AOC, folk-hero of WallStreetBets
The mainstream press have largely written off this group of retail investors as bad people, but Alexandria Ocasio-Cortez is taking up their cause despite the ostensible political mismatch.
Generally speaking, the /r/WallStreetBets subreddit is a hotbed of ableism, sexism, racism and homophobia, perhaps unsurprising for an internet community that describes itself as being “Like 4chan found a Bloomberg terminal.”
The personality of the community is founded on a juvenile interpretation of the high risk, machismo-soaked conventions we’ve come to associate with Wall Street investment firms since the 1980s, with a resurgent interest after the 2008 financial crisis. Scorsese's The Wolf of Wall Street was a rollicking good time, right?
What WallStreetBets is doing through derogatory language and worldviews (which the author does not condone) is highlighting the sheer stupidity of much of the trading behavior of Wall Street firms. The only difference is that institutional investors have more insurance from the powers that be when their investment schemes blow up in their faces.
WallStreetBets is simply asking, if the stock market is a casino, why can’t I buy a million-to-one lottery ticket? They engage is risky trades for the sport, not unlike what Wall Street firms do themselves.
From that description of WallStreetBets, it would be difficult to imagine the community embracing a political figure like Alexandria Ocasio-Cortez, nor her wanting to engage with them politically, but they are and she is.
If none of the actors involved in this GameStop Short Squeeze story seem particularly sympathetic, neither the 4Chan inspired investment gang, nor the more established well-heeled investment gangs, then what are we to think? Well, we should follow Alexandria Ocasio-Cortez’s lead and treat this as the class and wealth inequality issue that it is.
Ocasio-Cortez’s political-economic and class-based way of viewing social issues means that she understands that the situation is larger than just WallStreetBets.
The GameStop Short Squeeze story is a watershed moment for all retail investors and the retail investing industry in general. This is a reckoning for discount brokers like Robinhood, who so named themselves because they were supposedly revolutionizing stock trading for the general public, with no-fee trades and no account minimums, thus, in their minds, facilitating a massive taking of the rich to give to the poor.
But it has recently become clear that Robinhood’s aggressive marketing and “gamification” of stock buying has lured many novice investors into risking far too much money with far too little understanding of what they were doing, resulting in complete economic ruin for them.
Their name now seems like a cruel joke, after they reportedly (and allegedly) colluded with investment firms to shut down the buying of GameStop shares, precipitating a massive drop in the price which unsurprisingly caused economic disaster for many members of the WallStreetBets community.
Which is precisely what Ocasio-Cortez and other congress people are calling to investigate. Progressive democrats like Elizabeth Warren are also joining the call for investigation.
We should all be asking questions and were this takes us in terms of the future of retail investing, and think hard about why there are one set of rules of institution investors and another set of rules for retail investors. And why do institutional investors have such easy access to the ears of those in power?
We are seeing here a strange, highly volatile confluence of political interests between groups that wouldn’t normally co-operate. It will likely be temporary but it is a glimpse into how the contours of class relationships could be reshaped in the 21st century because of increasing global internet connectivity and the increasing prevalence of retail investment.
The working class aren’t supposed to own capital or invest in anything. It’s how the class is defined. But it’s now possible to refer to oneself as a “working class” investor.
What does this mean for the logic that distinguishes the working class from the ownership class? These will be some of the questions this newsletter, Tendy Town, hopes to pursue, among many other wild and fascinating stories coming out of retail investment subcultures.
This story is only beginning, in the long run society will need to come to terms with these issues outlined here if retail investing is to continue being the primary way people plan for retirement wealth. The rise of the working class investor, the juvenile internet investor, and all manner of amateur investors is only beginning. Please consider subscribing to Tendy Town if that sounds interesting to you.
By the way, the special guest that Ocasio-Cortez mentioned for her Twitch stream tonight is probably going to be Elon Musk. So watch out for that.
Great post! Oh man please let it be Musk.