Business
Column: Who elected Elon Musk our arbiter of social norms?
Here’s a handy two-step process for taking a thoughtful and judicious approach to the burning social and political issues of our time:
1. Examine closely the position taken by Elon Musk, and;
2. Go the other way.
Musk’s drift — more precisely, his headlong dive — into right-wing orthodoxies has been well-chronicled. He has openly endorsed antisemitic tropes, called for the prosecution of the respected immunologist Anthony Fauci (evidently buying into the right-wing fantasy that Fauci helped create the COVID-19 pandemic), and associated himself with a grotesquely ugly conspiracy theory about the assault on the husband of former House Speaker Nancy Pelosi.
This is the final straw.
— Elon Musk, explaining that California’s pro-transgender law provoked him to relocating his companies to Texas
He reversed policies at X, formerly Twitter, designed to block hate speech, including racist and antisemitic tweets. That has turned the platform into a hive of repulsive partisan commentary.
(Musk blames an imaginary advertisers’ “boycott” for the user decline at X, though the repulsive atmosphere of the platform since his acquisition probably has done more to drive users and advertisers away.)
Musk again put his acrid personal worldview vividly on display with his announcement Tuesday that he would move two of his private companies, Hawthorne-based SpaceX and San Francisco-based X, to Texas.
He made clear that his decision was triggered by Gov. Gavin Newsom’s signing of a law that bars school districts from requiring teachers to notify parents of their children’s gender identity changes. Newsom signed the law on Monday.
“This is the final straw,” Musk posted on X. He described the law as one of “many others” in California “attacking both families and companies.”
A few things about this.
If anything, Musk’s corporate activities point to what is often described as a “whim of iron.” He defends his policies and politics as derived from painstaking consideration based on immutable laws of human behavior, but they don’t hold water on those terms. Instead, they point to the social dangers of endowing self-interested personalities with the money to buy unaccountable influence in conflict with the public interest.
Musk appears to have a real problem with transgender rights. According to the Musk biography by Walter Isaacson, this may have originated with the decision of his eldest child, Xavier, to transition at the age of 16. “I’m transgender, and my name is now Jenna,” she texted a relative. “Don’t tell my dad.”
Jenna followed up with a political awakening that Musk ascribed to her attendance at a private school in California. “She went beyond socialism to being a full communist and thinking that anyone rich is evil,” he told Isaacson. Jenna broke off all contact with him.
Further, as is the case with much of Musk’s worldview, his claim about California’s attacks on families and companies is fundamentally incoherent.
The new California law is the antithesis of an attack on families. It aims to protect the right of parents to seek the most appropriate medical treatments for their children. Anti-transgender activists who have gotten laws enacted in 20 red states interfering with these medical consultations typically characterize them as “parents’ rights” measures, when they’re just the opposite — they interpose right-wing ideologies between these families and their doctors.
That’s the state of play in Texas, the putative new home of SpaceX and X. There, a law that became effective on Sept. 1, 2023, prohibited treatments widely accepted by medical professionals for “gender dysphoria” experienced by adolescents.
These are chiefly the use of puberty blockers to give the patients more time to affirm their gender perception, and once that stage is achieved the use of cross-sex hormones —estrogen for males transitioning to female, and testosterone for females transitioning to male.
The Texas law threatens physicians who violate the law in treating their patients with the loss of their medical license.
A trial judge, ruling in a lawsuit brought by parents of transgender youths and by doctors who treat patients in that position, blocked the law shortly before it was to take effect. The injunction was overturned late last month by the Texas Supreme Court in an 8-1 decision.
The majority made clear that its decision had nothing to do with the weight of medical opinion, which overwhelmingly supported the treatments at issue when undertaken through careful consultation.
The issue at the heart of the debate, asserted Justice James D. Blacklock in a concurring opinion, “is one of philosophy, morality, even religion. The medical debates at issue in this litigation are merely the surface-level consequences of deep disagreement over the deepest of questions about who we are.”
