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Moving Fast and Breaking Things
When someone is suppressed, restrained or otherwise pushed into a corner, the aggressor tends to assume unlimited power. The feeling of isolation and power imbalance gives the oppressor a form of momentum - as long as they can control the rules of the system, they are unstoppable, able to bend and crack someone to their will, even as onlookers attempt to intervene.
This kind of loathsome creature — call them an aggressor, a bully, a narcissist, it’s up to you — thrives on belief, and seems so poisonous because they appear to be able to get away with anything. The pain they cause and the obviousness of their malice is obvious to anyone operating outside of the system, but it’s very difficult to break in and even harder to break out.
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These people, however, always make two mistakes: they believe their system is transferrable, and never attribute anything they’re doing to luck. Nothing is by accident. Their successes are a result of fairly-won victories or fairly-won swindles against lesser creatures. People that weren’t smart enough to see them coming, or just collateral damage for their empire.
Sam Bankman-Fried, Elon Musk, Changpeng Zhao, Do Kwon, Marc Andreessen, Mark Zuckerberg and every ruinous cretin that I’ve written about in the last year has the same pattern - a laundry list of excuses that never involves true regard for another human being, a higher purpose that justifies their contempt for others as a necessary evil, and an ever-growing sense of outrage that they would be criticized. They have survived for a long time on work-adjacent success and superficial charm, because they’ve all found the right ways to get what they want.
And in every case, their failures are stemming from their unwillingness to cash out, to stop and take stock and say “I have it pretty good.” They are ever-greedy, ever-hungry, ever-empty souls that get worse as you learn more. They will never be happy, a burden they outsource to anybody unfortunate enough to stay too close.
That’s why it feels so incredibly satisfying to see them lose.
Fake Money, Real Crimes
Sam Bankman-Fried has decided that extradition would be the preferable option to living in a rat-infested prison with a bucket for a toilet, capitulating the world’s shortest four-dimensional chess game with the US government. Bankman-Fried assumed he was the smartest guy in the world, manipulating the media for weeks on end and thinking, if I had to guess, that they would somehow shield him after he publicly embarrassed both political parties with illegal political contributions. Bankman-Fried may have been smart enough to pull off one of the largest frauds of all time, but he wasn’t smart enough to build corporate infrastructure or redundancy for his massive fraud, assuming he was always going to be the smartest little shit in all of moneymaking history.
Sadly for him, he wasn’t smart enough to realize he got lucky. He wasn’t grateful for his success - he saw it as a natural byproduct of his genius, and thus there was no need to, say, prepare for the eventuality that someone would find out you were stealing.
It isn’t helpful to write “a normal person wouldn’t,” because Sam Bankman-Fried isn’t a normal person - he acts with the selfishness and disregard that it takes to defraud millions of people and steal billions of dollars. He also isn’t quite as exceptional as he has been portrayed, because he really isn’t a boy genius - he’s a cunning little fraudulent technologist that worked out exactly how to walk, talk, and build to extract capital. And even at the end, he still believed he had gotten away with it - except I imagine that nobody in a bahamian jail cell particularly cares if he created a cryptocurrency exchange, or has any interest in Effective Altruism.
Bankman-Fried built his structure up carefully - a dorky “genius” techie that had made a magic money machine, but legitimately this time, and because he showed the right signs, people gave him more and more money.
Changpeng Zhao (AKA CZ, CEO of Binance) of Binance called his bluff, because he too was this kind of monster. I personally believe CZ released the FTX balance sheet, and that he knew about the significance of FTX’s scam - potentially to distract from the ongoing Department of Justice probe of Binance, though far more likely because he had become tired of Bankman-Fried’s preening, and decided, in an alarming moment of arrogance, to sell their massive amounts of FTT token on the open market rather than sell to Bankman-Fried directly. Deep down, I really don’t believe any of this had to do with money, or ethics, or anything other than seeing an opportunity to take down a competitor he had grown to dislike. Bankman-Fried was bringing cryptocurrency the kind of attention he didn’t like, and something had to be done.
That’s because CZ, much like Bankman-Fried, always assumed he was one step ahead. He believed that doing this would flush Sam from the industry, all while Binance kept the market stable enough for the bad news to pass as it had so many times, except…it didn’t. And now their auditor is so concerned about the validity of their analysis that they’ve pulled Binance’s audit and stopped working in crypto entirely.
