The Robinhood CEO speaks of it Democratization of financeand equate it with home ownership as something every American should strive for. George W. Bush similarly challenged a homeowner society when banks began trading complex financial derivatives and putting mortgages on people who could not afford them. The resulting bankruptcy almost destroyed the global economy. As for the goal of universal stock ownership, we have a long way to go –55 percent of Americans According to Gallup, some form of stock, a number that is declined in the last few decades. Big investors like the hedge funds so hated by r / WallStreetBets still dominate the financial industry and are – at least before this week – the ones with the ability to move markets. So, for most of us, the GME phenomenon is bizarre and fascinating, but probably far removed from the material concerns. As the pandemic has shown, the health of the stock market in no way reflects the health of a broader economy hit by record starvation and poverty.
Industry veterans complain that there is no foundation tied to this GME boom – no foundation for corporate sales or a strategic plan to reverse the retailer. So much could be said about the many baroque financial instruments that underpin the wealth of Wall Street while doing little to the common good. The financialization of the US economy over the past 40 years has been a disaster for most Americans – it has brought with it income inequality, recessions, a housing crisis, and what is likely a legitimate impression that the economy is simply not working for them. It is a huge casino indeed, and like any casino, it is rigged for the benefit of the operators and their partners. No wonder hedge funds struggling to cover their positions bring perverse joy to small day traders and socialists alike.
Ultimately, someone has to pay for all of this volatility. If “Meme Stocks” It is unclear to usher in a new era of investment – and the relationship of individuals to corporate finance. It is up to regulators and Wall Street to decide how to respond to this wave of market-moving trollery. For those of us who aren’t trying to sign up for a Robinhood account, we’re nothing but idle bystanders standing at the craps table cheering or just watching in horror while someone else risks it all.