Those who aren’t applauding the r/WallStreetBets battle against Wall Street hedge funds are, in my opinion, on the wrong side of history. Leaning into their shortsightedness, the powerful politicians, main-stream media outlets, and Wall Street fund managers who were losing billions on their thwarted bet against GameStop quickly acted to end the reddit rebellion.
Within hours of the peak escalation of the “Game Stop Short Squeeze,” folks like Nasdaq Composite President and CEO Adena Friedman, Treasury Secretary Janet Yellen, and SEC commissioners were calling for more regulation of the financial industry — something stock market executives are typically vehemently against. Within hours, Friedman went from an anti-regulation, free market champion to complaining that the stock market is a dangerous place that should only be navigated by professionals.
It’s obvious that the public’s best interest was not kept in mind, and that the real worry for the financial elites was controlling the group of redditors — who more or less acted in the same way that an investment firm normally acts — beating them at their own game. Jordan Belfort (the real life “Wolf of Wall Street”) went so far as to say, “my firm was actually like Reddit,” during an insightful BBC interview. Unlike many on Wall Street, he openly expressed admiration for the redditors, going so far as to joke, “I wish I would have thought of it myself”.
It’s obvious that the public’s best interest was not kept in mind, and that the real worry for the financial elites was controlling the group of redditors — who more or less acted in the same way that an investment firm normally acts — beating them at their own game.
Beyond the obvious targeting by Wall Street, mainstream media, and members of the government, these reddit traders were even betrayed by supposedly “democratic” equity trading platforms they use to make transactions. TD Ameritrade and Robinhood limited purchasing options (in some cases banning purchases altogether) on the specific stocks that r/WallStreetBets seemed to be targeting.
Robinhood in particular has very close ties to Wall Street hedge funds — who pay the trading service hundreds of millions of dollars for user data in order to glean lucrative information on the movements of the stock market. It wouldn’t be a stretch to assume that this relationship could have played a role in Robinhood’s decision to stop the Reddit movement. The irony of the fact that an app named for a person who stole from the rich and gave to the poor is now doing the opposite should not be lost on anybody, but it’s always worth pointing out.
While Melvin Capitol cried about the money they lost and Wall Street leaders decried this short-squeeze as “dangerous”, the humble people of Reddit celebrated. One redditor, “Space-Peanut”, posted a heartwarming comment about what the short squeeze meant to him.
In an interview with Substack journalist Matt Taibbi, Space-Peanut said, “… I didn’t care if I lost every last dollar doing it, I was going to put it on GameStop, just to see them [Wall Street] panic for once. Even if for just one moment they have to think about how they’re going to make their payments for their Manhattan apartments, that’s worth it. They’re playing these games while there are people out there who can’t afford Christmas presents for their kids, can’t afford food. What are these families supposed to do?”
Many others on the reddit page shared exactly the same sentiment, oftentimes even showing pride in their losses as Gamestop stock inevitably came down. That same populist energy has been present in many other movements, including Occupy Wall Street, Bernie Sanders’ presidential campaigns, and even Trump’s 2016 campaign. At their core, each movement gained energy from a distrust in a government that enables a financial system that seemingly steals from average Americans to reward the wealthy.
A good time for reasonable regulation would have been after the financial crash of 2009, which caused 7 million Americans to be displaced from their homes and was likely the cause of at least 10,000 suicides. Instead, Wall Street received bailouts and profited off of the crumbling economy, and no major financiers faced prosecution for the market bust. And as a result, the same backward economics of 2009 happened again throughout the terrible year of 2020. Millions of Americans, again, suffered job loss, cut hours, loss of health insurance, eviction, and even death, while hedge funds had their most-profitable year since the 2009 recession.
Most Americans mostly want one thing: a better life for themselves and their loved ones. That doesn’t change between liberals and conservatives, even if their ideas of how to achieve it differ.
Most Americans mostly want one thing: a better life for themselves and their loved ones. That doesn’t change between liberals and conservatives, even if their ideas of how to achieve it differ. And despite our current political polarization, the people who have been obstructing us from living that better life are not our neighbors. It is the people on Wall Street who believe only they should pull the financial levers of our economy, even if it makes life worse for the rest of us.
It’s no wonder the r/WallStreetBets Reddit channel skyrocketed from about 2 million followers in January to over 9 million by mid February. For one moment, r/WallStreetBets made those elites sweat — and made most normal Americans cheer — and it’s moments like those that show us how similar we really are.
Daniel Goncalves is a writer from New Jersey focusing on our nation’s damaged system of government. When he isn’t ranting about politics, or working as a handyman, he is writing fiction or playing soccer. @dc_gonk