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Feb. 20, 2021 04:47PM EST
Biden's confirmation calculus
Opposition from Sen. Joe Manchin (D-W.Va.) imperils the nomination of Neera Tanden as President Biden's budget director but could help two other nominees.
The state of play: Xavier Becerra for HHSand Deb Haaland for Interior have better chances if the confirmation gods get their sacrifice elsewhere.
- The insiders' refrain: "Someone always goes down."
Between the lines: Democrats have been afraid to jinx it by saying it out loud. But they've been pleasantly surprised to see so many Biden nominees sail through.
- Twelve years ago, President Obama saw three nominees for Commerce withdraw before facing a committee.
- In the past month, Secretary of State Tony Blinken was confirmed 78-22, and Defense Secretary Lloyd Austin ran up the score, 93-2.
What's next: The HHS and Interior hearings, scheduled for next week, will be proxy battles for two of the biggest ideological fights of the Biden presidency — adding a public option to Obamacare, and curtailing oil and gas extraction on federal lands.
- The White House orchestrated campaigns for the two nominees, working with outside groups and sympathetic senators.
- Becerra has met with some 40 senators from both parties; Haaland has met about 35.
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Jan. 29, 2021 10:15AM EST
How Reddit explains the GameStop saga
Retail investors’ battle against short sellers who had bet against GameStop and AMC— and other heavily shorted stocks with depressed share prices — offers a window into what happens when Reddit culture spills out into the real world.
The big picture: Reddit is a microcosm of mainstream internet culture, a massive clearinghouse for all sorts of interests that's populated mostly by young men with a vaguely anti-establishment bent. That's caused major trouble at times, but is now propelling a populist-progressive unity movement that's rattling Wall Street.
Catch up quick: The run on troubled stocks with vintage appeal — first GameStop, then other 2000s mall staples like AMC, Nokia and BlackBerry — began with one man.
- Roaring Kitty, as he's known on YouTube and Twitter, has been talking up GameStop stock since taking a long position in it a year ago, when he noticed it was among the most heavily shorted stocks on the market.
- On Reddit, where he posts as u/DeepFuckingValue, he's spent months posting about it to the r/WallStreetBets subreddit, a forum of several million amateur investors and spectators who mostly ridiculed his bullish-on-GameStop posts until recently.
- The roughly $754,000 he ultimately put into GameStop is now worth tens of millions of dollars.
The WallStreetBets community has remained at the center of everything that's happened since.
- The most devoted investors hang out on the Reddit WSB homebase and Discord, where the main WSB server was shut down for allowing hate speech after getting spammed with racial slurs. (It has since resurfaced.)
- On major platforms like Twitter and YouTube, the WSB ethos — in this case, a half-joking commitment to holding strong on GameStop and the other stocks to try to force them ever higher — has proven attractive. It has drawn in newbies as well as entire communities, like the staff and fandom at Barstool Sports.
- Robinhood and other trading platforms have only burnished the anti-elite pull of the movement by throwing up roadblocks to freeze transactions involving the hot stocks.
The appeal is obvious. The WSB types have demonstrated that, by banding together, normies can flip the script on billionaires who were just waiting to cash in on failure and collapse.
- That it's being done with stocks that are in inexorable sectoral decline is part of the fun. A massively inflated market cap won't save GameStop from the fact that most video game sales are now digital, or AMC from the theater business being on life support, or Nokia from having lost the smartphone wars years ago.
- Keeping their prices up is instead a show of solidarity, a way to make the vultures tremble and, of course, a way to get rich, at least on paper, and at least until the party ends.
- Money isn't real, the thinking goes. Wall Street has always known that, and now regular people are seeing it too.
Between the lines: Some commentators have described the investors as trolls; some have drawn a through-line between them and the Capitol rioters.
- It's true that both groups viewed themselves as the good guys injecting anti-establishment online chatter into the real world and charging the gates to strike fear into the hearts of the elites.
- But the insurrectionists were there to overturn an election and possibly kill lawmakers. The WSB types are operating within the law, turning the system against the people they view as abusing it.
What's next: At some point, the inflated prices, wildly decoupled from any underlying fundamentals, are bound to come crashing down.
- But the excitement at having pulled this off at all could prove sustaining, driving the millions of Redditors and other retail investors into new schemes.
- Or, if Wall Street, Silicon Valley or Washington take steps to keep it from happening again, the excitement could curdle into rage.
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Nov. 10, 2020 10:58AM EST
After election, common ground online and on Facebook shrinks
Facebook and other social media platforms aim to serve users across the political spectrum, but as America's tribal partisan split deepens after a divisive election, more users may start choosing to stick with their own kind.
Why it matters: No competitor will be able to match Facebook's size any time soon, or maybe ever. But the nation's sharp schism is reducing the company's options for keeping users on both left and right engaged — and seeding the online landscape with potential alternatives.
Catch up quick: For years President Trump effectively used Twitter as his megaphone and Facebook as a source of fundraising. But now his supporters view both platforms' campaigns against election-related misinformation as censorship. Meanwhile, Democratic critics argue that the companies bend rules too far to placate the right.
What's next: Parler, a still-tiny Twitter-like social network that touts itself as "bias-free" and has become a haven for conservative platform immigrants, hit the top of the App Store charts in the days following Trump's election loss.
- Parler is no threat to Facebook at the moment, and neither are its rival alternative social networks.
- But one or another of them could easily pick up momentum, particularly if Trump smiles on it or moves to it.
Trump, already contemplating a 2024 run, could spend the next four years fighting battles on Twitter and Facebook. But he might also try to promote alternatives to them, perhaps as part of a long-rumored larger "Trump TV"-style media project, and particularly if he gets thrown off Twitter, which is more of a possibility once he leaves office.
Yes, but: One reason Parler and other conservative networks like Gab have yet to gain critical mass is that they don't offer key influencers a path to making lots of money (yet).
- It's hard for a platform to help people with huge followings monetize their social media presences when they're surrounded by inflammatory content.
Between the lines: Tech platforms could be facing a transition like the one TV news went through over the last 25 years, as broadcast networks that catered to the American center lost ground to cable news channels that drummed up viewers by taking sides.
The big picture: Facebook has little interest in taking sides, and would prefer to continue providing a playing field on which both right and left vie for attention, buy its ads, and feed its profits.
- But the creators of, and participants in, conservatives' alternate media reality look increasingly unwilling to keep playing that game.
- The bitterer the post-election fight becomes, the more likely it is that Facebook will be forced to choose between becoming the Fox News of social networks — or watching as someone else builds it.
Our thought bubble: Facebook and social media have been criticized for allowing users to build their own echo chambers and filter bubbles where they only communicate with like-minded people.
- But the dissatisfaction with these platforms right now comes from people who no longer want to share the same social space with their political opponents.
- They're not looking to leave the echo chamber behind; their goal is to seal it more tightly.
The bottom line: Facebook remains ubiquitous because it helps people connect with friends and family — who share political news as one among many topics. For now, its would-be competitors don't offer any kind of connection beyond an all-politics-all-the-time feed, and that's likely to limit their appeal.
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