News Brief: Finance Media’s GameStop Meltdown and the Thin Moral Pretexts of Wall Street’s Game…

Citations Needed | January 28, 2021 | Transcript


Nima Shirazi: Welcome to a Citations Needed News Brief. I am Nima Shirazi.

Adam Johnson: I’m Adam Johnson.

Zero Mostel and Gene Wilder in “The Producers” (1967)

Nima: We do these News Briefs in between our regularly scheduled full length episodes when — I don’t know — we have to talk about GameStop. So, that’s what’s happening today. Of course, you can follow the show on Twitter @CitationsPod, Facebook Citations Needed, become a supporter of our work through with Nima Shirazi and Adam Johnson. But Adam, I’ve been trying to follow the GameStop story and the only analogy I can possibly try and understand it using is, like, The Producers. That’s the only way. Okay, there’s, you know, short selling and shit like that, like you do this thing where you expect a thing to crash, and then you reap the benefits, but if it goes the other way you get screwed. But please, explain a little more about what we’re seeing with GameStop and then we’ll get into what winds up being both sinister and also funny about the reactions we’re seeing to it.

Adam: Just to edify our listeners, the basic gist of it is, and this is obviously a huge simplification, I don’t think it’s actually that complicated — a lot of people on the left, I think, that these things are more complicated than they are, I think some of the minutia can be — but the general thrust is that certain hedge funds buy a lot of short options, which is basically, like you said, it’s basically betting against the stock by entering a contract, whether it be a month or some amount of time, whereby you basically wager the stock will go down or not go up, and what happened is that people were privy to that, because these hedge funds did not have the actual monies, they actually they were over leveraged, they didn’t have actual money to make good on these short stocks if the stock went up. So they basically did a pump and dump and they hyped up and bought a bunch of stock, which led to a multiplier effect, a kind of psychological effect, where the stock then went up —

Nima: Right.

Adam: And then that created a situation where the hedge funds were forced to pay off or were forced to, at least in theory, to buy the stock at the price that they had on the short which they didn’t have enough capital for and then they have to buy more to offset that leading to a cycle.

Nima: So to actually clarify this even more, because I’m currently completely lost, we are lucky to have on with us today, Jacob Silverman, New York-based journalist who writes for such publications as The New Republic and also The Baffler. Jacob, thank you so much for joining us today on Citations Needed. Would love to hear your take on I think first how Adam described that, and then what we’re seeing with GameStop today.

Jacob Silverman: I thought that was pretty good. I think the basic mechanics are what both of you described, which is that, essentially, hedge funds have bet against GameStop as this beleaguered company that is a brick and mortar retailer not doing too well in general, and especially in the pandemic and they were overleveraged, especially important that Adam called out, what’s happening via Reddit, which we’ll all get into I’m sure, but as a pump and dump scheme. So really what you have is one side overleveraged and then the other side is pumping up this stock in order to gouge the hedge funders, but also make their own profit.

Adam: Yeah, Jacob, thanks so much for clarifying. I’ve been enjoying your work at The New Republic for a long time and I’m glad to actually finally have you on. It’s a shame it has to be under such circumstances.

Nima: It seems beneath you, to be honest.

Adam: Well, no, because here’s why it’s not: everyone’s having a good laugh at this but the thing your piece touched on which I really liked that kind of put into words things I was trying to articulate myself, which I think veers into our territory of media analysis, PR and kind of the broad psychology of all this, is that there are much bigger themes here at work that I think is what attracts people to the story beyond the kind of LOLs factor, which is that pretty much everybody except for the alt-center and I think the sort of maybe the kind of Wall Street wing of the right-wing, everyone kind of hates Wall Street in many ways, right? It’s sort of easy to hate for various reasons, namely that they don’t do anything. They move numbers around on a screen and they get rich doing it. They don’t actually produce anything for the most part. Now, I remember one time Steven Soderbergh was explaining why he made Ocean’s 11, a heist movie about a casino, aside from being a reboot, he said he was attracted to it because literally no one cares if you rob a casino, right? No one’s gonna feel bad that your main characters are robbing —

Nima: It’s a victimless crime.

