Robinhood’s CEO speaks of democratizing finance, equating it to homeownership as something that every American should aspire toward. George W. Bush made a similar call for a society of homeowners, just as banks began trading in complex financial derivatives and pressing mortgages upon people who couldn’t afford them. The resulting bust nearly took down the global economy. As for the goal of universal stock ownership, we have a ways to go—55 percent of Americans own some form of stock, according to Gallup, a number that’s declined in recent decades. Large investors like the hedge funds so hated by r/WallStreetBets still dominate the finance industry and—at least before this week—are the ones who have the capacity to move markets. For most of us, then, the GME phenomenon is bizarre and fascinating but probably removed from one’s material concerns. As the pandemic has demonstrated, the health of the stock market in no way reflects the health of a wider economy afflicted with record hunger and poverty.
Industry veterans complain that there are no fundamentals attached to this GME boom—no basis in company revenue or in some strategic plan to turn around the retailer. One could say as much about the many baroque financial instruments that underwrite Wall Street’s riches while contributing little to the common good. The financialization of the U.S. economy over the last 40 years has been a disaster for most Americans—bringing income inequality, recessions, a housing crisis, and the impression, probably justified, that the economy simply doesn’t work for them. It is indeed a giant casino, and like any casino, it’s rigged to the benefit of the operators and their partners. No wonder watching hedge funds scramble to cover their positions brings out a perverse pleasure in small-time day traders and socialists alike.
Ultimately, someone will have to pay for all of this volatility. Whether “meme stocks” herald a new era in investment—and in the relationship of individuals to corporate finance—is unclear. It’s up to regulators and Wall Street to decide how to respond to this wave of market-moving trollery. For those of us not racing to sign up for a Robinhood account, we are nothing more than idle spectators standing around the craps table, cheering or just looking on in horror as someone else risks it all.