The majority justices ruled that the Legislature was entirely within its rights to place limits on medical practice and parental authority in Texas. They asserted that barring parents from seeking medically indicated treatment of their children’s gender dysphoria was no different from a state law forbidding minors from getting tattoos, even with their parents’ permission.
“Of course,” responded Justice Debra H. Lehrmann, the court’s lone dissenter, “there is nothing remotely medically necessary about tattooing.” Depriving adolescents of gender dysphoria therapies, on the other hand, can be severely injurious to the patient’s physical and mental health.
If Musk thinks that Texas’ policies on parental rights are superior to California’s, he might ask the parents of transgender youths who have been driven out of Texas to seek treatment because of this ignorant and ideologically infected law.
Texas boosters, Musk included, like to describe the state as the coming place for venture investing. The truth is rather different. According to the National Venture Capital Assn., Texas has been mired in also-ran status for at least the last decade, a period in which it has been supposedly booming.
California’s position as the top state in venture funding has never been seriously challenged. In 2023, California VC funds raised $37 billion; Texas ranked seventh, with less than $1.2 billion. Of the top 10 venture deals by value last year, the NVCA reckons, eight involved California companies. The others were located in New York and Washington, D.C. Texas had none.
And in terms of assets under management by firms based in the state, California continues to reign with $644.5 billion as of last year. Texas ranks fifth, at less than $32.5 billion. It was edged out by No. 4 Florida, with $33.6 billion, but the figures for both Florida and Texas are a big drop-off from No. 3, Massachusetts, with $121.7 billion.
It’s not as if Austin, where Musk is hanging his Texas Stetson, offers newcomers a paradisiacal environment. In 2022, TechCrunch dubbed Austin “a city of unicorns and tech giants.” The thrill hasn’t lasted. Recent transplants have found that its boosters’ depiction of a vibrant intellectual climate was oversold. “Austin is where ambition goes to die,” an unhappy California immigrant told Business Insider.
Then there are its punishing summers — 78 days of triple-digit temperatures in 2023 — and soaring housing prices. Although Austin boasts one of the features of tech hubs, a leading research institution in the University of Texas, the state’s partisan political environment has turned increasingly hostile, with bills passed into law this year banning diversity, equity and inclusion (DEI) programs and narrowing faculty tenure protections.
Texas has the most restrictive anti-abortion law in the nation, with an almost total ban and a prohibition even on private health plan coverage of abortions. That hardly makes for an inviting prospect for women of childbearing age or for young families interested in the full range of reproductive healthcare options.
One advantage Texas has over California is something a rich entrepreneur like Musk would appreciate the most: It has no state income tax.
Musk can scarcely claim that his own corporate policies are family-friendly. They are, however, arguably self-destructive. Consider his treatment of thousands of former Twitter employees who were summarily fired after he took over the platform in October 2022 and are suing to receive severance payments, bonuses and other benefits they were promised before the takeover.
The mass firings have given rise to about 2,000 arbitration cases and a dozen class-action lawsuits, according to Shannon Liss-Riordan, a Massachusetts labor lawyer who represents the workers in arbitration and filed the lawsuits.
Among the workers’ claims is that while Musk was working to close his acquisition of Twitter, as it was then known, the company promised employees that they would be entitled to “benefits and severance at least as favorable” as what Twitter provided before the Musk takeover. The promises were made by company executives in a series of all-hands meetings at Twitter headquarters and were written into the merger agreement Musk and Twitter management negotiated in April 2022.
“The promises were made to keep employees from fleeing the company during those chaotic months before Musk closed on the acquisition,” Liss-Riordan told me. “Then after he closed, he just defaulted on that promise.”
Neither Musk nor spokespersons for X or SpaceX could be reached for comment.
Although many if not most of the X employees were required to bring their claims to arbitration, Musk initially refused to pay the arbitration fees that are typically charged to the employer in such cases.
That has frozen the proceedings in more than 800 cases, though not those originating in California, Oregon and Nevada, where employers don’t have the legal ability to refuse. About a third of the 2,000 arbitration claims are in California, Liss-Riordan says.
