There’s a reason the GameStop/WallStreetBets drama of the past two weeks got so much attention. It’s because it speaks forcefully to the inequities and systemic problems in both our financial markets and the internet economy and how they’ve shaped our politics and social tensions.

So, in true “Money Reimagined” form, we wanted to have a super high-level discussion about what the GameStop (GME) drama means for the future of money and society. And for that we called on someone who is a master at drawing big-picture narratives around such issues: Demetri Kofinas, the host of the popular “Hidden Forces” podcast.

See also: Money Is a Meme, w/ Lana Swartz and Nicky Enright

Demetri Kofinas 0:00
We had to watch you guys stand up on podiums and lie to us. We all knew you were lying. What I wanted to hear was an apology, something along the lines of you know, I’m sorry, I failed you, we failed you. And I feel that the country is radicalizing people in media, lots of talking heads are capitalizing on it rather than trying to quell it come together. You’ve got people with millions of listeners and viewers on television on both sides of the political spectrum, feeding into the division, and it concerns me deeply.

Adam Levine 0:32
Money is changing. So where do we go from here? through high profile interviews and thought provoking analysis, join coin desks, Michael Casey and Sheila Warren of the World Economic Forum as they explore the connections between finance, human culture, and our increasingly digital lives. This episode is brought to you by the CoinDesk Podcast Network.

Adam Levine 1:02
And just a reminder, CoinDesk is a new source and does not provide investment advice.

Adam Levine 1:11
And now, here’s Michael Casey.

Michael Casey 1:14
Hello, and welcome to Money Reimagined. I’m Michael Casey. Unless the nightmare of 2020 led you to a total information detox, you will know about the WallStreetBets slash GameStop story that dominated financial news coverage last week, members of the Reddit based retail investing group Wall Street Bets, otherwise known as WSB joined forces to place hundreds of buy orders or so called long positions on stocks such as GameStop that wall street was feeling pretty, eh ‘meh’ about they deliberately took on a group of big hedge funds that had placed large short positions. That is bets that the price will fall on those stocks. The idea was to force the funds into a short squeeze, where the rising price would compel them to buy back the stock, which in turn would drive the price even higher and impose big losses on all other short sellers now scrambling as well to buy and for the most part, the internet based horde of retail investors won. Many funds incurred massive losses. One of them, Melvin Capital, needed another institution to bail it out to the tune of billions just so that it wouldn’t go under. along the way, big issues arose for RobinHood, the day traders favored ostensibly free trading app. Now we’ll discuss what free does and doesn’t mean in this show, by the way. RobinHood has made the highly unpopular decision to block trading in GameStop, AMC Entertainment and other web favorites that lead there once surging prices to plunge. People were infuriated tweets from AOC and Ted Cruz even signal that the two diametrically opposed us lawmakers even agree that the system was unjust. This whole episode has shone a spotlight onto the workings of Wall Street and the inequity within it, offering a strong reminder that the imbalances behind the 2008 crisis still exists. It also raises even larger questions about information, money and power in the internet era, including the notion that power may be shifting to decentralized online communities such as WSB and potentially away from the establishment. If that sounds familiar, it’s because it feeds into a narrative at the heart of the crypto movement. It’s such a rich topic, one that demands high level analysis incorporating a historical perspective on the large scale economic and social shifts that have brought us to this point. And to help us do that. I can’t think of a better guest than this week’s Demetri Kofinas. Demetri is the insatiably curious host of the Hidden Forces podcast, which you can find at HiddenForces.io, His show is unique in terms of the gamut of topics it covers, and the way in which he and his guests weave different narrative threads together to arrive at a big picture perspective on what we’re all living through. he’ll join us shortly. First Sheila.

Michael Casey 4:10
Wow, what a story. This is, like, I just want to throw out one number for you to reflect on before we get to Demetri. And that’s the size of the WC subreddit group. And how fast it grew as this saga dragged on. At the end of the year, it had 1.75 million users, which is you know, pretty big number. But it now counts 8.4 million among its members. Clearly there’s a feedback loop here.

Sheila Warren 4:39
Yeah,

Michael Casey 4:40
that want in on this. This is a phenomenon. I mean, this is a true social internet phenomenon.

