The Response to the GameStop Fiasco Shows It’s Still Wall Street’s Economy
▻https://jacobinmag.com/2021/01/gamestop-wall-street-free-market-finance
There are two versions of neoliberalism. In the one we’re told exists, the government is kept small and its role in the market kept to a minimum, allowing the beauty of capitalism’s “creative destruction” to flower and sort the winners from the losers, spur invention and innovation, and create the most rational of outcomes for all of society.
In the one that actually exists — a political project of the business elite to keep workers weak and keep more of the economy’s spoils to themselves — the economy is deliberately shaped so as to best serve those elite interests. Sometimes that means a free market allowed to run free, and sometimes that means taking a strong hand to control it: whatever leaves the big guys with the fattest wallets at the end of the day.
We’re seeing this in action right now in the GameStop saga, where a group of Wall Street–trading Redditors this week created chaos in the stock market by artificially pumping up the share value of the struggling gaming retailer, at a time when many on Wall Street were betting it would drop. They’ve since done the same to other stocks, such as theater chain AMC and retailer Bed, Bath & Beyond. Such absurdity is par for the course in a stock market that’s more a bankers’ casino than an actual reflection of the economy, as we saw most dramatically in the record share values of 2020, which came with near-record levels of death and hunger.
But because this time it’s Wall Street that has been left holding the bag, due to foiled short bets, panic has set in among the financial establishment. With major hedge funds and others swiftly losing more than $5 billion (now up to $70 billion), there was nothing else to do: the free market had to be curtailed to protect the titans of finance.