Leaving aside the ethical implications of a company’s forcing employees into arbitration and then refusing to allow the cases to proceed, Musk’s demand that ex-employees submit to arbitration may be exceptionally more costly for the company than trying to reach a general settlement. Arbitration fees can average $100,000 per case, Liss-Riordan told me; hundreds of millions of dollars in claims may be at issue.
“You have to scratch your head over why Elon Musk has to fight this so hard,” she says. “Would it really be that big a deal to pay the employees what was promised to them? Frankly, it doesn’t seem worth his time.”
Business
Waymo reports teen riders for bad behavior and delivers them to the police
Robotaxis could be turning into robocops.
A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.
According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.
“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”
Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.
“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “
A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.
Waymo did not immediately respond to a request for comment.
Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.
The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.
The company said it does not use facial recognition or other biometric identification technologies to identify individuals.
“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.
The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”
“At least they got a designated driver?!” one user commented.
Business
Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination
At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.
On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.
The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”
The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.
There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.
— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports
Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.
Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.
In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”
Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”
From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.
No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.
But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.
The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)
West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?
But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.
It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.
Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.
He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)
I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”
Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.
Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.
In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”
In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”
Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)
It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.
Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.
They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)
Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”
Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.
Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”
B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”
So whose interest was really protected by the Supreme Court?
Business
Orange County real estate investor pleads not guilty in $100 million bank fraud case
An Orange County real estate investor accused of criminally defrauding an Arizona bank of nearly $100 million pleaded not guilty Monday and remains in custody.
Mahender Makhijani, 44, of Corona del Mar — who also was ordered by an arbitrator to pay $1.34 billion in a separate civil fraud case — was arraigned in Santa Ana federal court on two charges.
He is accused of bank fraud and making a false statement to a bank in a June 8 case involving a $100 million real estate loan made by Phoenix-based Western Alliance Bank. He was taken into custody on June 10.
Makhijani is accused of providing bogus collateral for the October 2024 loan now in default. In a civil lawsuit, Western Alliance said the outstanding balance as nearly $99 million.
Prosecutors say he falsified title insurance policies that showed the bank would have a first lien on the underlying collateral if the loan went bad, when in fact it did not.
A trial was set for August 11 before U.S. District Judge David O. Carter in Santa Ana.
Michael Schachter, his criminal defense attorney, did not respond to messages seeking comment.
In the civil case, an arbitrator in May ordered Makhijani to pay Laguna Beach real estate mogul Mohammad Honarkar $1.34 billion after ruling he had fraudulently induced him into a 2021 joint venture — and then wrested control and lost to creditors more than two dozen properties Honarkar had owned.
Makhijani has not been criminally charged in that case, but prosecutors alleged in an affidavit in support of the bank fraud charges that he used “force and threats” in his dealings with Honarkar and others — including taking over the landmark Hotel Laguna in 2023 that Honarkar was renovating.
Prosecutors sought to hold Makhijani without bail after his arrest.
The affidavit noted he is a legal Indian immigrant with a home and bank accounts in that country, has access to private jets and threatened to “run away” if caught in a difficult situation.
The request was denied and he was granted $500,000 bail.
However, Makhijani remains in custody after a hearing sought by prosecutors last month before Magistrate Judge Autumn Spaeth.
The judge declined to accept a $450,000 cashier’s check submitted by a Makhijani associate for the bail, finding insufficient proof the source of the funds was legitimate, according to court records.
Makhijani is not prominent outside Orange County real estate circles, but he established a thriving distressed-assets business over the last decade that attracted prominent Southern California real estate investors.
Prosecutors said it paid for a lifestyle that included two multimillion-dollar homes in Corona del Mar, a luxury apartment in Newport Beach and various luxury vehicles.
As of last month, prosecutors had not fully traced his assets, which they believe are not held in his name and some of which may be in India.
The businessman employed an array of shell companies and strawmen to sign documents on his behalf, and to stand in for him as operators of his companies, according to the affidavit.
Makhijani told an associate he took extra precautions because wanted to insulate himself from litigation and that “they were sharks in the distressed world who took advantage of people,” the affidavit stated.
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