Adam: Right. I think the words he said, ‘If you find a poker chip on the floor of a casino, it’s like you’re gonna go return it to management,’ right? And I think that this is kind of one of those stories. It’s a story that unites people across different political currents, because pretty much they’re a casino, and everybody hates them. So, I want to start off by talking about some of the cultural and political forces at work and of course, we don’t endorse the politics, I think of the Reddit bets, because I think some of their politics are pretty awful or dicey or they’re kind of a mixed bag and of course, they’re in it to some extent for their own profit, but let’s talk about the contradictions at work here and what you found in your piece and your observations were being teased out by this gambit.

Jacob Silverman: Sure. So you have all these Redditors who are united basically through this one Subreddit, WallStreetBets, and a couple more vocal participants who are more committed also with the amount of stock that they bought, who are kind of leading this campaign of meming and drollery to pump up GameStop and make some money for themselves, as we said, and stick it to the hedge funds. So I think there are a couple things going on here. One, there’s just total shock on the part of Wall Street in general and kind of the finance media, that this kind of thing could happen. There have been different cultural moments where you had kind of flash mobs — to use maybe a 2010 kind of word — or, you know, groups of people come together to do something dramatic whether it’s a political protest or I saw someone online call this a Boaty McBoatface moment. Do you remember that?

Nima: Of course!

Adam: Yeah, of course.

Jacob Silverman

Jacob Silverman: Yeah, there was some boat that was crowdfunding its name and ended up being called Boaty McBoatface, as a ferry or something like that. In a lot of ways this is kind of one of those Boaty McBoatface moments, in that we can recognize it from other areas of life, but when applied to finance, it’s pretty new and novel. I think that’s why it’s pretty scary for the financial industry. And what it does is it sort of attacks this myth that one, the market is rational in any way, which you know, a lot of stuff, especially to the left is sort of a kind of obvious bit of insight, but I think once again, it’s always good to expose this stuff to a wider audience, and to the people that are sort of the powers that be, in this case, the finance industry. So to them market manipulation, they wouldn’t use those terms, but market manipulation is okay if it’s Carl Icahn, or if it’s a bunch of hedge funds seemingly deciding separately to all short the same company. There are different kinds of collusion and insider trading and things like that beyond just the legal definition that might go on and I think a lot of people, as you gestured at, from various parts of the spectrum, especially people who aren’t wealthy, do feel like the economy and Wall Street in general is just rigged against them. And that’s why I did get into the casino idea in my article, which is that I’m certainly not the first to invoke that, but I think it is a handy sort of prism or metaphor through which to view all this, which is that Wall Street definitely is a casino and suddenly you have the equivalent of card counters or someone who is exploiting some kind of loophole.

Adam: You’re scamming the scammers, which is the ultimate.

Jacob Silverman: Totally and the casino is suddenly shut down and trying to readjust the rules before they can open for business again.

Nima: Yeah, exactly. It’s this whole, you know, the house is never supposed to lose, which is why when you have someone coming in to change those rules, we see all this kind of pearl clutching head to the fainting couch, over, you know, one of the ringleaders on this Subreddit, WallStreetBets, you know, their their username is DeepFuckingValue, right? And to me, the reaction to this from Financial Press, Wall Street Journal, CNBC, etcetera, is how dare they do the thing that we’re supposed to do? And it’s almost like there’s this correlation, you know, just getting past the Trump presidency or whatever the fuck that was, it’s almost less about what’s happening, then who’s doing it. Like, ‘This isn’t the decorum of the noble stock market. Reddit can’t do that.’ Just like, you know, ‘Trump can’t just do that.’ But what’s actually happening is really just kind of how this fucking casino works anyway.

Jacob Silverman: Yeah, it’s just a somewhat more distributed group of people and certainly, lower class — I just mean that descriptively, not in any pejorative way — group of people, though, class is definitely a part of this and I think it’s part of the sense of access and who’s allowed to do this kind of thing and you still have a finance industry that views this as their domain, that they’re the ones who are supposed to make big bets and move markets and control the fates of companies. Even what they do is not socially useful, which I think a lot of us would agree.

