Peter Thiel

From RationalWiki
Jump to: navigation, search
Thiel in 2014
Someone is wrong on
The Internet
Icon internet.svg
Log in:

Peter Thiel (b. 1967) was born in Germany and raised in the US. He is a citizen of three countries (Germany, US and New Zealand), though there is suspicion about the circumstances under which Thiel became a New Zealand citizen.[1] Thiel is a hedge fund manager and venture capitalist. His fortune comes from investing in small, Internet-based companies, most notably PayPal.Wikipedia's W.svg

Thiel has gained significant publicity from being a homosexual who openly supports Republican politicians, including anti-gay Vice President Mike Pence. He has also gained ire in the media for funding multiple lawsuits against GawkerWikipedia's W.svg and its subsidiaries, leading to Gawker's bankruptcy.[2]

Companies[edit]

PayPal[edit]

Peter Thiel made his first large investment by co-founding PayPal in 1999, giving the company $500,000 and taking partial control over its business decisions. His original goal was to promote PayPal primarily as an online currency exchange,[3] but its secondary purpose of processing credit cards and wire transfers for eBay was far more popular and, most importantly, more profitable.[Note 1]

Thiel's half-million dollar investment in PayPal grew to $55 million after PayPal's IPO in 2002.[4] To date, this is Thiel's highest-yielding investment as an annual percentage.

Clarium Capital[edit]

Peter Thiel used the capital gains from his sale of PayPal stock to create Clarium Capital in 2002, a hedge fund that charges large "performance fees" for gains in place of a flat maintenance fee.[5] The fund made its primary gains by betting on oil price spikes in the mid-2000s.[6]

In 2008, Thiel used the Austrian school of economic reasoning to predict the following:

  1. Low interest rates would increase the money supply, thereby causing inflation and price spikes for oil, natural gas, and gold.
  2. The S&P 500 index would plummet due to high inflation, an energy crisis, and the election of any non-libertarian President.
  3. Barack Obama would somehow make doing business in the United States impossible.
  4. U.S. government bonds would lose value, and the Federal government would struggle to pay Carter-era bond yields of 20% or more.

The opposite happened:

  1. Low interest rates caused lending rates to plummet, but inflation remained subdued thanks to the majority of consumers depositing excess money in savings accounts. Banks would send excess money to the Federal Reserve, in effect giving the money the Federal Reserve "printed" back to the Federal Reserve.
  2. A sudden slump in demand for oil due to the 2008 Financial Crisis caused global oil prices to fall from a high of over $140 per barrel to a low of $28 per barrel. Low interest rates financed American natural gas operations, in particular fracking, causing the price of natural gas to fall from a high of $14 per MMBTU to $2.
  3. Barack Obama enacted an extremely business-friendly policy for the technology sector and part of the automotive sector. On a related note, Thiel's former PayPal associate Elon Musk took advantage of Obama's policies by introducing a luxury electric sports car.[Note 2]
  4. Excess savings deposited into banks that were not sent back to the Federal Reserve were used to buy U.S. government bonds. This caused yields to fall to historic lows. As of 2017, the highest yielding Federal bond as of 2017 pays only 3% interest.

Thiel's fund lost over 90% of its value in 18 months.[7]

Palantir Technologies[edit]

Founded in 2004, Palantir Technologies is a private software firm that specializes in writing custom software to analyze large sets of data. Its largest sources of revenue include the CIA, the Department of Homeland Security, the National Security Agency, and the Federal Bureau of Investigation as customers.[8] Palantir was sued by the U.S. Department of Labor in September 2016 for systematic hiring discrimination against Asian job applicants.[9]

Beliefs[edit]

Economics[edit]

Peter Thiel considers himself a libertarian who subscribes to the Austrian school of economics. This is ironic, considering the most outspoken member of the Austrian school is Hans-Hermann Hoppe, an extreme homophobe. Also, much of his income comes directly from being a contractor for the American government.[Note 3]

Social issues[edit]

Peter Thiel also has a disdain for women.[Note 4] In a 2009 essay written for Cato Unbound, Thiel theorized that giving women the right to vote set the United States on a downward spiral:

The 1920s were the last decade in American history during which one could be genuinely optimistic about politics. Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women — two constituencies that are notoriously tough for libertarians — have rendered the notion of "capitalist democracy" into an oxymoron. —Peter Thiel [10]

Medicine[edit]

Peter Thiel subscribes to various woo, having grown up in California, and believing he is smarter than everyone else.