Worse still, Dirty Bubble Media reports that Binance US and Binance.com are comingling assets (and that Binance US may use a foreign “market maker” to pump itself full of funds), which would be illegal considering that Binance is explicitly not allowed to operate in America. The exchange has been dealing with billions of dollars of withdrawals in the last week, and while it isn’t clear how bad things are there, the worm has turned. Reuters published a detailed report yesterday elaborating on the shadowy nature of Binance’s business, and how a company with supposedly tens of billions of dollars can exist without having a headquarters, board of directors, or even an obvious executive team. Now the Department of Justice is considering charging Binance - and CZ himself - with crimes including breaking anti-money-laundering laws and sanctions based on a criminal investigation that started in 2018.
What happens with Binance is anyone’s guess. They are likely some form of insolvent, though it’s not obvious if that means “we have the equivalent of assets” or “we do not have enough of anything.” But it’s not great when you have to pause withdrawals of a major stablecoin because people have been trying to pull billions of dollars at once, something that would not be an issue if you, say, had those billions of dollars sitting in your exchange.
That’s because none of these cryptocurrency “geniuses” ever plans for the most obvious thing of all - their own stupidity. CZ could have likely made billions of dollars in a relatively under-the-radar way, but he chose to delight in media attention assuming that, just like Marc Andreessen, they would always have his back. He assumed that nobody would look behind the curtain, or that anybody behind the curtain would dare break his confidence, either because he had intimidated or enriched them sufficiently enough.
He also didn’t realize that his best scenario would be to keep Bankman-Fried and FTX’s problems as quiet as possible. A smart man would’ve realized that FTX dying - and in a graphic and detailed way, too - would cause a cascade effect that ended with the world treating cryptocurrency exchanges with concern and disdain, all while the slow hand of the US government finally moved to strike. But CZ couldn’t help himself.
Whatever Bankman-Fried had done, CZ had to respond, and he refused to choose self-preservation. He had to assert dominance. And he never thought for a second that doing so might accidentally kill his industry.
This is appropriate because I really believe that something snapped in 2022, beginning a massive reckoning between technology and society.
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As I wrote in The Year Of Finding Out, 2022 has been an era where we have seen the intellect and ability of so-called “geniuses” put to the test (or otherwise seen behind the curtain), only to be revealed as at best situationally intelligent and at worst ruinously stupid at the only time it counts.
As Karissa Bell of Mashable said, Mark Zuckerberg’s Meta has flunked its first year as a “metaverse company,” its stock sitting at just under a third ($116 as of writing) of where it was a year ago ($325.45) and its chief executive desperately trying to convince the FTC to let him buy a VR startup that nobody has heard of.
You see, VR and “the metaverse” was Meta’s real “product” that was launched under Zuckerberg’s leadership - even if he did have to acquire Oculus to do so. This was the first time Zuckerberg eagerly heralded a product launch since the original Facebook, and yet it was so blatantly, painfully obvious how little he had to show for it. His long, rambling, empty missives about “persistent, synchronous environments where we can be together” paired dissonantly with Meta’s janky-looking virtual reality chatrooms, and despite one of the more craven media pushes I’ve ever seen, it was fairly thoroughly rejected by the press.
I still believe Mark Zuckerberg will kill his company, because he is an unchecked, unrestrained tech titan that thinks he’s the smartest person ever born. And now the few remaining great minds are leaving his broken utopia, with gaming legend (and former CTO of Oculus) John Carmack leaving the company and saying that Meta was “constantly self-[sabotaging] and [squandering] effort.” If Zuckerberg was capable of evaluating reality and seeing his own faults, he would have fallen over himself to both cater to and retain Carmack - but he didn’t, because he doesn’t think he’s wrong.
All of this, like in all of these stories, was avoidable if Zuckerberg hadn’t been an arrogant, greedy solipsist. He could have avoided Cambridge Analytica - or at the very least shut it down on hearing it existed - by not poisoning his company with a “revenue at any cost” strategy. He could have avoided embarrassing himself with his metaverse play if he had, say, tested it with people who said words other than “very good sir!” every time he spoke.
I cannot imagine that Meta exists in the form it does today if Zuckerberg continues to push “the metaverse.” The technology is not there yet, even in the hands of someone who knows what they’re doing, and spending billions of dollars is not going to fix the problem. The “metaverse” that Zuckerberg wants is something that is decades away, and he can’t even create something fun.