Sheila Warren 4:45
I totally agree. You know, I think our colleague, NLW, put it really well on Twitter when he said there are two types of people on Twitter right now there are those who recognize this for the tremendously significant cultural moment that it is and there are those who do not yet

Sheila Warren 5:00
realize what a tremendous a significant cultural moment. This is. And I think that to the themes of our show, this really does capture, it kind of encapsulates in a microcosm, a lot of the power dynamics that we’re talking about how we think about money, who makes money, who gets to make money, the permissions that we attach to the society around and making, holding and use of money. And I think whether it was engagement by, you know, business and cultural icons, everyone from Elon Musk and Chamath, weighing in on this, it was dominating the news cycle on not just financial, you know, CNBC types of shows all over the place, but also just really forcing a reckoning. You know, in my mind, I think what’s really interesting about this is how it’s juxtaposed with our considerations with this new administration and the Biden administration, the priorities that they have yet to really articulate, and we’ve gotten some clues as to how the new appointees might feel about some of these topics. But you know, we’re still giving them kind of a hell of an opportunity to, to really land big with something and come up with some statements here. Still remains to be seen what kind of happens there. But yeah, I mean, talk about just like a COVID situation, talk about a massive reveal, and pulling back the curtain on how some of these things work, algorithmic trading, all these kinds of systems and bringing that into popular awareness.

Michael Casey 6:17
Yeah. And going to the belly of the beast, right? I mean –

Sheila Warren 6:22
Yeah.

Michael Casey 6:22
Wall Street is the thing. It is the most American of stories. And speaking of stories, Demetri, let’s welcome you in here. First of all, thanks for joining us, I’ve had the pleasure of being on your show, twice, which I have always thoroughly enjoyed. I feel like you have a unique gift to steer conversations, when we hit upon these big, like onion like stories where you have to peel away all the pieces, you just demand for this. So I’m thrilled to have you here.

Demetri Kofinas 6:50
Thank you.

Michael Casey 6:50
What I want you to do, though, is to like look at the concept of narrative itself, or I would just use something of a master of, because as far as I’m concerned, it is everything when it comes to what a price is, at the end of the day, the whole concept of a market is this idea that there is a collective consensus around what value is. There’s no such thing as a fundamental, absolutely accurate price, it is a function of what everybody agrees to be the price. It’s a battle of narratives, right? Whether you’re a bear or you’re a bull. And historically, Wall Street has controlled the narrative. So I find this really interesting that there’s a sort of a merger of the internet here, bringing, you know, essentially storytelling capacity to groups. And so as much as a lot of Wall Street traders will look at this thing going ‘these crazy redditors. You know, like, don’t they see GameStop has got no chance it’s a has-been stock and so forth, is fundamentally wrong’. Well, who’s to say they’re wrong, right? I mean, that might seem insane that GameStop was reached the levels that it did, but it’s really all about who owns the narrative. And Wall Street’s always owned it, too. Now, what do you make from all of that?

Demetri Kofinas 7:59
Thanks for having me on. By the way. There are, I think, a lot of interesting angles to this story. First of all, the observation in and of itself, that everything is effectively a narrative. I think that is, if not new than the recognition or the consensus that everything is just a narrative is relatively new. I do think there is something else that’s new, which is that we are in this hyper connected world. And we have also this unprecedent amount of balance sheet expansion that’s gone on over the last 12 years with fits and starts. And so I think those things factor into it. I mean, if you want to talk about the big narrative, driving all of this, I think at the core, the sort of God meme is the Fed printer go BRRRRRR. I think that’s ultimately like at the core of it. And I do agree that Wall Street has traditionally controlled the narrative and financial media through Wall Street, etc. And I think what’s interesting here is you see a lot of competing narratives, like a narrative war going on, you guys got like Chamath going on CNBC, Elon… You have a lot of behavior also, that would have been considered really out of bounds. And in some ways, I have to say, when I saw Chamath go on CNBC, the first person, I thought it was Donald Trump, Donald Trump in the 2016, Republican primary, I don’t know if anyone else had this thought. But when you criticize Steven Cohen, if he did, or if it was just the CEO of RobinHood, it reminded me of like, Trump going after Jeb Bush, the corrupt establishment, and then positioning himself as being the leader of the resistance of the anti-Wall Street movement.

Demetri Kofinas 9:28
And the comparison between Wall Street bets and occupy wall street feels off. And it also feels somewhat contrived. And maybe it’s also a reach because they both share the same name. But I think that’s what I think there’s a huge narrative competition. I still think value matters. But I do think we are in this hyper real hyper connected society at the perhaps very end of a bubble, but it’s felt like we should have been there for the last five years. That’s kind of where my head’s been at with this stuff.

