If It Ain't Woke
Anti-Woke
The term ‘woke’ has become both a straw man and a guiding star for the American right - they are on a crusade against the forces of wokeism, whatever and whoever those are (unclear). One nice thing about conjuring a movement out of whole cloth is you can shape it to fit whatever you happen to be upset about. And so conservatives unearth woke culture everywhere - doctors, teachers, payment apps, even the military are all in league to destroy the American way of life by doing ‘woke’ stuff.
Like any right wing movement, anti-woke has its grifters and charlatans. Here’s one:
An attempt to make a right-wing superhero movie has ended in disaster, with $1 million missing in China and a participant facing a federal indictment.
A sentence that, though both dumb and outrageous, barely moves the needle in 2022. A far-right blogger raised funds to make a film based on a Confederacy-themed (?) comic book superhero. Apparently a trailer of the film once existed but has now been removed from the Internet. Luckily, the SEC has a copy of the transcript:
FEMALE NARRATOR: With the assistance of the Global Justice Initiative federal police have raided the homes of all those who have been known to have committed hate crimes
MALE NARRATOR: You will not be warned, there is no escape, the global crackdown on hate has begun.
Obviously, the hero is defending the hate crimes, fighting a global police force trying to rid the world of hate. Sure. Anyhow, the comic’s creator - Vox Day - raised a million dollars to make his movie, and transferred it to a ‘bank’ in Utah for some reason:
[Vox Day]’s history of racism could have made it difficult for Rebel’s Run, which stars a character sometimes depicted in a Confederate flag bustier, to find traditional financing.
[…]
Given that track record, he instead turned to Utah-based Ohana Capital Financial, a business aimed at customers that would struggle to get money elsewhere.
As Ohana’s promotional materials put it, according to prosecutors, the firm offered “banking [to] the unbankable.”
I am unclear on how being racist on the Internet makes you unbankable - Alex Jones has no problem hiding his millions, Kanye West is still rich, etc - but sure, Ohana Capital promised they’d help get the movie made. However!
Ohana was the creation of James Wolfgramm, a self-described cryptocurrency billionaire who posted pictures of sports cars that supposedly belonged to him on social media. But in fact, according to a federal indictment filed last month, Wolfgramm’s wealth was a sham.
Wolfgramm owed millions to other ‘clients’, or people he’d duped into giving him millions for fake pandemic PPE and whatever other scams he got into. Vox Day has claimed the Ohana deal was a conspiracy to fleece his right-wing fan base, which sounds an awful lot like what he does? Really, he needs to maintain their trust to make more movies:
[Vox Day] isn’t done with movies yet, though. In a video to his fans, he told them he’s working on a script starring his friend, antisemitic former comedian Owen Benjamin. In this new movie, Beale plans to cast Benjamin—who believes the moon landing was faked—as the head of NASA.
Sick. Can’t wait. So (one of) Ohana’s scam(s) was promising to bank the right’s most online racists. What if a bank with more reputable financial backers claimed it could create banking products for a much larger group of garden variety racists?
An A-list group of financial backers including Ken Griffin and Peter Thiel gave Toby Neugebauer tens of millions of dollars to build a new kind of bank—one aimed at people who see Wall Street as too liberal.
The potential customer base was huge, Mr. Neugebauer and his business partner, former Mike Pence chief of staff Nick Ayers, told the investors. Plumbers, electricians and police officers, the pitch went, are fed up with big banks that don’t share their values.
The startup, called GloriFi, initially aimed to launch with bank accounts, credit cards, mortgages and insurance, while touting what it called pro-America values such as capitalism, family, law enforcement and the freedom to “celebrate your love of God and country.”
One problem the right wing media ecosystem faces is in order to keep its viewer base engaged, it needs to provide an endless array of things to be mad at, scared of, or both. You may recall we have talked about Texas’s crusade against banks - more on that later - which have become a hobby horse for right wing politicians. It makes sense that a couple of GOP rising stars would create their own bank - an extra, super-duper patriotic bank - to give angry cable news viewers another way to virtue signal their love of whatever the people inside the TV tell them are core American values. What better way to externalize your love of God and country than with a credit card made of bullets?
Within months, the investors’ money was nearly gone, and GloriFi was on the verge of bankruptcy. It missed launch dates, blaming faulty technology and failures by vendors, and laid off dozens of employees. It stumbled with products; for instance, a plan to make a credit card out of the same material used for shell casings failed when the company realized the material could interfere with security chips and potentially be too thick for payment terminals, according to people familiar with the matter.