Adam: Well, right. So I mean, it’s basically there’s these rules to the game we set up. They’re arbitrary and self serving and, you know, because I think one of the kind of libertarian myths is that the free market — so-called “free market,” which we will absolutely do an episode sometime in the future in greater detail — is an organic thing that it’s somehow emerges like any other law of nature, and that they’re simply good at playing the game. Now, of course, I think, again, this is not a surprise to our leftist listeners that there is competition to the same extent there’s competition in the NBA, right? You have a colluded band of owners who set the rules and within that you can make money but at the end of the day, they’re all part of the NBA, they’re all part of the same organization effectively and they both profit off of these rules and the monopolistic capture of these rules and so on — to sort of beat the metaphor to death — and then someone sort of outside of that club, outside of the Owners Club, beats them at that game, and then they’re scrambling. The Financial Press, as you note in your piece today, was scrambling to sort of reverse engineer a moral pretext to be outraged. You know what I mean? Like there was no, it’s sort of like when casinos, when there was those really advanced counting operations run out of MIT and like casinos actually could ban people, but they tried passing laws in Nevada to outlaw it but there was no rule to outlaw it, it’s actually not illegal to card count, because you can’t really come up with a reason, you’re just sort of generally mad and we saw some of those reactions today.

Nima: You’re too good at the thing that I’m supposed to be good-er at.

Adam: Yeah, and Josh Barro led the charge. He said, quote, “The purpose of the stock market is so productive firms can raise capital to do things. Detaching stock price from fundamental value makes the markets serve the real economy worse.” Now, again, like you mentioned, any leftist would laugh at the idea that there’s this objective real value that we’re somehow corrupting is laughable, because so much of how you game the stock market is by the sign of psychological factors. So to what extent did you find the reverse engineered moral pretenses convincing? Or at least entertaining I should say, because I doubt you found them convincing at all.

Jacob Silverman: Well, it is interesting to see sort of the ideology trotted out very plainly, and people try to justify the market or characterize it in some platonic way of what they think it’s supposed to achieve. Like anything I suppose it’s sort of a comforting myth that people tell themselves and tell each other to justify what in practice is, as we know, is a much messier and more chaotic way of structuring the economy. Other than that, I mean, I think also, you talked about moral justifications, one relayed idea that I think is important is that a lot of people were trying to ascribe a kind of moral character to what these Redditors are doing, the uprising going on, which I think is interesting and worth considering. I think there is a sort of insurgent character here, but I think it’s, as I sort of tried to reduce it to in my writing, I think this isn’t people trying to overthrow capitalism or even finance or even one hedge fund necessarily.

Nima: Right.

Jacob Silverman: These are people trying to disrupt it and make money off of it. There’s definitely an element of lulz here, but it’s also not really trying to overthrow the existing order. It’s kind of trying to alter it or make room for them and say that the rules are unfair.

Adam: It’s like your dad in the ’90s stealing cable. He got one over on the man, but it’s not exactly a revolutionary act.

Jacob Silverman: Yeah, exactly.

Nima: He still wants cable.

Jacob Silverman: Yeah and I think some people who are basically at heart, either centrist or just believers in kind of the capitalist status quo, are trying to say that this is somehow the second coming of Occupy, or a digital Occupy or some kind of revolutionary act and some people are calling that out for the nonsense that it seems to be but there’s a temptation to say that the Reddit guys are kind of the good guys and are sort of representing the people. Now, they’re not necessarily all good or all bad, it is sort of a mixed bag as you alluded to earlier with their politics, but is definitely not an attempt to overthrow capitalism for some new political order or philosophy.

Nima: Yeah, I think, you know, what I’m also curious about is what we’re seeing as some of the reactions to it, and yes, there’s like the Josh Barro kind of like, ‘Oh, the dear stock market’ reaction, but regulators and Wall Street, arbiters like NASDAQ, have also been speaking out on this, as you would imagine, and there seems to be this appeal to ‘Oh, now we need regulation,’ right? But it’s only regulation, it’s only monitoring, when it has to do with certain actors as opposed to others. So for instance, NASDAQ CEO, Adina Friedman, told CNBC today:

[Begin CNBC Clip]

Adina Friedman: Well, I do think, though, that as we look at these new technologies that are there available to everyone, including investors, I think it’s also important for regulators to understand that, you know, manipulation is manipulation, whether it’s happening through a new technology medium or it’s happening through traditional mail.

