The Madness Of Crowds February 1, 2021February 1, 2021 Before we get to GameStop, start with this: More than a third of Republicans believe the QAnon conspiracy that Donald Trump is waging a secret war against a shadowy cabal of paedophile cannibals is “mostly true” . . . So, for the record: > No Democrat I know has eaten children or worshipped Satan. > Though some Republicans deny it, the Parkland massacre — like the Holocaust — was real. > The 9/11 attackers really did crash American flight 77 into the Pentagon. > The Clintons did not murder John Kennedy, Jr. > I’ve met George Soros. He’s done more to champion freedom and democracy around the world than anyone I can think of. The idea that he used space lasers to light California’s forest fires is insane. As is the idea that someone who believes these things would have been endorsed by the leader of the Republican party; would have been elected; and would be appointed by her Republican colleagues to the Education Committee. The difference between our fringe and theirs is that our “fringe” fights (peacefully) to give the average American a better deal: Higher wages. Consumer protections. Health care. A habitable planet for their kids. Crazy s–t like that. Their fringe beats Capitol Police with American flags, wears Camp Auschwitz t-shirts, and seeks to murder the House Speaker and Vice President. To which their leader, watching gleefully on TV, eventually responds: “Go home. I love you. You are very special people.” Their fringe are evangelicals — especially the one African American in the crowd the camera dutifully zooms in on — who just laugh at the notion Joe Biden could have won. (WATCH!) Because who who better embodies Christ’s teachings than Trump? The first crowd madness we are living through is the madness of those who’ve been conned into believing Trump and Putin are the ones to be trusted — the good guys in this tale — while the 84 million who voted for Biden are somehow in league with the devil. [BONUS: Tips on deprogramming a QAnon cultist.] The second, shorter-lived and far less consequentional madness — which is not so mad at all, really . . . is the coordinated set of short-squeezes being played out on Wall Street these days. If they were literally coordinated, they would probably be illegal. (I’m pretty sure formally banding together to manipulate stock prices crosses some lines.) But for a crowd of small investors — followed by some big ones — to see the vulnerability of hedge funds’ large short positions in certain stocks . . . and then to bet there will be a short squeeze from which they can profit . . . is neither illegal nor “mad.” Unlike the crowds who blindly purchased shares in the South Sea Company centuries ago, most of today’s crowd buy GME, AMC, and the others knowing full well the underlying stocks are overvalued — but buying anyway in a game of musical chairs from which many, including friends of mine, have profited by getting out before the music stopped. (The music will stop. Those buying when it does will suffer huge losses. But the beauty of it, from the little guys’ point of view, is that most of those buying at the top will be hedge funds buying from them to cover their shorts.) The Robinhood crowd are, in many cases, “mad” — angry — that they’ve had such a rough go of it these past 40 years, as the richest of the rich just kept getting richer and richer still. But they are not “mad” — crazy — to feel this way . . . or to revel in this rare opportunity to profit from a loophole of their own. Short-selling is not evil per se; it can add to the rationality of stock prices. Short squeezes, probably do more harm, as there is nothing remotely rational about GameStop at $350 a share. But to the extent a load of little guys successfully exit with modest windfalls at the expense of the mega-wealthy . . . well, it’s a colorful, if haphazard, way to chip away all-too-slightly at the massive wealth inequality from which the U.S. economy now suffers. (Again: see Nick Hanauer’s letter to his fellow billionaires for how dangerous-to-democracy this inequality is.) The third madness of crowds relates to our response to COVID. The madness of people refusing to wear masks. The madness of our — largely alone — keeping schools closed as much as we have. The teachers unions’ understandably see their role as protecting teachers. Where are the children’s unions? Just open the schools, already, argues the Atlantic. “There’s little risk of coronavirus transmission in classrooms,” argues Mike Bloomberg. “There’s immense risk for students stuck at home.” (The qualifier, as always: protect high-risk teachers and staff! Have them remotely teach kids who can’t avoid close contact with high-risk adults.) Have a great, sane week.