Elon Musk dances with a robot after getting his trillion dollar payoff from Tesla.

By Bob Gaydos

If you’re a billionaire, why do you need to be a trillionaire?

This not-so-rhetorical question occurred to me the other day when I read that shareholders of Tesla had voted to give the company CEO Elon Musk a one trillion dollar bonus, salary, gift, whatever you wanna call it simply because he asked for it. In company shares.

This would make Musk, already the richest person on the planet, a million billion times richer I think. It’s hard to multiply all those zeros.

So I ask again, why? And, before I proceed any further, let me give due credit to singer Billie Eilish, all of 23 years old, who inspired this question when she had the presence of mind and maturity to ask a room full of very rich people, including some billionaires, “If you’re a billionaire, why are you a billionaire”?

Really. Why? Eilish, who already has a string of awards for such hits as “Bad Boy,” “Birds of a Feather” and others, with which I am also unfamiliar, asked the question as she accepted an award from WSJ Magazine.

But she didn’t just ask the question; she gave the reason behind it. As she addressed the celebrity-studded audience, she said: “We’re in a time right now where the world is really, really bad and really dark and people need empathy and help more than, kind of, ever, especially in our country. I’d say if you have money, it would be great to use it for good things, maybe give it to some people that need it.”

Umm, yeah. For the record, Ellish who has an estimated net worth of $50 million, also said she is donating $11.5 million of the proceeds from her Hit Me Hard and Soft tour to support organizations fighting for food equity, climate justice, reducing carbon pollution, and combatting the climate crisis.

So, great, now that I have sufficiently buried the lead, what about Elon Musk? Why does he need to be a trillionaire? Why does he even need to ask for $1 trillion? And why do people think he deserves it?

He wants to replace people with machines that will do all the work and thinking they used to do. He spent a couple of months in Donald Trump‘s Oval Office office trying to eliminate every possible job in the federal government, while collecting information on American citizens. He dismantled USAID, cutting off crucial food supplies to starving people. He seems intent on populating the world with as many mini-versions of himself by as many willing partners as possible. All white.

He seems utterly divorced from all the problems of his native Africa and he has been known to throw an occasional Nazi salute. Yet he has convinced millions that he is a genius and also a genius at making money for them. (Sound familiar?) This, even though cars are still not really driving themselves and he’s nowhere close to putting anyone on Mars, curing cancer or ending violence in the Middle East.

The big corporate stockholders in Tesla, perhaps feeling Musk already had too much power and money, voted against giving him the trillion dollar payday, but the retail shareholders felt otherwise.

They voted— 75 percent of them no less— to give Musk up to $1 trillion over 10 years if the company meets a list of benchmarks such as selling 1 million humanoid robots. Again, to do much of the work that those people who voted for the big payday for him now still do.

That presumably would include artificial intelligence writing columns like this informing humans what a wonderful life they have now that they have nothing to do. They won’t even have to worry about “those people“ taking their jobs from them. “Those people” will presumably just go about doing whatever “those people” do. And Musk, in addition to producing robots and mini-Musks, will do whatever trillionaires do. In that regard at least, he really can be a trailblazer.

Paradise will be delivered, overnight by Amazon, courtesy of greed and willing ignorance.

***

(PS: We’re told that Mark Zuckerberg, who was in the audience, did not put a like on Eilish’s comments.)

By Bob Gaydos

Algorithms are cool. I get it. I mean, I get that they’re cool, not how they work. I like to think that, if I had to, I could probably work really hard to understand them, but I dropped out of engineering school to do this. No regrets.

In fact, writing about life in all its complexities has given me an appreciation for what people — real people, not some numbers-crunched algorithm people — have to deal with on a daily basis. It has exposed me to the value of compassion, compromise and common sense.

Our universal dictionary, Wikipedia, defines an algorithm as “an unambiguous specification of how to solve a class of problems. Algorithms can perform calculation, data processing and automated reasoning tasks.”

But they can’t, obviously, do ambiguous.

I’m thinking about algorithms because Facebook, an Internet empire built on them, recently said it was going to hire 1,000 people to review ads in response to the embarrassing revelation that users’ news feeds during the 2016 U.S. presidential election were awash in political ads run by Russians, undoubtedly using their own algorithms to target various groups in an effort to influence the outcome. Facebook said Russians bought about $100,000 in ads — with rubles — but apparently the social media giant’s algorithms detected no ambiguity afoot with Russians arguing to protect Americans’ Second Amendment rights or stirring up anti-gay feelings, not in Moscow, but in the American heartland.

