide to take matters into their own hands. Brittany Packnett Cunningham, apparently noted as an anti-police activist, likely would not like what happens when citizens are finally pushed an inch too far.

The resulting post of mine was originally in three parts, but reposted here in total, below the fold. The story of the Vigilance Committee of 1856 was one that I had originally researched as providing a turn of plot for my Gold Rush adventure, The Golden Road. The hero of that novel, young Fredi Steinmetz worked for a time in San Francisco with his friend Edwin, selling copies of James King’s Evening Daily Bulletin on the streets and delivering to subscribers late in 1855, but left for the diggings before the Vigilance Committee renewed itself. The situation in San Francisco, which finally boiled over, reminds me very much of current events; naked chicanery at the polls, political corruption, a high level of crony capitalism, and criminals terrorizing ordinary citizens and going unpunished.

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Woke Democrats and Environmentalists will scare off our allies.

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The Russian invasion of Ukraine has set off radical changes in international relationships. The US and other (not all) European nations have imposed severe sanctions on Russia designed to destroy its economy. The precedents set are not all positive. First Ukraine has defined corruption for years. The Biden family and even Mitt Romney’s family got positions on a Ukrainian gas company’s Board for lots of money and no work except influence. The “Maiden Revolution” in 2014 was engineered by the Obama CIA. It expelled a pro-Russian president duly elected in an election probably more honest than the US 2020 election. Not all agree that it was an honest process.

As Ukraine’s political crisis deepened, [Victoria] Nuland and her subordinates became more brazen in favoring the anti-Yanukovych demonstrators. Nuland noted in a speech to the U.S.-Ukraine Foundation on December 13, 2013, that she had traveled to Ukraine three times in the weeks following the start of the demonstrations. Visiting the Maidan on December 5, she handed out cookies to demonstrators and expressed support for their cause.

The extent of the Obama administration’s meddling in Ukraine’s politics was breathtaking. Russian intelligence intercepted and leaked to the international media a Nuland telephone call in which she and U.S. ambassador to Ukraine Geoffey Pyatt discussed in detail their preferences for specific personnel in a post-Yanukovych government.

Ukraine has remained an economic basket case in spite of the change to a pro-western government.

The furious reaction to the invasion by US officials has alarmed some nations that have remained neutral. Some of them have been our allies, or at least friendly.

In a development that suggests trouble ahead, China’s basic approach—not endorsing Moscow’s aggression but resisting Western efforts to punish Russia—has garnered global support. South African President Cyril Ramaphosa blamed the war on NATO. Brazil’s president, Jair Bolsonaro, refused to condemn Russia. India and Vietnam, essential partners for any American strategy in the Indo-Pacific, are closer to China than the U.S. in their approach to the war.

Western arm-twisting and the powerful effect of bank sanctions ensure a certain degree of sanctions compliance and support for symbolic U.N. resolutions condemning Russian aggression. But the lack of non-Western enthusiasm for America’s approach to Mr. Putin’s war is a phenomenon that U.S. policy makers ignore at their peril.

The dominant role played by the “Woke” left and the Green New Deal enthusiasts in the Democrat Party has concerned many of them. Right now, Democrats hold all three branches of government, although narrowly.

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Aristos a la Lanterne!

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When the rage of downtrodden French peasants, living-on-the-edge city dwellers and frustrated bourgeois towards the ruling nobles and royalty final exploded into a kind of civic wildfire, there was no appeasing their collective anger. A handful of wary and fleet-footed aristocrats, or those who had made a good living out of serving the royals and the nobility fled from France in all directions. The slow and unwary made a humiliating appointment with Madame Guillotine before a contemptuous and jeering crowd, if they had not already run afoul of a mob with pikes and knives, and ropes at the foot of civic lampposts. (The fury of the French Revolution flamed so furiously that it that eventually it burned a good few leading revolutionaries themselves. As the Royalist pamphleteer Jacques Mallet Du Pan remarked pithily, “Like Saturn, the Revolution devours its children.) For a long time, my sympathies as regards parties in the French Revolution tended to be with those who fell out with it, sympathies formed by popular literature and music: The Scarlett Pimpernel, A Tale of Two Cities, Dialogues of the Carmelites, and other tales which basically tut-tutted the madness which overcame all reason and discretion, and championed those who had the brunt of it fall on them, either justly or not. How fortunate that our own very dear revolution had been able to escape such conflagrations: Loyalists in the colonies might have suffered being tarred and feathered and ridden out of town or having to leave in an undignified rush when Yankee Doodle went to town and made their independence stick. But the jailhouse regrets of those who called up and inflamed that conflagration, even inadvertently is not my concern here.

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