[End CNBC Clip]

Nima: What do you see as the kind of, you know, appeal for, ‘Oh, we need to regulate this,’ as really a stand in for, ‘Wwe need to clear out the riff raff,’ you know, WallStreetBets, I believe, the Subreddit was actually taken down today, a move that was swifter than any action against 4chan, 8chan, any kind of, you know, ‘Hey, when white supremacists get together, I guess it’s not really a big deal, but if anyone fucks with the beloved stock market that needs to be moved on.’

Adam: That moved fast, and by the way, the Discord server was taken down too allegedly for hate speech, but I don’t think anyone’s really buying that. I think they found some instances of hate speech and then reverse engineered that as the reason. So yeah, they moved swiftly, they moved swiftly on that one.

Jacob Silverman: Yeah, I think what’s interesting is how unsettled it is, which is that there isn’t much I mean, they they’re saying, ‘Oh, this is why we’re doing these things,’ whether it’s taking down the Discord server or the NASDAQ CEO talking about disinformation and things like that, but it is very clear, as you said, that this really is about access and clearing out the riff raff so to speak, and making sure that this kind of thing doesn’t happen again and you don’t have to agree with everything the writers are doing to say that this proves one of their points, which is also a point of the left, I’d say, which is that this is all rigged to some extent, or in a related way, there’s sort of a club, and if you’re not in the club and don’t have access to it, you’re not going to benefit to the same degree that the people who are on the inside are going to.

Adam: Well, I mean, it reminds me a lot of that, you know, I remember when Wolf of Wall Street came out, people were like, ‘Oh, this is a searing satire on Wall Street excess,’ and if you actually know the story of Jordan Belfort and how he was, you know, his relationship with the SEC and FBI, it’s like, yeah, yeah, guy was a scumbag definitely stole from old ladies, but the reason why they went after him and the reason why he became this Wall Street DEMON is because he wasn’t really in the club. He wasn’t part of the old sort of traditional JPMorgan, Citibank world, he was kind of a little bit on the outside, And his crime was not so much that he was committing these crimes, because everyone committed those crimes, that he was sort of uncouth and not part of the club in many ways, right? And this sort of reminds me of that where it’s like, you can do evil thing X, Y and Z, but you have to sort of have a way of doing it and if you do it without sanction or without going through the proper channels, we need to then reverse engineer a moral excuse to sort of condemn you and it strikes people as a little arbitrary. You know what I mean?

Jacob Silverman: Very much so and what also surprises me is just that they never really seem to have thought of this kind of thing. I mean, I assume they can’t anticipate every eventuality, but there’s a way in which Wall Street, I suppose, seems stuck in the past with, not that I am some techno-utopian-future-looking-guy, but I mean, even when there was a notable event, maybe you remember this, I forget what year is probably 2013 or 2014, it was definitely during the Obama administration because there was an Associated Press Twitter account that was hacked and they sent out a fake tweet that said that Obama had been injured in a bombing, I believe. And there was this, what they called a flash crash of the market where, you know, everything just tumbled until they put the brakes on and they stopped trading and then the tweet was revealed as a fake and the account was hacked, and life sort of returned back to normal. But there was this huge movement in the market and really because of a piece of disinformation and it was supposed to be this kind of lesson for the market among everything else that’s happened in our society related to disinformation in the last few years, but to think that they’re not really equipped to address this kind of thing and you don’t necessarily have to describe it with the label disinformation, but some sort of, you know, online influence-operation dealing with the manipulation of attention and memes, especially when a lot of regulatory measures about stock trading do have to do with the trading of knowledge and who knows what, and who can reveal what kind of information, you think there would be a little more foresight, but instead, they sort of did what they did after the flash crash, which is they just pumped the brakes, stop the train immediately and convened in the smoke filled room and they’re gonna come back out with it with an answer for everyone.

Adam: Yeah, and the dealer halfway through the hand was like, “Actually, the game’s called ‘Twenty-Three,’ not ‘Twenty-One.’ We have decided that.”

Jacob Silverman: Yeah.