It is impressive that GloriFi was able to burn through 8 figures’ worth of investor cash in a few months, but perhaps less surprising when you consider the guy in charge:
Some employees alleged that Mr. Neugebauer had a volatile temper and drank on the job, and the company’s unusual workspace—Mr. Neugebauer’s home—added distractions.
You may think it somewhat unconventional to situate a bank’s headquarters in the private home of its founder, but that’s just the sort of old-school banker’s mentality GloriFi was trying to disrupt! Obviously. Or maybe it was a lack of experience:
Neugebauer and Ayers began to canvass investors last year. The pair lacked much experience in banking or technology. Mr. Neugebauer, the son of a former Texas congressman, co-founded a private-equity firm that invested in oil-and-gas companies. Mr. Ayers was a longtime political operative.
They promised GloriFi would offer a range of services through a smartphone app that beat the technology of big banks, and planned to bring in customers through ads on Fox News and internet influencers.
I am shocked the bank was not a resounding success. It turns out that banking, unlike building a social media company, is pretty heavily regulated, and it’s not as simple as getting a who’s who of conservative political donors to fund a bunch of impressive-sounding-but-unrealistic goals like bullet cards and a bank-beating smartphone app.
What about existing banks with functional credit cards and smartphone apps? Some of them have run afoul of new anti-woke rules:
Weeks after a Texas school district dropped UBS Group AG as its municipal-bond underwriter because state Republicans labeled it unfriendly to the oil industry, it’s now demanding the bank cover the costs of having to redo the sale.
Texas is addicted to using public debt to finance a significant portion of its state spending - politicians can saddle taxpayers with billions in future payments while diverting existing revenues to political and corporate allies - and big banks are more than happy to accept risk-free fees to service the bond offerings. Except, in this case, the school had issued the bond before the Texas AG issued its ‘boycott’ list, and these days it’s more expensive to borrow:
Municipal-bond yields surged dramatically and made it more expensive to reissue the debt. But the school district blames UBS -- not the Republican attorney general’s office that is enforcing the law. In fact, the attorney general’s office is representing the district in its effort to recoup the costs incurred from having to resell the debt, according to a document provided through a public records request.
One of the arguments made by anti-ESG proponents in states like Texas is that by claiming to take things like cultural diversity and the climate into account while doing financing and investments, banks are somehow acting against their fiduciary duty. Texas - via Ken Paxton - argues that if banks don’t invest in dirty oil and gas businesses, or gun manufacturers, they’re making a bad financial decision for their constituents. But costing taxpayers money with increased borrowing fees and paying state employees to sue a bank in a case they’re unlikely to win are apparently what’s required in the fight against, uh, poor fiduciary governance.
Anti-woke and anti-ESG forces present themselves as defenders of conservative - or ‘real’ - values, but it’s a difficult sham to maintain when the targets of their ire are constantly changing and evolving based on the latest trending outrage topic in right wing media. Or when the people in charge of building the brave new anti-woke future are more concerned with pilfering the money for themselves.
Social Media
Speaking of anti-woke, its most publicly visible new crusader seems to be having a good first week at his new job running a social media website, according to many many many press accounts. Running one of the world’s biggest and perhaps most influential social platforms was never going to be an easy job, and it’s not surprising that a whimsical billionaire has not proven to be a great fit.
The problem with any large social media platform - and we talk about this a lot around here - is that at a certain point, the sheer scale of policing and moderating it becomes an impossible task. Facebook has failed so badly it’s enabled global unrest, not to mention rampant scams and mental health side effects in the market it dedicates most of its moderation resources to.
So it makes sense that when Musk took control of Twitter he’d focus not on the huge problems facing Twitter’s content team - political misinformation, civil rights crackdowns, illegal pornography - and instead on how best to create a subscriber-only club for the tiny fraction of Twitter’s English-speaking superusers, who produce the majority of the site’s content. When you surround yourself with a Who’s Who of the least interesting libertarian-cum-fascist right wing investors and tech founders, it’s no surprise one of the top issues of concern for the Musk team is protecting users who abuse and misgender trans people.
One source of endless consternation for the rich and powerful on Twitter is they’re vulnerable to the comments of random strangers in their mentions. A serious owner of Twitter would recognize that the freedom to comment - or shitpost - on social media is in fact central to the First Amendment, and any major platform would have a duty to both protect speech on its platform for moral and legal reasons, and police abuse and harassment for (different) legal and business reasons. However, when you’re the world’s richest person whose comments are full of crypto scams, bots, and porn, you may view most speech as harassment, to you personally. You might, for example, spend your energy finding ways to reduce comments and ads for an elite few on the platform, while firing the people responsible for protecting the rest of the website’s users from abuse. Even if doing so would alienate the advertisers who generate nearly all of the company’s $5 billion a year in revenue in exchange for a subscription service that could generously generate in the tens of millions’ of dollars a year.