Sheila Warren 9:57
I think that the parallels people are drawing between Occupy and Wall Street Bets had been similarly somewhat bewildering To me, it seems like quite a bit of a reach. I agree with you on that. Certainly, if we zoom way out, we can say, ‘Yeah, okay, it’s kind of this like anti establishment’ but whose comprising that I find really fascinating because with Occupy, the coalition around Occupy was not as made up of as diverse voices, shall we say, as this one where you have actual literal billionaires, right? Political leaders from both sides of the spectrum kind of coming in and saying, ‘Go team’ in a way, you know, and spurring I think some of that massive growth, Michael, that you noted, like, I think there’s a lot of like, curiosity seekers, you know, I’m sure who joined the subreddit, just to kind of figure out what kind of, you know, troll a bit or see what’s going on. But there’s no question that those things are significant, right? I mean, I think that the audience is that some of these people AOC even Ted Cruz, you know, Elon, Chamath, the audiences that they capture, particularly from people who aren’t necessarily going to go and do their own education around the topic, are huge. And so getting to the question of narrative, and I think we have to acknowledge in our society, we are in a world where celebrity type status around certain individuals and those come from various sectors, various geographies, there is an outsized amount of control of narratives or shaping of narratives some of these people have. And so it begs the question like, what is their interest in doing this? What is their personal interest? And what is their agenda around some of this stuff, right? And I think layering that into the more grassroots, you know, kind of orientation of what happened on this subreddit Initially, I find that really fascinating. And I feel like we’re not talking about that enough.

Demetri Kofinas 11:38
The memetics aspect is also fascinating.

Sheila Warren 11:41
Yeah.

Demetri Kofinas 11:42
Like, I don’t know how much time you guys have spent. Yeah, looking into the meme culture on the internet-

Michael Casey 11:46
Our first episode was all about money is a meme, by the way,

Demetri Kofinas 11:49
Oh, fascinating. So I got to listen to that one. I mean, I had Lily Francus is on my program. She goes by the Twitter handle, @nope_its_lily. She’s got a fascinating take on this stuff. And it’s unique in that she’s focused on both the options trading side and also the meme side. But we spent basically the entire show talk- Well, not the entire show, but a lot of talking about the memes. I don’t know if you guys saw that video of the Joker circulating where they dumped it over. And he’s like, What do you get when you cross an entire generation that…

Michael Casey 12:17
Yeah

Demetri Kofinas 12:17
I mean, that’s, that stuffs wild. That’s really powerful stuff. And it’s like, it’s the way that an entire generation now that’s been, you know, internet, natives communicate, and organize. And that’s what we saw, in the case of Wall Street Bets, you see this persistent organizing impulse. And similarly with everything else, cryptos like ground zero for this, right? Like, so often, I get DMs from people saying, everyone’s talking about chainlink right now. It’s gonna pump.

Demetri Kofinas 12:42
You know, for me, I’ve had this sort of value investing mindset. It still is not intuitive, you know, but then that goes back to your point, Michael, about narratives of the kind of man at the top.

Michael Casey 12:54
One of the reasons why it’s an easier story to tell about crypto than it is Wall Street Bets, right, is because when you talk about a token, and certainly I would only really limit this to tokens of blockchains that actually do have some real value underneath them. There are plenty of pumps and dump stories, there’s just absolutely, but the vast majority of tokens would probably fall in that category, but the big ones, and there’s quite a number of them. Yes, there are these tribes, right, these crypto tribes who emerge, who get in there and pump it up by gathering and telling the story. They’re often quite passionate about it. And that’s, that’s fine. But the thing that makes it distinct from say, pumping up GameStop is that they themselves are the value proposition in the sense that the value from a blockchain comes from the network, right? Like it’s the network effect of the number of people who are into something that literally is its value, right, money is a function of that Metcalfe’s law type thing. And the same goes for, you know, the security of a blockchain network. So there’s this self-fulfilling part of that conversation that makes crypto a little different. But at the same time, it is absolutely central to these bigger issues as well, because it is the network effect of something like Wall Street Bets, that speaks to this new concept of power, that we can actually collectively organize, and act. And I try to get back to occupy wall street because I think it is inevitable, again, because people like memes and narratives, this thing wouldn’t be getting anywhere near the traction was getting, if it was just trying to make money off it with hedge funds. It is precisely the fact that they use the narrative of insurrection of taking over now that is really powerful. It does have parallels because of the language. But here’s the point. I also think it’s important, and that is that this is really hitting Wall Street in his pocketbook, whereas the only mechanism for this Zuccotti Park protesters to make a difference really was to appeal to their representative leaders and say, Hey, do something regulate. This is different. This is seizing the mechanisms of power.