Adam: Because then, you know, this reminds me, this evokes to me that what ought to have been, I think the biggest scandal of my generation, even more so than the financial crisis and I think maybe even the Iraq War, which was the LIBOR scandal, where you basically had an open acknowledgement that for years, the LIBOR, the London Interbank Offered Rate, which was the sort of interest rate, was being manipulated in secret, that banks, Barclays, Deutsche Bank, Citigroup, JP Morgan, and the Royal Bank of Scotland, basically had insider information of interest rates, which was central to their growth and profiteering. I mean, this was, you know, people I knew who were the most hardened capitalists, true believers, like people who drank the Kool Aid unfortunately, were like, outraged by this, right? This was sort of the, this violated a key tenet of the supposedly free market. And basically, it kind of was a story and then went away, but it really did expose this is all fake, you know, it’s just, again, I know, this is maybe a little bit of leftist dogma, but I do think it’s true. It’s just all fake.

Jacob Silverman: And I think what we sometimes don’t realize until stories like this come out is that a lot of industries are based on competition, sure, but there’s often also a sort of constructed or rigged competition. There are rules of the game, there are agreements, sometimes against the law, that underwrite the whole operation and serve the rule and the rules that everyone abides by. I write about tech a lot. So one thing that comes to mind for me was, there was an agreement between Steve Jobs when he was still alive and the folks at Google and a couple other major companies to basically artificially suppress salaries for Silicon Valley engineers and software programmers and and other sort of highly educated, highly sought after staff. One way they can do that was by not poaching from each other. There was a settlement I believe, in the last couple of years over this, but you know, again, That’s another example of big companies, close to monopolies, if not monopolies, but they still manage to find ways to kind of rig the market for themselves, in this case against their own labor force.

Nima: Yeah. I wonder how much of this has to do with ascribing terms to things when they happen and are noticeable as opposed to the things that just always happen and what I mean is “momentum trading,” the idea of “momentum trading.”

Jacob Silverman: Yes.

Nima: Can we kind of discuss that a bit and what it means in this context and isn’t everything, potentially “momentum trading,” it just depends on where the momentum is coming from?

Jacob Silverman: Well, I think one problem with “momentum trading” is also that when the momentum seems to be so artificially driven, and so kind of malleable to, again, it just seems online social media driven energy if anything is sort of kind of an artificial market force that is, and you end up in a very strange place.

Adam: This is where it begins to merge into so much of what we talked about in the show, which is, and you touched on this earlier, which is this clergy class of breaking down the kind of mystique and the mystery and the awe. If you’ve ever had the privilege of going to the Vatican, you walk in there, and you look up and it’s so huge, it’s so big, there’s so much grandeur and marble, and it just really is truly the definition of awe inspiring, and the first thing I thought to myself, when I looked up is I said, oh, yeah, I could definitely see a peasant walking in here in the 17th or 18th century thinking these guys definitely have a hotline to god, for sure. This is so huge and awe inspiring and mysterious that, yeah, I could buy that these guys are down with Jesus and they talk to him on a daily basis and this guy’s the Vicar of Christ on earth. I could see that being plausible. You see this with a lot of ancient religions, you see the sort of grandeur to it that the opacity and the mysticism and the inscrutable language is how you kind of scare the shit out of people. And one of the things you touch on is that, what this episode does is it shows the man behind the curtain a little bit, and it pulls back on that mystique, and I want to comment on why that sort of inscrutable nature of quote-unquote “economics” is central to this mass psychology that, ‘Oh, yeah, these people know what they’re doing. They’re the smartest people in the room and all their vast amounts of wealth are by definition earned because they have some skill, or they have some access to the sort of free market gods that we don’t have.’

Nima: And that we need them.

Adam: We need them. We need them to interpret the inscrutable text, right.

Jacob Silverman: Right. I think there’s definitely, you could say there’s a sophistication to some things that finance does, I mean, they code complicated algorithms, they analyze all kinds of market dynamics, ingest all kinds of data and things like that, but a lot of it does come down to, can you justify it socially or morally or as useful to sort of the common good or people’s lives? And in most cases, you can’t, so then it does kind of get wrapped up in its own sort of mysticism, there are religious aspects to it, I think, or at least anything you sort of put on that kind of pedestal as a totalizing belief system. So that kind of gets us back to why this whole episode is so shocking in some ways because we’re witnessing, not just something bizarre and unexpected, but we’re also witnessing people from the financial establishment who really believe strongly in this stuff and in the given order and the status quo, having their own belief system being sort of shaken before eyes and we’re seeing that play out on Twitter and on CNBC and elsewhere.