Congress is investigating. That’s good. It should do something this year. But Facebook has more than a Russia problem. It has become the major source of news for millions of Americans, yet its news feeds have been shown to be awash in fake news. Lots of really fake news, not Trump “fake news,” which is real news.

Facebook — actually Mark Zuckerberg — is talking about becoming a more responsible source of reliable news information and hiring “content moderators” to review, well, content, and a lot of additional people to look out for violent content on the site. Swell. 

If you will permit me a self-serving observation, he’s talking about hiring people to exercise judgment over what appears publicly on Facebook because: (1) algorithms can’t think or feel like people and (2) this is how responsible newspapers have operated forever. Just saying.

In the interests of full disclosure, I also will say I have had my own personal experiences with Facebook algorithms. Recently, I received an e-mail telling me that an ad I wanted to run boosting a column on a Facebook page I administer was rejected because it had too much copy. It didn’t say the copy was boring or poorly written or even offensive. Just too much of it.

OK, I’ve had editors tell me the same thing, but I was also never prepared to give an editor ten bucks just to run the column. Oh yeah, the ad in question was proposed in July. I got the rejection e-mail on Halloween.

Then there’s the friendly way Facebook greets me every day with news of the weather in Phillipsport. “Rain is in the forecast today, Robert.” Thank you. If I Iived in Phillipsport it would matter a lot more, but it’s a half hour drive and there’s a big mountain range between us and my page unambiguously says where I live. Can’t the algorithm read?

But the incident that really convinced me that Facebook had an algorithm problem was its response to a complaint I filed regarding a post that was being sarcastic about the dotard-in-chief. I am guilty as charged of leveling (much-deserved) sarcasm at the Trump, but this cartoon had him in a coffin with a bystander saying to Melania, “‘Sorry about the assassination, Mrs.Trump, but he knew what he signed up for.”

As a “content moderator” for newspapers for several decades, I would never let such a tasteless, provocative, potentially dangerous item to be published. I told Facebook the same thing. I said they should delete it. It encouraged violence at a violent time in our history.

The algorithm replied that the post did not violate Facebook’s standard of, I don’t know: Acceptability? Appropriateness? Decency? Who sets this pathetic standard?

I use Facebook a lot. It has many wonderful benefits. But “automated reasoning” is not a substitute for good old, gut-instinct common sense. It’s the best way to connect people with people. Maybe people cost a little more than algorithms, but I think Zuck can afford it and there are a lot of laid off editors looking for work. If it’s not fake news that he’s serious about running for president some day, he’ll be glad he did it.

I’m also curious to know what Facebook says if I decide I want to pay to boost this post. I wonder if they’ll let me run a picture of Zuck. Can I even call him Zuck?

Stay tuned.

rjgaydos@gmail.com

Facebook founder Mark Zuckerberg married girlfriend, Priscilla Chan. AP photo

… pretty soon you’re talking about real money                                                                                                By Bob Gaydos

Mark Zuckerberg lost $2 billion Monday, the second day after his company, Facebook, raised $16 billion in an initial public offering. Maybe you didn’t notice because Mark is still a long way from visiting the soup kitchen.

Facebook sold 421.2 million shares at $38 a share on May 17, a Friday, the biggest technology IPO in history. By Monday, the share price had dropped below $34, delivering that “blow” to Zuckerberg’s wallet. By the close of business Tuesday, Facebook shares had dropped to $31, but the founder, whose financial interest in the company stock was estimated at $17 billion, was reportedly enjoying his honeymoon and not fretting about the public’s judgment that his wildly popular social media enterprise was also wildly overvalued. He actually got married after the IPO, which to me implies true love.

At roughly the same time, JP Morgan Chase, the bank that is too big and too smart to make an investment mistake, much less fail, announced it had blown $2 billion — there’s that number again — on something called synthetic derivatives. This is what we make in America today instead of shoes and cameras and tires and auto parts. Jamie Dimon, the Zuckerberg of JP Morgan, was uncharacteristically embarrassed and apologetic about the loss, which, as with Zuckerberg, barely put a dent in the JP Morgan bank account, although it did get some people fired.

The problem with the JP Morgan fiasco, though, is that it is a bank as well as an investment company and $2 billion is still a lot of money to lose. It tends to weaken people’s trust in your judgment and maybe even make them put their money elsewhere.

Even worse, nobody, not even supposed experts on complicated investment schemes, can seem to explain what the heck a synthetic derivative is in the first place. I asked a college business professor to explain it and all I got was a blank stare. As far as I can tell, a synthetic derivative seems to be something akin to a fantasy baseball league for bored stock traders looking to hedge their bets on other investments. Whatever that means. I think they make it up as they go along. The main requirement seems to be that not even the people who create it know exactly what they’ve created. Maybe Mary Shelley would understand.