Sheila Warren 14:53
I’m not convinced that algorithms haven’t just adjusted some of this behavior, you know and that we aren’t seeing Wall Street. Take Both sides of this and come out on top regardless, I mean, maybe it caught me more of a cynic on this, I certainly think the initial brunt of this was a big shock to the system. But I mean, these algorithms and traders and analysts, they adjust pretty fast. And so I’m willing to bet a lot of that influx of new, you know, redditors, on the subreddit is analysts, right? Who are just really watching that and extracting whatever insight they can to kind of figure out what ships are coming in, where things are gonna go. It kind of leads us directly to the question around like, free speech, political speech, privacy, these kinds of things. Like, one thing I find really interesting about all this is, it leads us to the question around one consumer protection, who is the consumer that we’re trying to protect? What is protecting me? Right, are we willing to and you saw this, I think in that sort of infamous clip that went around, you know, to mouth on on CNBC, are we gonna throw out like everyone’s possible gains of all of these randoms citizens so that I small, very small minority of them will be protected from doing things they don’t understand and potentially losing their retirement savings or their shirts? Or are we going to try to come in and say, we accept a certain amount of unfortunate circumstance in the system in the name of increasing democratizing access in the interest of shifting these power dynamics, like things like this? You know, to what extent are we being patronizing or paternalistic if we say that there’s no way some random person on Reddit is going to be able to understand the complexity of trades? And this kind of, which is, I think, patently untrue, right? And offensive, frankly.

Sheila Warren 16:29
But where do you come out with all of this, and I think where you come out with this has an awful lot about us, as a society, it’s going to say an awful lot about individual personalities of regulators who are going to come at this with a particular approach. And it gets back to things we’ve talked about a lot on this show, Michael, which are like the personalities involved here, right? The idea that you don’t come to this without your own view of what makes a functioning economic system, what makes a functioning, you know, trading platform, like how should these things work? How do they work? Who is being empowered? These are all really fundamental questions. My view is, the more transparent we are about it, about the complexity of these things, the better off we’re going to be as a society in terms of maybe making some new rules.

Michael Casey 17:08
Dimitri, the algorithms just gonna fight back and take over.

Demetri Kofinas 17:12
Well, I mean, obviously, it is a cat and mouse game, right, so Wall Street’s gonna adjust.

Demetri Kofinas 17:17
What sort of came to my mind, as I was listening to Sheila talk was, again, this distinction between Occupy Wall Street and Wall Street Bets. And this is something I’ve talked about on my show before, this observation that our society feels like it’s become much more nihilistic. And there’s something self destructive about the way in which Wall Street Bets is described as a social movement. It’s not a revolution, I mean, the solution to the things that plague our society are not going to be advancing, democratizing the tools of speculation, you know, like, that’s ultimately you can’t have a casino economy for an indefinite period of time. So I feel like, while it’s true, I don’t know if it was Michael or Sheila that made the point that it was you, Michael, that this hurts Wall Street’s pocketbook in a way that Occupy Wall Street didn’t.

Demetri Kofinas 18:04
True, I suppose, certainly the implications of what it could mean the fact that there’s this roving group of terrorists going and ‘blowing up’ different equities that you might have open short positions in. But I think that, that occupy wall street was much more focused on actually advancing a social agenda that was, could rectify the problems of society. I mean, that case, the 2008 bailouts, the consequences on the real economy. I don’t see that today. And it troubles me that the conversation has been co opted by individuals that are attempting to suggest that the solution to the problem is democratizing the tools of finance, democratizing the tools of speculation. That isn’t an appealing narrative to me, and I don’t think that gets us to where we need to go.

Michael Casey 18:45
That’s a really good point, an interesting one and zeroes in on the core issue. I do think, though, that you can draw this line between the two, right? I mean, you wouldn’t have had, as I said, the power of this particular episode, if it weren’t for I think the language and reference points that the prior setting established. I mean, that’s being co-opted and turned into something just nihilistic. Perhaps it’s also self serving, self interested. Yeah, that’s a valid and cynical, but probably quite accurate perspective. But I wonder as well, though, as I mentioned, in the monologue, I mean, this remarkable moment, where we saw two tweets come together from Ted Cruz and AOC, essentially making this point. Now, that’s also self serving, right, jumping on the bandwagon being seen to be playing here, but it is raising the conversation. I feel as if you know, the front page of every newspaper is addressing this.