Nima: Totally, I think a great example of that is this tweet from Neil Irwin, Senior Economic Correspondent for The New York Times, today, this is January 27, writing this, “Trying to make sense of the Gamestop thing as a 42 year old who has covered econ and markets for 20 years, I feel like Don Draper sitting back and trying to listen to the Beatles, then giving up after a short while, confused and discomfited.” Obviously, the reference to the Mad Men episode that ends with “Tomorrow Never Knows,” and it’s this, you know, the new sound with the reverse guitars, etcetera, etcetera, and it’s just totally inscrutable, right? Can’t understand this, the Don Draper style does not compute with this and I think that reporters and market followers today are really like, ‘I don’t even know, this is just so not how it works. Like, what do I even do about this?’ And I think that that is kind of exposing so much of what we’ve been talking about today, which is like, well, you know, I guess if you think you know what the rules are because they’ve been rigged for so long, then when there’s anything different, it just throws you for a loop.

Jacob Silverman: Yeah. And I think one thing that this sort of reminded me of today or made me think was that we kind of got out of the 2008 recession with the banking industry and finance not really questioning its priors or its first principles or really having any humility because most of them just got bailed out. Obviously, for a lot of people the 2008 recession was a time to question those things and to think about socialism or other forms of political economy, but I think for the finance industry itself, they sort of escaped any sort of psychic or ideological reckoning or however you might want to describe it and while this isn’t necessarily an earthquake, we have to see how far this reverberates, it has that kind of potential, or at least it exposes some psychic crack there, where suddenly they’re saying, as you just described, ‘Wow, this isn’t how things are supposed to work and maybe that says something larger about how we do things.’

Adam: Yeah, because we definitely don’t want to overemphasize it, as you note in your piece, this will almost certainly be corrected in a matter of days.

Jacob Silverman: Right. That’s important to say.

Adam: Because the markets themselves are private, they can just make up any arbitrary rule they want, right? They can change the game to 23, you know, mid shoe, and I think that it probably will, it’s sort of a fun gag, everybody enjoyed it for a week or two, you know, like we talked about, because everybody likes to see the casino lose. But, you know, one of the things that you sort of touch on is, I guess the, one of the take home themes is this idea of elite institutions losing legitimacy, which is, I guess, probably the key theme of, you know, the past 10 years, right? Ever since Occupy, maybe even after Iraq, and I want to talk about that and the kind of specter of watching the kind of big guys stumble around and get beat at their own game and whether or not there’s any kind of political utility to that, or is it simply just kind of a spectacle in your mind?

Jacob Silverman: I think there’s some political utility in that people are enjoying this because largely they have criticisms of the banks and of finance that are in general legitimate, not everyone might share the same criticisms on say, the left or the Reddit-right, and again, even these Reddit people may not be a monolithic political grouping but, you know, a lot of people do think finance has too much influence over our economy, it’s swallowed up too much of the economy, or that there’s too little accountability for bankers that can make crimes or that hedge funds themselves are just not very socially useful, and shouldn’t have vast funds and influence that are available to them. So those kinds of political critiques are things I think you can draw from this. I’m not saying that everyone involved is thinking on that level, again, we don’t want to make that mistake of saying that these people are all revolutionaries, much less that they all have kind of a progressive or left political persuasion or even doing this on the level of politics, but I think those are the kinds of lessons that I draw from this, which is that there’s room for people, either people are acting based on some of those impulses, or there’s room for some of those people to be educated in that direction to say like, ‘Actually, yeah, I agree.

Nima: It’s a learning moment.

Jacob Silverman: Yes, it is sort of a learning and teachable moment and kind of a big tent sort of expansion sort of moment, where we can bring other people in and say, we love that you’re doing this because this speaks to our politics and because of XYZ.

Adam: Yeah, because it can sort of branch two ways, it can bring, you know, your dad in the ’90s got free cable, you can either go two ways, you know, maybe we should talk about the monopolization of the cable companies and how evil they are and work to change that or why don’t we figure out more clever ways of stealing cable? And I’m afraid, it’s almost certainly going to lead to the latter, which is, what are more clever ways we can game the system as opposed to like, we just exposed the system’s bullshit, maybe there’s a bigger political discussion, because the ultimate way to game the system is by seizing the means of production. That’s the ultimate life hack. But unfortunately, I don’t think that will be the lesson that’s vomited out of this episode.