Thiel believes that frequent blood transfusions from young orphans can extend his life indefinitely.[11] This is the modern equivalent of bloodletting, and is nothing more than a panacea: "young blood" only replaces old blood, something the human body already does hundreds of times a day.[12]

Thiel also prescribes human growth hormone to himself, believing that it reverses aging.[13] The NIH condemns this practice, citing instances of diabetes, colon cancer, prostate cancer, and Hodgkin's lymphoma, among other side effects.[14]

Thiel invested $500,000 in a failed LessWrong-inspired medical advice project call MetaMed.[15]

Feud with Gawker[edit]

Peter Thiel funded several lawsuits against Gawker, most notably Gawker Media LLC v. Bollea, a.k.a Hulk Hogan.Wikipedia's W.svg[16] Bollea won the case, and was awarded $140 million in damages.[17]

Proponents of Thiel celebrate the verdict as a victory over tabloid journalism, while opponents consider the victory a chilling effect on freedom of the press. Either conclusion is extreme, and is a result of the hostile media effect.

Arguments for Thiel[edit]

Defenders of Peter Thiel's actions typically refer to two events: Gawker "outing" Thiel as gay, and Gawker publishing a recording of Terry Bollea as illegal voyeurism.

Homosexual "outing"[edit]

Before Gawker published its now-infamous article, Peter Thiel is totally gay, people, in 2007, writer Owen Thomas contacted Thiel, requesting a comment. Thiel did not object to the publishing of the article at the time. The article was not an attempt to demonize Peter Thiel; rather, it was a celebration of a homosexual who appeared to be a wealthy, well-adjusted individual succeeding in a world dominated by Bible-thumping Wall Street stiffs.

Thiel's objection to Gawker came only after his hedge fund company, Clarium Capital, lost billions of dollars in 2008 and 2009. In private, Thiel blamed the Gawker article for scaring away potential investors in the Middle East. Peter Thiel was a very confident individual who considered himself too smart to lose money. Rather than blame his loss of billions of dollars on his own bad ideas, he sought a scapegoat.

Unfortunately for Peter Thiel, suing a media company for calling him a homosexual would have gotten him nowhere. He could not sue for libel, since it's technically true that he is a homosexual.[Note 5] Thiel could not sue under any California privacy statute, since Thiel himself had admitted to being gay before the Gawker article was released.

Hulk Hogan sex tape[edit]

Peter Thiel defends his funding of Terry Bollea's legal action against Gawker, claiming that "a single digit millionaire" could not afford a proper legal offense against a large media company.[18] This is patently false, particularly in Florida, where Terry Bollea's former friend Bubba The Love SpongeWikipedia's W.svg (a.k.a., Todd Alan Clem)[Note 6] is also a single-digit millionaire. Clem brags that his litigation team has never lost a case, though nearly all of those cases feature "Bubba The Love Sponge" as a defendant.

Clem was a defendant in a separate case involving the sex tape.[19] Though "Bubba The Love Sponge" has a name that makes him sound like a dolt, he was smart enough to settle the case out of court for a mere $5,000.[20]

Clem has a unique position in the sex tape scandal because he is not just an accomplice: he is also a victim. The sex tape itself was part of Clem's home security system. Clem alleges that his former co-workers, Michael "Cowhead" Calta, and Matthew "Spice Boy" Lloyd, stole the recording and searched for a tabloid to sell it to.[21][Note 7] Clem also alleges Calta and Lloyd brokered the sale of the sex tape to Gawker through Don Buchwald. Calta and Lloyd were asking for "millions", but only received $8,000.

Peter Thiel has declined to fund any legal case against Michael Calta or Matthew Lloyd. Apparently, Bubba The Love Sponge Clem isn't enough of a "single-digit millionaire" to warrant Thiel's help.

Arguments against Thiel[edit]

Journalists and media company executives — notably, former Gawker CEO Nick Denton — argue that litigating against media companies for publishing unsavory information about public figures has a "chilling effect" that will lead to censorship. Denton is correct, to a point.

Freedom of speech[edit]

"Whistleblower laws" already exist to defend journalists, employees, and activists in general from litigation for illicitly recording a newsworthy event. However, these laws only offer protection when the recorded act is illegal. Had the recording in Bubba The Love Sponge Clem's house actually recorded a crime, Denton may have had a valid defense in court. Having sex with your best friend's wife is not illegal in Florida.

