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The GameStop squeeze and the politics of envy
The GameStop squeeze and the politics of envy
Sep 30, 2024 2:19 PM

The GameStop squeeze is still alive, if fading. After jumping 1,500% in a matter of weeks, the stock has dropped and stalled, with some retail investors still holding out for another surge.

But while the dust has not yet settled, the popular narrative already seems to be firmly fixed: This was a battle between David and Goliath, a revolution sparked by the spunky rebels of Reddit against the hedge fund know-it-alls who have long deserved euppance. Whatever the end results, a new day has dawned in the fight to “stick it to the man.”

In many ways, it represents yet another manifestation of mob politics in the age of Instant Culture, inviting cheers and jeers from populist corners in predictable partisan patterns – all with little care or concern for detail, nuance, or underlying virtues or principles.

The game has started. The narrative is set. The protagonists are predetermined. The villains are duly marked. And so we grab our proverbial popcorn with glee.

“When everything is a game, everything is a joke and vice-versa,” writes game critic Todd Martens. “So, smile when you pose with that stolen lectern from the Capitol and laugh when you make thousands off a pany. Different people, different causes, but it’s all rooted in the same internet-fueled principles. No wonder, then, Republicans and Democrats have appeared aligned on the GameStop saga. It’s one thing to think the revolution will not be be televised, but it’s a whole other challenge when it’s memed and gamified.”

From Sen. Ted Cruz to Rep. Alexandria Ocasio-Cortez, politicians are hastily jockeying to unite behind the “little guy” against the “wealthy elites,” regardless of the existing laws or the wider range of incentives and trade-offs at play. The populist rage has found its focus, spurring a frenetic contest for the most outspoken Advocate of the Masses – an honor that is sure to catalyze plenty of undue oversight from our federal bureaucracy.

The risk of cronyism is real, to be sure. Yet in this particular case, the trades were made freely and without government interference. The verdict is still out on why Robinhood and other consumer platforms chose to block specific trades, but the rationale seems largely legitimate. Likewise, we have yet to fully understand the role that big money played on the spunky side of the trades, meaning that this may have been a bet between Goliaths and Goliaths, with the mon man” playing a smaller role than originally suspected. As Avik Roy explains, “The pundit class narrative about $GME as the ordinary Joes notching a win against the Wall Street titans pletely wrong on multiple levels.”

In the latest Acton Line podcast, financial analyst David Bahnsen digs deeper into these nuances, helping discern what really went down, and where the populist mythology typically goes astray. When es to hedge funds, for example, Bahnsen points out their various contributions over the years, which have led to new synergies, better price discovery, and greater accountability in capital markets.

“Are there some [hedge funds] who are sinister and short-sighted?” Bahnsen asks. “Yes, and those things have to be dealt with by market forces. But are these people operating in their self-interest and in pursuit of a profit that satisfies their clientele…doing an evil act? The answer is absolutely not.”

Unfortunately, the populist masses seem less concerned with such details, preferring to fill in the blanks with more vanilla varieties of eat-the-rich sentiment. For Sen. Elizabeth Warren and many others, the question is not so much about unfair “market manipulation,” but whether “the wealthy” are the primary players, and how the government can get around to “playing cop” accordingly.

Without a clear understanding of the moral good of free and open exchange and an honest embrace of the risks e along with it, this is where such fantasies typically lead. By seeking to “tear down the rich” as a value unto itself, we are bound to drift toward more sinister searches for political power and control, with results that have historically harmed the rich and the poor alike.

Thus, our concerns ought to revolve around far more than profits and losses or the makeup of winners and losers on this or that particular squeeze – whether they are rich or poor, “entrenched” or “revolutionary,” living on Wall Street or in their mothers’ basements.

As former Wall Street trader Chris Arnade explains, the underlying cultural attitudes have far more significance, bearing intangible fruits that are sure to endure beyond the material chaos of the moment. When all is said and done, the “smart money” will have stayed plenty safe and secure. Meanwhile, popular sentiment is only likely to grow in its cynicism and antagonism toward the rich:

For bankers this will just be another day at the office, another of the many market blow ups that don’t impact them, but impacts everyone else. Another thing those normies are outraged about to roll their eyes over.

The lesson taken away by those losers, and everyone else not on Wall Street, is more important, insightful, and dangerous though. It will be that there isn’t a meritocracy, or at least a justified one. It will be that everyone is just playing games. Those at the top get to dress up their game, even though it is destructive to everyone else, as legitimate, call playing it a career, and get rewarded mightily for it. Others, like them, have to make it a hobby, and even though it is just harmless fun, get scolded for it.

This will harden a cynicism that already exists in large parts of America. A cynicism that will convince more and more people to play all of their life, recklessly. To do what is known in gaming circles, as Int-ing, or Intentionally dying. Running madly at the boss, unworried if they are going to lose, suffer, or die. Because if you are not going to be allowed to win a rigged game, you might as well ruin it, and extract just a tiny moment of joy from that.

As real and pressing as those trends may be, Christians have a moral obligation to resist such cynicism – seeking clarity about the nature of our economic systems and institutions while staying vigilant to put freedom and virtue ahead of envy and class resentment.

“At its core, populism is covetousness disguised as a political movement,” writes Bahnsen. “And when es to matters like this Gamestop/Robinhood silliness, the rank disdain for the Ten Commandments that undergirds the current narrative – not to mention disdain for a coherent grasp of basic facts – is really self-evident.”

When we look past the bluster and acquaint ourselves with the facts, it es clear that this is not a Marxist crisis of history, wherein an oppressed proletariat is unduly shuttered from access and opportunity. If anything, the latest spectacle ought to confirm that our reality is quite the opposite.

“The arguments being made against [wealthy people] are not substantive or intellectual. They’re not theological or even philosophical,” Bahnsen concludes. “They are simply arguments that stem from a covetousness. And I think that is the problem for men and women of faith. It is an empty argument devoid of actually connecting the dots as to what these people are doing.”

Throughout the chaos of the squeeze – amid the mob’s rush to “run madly at the boss,” as Arnade puts it – there is plenty of room to ride the wave, knowing full well the range of risks and the players at hand.

But if we truly hope to help the “little guy,” we should understand that success begins not by burning down the wealthy for its own sake, but by keeping our sights on reality over resentment, value over vindictiveness, and freedom over fury.

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