Nima: Yeah, probably not. I mean, something that I’ve also been seeing, and it’s not maybe the primary reaction, but for instance, marketing Professor Scott Galloway at NYU, made this point, and I’ve seen it a few other places with relation to the kind of, you know, how have the Redditors taken control of the economy, etcetera, and one of the kind of tisk tisk reasons that is articulated, Galloway makes this point in a thread that otherwise has nothing to do with this, and that is weird for its own reasons, but credits people being not only bored, but having stimulus checks that then they used to, like, ‘Oh, now they have this money that they wouldn’t have had otherwise and they’re sitting at home bored during a pandemic and so they’re just deciding to fuck with things.’ But what that does, is, it’s framing stimulus checks, things that most people need to feed their families as this thing that now has this negative connotation of just these shitty frat guys sitting around with free money fucking with the stock market and so that kind of framing of where the problem lies, is something that I think we should really be paying attention to because I think it could be really exploited for bad shit and perverted for talking negatively about things that are ultimately positive.

Jacob Silverman: Yeah, and I think that’s almost like a Welfare Queen sort of stereotype updated for the pandemic recession and it goes back to this sort of class issue that the fact that these individual investors and these Redditors are seen as sort of low class and they don’t belong in the club. I mean, one thing, we don’t have to get into it too deep, but one thing that is sort of a catalyst here, and kind of opened the door, I think, to more people, is the presence of online trading platforms like Robinhood. So, I wouldn’t put this in the same category as, Oh, everyone has a stimulus check to mess around with,’ because obviously, most people haven’t even got them and for a lot of people, that’s essential money.

Nima: Right.

Jacob Silverman: But there are tools out there that have made investing and small time investing a lot easier, a lot more seductive, and a lot more sort of gamified, and a lot more of a social media infused experience. So if you’re part of this kind of mini-movement, if you’re on Robinhood, and tracking all these other people doing the same trades and on Reddit and on Twitter, you can see how this sort of communal and group think kind of takes over.

Adam: Yeah, and I think that there’s definitely again, there’s two branches this goes and it’ll definitely just be a kind of libertarian troll, ‘How do I game the system?’ Kind of even almost sort of a Mr. Robot-type, the lone man or a group of lone, brave men will sort of meet the system at its own game, but there’s never any kind of existential analysis, which is, you know, that’s what it is and it’s Reddit, there’s nothing really more to expect, I’m not too upset by that, but I do think that watching these elite institutions and finance journalism, which is of course, like the most sycophantic journalism, other than maybe tech journalism, watching them scramble, I think is definitely, like you said, at a teachable moment. So I really appreciate you coming on to talk about that and kind of parsing all this stuff, because there’s definitely a lot of themes here we can tug at.

Jacob Silverman: Oh, well, thank you. Yeah, it’s fascinating and it’s something that is besides just being a great sort of meme and thing to dominate the news cycle, it does raise some good questions.

Nima: Yeah, and again, thank you so much, Jacob Silverman for joining us on Citations Needed. Jacob is a journalist, writer, usually on technology and national security for The New Republic, has also written for the Baffler and New York Times, Slate, LA Times, Washington Post, he is the author of the book Terms of Service: Social Media and the Price of Constant Connection. Jacob, thank you again, really, for joining us today on Citations Needed.

Jacob Silverman: Thanks. Glad to do it.

Nima: And that will do it for this Citations Needed News Brief. Thank you all for listening. Of course you can follow the show on Twitter @CitationsPod, Facebook Citations Needed, become a supporter of our work through with Nima Shirazi and Adam Johnson. All your help through Patreon is so incredibly appreciated. We’ll be back soon with another full length episode, but we’ll leave you for now, unless of course, there’s more GameStop news tomorrow, but thanks again. I’m Nima Shirazi.

Adam: I’m Adam Johnson.

Nima: Citations Needed is produced by Florence Barrau-Adams. Associate producer is Julianne Tveten. Production assistant is Trendel Lightburn. The transcriptions are by Morgan McAslan. Music is by Grandaddy. Thanks again everyone. We’ll catch you next time.


This Citations Needed News Brief was released on Tuesday, January 28, 2021.

Transcription by Morgan McAslan.