Zuckerberg believed that the media would blindly take his genius ideas and say they were perfect, partly because they had before, and partly because he has lost all sight of how regular human beings say and do things.
He thought he was Steve Jobs, but he’s really Gil Amelio.
At the precipice of self-inflicted destruction sits Elon Musk, a man who has reduced his personal fortune by over $100 billion in the last year. The cost of Twitter’s acquisition — combined with Tesla losing more than half of its share price since September — now means Musk’s personal wealth is less than half its all-time high of $340 billion. Musk no longer holds the title of the world’s richest man. That now belongs to Louis Vuitton magnate Bernard Arnault.
Under the largest spotlight in the world, Musk has proven himself to be a petty charlatan who lacks any meaningful skills necessary to run a company. While we may have been able to fool ourselves that Musk could have successfully run three or four companies at once, the truth is more likely that SpaceX and Tesla have survived his tenure as CEO rather than thrived under his leadership. The current state of Twitter is fascinating because it is the most conspicuous analysis of a company we’ve ever seen, one that has revealed exactly how little a Chief Executive can know, how foolishly a Chief Executive can act, and how ignorant one very rich man can be.
And let’s just say that things haven’t got better.
In the last week, Musk banned ElonJet, an account that chronicled the location of his private jet (note: all air traffic is trackable publicly), under a hastily-created policy that banned anyone posting any kind of tracking of “real-time locations.” In an act of pure distilled petulance, he also banned the personal account of its creator, Jack Sweeney, and threatened legal action against the 20-year-old college student.
Musk then justified the policy further based on an alleged stalking incident, shortly before posting a video of a guy in a mask in a car, along with the car’s license plate. Musk also referred to real-time location as “assassination coordinates,” a term which only the most normal man could think of.
Musk then crossed a very specific line, banning reporters from CNN, Washington Post, the New York Times and Mashable for “doxxing [his] real-time location,” by which I mean “posted links to ElonJet’s other pages.” He agreed to unban them if they deleted the offending tweets. He then banned Taylor Lorenz several days later for - I kid you not - asking for Musk’s comment on a story, though Musk said it was for “prior doxxing action[s]” that he has yet to elaborate on. He also banned Business Insider reporter Linette Lopez, who has reported on Musk’s companies for many years, and she remains banned. He also chose this point to ban “promoting” links to Facebook, Mastodon, Truth Social, Instagram, Nostr (Jack Dorsey’s new social network) and Post, only to roll back this policy because it was, well, extremely stupid.
Musk then launched a poll asking if he should step down from Twitter, a poll that 57.5% of voters said “yes” to. He has yet to step down, and has now suggested that future polls will be limited to those paying for access to Twitter Blue. This happened
As loathsome as it was to write up everything above, it illustrates exactly how vividly Musk has shown his ignorance, cruelty and lack of impulse control. A year ago, we might have still believed that he earned his place in the world - that some combination of genius and guile happened behind the scenes that we had missed.
Sadly, It’s now obvious that when Musk takes the wheel, the company immediately begins to careen in violent directions, lurching as if intent on destroying random objects based on how they appear. The Twitter acquisition was always stupid, and just like Elon, it’s loud, stupid and dramatic for absolutely no reason. There was no reason to pile on $13 billion of debt to an already-struggling business. There was no reason to fire the Trust and Safety team. There was no reason not to retain senior ad personnel and copy their plans. Every choice that Musk has made has been fully intentional and utterly unavoidable, driven by a single-mindedly arrogant buffoon that cannot accept he doesn’t know everything.
Thanks to this arrogance, he may find himself incredibly screwed.
Musk’s bankers are considering a deal to exchange some of the onerous (11%!) debt on the Twitter deal for margin loans backed by his own personal Tesla stock. Tesla’s stock is tumbling, sitting around $138 - down nearly $30 a share in the last week - and their third largest shareholder is calling from Musk to step down as CEO. Musk owns 25% of Tesla between stock and options and has pledged more than half of it as collateral for loans, and much of his wealth (currently $209 billion) appears to come from the private valuations of companies like SpaceX and The Boring Company. Musk has had to sell billions of dollars of Tesla stock to keep Twitter going, and it’s obvious that that is where most of his liquidity comes from.
