There’s a popular theory about how our financial markets work that goes like this: The markets are efficient mechanisms for “price discovery”—as in, the ideal price. The true price, the real one. That’s the part of the theory said out loud. The GameStop meltdown has revealed the unspoken corollary: that the markets are right and efficient and so forth so long as they’re run by the right people.
Now the experts tell us that the true price on the market changes every day, because the fundamentals are always changing, even though they’re fundamental. It’s very confusing to normal people. That’s why we need the experts—like the ones on CNBC, devoted to interpreting the fancy graphs. And those experts, for doing us this service, deserve to be paid, they say. That’s why they trade stock options on the very predictions they make on TV. And they usually pay out.
But options traders aren’t manipulators, we’re told. Heavens no. They’re doing the market a service, saving us from false beliefs—like the common belief that one can have a claim to 100 percent of a stock’s value. The options traders know better; until recently, they were trading options on 140 percent of GameStop.
Naturally, people are somewhat suspicious of this whole system. Every so often it seems to crash the entire economy. But even when it’s supposedly working, something seems off. After all, this money—that free, zero interest cash gushing out from the Fed—is supposed to be flowing through this Rube Goldberg machine to Main Street, somehow. When it doesn’t make it there, normal people want in on the game.
And the elites are happy to help. Enter Robinhood—as in, steal from the rich. Robinhood was the trading platform for the little guy. No fees, no hassle. It was Big Tech, once again, allegedly democratizing another sphere of American life captured by elite control. But like the tech platforms, Robinhood wasn’t really about its users. Its bread was buttered by selling the data on users’ trades to the big players—the elite guys, like Citadel—to give them inside tips on where retail investors were sending their money. And the Citadel guys, in turn, pay off their regulators—like treasury secretary Janet Yellen—in their years away from government for favors when they’re back in power.
All was well and good when harmless data collection on retail traders was all Robinhood was doing. But tech knows from experience that democratizing the elites’ domain is a tricky business. They might start placing their bets against the elites’ interest. But that can’t be allowed to happen. People need to be nudged, for their own protection, when they get out of line.
So when GameStop traders decided to call Wall Street’s bluff—when the elites’ stock options house of cards started tumbling down—Big Tech did what it does best: It shut down their Discord server and closed off the Robinhood purchases. This wasn’t market manipulation, of course. It was just content moderation.
And now the crackdown will begin. Get ready to be told that retail investors are the problem. They’re too unsophisticated to be trusted. They’re herd-like. But do not under any circumstance question the financial system that built the house of cards they toppled. Do not ask whether a few elite traders themselves set off the GameStop buying frenzy—maybe even with their own WallStreetBets accounts—thinking it wouldn’t get out of hand. There’s only one scapegoat that’s acceptable, ever: the free choices of ordinary people who want in on a system that’s not meant for them. That sort of freedom is dangerous.
Josh Hawley is the junior United States Senator from Missouri.
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