Vexatious litigation[edit]

Nick Denton does have a point about Peter Thiel's choice of action. The act of funding Terry Bollea's lawsuit against Gawker appears to be part of a larger action to destroy Gawker by any means necessary, a textbook example of "the ends justifying the means".

Thiel has funded another lawsuit against Gawker: a defamation case filed for Shiva Ayyadurai. Ayyadurai claims he invented email in 1978 (not Ray Tomlinson in 1971 as consensus reality has it), and claims that Gawker's refuting of Ayyadurai's claim had hurt his reputation.[Note 8] Gawker settled the case for $750,000, but only to close the case so that Gawker could be sold.[22]

Notes[edit]

  1. Processing credit cards in the United States yields up to a 3% fee, versus a 1% fee or less for currency exchanges and wire transfers.
  2. IRC 30D allows Tesla owners to claim a one-time $7,500 tax credit for buying an electric vehicle. While commendable, the credit would have phased out faster if Musk had founded a marque for an established automobile company, since the credit only applies to the first 200,000 vehicles sold by a company including all of its marques. The tax credit would phase out faster from sales of the Nissan Leaf, Ford Fusion Energi, or Chevrolet Volt if Musk had partnered with Nissan, Ford, or GM, respectively.
  3. However, getting government money and being a libertarian are compatible with objectivism.
  4. Homosexuals typically support women's rights. Thiel's hatred for women is almost at Dr. Strangelove-level insanity.
  5. In the United States, truth is an absolute defense against a libel claim.
  6. Born Todd Alan Clem, he legally changed his name to "Bubba The Love Sponge Clem" after receiving the nickname on his eponymous radio show, The Bubba The Love Sponge Show.
  7. Unfortunately, neither Calta nor Lloyd legally changed their names to "Cowhead" or "Spice Boy".
  8. Ayyadurai wrote a software program in 1979 called EMAIL that only operated in one office for one internal network. Ray TomlinsonWikipedia's W.svg is widely accepted as the actual inventor of email, having sent the first "user@domain" message over the Internet in 1971.

References[edit]

  1. New Zealand decided it was in the public interest to make Peter Thiel a citizen by Anna Fifield (February 1, 2017 at 2:30 AM) The Washington Post.
  2. How the Gawker Media Bankruptcy Will Work by Jonathan Guilford (06/21/16 09:45AM) Gawker.
  3. Jackson, Eric M. (2004). The PayPal Wars. pp. 321–327.
  4. Ebay Inc – ‘S-4’ on 8/6/02
  5. "THIEL’S HEDGE FUND PLUMMET". The New York Post.
  6. "Pessimism Exacts a Price on the Skeptics". Wall Street Journal.
  7. "The Quick Gutting of Peter Thiel's Clarium Capital". Gawker.
  8. "Leaked Palantir Doc Reveals Uses, Specific Functions And Key Clients". TechCrunch.
  9. Palantir Sued Over Alleged Hiring Discrimination: Labor Department says data-mining firm has shown bias against Asian job applicants since at least 2010 by Tim Higgins (Updated Sept. 27, 2016 1:09 a.m. ET) The Wall Street Journal.
  10. Thiel, Peter. "The Education of a Libertarian". Cato Unbound.
  11. "Peter Thiel Wants to Inject Himself With Young People's Blood." Vanity Fair.
  12. Israel, Brett. "Young blood does not reverse aging in old mice, UC Berkeley study finds". Berkeley News.
  13. "Peter Thiel: I'm on the Human-Growth-Hormone Pill". Bloomberg.
  14. "Provision or distribution of growth hormone for "antiaging": clinical and legal issues." NIH.gov.
  15. Come With Us If You Want to Live: Among the apocalyptic libertarians of Silicon Valley by Sam Frank (January 2015) Harper's. mirror
  16. GAWKER MEDIA LLC v. BOLLEA LLC LLC LLC KFT. Retrieved from FindLaw.
  17. Madigan, Nick. Jury Tacks On $25 Million to Gawker's Bill in Hulk Hogan Case". The New York Times.
  18. Podnar, Rachel. Blog Log: Weep for the ‘single-digit millionaires’ and bust out your holiday gear. The Washington Post
  19. Bollea v Clem
  20. Mitchell, Houston. Hulk Hogan settles lawsuit with Bubba the Love Sponge. Los Angeles Times.
  21. Spice Boy is a Thief. Bubba The Love Sponge
  22. Morris, David Z. The $750,000 Gawker Settlement That Could Distort Internet History