My Response To Chris Hughes
He's not quite ready to return his fortune, but he finds it very thought-provoking.

May 9, 2019

Topics = { Facebook }

Chris Hughes, Harvard housing lottery winner, destroyer of magazines, failed investor, self-appointed philosopher, and Rich Man Who Can't Code, would like us to know that he has an opinion: the same opinion that Elizabeth Warren outlined months before, which is that anti-trust law is the best solution to one of modern society's biggest problems: Facebook.

Unfortunately, he's wrong.

For what it's worth, splitting up Facebook into three parts is a fine idea. But it's not the best idea and it won't actually solve the problem, which has nothing to do with the acquisitions of Instagram and WhatsApp. That problem, which I have written about countless times before—long before it was popular and long before Chris was willing to say anything—is that Mark Zuckerberg is a bad faith actor, and we live in a society that rewards bad faith actors more than anyone else.

Chris goes out of his way to lob every criticism he can think of at Mark, except the one he knows will really get him in trouble: the two-word phrase "bad faith." Bad faith means a lot of things. It means someone isn't trustworthy. It means deception. It means criminal liability. But Chris writes, "I don't think these proposals were made in bad faith." In fact, he goes further. Chris also writes, "[Mark Zuckerberg] has demonstrated nothing more nefarious than the virtuous hustle of a talented entrepreneur."

See? Mark isn't nefarious. He's virtuous.

Chris knows that's not true. That makes Chris a liar, just like his virtuous friend.

Actually, "bad faith" describes Facebook perfectly. In January 2019, I wrote a whole report explaining why. The New York Times had a draft of the report a month early, but still managed to bury its reference three quarters of the way down an article that was itself buried amongst two other higher-profile articles on Facebook that day—all without making the report's main point. Instead, it was picked up by Russia Today, Zerohedge and Breitbart, presumably because the report offered readers some controversy.

The point of the report wasn't to be controversial. It was to articulate the truth. My report pointed out specific instances where Mark had lied in public, over and over again. He just did it again on the company's Q1 2019 earnings call, where he claimed once again that Facebook is growing. (It's not.) My report also pointed out that more than half of Facebook's accounts are likely fake.

From 2004-2015, when I used to point out that Mark's lies (and those of his enablers, including Chris) had had a detrimental impact on my life, most people rolled their eyes and assumed me to be jealous. Then Mark's lies starting having a detrimental impact on their lives. It only took twelve years for those lies to shake the foundations of democracy in a way we haven't witnessed since World War II.

Why focus so much on Mark's lying? Because it's the key to everything. If Facebook were broken up by the time you finished reading this sentence, Mark Zuckerberg would still be in charge of a company that claims—falsely—to have 2.3 billion customers, or about seven times the population of the United States. He would still be able to unilaterally dictate what kind of speech is and is not permitted on that platform. He would still be able to (easily) build new features to replace the smaller ones that had just been taken from him. Yet this kind of "solution" is still bandied about by Serious People as though it might accomplish something in the long term.

The only kind of regulation that can possibly matter when it comes to reining in Facebook is the kind that will stop Mark from lying. And at this point, we already know from extremely well-documented experience that Mark cannot and will not stop lying. The last time he inadvertently told the truth in July 2018, informing investors that the company's growth days were over, Facebook's stock experienced the largest one-day drop of any company's stock in the history of the stock market.

Therefore, the only answer is to dispose of Mark as Facebook's CEO, and further, to enact legislation specifically designed to identify and remove bad faith actors like Mark from public markets (and public service) entirely. Such legislation would have a transformative and positive effect on Wall Street and Silicon Valley. And there's no good reason not to do it. Serial liars, otherwise known as con artists or grifters, should have no place running society. One needs look no further than Donald Trump for proof.

There would, of course, remain the issue of the company's practices with regard to privacy and content moderation. This is where it starts to become evident that no silver bullet will undo the harm that Mark and his army of enablers have caused. The public wants accountable democracy, but it also wants privacy. When it comes to Facebook, these two concepts are fundamentally at odds: accountability requires transparency, which is in some ways the opposite of privacy. My preferred regulatory solution leans more in favor of transparency, but not completely. Facebook's many challenges would be far easier to handle were Facebook required to know who its users actually are, much like banks are required to implement Know Your Customer (KYC) policies. With hundreds of millions (if not billions) of fake accounts out of the way, it might actually be possible for Facebook's limited staff to start moderating the site in a responsible manner—emphasis on "might." It also might not. Either way, a smaller, more transparent Facebook would be good for competition. But this would naturally require giving a company with a horrendous track record of handling information even more information in some cases. (With Mark gone, I would find that prospect less worrying.)

The other option is an Enron-style bankruptcy. I remain steadfast in my belief that Mark has quietly orchestrated the largest fraud in American history (short of Donald Trump's election as President). As suggested by Dina Srinivasan—who unlike Chris Hughes, actually is a serious student on anti-trust law and history—it is at the very least the largest bait and switch in history, having started off promising privacy to its users at Harvard. But if in fact half or more of the company's accounts are fake and the public has been prevented from knowing about this crucial fact due to a deliberate cover-up, which seems likely based on its mealy-mouthed, once-a-year SEC disclosures and a transparency portal that hasn't been updated since September being overseen by a committee of paid academics who have still not issued their report, then the company should simply go out of business.

In the meantime, we'll continue to have this half-baked debate about whether Facebook should be broken up or not. Let's just be clear that Chris Hughes is no different than any of the bankers who, while clutching their hundreds of millions of dollars in personal wealth, begged the government for a bailout after having caused the 2008 Financial Crisis. Chris is entitled to his opinion, as is Mark, but that doesn't mean that either is one that should be taken seriously.


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