I do not think Elon’s little adventure as a social media mogul will last long - he is already starting to post (even more) erratically bemoaning the challenges he is facing running his new hobby business. Whatever state he leaves Twitter in - assuming he doesn’t just shut it down, which would arguably be a net good for society - the question of how to really run a social network will remain.
Questions of leadership aside, I think it is important to decide as a society if we want huge platforms to connect millions or billions of us via the loose threads of digital profiles.
In recent years, Facebook became the go-to news source for many Americans, despite the company’s antagonistic stance against news orgs and publishers. Should we ever have gone to Facebook for news, instead of keeping the site firmly grounded in family and cat photos? Probably not, but Facebook’s need to keep engaged as long as possible to please shareholders created a perverse set of incentives that fundamentally changed how millions around the world consume news. In doing so, Facebook’s inability to filter out mis- and disinformation, propaganda, or hate speech in its news feeds has turbocharged political unrest and violence everywhere it exists.
Twitter has, for better or worse, become the de-facto platform for journalists, politicians, and others to consume and discuss news and current events. It’s also a place for people to argue about a variety of topics, which is probably fine too. It’s also also a platform for politicians to spread conspiracy theories, organize coups, and encourage violence against their enemies. Like Facebook, by fashioning itself as a watercooler for the world’s influential and the people who report on them, Twitter gave an implied sheen of authenticity to whatever was said by its ‘verified’ cast of experts. Now, Musk wants to offer that implied authority to anyone with a few bucks to spend, while driving many of the site’s content creators off by revoking their status.
Can Twitter realistically become a trusted source of news and conversation while being run by a cabal of thin-skinned rich men who spend much of their time mad no one will agree with them online? Under prior leadership, Twitter was largely unable to control spam, scams, and light insurrection on its platform. Musk seems dead set on leading the company in the other direction - attempting to make Twitter into a crash pad for him and his rich friends, while the site descends into race war and porn, for some reason.
Unlike the era of Facebook and Twitter’s rise, we now possess the technology to create smaller, better moderated social networks, perhaps even within a single country or spoken language. The tech press won’t find them sexy, and they may not land billions in VC dollars or massive IPOs, but perhaps if we viewed social media sites the way we view our actual social networks - the family group chat, the fantasy football league, the work Slack - we might be willing to accept a decrease in reach in exchange for a more pleasant, palatable experience online. The advertisers would probably hate that, though.
Speaking of advertising and globe-spanning networks without effective moderation, here is a story about Google’s ad platform:
Google is funneling revenue to some of the web’s most prolific purveyors of false information in Europe, Latin America and Africa, a ProPublica investigation has found.
Just because you don’t run a social network doing conspiracy theories doesn’t mean you can’t fund those operations by allowing them to monetize the ads on their sties, right?
Like other major tech firms, Google’s refusal to properly invest in non-English moderation has significant real world consequences:
In one instance, Google continued to place ads on a publication in Bosnia and Herzegovina for months after the U.S. government officially imposed sanctions on the site.
[…]
Google ads are a major source of revenue for sites that spread election disinformation in Brazil, notably false claims about the integrity of the voting system that have been advanced by the incumbent president, Jair Bolsonaro.
[…]
The investigation also revealed that Google routinely places ads on sites pushing falsehoods about COVID-19 and climate change in French-, German- and Spanish-speaking countries.
It is bad enough that Google is profiting from these ads, spreading wild conspiracies and misinformation in places that may not have the same access to credible sources. The company has long had strict policies about where its ads can show, and seems incapable or unwilling to enforce them:
The analysis found that Google placed ads on 41% of roughly 800 active online articles rated by members of the Poynter Institute’s International Fact-Checking Network as publishing false claims about COVID-19.
Often major brands are spending money on Google’s ad marketplace and having their ads show up next to two-year-old Serbian articles about how cat owners can’t catch COVID-19.
The primary problem is the same one facing Twitter and Facebook - scale. If Google simply said ‘you know what? we’re only going to run ads in English-speaking countries, so we can build an expert team to ensure brand safety’ that would likely fix many of the problems, but Google is a publicly traded company and investors and shareholders want continuous revenue growth at all costs. So Google operates in many countries it shouldn’t, and its risk measures are easily overwhelmed, and people in Serbia concerned about whether to vaccinated or adopt a cat are seeing ads for upscale fashion. And such monetization for Serbian cat blogs incentivizes disinformation merchants to create more blogs - maybe in Croatia or Bosnia, where conspiracy blog publishers reap healthy profits from the search giant.