Once upon a time, banks weren’t allowed to take such risks with clients’ money, but that was before all the smart Wall Street guys and gals convinced their bought-and-paid-for members of Congress that really, really, really, really, really big banks didn’t need to be regulated and could be trusted to deal responsibly with complex investments as well as mortgages and savings accounts. Why? Because they were really big and really smart and could make a heap more money for the people who were bankrolling congressional campaigns — and for themselves. And because most politicians were too embarrassed to admit they didn’t have a clue what the big banks were up to.

I don’t venture into the world of high finance often because, like most Americans, never mind politicians, I don’t understand it very well. But at least I admit it. Plus, I get depressed hearing about $25 million golden parachutes for CEOs who mess up, lose other people’s money, but still somehow deserve to be handsomely rewarded for their service. It seems to me if you can’t hit a curveball anymore, you get released. Period.

I also find it had to understand why anyone these days would trust the same bankers who mortgaged this country’s future with phony baloney home loans to people who didn’t have a prayer of repaying them, then gobbled up federal bailout money to make profits, and then foreclosed on all those people to whom they gave bad mortgages — often without bothering to do any real follow up on the loans and their clients to see if they could maybe work out a way to pay.

These are not honorable people. These are people who see only the need to make more money, in any way possible, including conjuring synthetic derivatives. I’d rather invest in a crystal ball factory. The people who work at these super banks are this way because no one has paid the price for their greed. They say they are merely applying the principles of a free market to their trade — a market that returns less than 1 percent on savings accounts and charges fees every time someone answers a customer’s question.

This change in the approach to banking began at the end of the Clinton administration with repeal of the Glass-Steagall Act, which prohibited banks from co-mingling commercial and investment accounts. Risking clients’ savings by creating exotic investment packages and selling them to other clueless investors was forbidden.

In the wake of the 2008 banking crisis, the Dodd-Frank Bill was enacted, to return some modicum of regulation over the super banks that were created when Glass-Steagall was repealed. Part of that bill is the so-called Volcker Rule, which prohibits proprietary trading by commercial banks in which bank deposits are used to trade on the bank’s investments. The rule is named after former United States Federal Reserve Chairman Paul Volcker, who was named chairman of the President’s Economic Recovery Advisory Board by President Obama when he inherited the banks’ financial mess in 2008. Things being what they are in Washington these days, the Volcker Rule is not scheduled to go into effect until July 21 of this year. And no one expects that deadline to be met.

What’s more, some economists feel the rule is still too weak because it is full of exceptions and would not have prevented the JP Morgan Chase fiasco. (Volcker himself warned about the risks of derivatives.) All of this has, predictably, led to a lot of calls for stricter regulations on these super banks.

But Morgan’s Dimon, chagrined and embarrassed as he may be, isn’t ready for a return to the old days, when banks were banks and investment companies were investment companies and people knew their money was safe. In fact, he wants Volcker weakened so his minions can try to create even more exotic investment thingamajigs. Apparently, he just plans to watch his help a lot closer from now on and wants us to trust that he will do it. Shame on him.

Most likely, given the political climate, nothing is going to change. Democrats will argue for more regulation as they have for years. Republicans, who lately seem to believe only the rich should get richer, will demand no regulation at all. Meanwhile, these 20 or so super banks that now control the U.S. economy will continue to try to create billions out of nothing because sometimes it works. No one knows quite what they do, but everyone involved at the bank winds up with tons of money when it works and a chunk of that money finds its way to congressional campaigns. So it apparently doesn’t matter that none of it seems to create jobs or promote economic development or entrepreneurship. The derivatives just keep feeding the same overstuffed mouths over and over again.

Too big to fail? Too big to regulate? These banks are really too big to exist, but no one except the Occupy movement is making this argument publicly and persistently these days.

Which brings me back to young Mr. Zuckerberg. I don’t feel sad for him that his IPO didn’t cash in as big as some had predicted. (Some of that, by the way, was due to bad calculations by the NASDAQ and the big banks that handled the initial offering.) He and his partners made their millions or billions and one of them (not a native American) even renounced his U.S. citizenship to protect his profits from the IRS.

But hey, the way I see it, they’re entitled. Heck, they created Facebook with their own brains and there is nothing synthetic about it. They made it into the closest electronic version of a living, breathing organism. It has a pulse. It is a vehicle for people around the world to communicate instantly with each other at any time. Their product is useful, portable, entertaining, ubiquitous, optional — and free. In our economic system, that should equate to profitable. It may just not be as profitable as its creators thought it was.

But that’s what happens when people have even the slightest understanding about what they’re being asked to buy.

 bob@zestoforange.com