Current Events in August 2023

Twitter has been in hot water for quite some time. 

Over the last year, the company has paid over $150 million for failing to protect consumer data, a data breach exposed over 200 million users, and Meta launched a new app, Threads, that directly competes with Twitter. 

Now, in the last week, the company’s owner Elon Musk has decided to rebrand Twitter to “X.” 

What’s different so far? 

For starters, typing in Twitter.com on your browser will now redirect you to “X,” while the opposite is also true – typing in X.com will take you to Twitter. The bird logo has been removed from Twitter headquarters in San Francisco and replaced with the new X logo. Musk has also changed his handle to “X.” 

However, in terms of the capabilities users have grown accustomed to, there haven’t been any changes as of yet. Tweets are still called just that, and replies, mentions, and retweets haven’t changed yet either. 

“Twitter was acquired by X Corp both to ensure freedom of speech and as an accelerant for X, the everything app,” Musk posted on X. “The Twitter name made sense when it was just 140 character messages going back and forth – like birds tweeting – but now you can post almost anything, including several hours of video. 

“In the months to come, we will add comprehensive communications and the ability to conduct your entire financial world. The Twitter name does not make sense in that context, so we must bid adieu to the bird.” 

What does this mean for consumers? 

Social media experts weighed in on the Twitter rebrand and what this means for consumers and the future of social media. 

“I think the most crucial thing Twitter users, now X users, need to be mindful of is what Elon Musk wants the platform to ultimately transform into,” David Triana, account executive at Delight Labs, told ConsumerAffairs. “Musk said last year that he wants X to be a platform that could be used for just about anything and everything in your daily life (communication, shopping, banking, entertainment, etc.), which would inevitably mean linking a lot more of your personal information to the platform. Could that lead to more of a data risk? Sure, but that risk is associated with nearly any platform on the internet.

“A curious thing to keep in mind will be if this rebrand turns users off of the app and points them in the direction of Threads, or any other up-and-coming social media app,” Triana continued. “I think longtime users will stick around, especially those in media and entertainment since it has really become intertwined with their daily work. With that being said, if this becomes something where Musk is making these seemingly random decisions and users start to wonder what the actual endgame is, it could lead to an exodus that might be more substantial than people think."

Emily Zinberg, director of social media and digital marketing at 3E Public Relations also had data privacy concerns about the rebrand. She told ConsumerAffairs: “Elon Musk and Twitter CEO Linda Yaccarino have both referenced adding a banking and payment element to X, allowing users to ‘conduct your entire financial world.’ If this is true, X will need to step up its data security protections to make users feel more comfortable interacting with these new experiences. Twitter’s privacy issues are no secret, and consumers should do their due diligence into how that will be addressed as X unveils new features.”

Mysteries remain

As for now, consumers may not have much adjusting to do when it comes to the latest iteration of Twitter. However, the future of X, and how consumers interact with it, remains a mystery. 

“The rollout of the new logo happened quickly, not giving consumers much time to understand what was happening, if it was happening, and how it would impact their user experience,” Matt Caiola, Co-CEO of 5WPR, told ConsumerAffairs. “The good news for consumers is that the rollout of the rebrand seems to have slowed, allowing us all more time to understand what exactly will be changing.

“Until we see major upgrades on how we utilize the platform, we don’t predict the vernacular to change any time soon. Until issues like trademark infringements are officially out of the way, we’ll still be ‘tweeting'.``

At the beginning of the year, many economists expected the U.S. to be in a recession by now. The fact that we aren’t can probably be attributed to a still strong labor market and growing corporate earnings.

But a 33-year-old singer could have something to do with it as well. Taylor Swift’s Eras tour has been crisscrossing the U.S. for months as she has performed in sold-out stadiums. Her legions of dedicated fans sometimes travel great distances to attend her performances, filling hotels and restaurants, sometimes days before and after the concerts.

After Swift performed in Philadelphia, the Federal Reserve Bank of Philadelphia acknowledged her impact.

“Despite the slowing recovery in tourism in the region overall, one contact highlighted that May was the strongest month for hotel revenue in Philadelphia since the onset of the pandemic, in large part due to an influx of guests for the Taylor Swift concerts in the city,” the bank noted in the Fed’s “Beige Book” report.

After Swift performed three sold-out concerts in Chicago in June, the tourism marketing organization Choose Chicago reported hotels in the city saw record occupancy and revenue during that period.

Hotels are jumping on the bandwagon

Businesses in cities where Swift is scheduled to appear now eagerly anticipate her arrival, along with the throng of her fans, all eager to spend money. In late July, as Swift headed for Santa Clara, Calif., local hotels took full advantage. 

Some hotels, booked to capacity with “Swifties,” arranged tailgate parties before the concert at Levi Stadium. Tourism officials were ecstatic.

"The Taylor Swift effect, it's even bigger than I anticipated," Christine Lawson, CEO of Discover Santa Clara, told KTVU-TV.

Lawson said that hotel occupancy in Santa Clara was at nearly 100% the week of the concert, at a time when rooms normally go begging. 

Boosting a normally slow period

"July and the weekends, in particular, are slow in Santa Clara,” she said. “They’re not our peak times of the year. So this has a great financial impact for us, from an economic standpoint, just to have the hotels full. Everyone will be going to the restaurants." 

It’s estimated that by the time the Eras tour ends, including its international stops, it will have raked in $1 billion. But the multiplier effect of her fans’ spending is even greater, as not only hotels and restaurants benefit, but also bartenders, hairstylists, and Uber drivers. One tourism official compared the concerts’ effect on cities to hosting a Super Bowl.

In late July the U.S. government reported that the economy grew by 2.4% in the second quarter, a much higher rate than expected. 

Electric vehicle (EV) sales have increased in the last couple of years but EVs still make up a small fraction of cars and trucks on the road. 

That disappoints automakers, as well as government policymakers who are pushing to phase out gasoline-powered vehicles. At government prodding, automakers have staked their financial futures on consumers embracing EVs.

When it reported second-quarter earnings last week, Ford predicted it would lose $4 billion on its EV division this year, double 2022’s losses. With that sober economic reality staring it in the face, Ford is slashing the number of EVs that will roll off its assembly line. 

The company has lowered its sights from producing 600,000 EVs by the end of this year to turning out that number by the end of next year.

‘Too expensive'

The problem, says Ford CEO  John Lawler, is not just competition from Tesla and other automakers. Lawler says EVs are “too expensive” for most car buyers. 

To underscore that point, Ford recently slashed the price of its top-trim version of the F-150 Lightning by nearly $10,000. In the used market, iSeeCars.com reported that used EV prices are "collapsing," falling nearly 30% in June.

According to a popular EV blog, the average cost of an EV in the U.S. is in the neighborhood of $64,000. At the low end is Chevy Bolt, at $27,495. Earlier this year GM announced it would eliminate the model – perhaps because of small profit margins – but recently gave the model a reprieve.

The most expensive Tesla model will set you back by more than $107,000. That compares to $48,000 for the average new car of any kind.

The price could be even higher

After doing a deeper dive into the number, FindMyElectric.com puts the average price of EVs in the U.S. at around $76,000. While some consumers can afford that, many more can’t. 

If only a portion of the population can afford an electric car it could make it politically unpopular to phase out the internal combustion engine. And expensive.

The Energy Information Administration, a federal agency, reports EVs made up 14% of U.S. car sales in 2022. You could speculate that the people who bought EVs are fairly affluent.

Ford seems to be saying it’s concerned about the people who aren’t.