With so much money sloshing around, the frenzy begins
It was amazing how quickly it happened. For almost five years — from Donald Trump’s rise in the 2016 Republican primaries to the Jan. 6 insurrection following his defeat — the lurid spectacle of our national politics sucked up most of the country’s cultural energy.
And then it was over. Trump’s cultural power evanesced as quickly as his political power did. Now everyone except those running in Republican primaries can ignore him. National politics didn’t exactly become boring — Joe Biden’s administration is proving transformative — but it no longer demanded most people’s minute-by-minute attention. That left room for a new national obsession, especially once the vaccine rollout picked up and the end of America’s pandemic nightmare appeared in sight.
Increasingly, as the economy gets hotter, I wonder if that obsession might be markets.
This seems like an odd thing to say, given the near-universal backlash against neoliberalism, an economic and political tendency that put markets at the center of everything. But consider some of the strange new innovations in capitalism we have seen recently.
In January, the Gamestop saga — in which day-trading ironists on internet message boards bid up shares in that video game retailer — inaugurated the rise of the so-called meme stock. This created what Bloomberg called “one of the wildest periods of stock market mania in modern history.”
In March, Christie’s auctioned off an NFT — a nonfungible token, essentially ownership of a digital item — of a compilation of images by Mike Winkelmann, an artist better known as Beeple, for $69 million. The NFT market quickly got meta; articles about NFTS, including one in the New York Times, and a “Saturday Night Live” sketch about NFTS have sold as NFTS for six figures.
The housing market hasn’t been this frenzied since before the financial crisis in 2007, with investors buying up whole subdivisions. New York magazine has a story about a new internet marketplace called Bitclout where you can buy shares in people’s reputations, whether or not they consent. “In theory, every public action and utterance from anyone becomes tradable by anyone else,” writes Jen Wieczner. It seems deeply shady, but Wieczner reported that investors have poured more than $100 million into it.
There are also simpler ways for people to monetize their personalities. In the Times, Taylor Lorenz wrote about a company that bills itself as a “human stock market,” allowing fans to pay to decide what professional influencers wear or whom they hang out with.
Not long ago, the cutting edge in media was unionization. Now it’s independent journalists becoming Substack newsletter entrepreneurs, a business in which the most successful can earn more than $1 million a year. There are lots of reasons for the Substack phenomenon, including collapsing job security at many media organizations. But it works only if enough people have enough disposable income to pay for newsletters that often cost as much as prestige magazines.
Some of this stuff is dystopian — Bitclout is an argument for a much higher marginal tax rate — and some of it, like writers making a living on Substack, is interesting and hopeful. But all of it indicates the way culture changes when there’s lots of money sloshing around.
The fallout from the coronavirus has left many people devastated; a Pew survey in March found that a narrow majority expect the pandemic to make it harder for them to reach their financial goals. At the same time, we’re probably on the cusp of the fizziest economy in decades. The Federal Reserve has forecast that the U.S. this year will see the strongest economic growth in four decades.
In a letter to shareholders, Jpmorgan Chase’s chief executive, Jamie Dimon, wrote that, thanks to factors including government stimulus, increased savings, “a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom.”
This is wonderful news. But watching the bizarre things happening in art and finance, I thought of something I read in William J. Bernstein’s recent book, “The Delusions of Crowds: Why People Go Mad in Groups.” He wrote that one of the defining features of a bubble is that “financial speculation begins to dominate all but the most mundane social interactions,” and “stocks and real estate” become primary topics of conversation.
We’re not quite there yet. But having lived through the 1990s, I remember what the beginning of a boom culture felt like. As happened a century ago after the last world-transforming pandemic, we could be in for a period not just of prosperity but delirium.