Elon Musk is ‘now existing in a world where there are no rules’

Is it possible to be a billionaire entrepreneur and just not care what Washington thinks?

Elon Musk is trying to find out.

Musk's new company is in internal chaos and top safety executives are leaving. A memo leaked from an attorney on Twitter’s privacy team that described Musk’s lawyer saying “Elon puts rockets into space, he’s not afraid of the FTC.”

The Federal Trade Commission, which fined Twitter $150 million this summer and is accustomed to being taken seriously, was none too happy and issued a rare slapback saying that “no CEO or company is above the law.”

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As Musk’s empire grows — and he fiddles with the dials at a highly public platform like Twitter while actively trolling the politicians who run the capital — he’s likely to come more directly into the sights of regulators and elected leaders.

Then what?

I recently spoke with Tom Wheeler, a Brookings fellow, former FCC chair and former venture capitalist himself, to get his take on the political pushback Musk is likely to receive as he tinkers apace with the “digital town square.” Our conversation, edited for length and clarity, follows:

By making himself Twitter’s chief moderator, Musk has opened himself up to not just regulatory risk but political risk. How successful do you expect him to be at handling it?

When Mark [Zuckerberg] saw that there would soon be a thing called visual social media, or social virtual reality, he started planning and he clearly has a vision for it. I haven’t seen Musk illustrate that kind of comprehensive, long-term view. It’s rather a, “I’m smart, I can come in and fix anything, let me throw all this stuff at the wall” approach.

[Announcing his purchase of Twitter at] $54.20 a share has nothing to do with finance, and everything to do with “Hey, isn’t this cool?” The dog has caught the bus, and now he’s trying to figure out how to drive it.

What are the risks that he and his team might not be thinking about?

Well, Musk has been the darling of the right. It’s an open question whether, for example, Donald Trump going back on Twitter is good or bad for Republicans. My reaction when he said “Well, we’re going to wait until after the election” [to reinstate Trump’s account], which just happens to coincide with when Trump reportedly will announce his re-election campaign, was that you can’t play to one side and ignore everyone else.

At the same time, his problems in Congress will not likely be strictly partisan. It’s like the old story about Sam Rayburn talking to a young Lyndon Johnson, when Johnson was sounding off and saying that Republicans were the enemy, and Rayburn said “No, Republicans are our opponents. The Senate is our enemy.”

There are a lot of people [in the Senate] who care about Twitter, and will say “This is my issue.” Dealing with Washington is not walking through a poppy field, it’s walking through a minefield, which I haven't seen Musk do successfully.

What do you think about the concept of “jawboning” and how it might intersect with Musk’s ownership of Twitter, especially after the midterms?

We [at the FCC] discouraged the first iteration of the T-Mobile-Sprint merger, saying “You're welcome to present all the facts and then we’ll make a decision based on the facts, but we don't think it's a good idea.” They dropped the effort.

But there’s another kind of jawboning: Congress is going to want to hear from Mr. Musk, and while you may think you’re up there to testify about rockets or cars, the question of “Why did you allow this hate speech on Twitter” is certainly going to come up. Congress, when it can’t legislate, uses hearings to coerce.

I was told by a group of committee chairmen at one point in time that if I didn't do what they wanted me to do on a particular topic, they would have me before their committees once a month. And they lived up to their promise.

And while Musk is used to operating in heavily regulated, established industries like aerospace and automotives, he’s now stepped into one of the murkiest, most unsettled and politically controversial regulatory areas he could have.

Even Adam Smith said there was a need for regulation before the “invisible hand” could work. When you step into a heavily regulated area, like automobiles, or batteries, or spaceflight, you know what the rules are. In an unregulated environment, there is no such thing as certainty of expectation.

He is now existing in a world where there are no rules, where he is asserting that he can make the rules, to which I say: Good luck.