Editor’s Note: Last week, President Trump accused Silicon Valley giant Google of censoring conservative-leaning articles in its search results. Google denied the charge.
But Dan Denning, Bill’s coauthor on The Bill Bonner Letter, thinks the president might be on to something… Today, he previews the looming showdown between the federal government and America’s biggest corporations.
What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it.
– Herbert Simon
On Wednesday, September 5, representatives from Twitter, Google, and Facebook will face members of Congress in Washington, D.C. in a new round of hearings about the conduct of Big Tech.
These hearings could lead to three different results: antitrust regulations to break up Silicon Valley giants… even more power for those same companies to censor speech on their respective platforms… or absolutely nothing, as Congress once again proves how incompetent and technologically illiterate it is.
If you’ve been following our research in The Bill Bonner Letter, then you already know our take: Big Tech is a threat to freedom of speech.
For investors – even for those who don’t own Big Tech stocks – it’s also a threat to what is now the longest bull market on record. When tech falls, for whatever reason, we believe it’s going to take the market with it.
But between now and then, what should you do?
There’s what you need to do with your money (which Bill and I have covered in the newsletter)… and then there’s what you need to do with something even more valuable: your time. That’s what I’m going to cover here.
But first, a lot has happened in the last few days with this story. Let me get you up to speed. As usual these days, it starts with President Trump.
A Very Antitrust Situation
The president lined up Google in his sights in an interview with Bloomberg last Thursday. He said:
I won’t comment on the breaking up, of whether it’s that or Amazon or Facebook… As you know, many people think it is a very antitrust situation, the three of them. But I just, I won’t comment on that.
Later that same day, at a rally in Evansville, Indiana, the president said:
I’ve made it clear we as a country cannot tolerate political censorship, blacklisting, and rigged search results… We’re not going to let them control what we can and cannot see, read, and learn from…
Those comments followed tweets from earlier in the week where Trump said social media companies are “suppressing conservative voices” and that Google’s search results about him were rigged.
The president suggested this might be “illegal” and his economic advisor Larry Kudlow said the White House was “looking into the issue.”
Later in the week, Utah Senator Orrin Hatch published a letter he sent to Federal Trade Commission (FTC) Chairman Joseph Simons. Hatch went after Google, saying he found several of the company’s practices – including allowing third-party access to users’ Gmail data – to be “disquieting.”
He asked the FTC to “reconsider the competitive effect of Google’s conduct in search and digital advertising.”
This is the most direct antitrust language used yet, with respect to breaking up Big Tech the way Standard Oil and AT&T were broken up. You can expect to see bipartisan support for this position as the midterm elections heat up.
Big Tech is a big target right now. And the way it’s handling itself isn’t helping.
For Sale: You
Bloomberg news reported a couple of weeks ago:
For the past year, select Google advertisers have had access to a potent new tool to track whether the ads they ran online led to a sale at a physical store in the U.S. That insight came thanks in part to a stockpile of Mastercard transactions that Google paid for.
But most of the two billion Mastercard holders aren’t aware of this behind-the-scenes tracking. That’s because the companies never told the public about the arrangement.
Google competes with Amazon in the digital advertising space. Pairing up digital ads with actual customer purchases gives it information it can deliver to advertisers to measure the effectiveness of their ads. As usual, it’s your information… And as usual, it’s not something they tell you about.
Both companies published assurances that the data was both anonymous and encrypted. In other words, the data showed that you clicked on a specific ad and then later purchased an item in a physical store with your Mastercard. But the data didn’t have your name or any individually identifying details.
Blah blah blah…
More smoke from Big Tech when it comes to data privacy. And it’s not just Google and Facebook.
If you use Yahoo! Mail or AOL, then your email is being mined for data that can be sold to advertisers. A Verizon subsidiary named Oath bought AOL in 2015 and Yahoo in 2017. Unless you opt out, the terms of service for both AOL and Yahoo allow them to mine the contents of your email.
Gmail did this as well, right from the very beginning in 2004. Google said it stopped mining Gmail for data last year, when it was revealed that third-party developers also had access to the contents of your mail.
Gmail, by the way, still reviews your email – but only to make helpful reminders about things you need to reply to and files you said you would attach, but didn’t… or to even suggest automated responses based on what someone has written to you.
