3/22/2023 0 Comments Layers of fear gamestop![]() And so, Matt wrote a really interesting piece on GameStop that saw what happened at GameStop through the lens of what’s known as the Cantillon Effect, which is that we’ve been living in a world since the financial crisis where the Fed has kept interest rates near zero. And the further away you were, the more you were harmed.Īnd the core of this idea is that money isn’t neutral. So, back when he wrote his book, what that meant was that the closer you were to the king and the closer you were to the wealthy, the more you benefited. And his basic theory was that whoever benefits when the state is printing a bunch of money is based on the institutional setup of that state. Richard Cantillon was an 18th-century French banker and philosopher. And those of you who speak French in our audience are going to have to forgive me, because I am a classic ugly Midwesterner in my complete inability to pronounce French words. And Matt had written a piece that highlighted something called the Cantillon Effect. Matt Stoller is the head of research at the American Economic Liberties Project and also the author of Goliath: The 100-Year War Between Monopoly Power and Democracy, a book that I strongly recommend.īethany: Yep. And that’s what led us to choose our guest for today. So, there are all these different threads in the GameStop saga, but this ultimately, I think, is a story about American society and where we are now. ![]() And the kind of stories that, to me, do transcend the narrow interest of the business world are the stories that do get at these deeper issues. And, actually, like artichokes, the best part is after you peel all the layers.īethany: That’s making me laugh, because artichokes are actually my favorite food in the entire world. ![]() Luigi: The fascinating thing about this story is, it is like an artichoke, it has many layers. ![]() Speaker 12: That’s not what it is at all. That when the big guys, including one of your main investors in your company, started to lose, you shut down the game to starve the little guy. Speaker 11: This looks like a move by an outfit called Robinhood, which is supposed to be taken from the rich and giving to the poor and doing exactly the opposite. Speaker 10: But then, this morning, something huge happened, and that’s this trading app, Robinhood, just halted anyone’s ability to buy GameStop. Where did they communicate and convene? On these social media platforms. And from there we saw a whole bunch of people become interested in the markets. We have our disposable income, and we can’t spend it socializing or going on trips. Speaker 8: Video game retailer GameStop is set to continue their head-spinning ascent today amid an ongoing battle between bullish day traders and hedge-fund short sellers. I’m always surprised when this happens, because it’s the rare business or economic story that really breaks through and becomes a cultural moment. Luigi: So, Bethany, are you getting messages about GameStop from all sorts of people?īethany: Yes. I don’t think we should kill the capitalist system in the process. Warren Buffett: We ought to do better by the people that get left behind. Luigi: And, most importantly, what isn’t. Milton Friedman: First of all, tell me, is there some society you know that doesn’t run on greed? Phil Donahue: Did you ever have a moment of doubt about capitalism and whether greed’s a good idea?īernie Sanders: We have socialism for the very rich, rugged individualism for the poor.īethany: And this is Capitalisn’t, a podcast about what is working in capitalism. ![]() We believe in democratizing finance, which another way of saying that is, everybody should get equal access to cheating, versus the traditional American model of saying, “No, we want to keep speculation to a minimum, so people can focus on business and working for a living and making useful and productive things.” Matt Stoller: We’ve given up on the ability to stop cheating in the economy. ![]()
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