How exactly to regulate international tech giants and prevent them from causing harm in other countries is an open question. Our legal system seems intent on marching backwards rather than forwards in time, and content moderation has proved an insurmountable problem for even the most deep-pocketed software company. Local governments could ban Google - Australia recently played chicken with this over publishing fees - but in most places, there is not another search or advertising platform to step in and fill the void. By allowing Google to accrue a massive monopoly on how people navigate and consume information on the Internet, we’ve created an unaccountable, shambolic mess that may take years or even decades to fully untangle.
Cornhole
Perhaps the greatest controversy in the history of the sport of cornhole unfolded in August at the 2022 American Cornhole League World Championships, in Rock Hill, S.C.
Was the No. 1 ranked doubles team using illegal beanbags?
You bet they were!
With the cornhole world watching live on ESPN, officials inspected the bags with the solemnity required for such a grave complaint. Then they huddled near sponsor banners for Johnsonville sausage products and Bush’s baked beans.
It was true—the bags weren’t regulation size. “They’re too small,” color commentator Mark Pryor exclaimed to viewers. “That’s going to create some drama.”
It certainly did, but not for the reason you might expect:
Messrs. Lopez and Richards asked officials to check their opponents’ bags, too. Turns out, they weren’t compliant, either.
This now infamous incident is known to fans as BagGate and it has sparked a frenzy in the game that started in the backyard, enjoyed between swigs of beer.
BagGate! I love it. It is rare we get to talk about subjects with both low and literally high stakes as cheating in second- or third-tier competitive sports, so let’s sit back and enjoy the show. (Note: I have not written about the chess cheating scandal because the details are so inscrutable I gave up in frustration.) Anyhow, there is something called the American Cornhole League (ACL) which has matches shown on ESPN - I’ve even watched one or two, when they happened to be on at a bar - with a staggering twenty two thousand events each year. Top players can earn six figures from prize pots and sponsorships.
With that kind of money on the line, players are heavily incentivized to cheat. What are they doing?
Since a lighter, thinner bag could provide an advantage, some players are boiling bags or washing them with vinegar to try to make them more pliable and slick. Others are bringing out the sandpaper, hammers and rubber mallets.
[…]
[Nate Voyer] knows a player who lays plywood over his bag and drives a car over it. That crosses into a gray area in Mr. Voyer’s view because it could crush the resin beads into smaller pieces.
Yes, driving over your cornhole bags is a ‘gray area’ so be warned. Competition cornhole bags have required sizes and weights:
Cornhole bags, according to ACL regulations, must be 6 by 6 inches when laid flat, and weigh 16 ounces—with slight specified variations tolerated.
Which seems pretty straightforward - you can simply weigh and measure bags before matches, right? Right?
After a one-hour delay, officials at the world championships decided no intentional violations had taken place and opted to continue the contest. Was there cheating? “It’s possible, but I’m pretty confident that it wasn’t intentional,” says ACL spokesman Trey Ryder.
What? Argh! Players from both teams claim they did not intentionally use illegal-sized bags, or know how they ended up smaller than regulation. But it seems like the sport didn’t do much in the way of bag verification - I cannot believe I am typing these words - prior to BagGate. It sort of makes sense? A beanbag is, by nature, prone to changing shape. You’d think weight would be easy to measure, but weighing thousands of bags in tens of thousands of competitions might overwhelm the league’s infrastructure. Who knows.
Some of cornhole’s top players are in the unusual situation of transitioning from hobbyist/enthusiast to well-paid professional athlete, which leads to quotes like:
[Jay] Corley, once an amateur, now competes around his job in licensing at the Virginia Department of Health. He studies the philosophies of fellow athletes Michael Jordan and Derek Jeter, and no longer drinks when he plays. “I want to take care of my body as a professional athlete,” he says.
I look forward to the first professional pickelball scandal.
Short Cons
Bloomberg - “But crypto has dug itself into finance, into technology, and into our heads. And if crypto isn’t going away, we’d better attempt to understand it.”
The Verge - “Twitter is a disaster clown car company that is successful despite itself, and there is no possible way to grow users and revenue without making a series of enormous compromises that will ultimately destroy your reputation and possibly cause grievous damage to your other companies.”
CNN - “US financial institutions reported more than $1 billion in potential ransomware-related payments in 2021 — more than double the amount from the previous year and the most ever reported, according to Treasury Department data shared exclusively with CNN.”
NYT - “Mr. Cofield was so convincing that he persuaded the financial-services giant to transfer $11 million from Mr. Kimmel’s bank account to a precious metals dealer in Idaho to buy 6,106 American Eagle gold coins, prosecutors said.”