I could go on. But the point is simple: Big Tech companies have not even begun to address the privacy and abuse concerns first raised in the 2016 election, and again during Facebook’s Cambridge Analytica scandal.
If anything, they’ve gotten worse. Antitrust regulation – on the basis that the companies have gotten so big and powerful that they’re stifling competition and free speech – is now on the table.
So what should you do?
Trump accused Google’s search algorithm of having a bias. He’s right… But all news selection is biased, even if it’s an algorithm doing the selecting. An algorithm is a set of instructions about how to respond (automatically) to data – but it’s only as good as the person who writes its rules.
Google will tell you that the algorithm for Google News is based on how recent a story is and how many people have linked to it. Both factors (along with others that are proprietary and secret) give a story “authority,” which is supposed to make it more trustworthy – in other words, real news, not fake.
The truth is that the tech companies may have a liberal bias. Some employees at these companies certainly think so.
It was reported last Tuesday that dozens of Facebook employees had accused the company of having a “political monoculture that’s intolerant of different views.”
A Facebook engineer wrote, “We claim to welcome all perspectives, but are quick to attack – often in mobs – anyone who presents a view that appears to be in opposition to left-leaning ideology.”
The mainstream media is full of these habits – habits which tend to view the little guy as a rube and the D.C. elite as smarter and more virtuous… habits which cause investors to buy high and sell low… habits which encourage you to be compliant, go along with the herd, and not think for yourself.
Before the internet was dominated by Facebook, Amazon, Google, Apple, and Microsoft, individuals could publish, find an audience, and think freely. It was the libertarian dream: a decentralized marketplace of ideas.
Now, the crushing weight of monopoly is silencing any kind of alternative voice. And that includes the alternative views of the Diary. As Bill wrote, Google recently took issue with one of his essays.
The business model of Big Tech and the mainstream media is to surveil you, sell your data, and ensure that their platforms become just another medium for disseminating the same mainstream message. What a travesty.
This is why Bill and I have decided to join the fight in preserving free speech and free thought online. We’re looking into more concrete ways to take this campaign to the next level. That may include a future Digital Bill of Rights that we ask candidates for Congress to sign. More on this in the coming weeks.
The best way you can preserve your free thought is to free yourself completely from the embedded bias inherent in Big Tech and the mainstream media. That means quitting these platforms altogether. That’s the free-market solution. No regulation needed. If you don’t like or approve of a product, don’t use it!
Mind you, antitrust regulation may still happen. If these companies are too big or too arrogant to regulate themselves, or if that regulation turns into systemic silencing of alternative political and financial voices, then regulation might be the only way to stop them.
Exactly how they might be regulated – who wins and loses, which pieces of which companies are the most valuable/viable as standalones, etc. – is a topic for another day.
Thompson Clark, an analyst with Bonner Private Portfolio, already has some ideas on which companies will win if Amazon and Google are broken up.
And Jeff Brown, Bonner & Partners’ chief technology analyst, has made the case that creative destruction – via blockchain – will disrupt and destroy Big Tech far more effectively than antitrust regulation (and will also create genuine opportunities for investors).
Both of these topics will be addressed in The Bill Bonner Letter in future months.
For now, let’s finish with how you’re going to take care of your brain. How much you’re influenced by what you see, the order in which you see it, or whether you see it at all is important to consider.
Trump is on to something when he notes that a few powerful companies controlling what you do and don’t see is worrisome. (It’s also the whole idea of the Deep State to control the masses by controlling the press and public conversation.)
There’s no simpler way to free up your mind from mainstream bias than by walking away from all of it. “A wealth of information creates a poverty of attention,” as Herman Simon wrote in the quote at the top of this article. I’d go even further and suggest that too much information creates cognitive poverty. The more informed you think you are, the dumber you’re probably getting.
This might not be a popular opinion. But it’s certainly true in financial markets. The threshold for what passes for news these days is embarrassingly low. Most of the things you read and see on TV about the stock market simply don’t matter, at least not to the intrinsic value of a particular security. The news doesn’t make a difference.
In his 1972 book, Steps to an Ecology of Mind, anthropologist Gregory Bateson coined the phrase “a difference that makes a difference”… Real news is reporting on a difference that makes a difference. Everything else is fake news, designed to consume your attention and rob you of your thought.
Walk away from it.
Coauthor, The Bill Bonner Letter