All of this is happening as Tesla faces its roughest year yet. Between Rivian, Cadillac, Ford, Audi and other auto manufacturers are creating better-looking vehicles at similar (or cheaper) price points, all while Tesla has to recall hundreds of thousands of cars. Tesla is about to get hit by a wave of competition it cannot afford to face as their CEO busies himself banning journalists and hanging out with Jared Kushner at the World Cup.
Musk is spinning too many plates because he can’t accept that he’s wrong - wrong about buying Twitter, wrong about how he runs Twitter, and wrong about being the smartest man in the room. Over the last year of following this story, Musk has proven again and again that he doesn’t know what he’s doing and is driven by an impulsive need for attention and adulation.
And if he’s not careful - something he has never appeared to be before - he will destroy most of his wealth. Forbes reports that Musk’s wealth was $24 billion in 2020, ballooning to $155 billion in 2021 - a Bankman-Fried adjacent pumping based entirely on Tesla’s stock value and trust in the valuations of private (and in some cases pre-revenue) companies run by Elon Musk. If you begin to question how well Tesla, or SpaceX, or The Boring Company (which is better known for abandoning projects than completing them) are run, it’s fair to consider whether he’s worth all that much to begin with.
It’s also worthwhile mentioning that some of the big boosts in valuation - The Boring Company raising $675m in April, and SpaceX raising $127 billion (quadrupling its value in three years) in May - came at the tail-end of the massive drop in startup valuations we’ve seen this year. Musk’s wealth is inflated based on spurious values, the most spurious of which is Tesla, a company that trades at around the same price as Toyota despite making significantly fewer cars and less money.
In short, Musk’s entire fortune - his entire existence - is fueled by hype and trust in his genius. Without it, Tesla would not be worth such obscene amounts of money. Without it, Musk would not be able to raise ridiculous funding rounds for unprofitable companies. Without it, Musk wouldn’t have been able to buy Twitter, and he chose to do so by leveraging everything he had - not just the money he offered, but his reputation and the value that said reputation bestows upon everything he does.
While he would resent the comparison (because his companies technically make stuff), Musk is not altogether different from Sam Bankman-Fried in how he built his wealth. Musk’s fortunes are built on top of a combination of leveraged debt and spuriously-valued private deals, and all of them hinge on him being a trustworthy operator and company steward.
If that changes, Musk’s fortunes will change with it. He will have to move fast to jettison debt from Twitter, or sell the thing entirely. He will never not be a billionaire, but I would be shocked if his wealth doesn’t return to something more like he had in 2019 or 2020. There is no way that things can continue as they are - and I think he’s beginning to realize that’s the case.
You Cannot Outrun Gravity
Every single executive I have criticized in the last year has shown the remarkable belief that they are not subject to the rules of reality that you and I face. This is in part because they’ve been able to escape abiding by said rules through unimaginable wealth and the power that it grants you, but also because such greed may be impossible to acquire without hubris.
They always believe that they alone are worthy. They never have a backup plan, because they have always prided themselves on “being good when the going gets tough.”
Yet they will always be deeply vulnerable to their own failures. They will always make mistakes, because they don’t believe they’ve ever made one. And when they start losing, they lack the capability to stop the world from falling down around them, because that starts at a point of introspection they’ve never had to reach.
As the world turns on these wretched charlatans, take pride in every time you’ve seen them for who they are. Take pride in not accepting the terms of prestige that the rich and powerful demand just for existing. Take pride in fighting for causes that support workers’ rights, diversity and fairness.
And spit venom in the eye of those who would step on another person’s skull to make a dollar.
At this point, I am taking a break for the rest of the year to rest and recuperate, and I’ll be back the first week of January, unless I find a subject I just *have* to write about. In any case, it feels like a great time to thank you for reading this newsletter.
In the last year, Where’s Your Ed At has grown from 4,562 to 13,856 subscribers. I have published 179,311 words across 80 articles.
I am so proud of the community that has grown - I appreciate your support, comments and emails so much more than I can put into words. Next year I am planning to launch an audio component - something short, sharp and sweet - that will speak to the themes I’m discussing here.
I’m repeating myself, but thank you for reading. I started doing this because it makes me happy, and your responses have made me even happier. I will never stop being grateful for the time you take to read articles that have averaged 2,241 words a piece - it is an investment of your time that you could make elsewhere, but you chose me. I won’t forget it.
I’ll see you in 2023.
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