Michael Casey 19:33
Are they getting it right? It’s so complex to Sheila’s point that probably not. A fundamental problem that we’ve talked about for so long you and I’ve talked about it a couple of times, Demetri, of the excessive power of captive politicians, and money that runs it in Wall Street’s hands. And the distortions that that has created in the decision making around our political process is very, very real. And it goes to the heart of the, you know, imbalances in our society, the massive wealth inequity and everything else. So it’s putting it front and center again.

Michael Casey 20:08
Now, they’re pretty good at making us, ‘oh, look over there, a shiny object, you know, look at something else,’ which makes me sound very conspiratorial. I don’t usually wear a tinfoil hat. But it does work like that, right, there is this sense that we just lose attention, and we move on to something else. However, at least for the moment, there’s a conversation about it at a really interesting moment, because we’ve got an entirely new administration coming in. So I don’t know. I mean, both of you, Sheila? Demetri? I mean, do you see this having any real political impact in terms of, you know, legislation, in terms of priorities in the Biden administration?

Sheila Warren 20:42
The end there, you know, there’s the Biden administration certainly. And I think you’ve got Elizabeth Warren, you know, still very much active in the conversations, you’ve got the CPFP, this consumer protection financial bureau, that’s going to take a more of an active stand on some of these things, I’m sure. And we’re gonna start kind of thinking through that. But I mean, let’s just look at one of the major players in this scenario, right. I mean, Chamath has also come out for recalling the governor of California and announced his intentions to, you know, to run. And so I was on a call with someone yesterday, who very blatantly told me that the only reason he cares about making money is so that he can influence politics and political process. These things are inextricably linked, you’re seeing a lot more influence right?

Sheila Warren 21:24
Over the course of time, Citizens United was like, sort of a harbinger of of this era of a tremendous amount of corporate money coming into political process, these things are not at all separated. It used to just be like, there were lobbyists. And then they were kind of they had to do a lot of disclosures and things like this, you kind of understood who was talking to whom you could track it, right? Like, and you had like, groups that came out, you had the NRA, giving people grades and this kind of thing. Most of that, frankly, like the majority of it is now hidden, like you just can’t access that you have no idea where the money is going, or how it’s being flushed, where it’s become increasingly opaque. I think that has led to a lot of the current political system being what it is like that is the direct… The most direct link. So I think we can’t separate money from politics. As we all know, we’ve all talked about this many times on our various shows and in our writing. It’s really about what the opportunity is here. So what’s the vitamin stration going to do? Well, I hope they start having a more open conversation about the link between money and politics. You know, I certainly hope that happens, do I think it’s going to happen? It kind of remains to be seen, but you do have, you know, very vocal members of Congress. AOC is one of them. But there are several others, Katie Porter, who you know, her famous whiteboard, which I’m obsessed with, that just break this down in language that ordinary people can understand. And they eliminate some of that complexity. Because these systems are deliberately complex, that’s something really important to understand. They don’t have to be as complicated as they are. They are very complex, in part because regulations require certain kinds of reporting, whatever, but in part to preserve an opacity that makes the flow of money very hard to track.

Michael Casey 23:00
I’m gonna jump in before you speak to me, because I want to just set you up a little bit here first, right? Because what I find fascinating at this moment, I know that you’ve thought hard about it. Did you know citizens united create this issue around opaque money and politics? it coincided at the same time that the business model, Shoshana Zuboff has now given us the language to talk about, of surveillance capitalism also emerged, which is also equally about opacity, in terms of how information is gathered and used. So when I hear about that we don’t know where the money’s going for politics. We don’t know which bots delivering and taking advantage of these centralized platforms. Which brings us back to the question of crypto and whether or not we have a decentralized solution, but centralized internet platforms for which the business model is entirely built around creating information monopolies that they can literally obscure from you and alter your behavior. You know, one of the comparisons that Chamath himself made about RobinHood, which I thought was very interesting was that he used the Bruce Schneier quote and said, You are not Robinhood’s customer, you are Robinhood’s product. To me, that is like taking surveillance capitalism to the next level, because not only are they using your data, selling… That’s what Robin Hood does, right? You trading for free, but you’re ultimately your data is now a type of flow orders that allows bigger players to use that data and essentially trade against you. But it’s being injected straight into the capital markets themselves. Anyway, like there’s a convergence there between money politics and internet power, and algorithms and opacity, the lack of transparency.

Demetri Kofinas 24:33
Sure, yeah. I want to touch on a couple things. One observation that occurred to me at towards the end of what you were saying is that part of the reason why business models like Robinhood’s exists today, is because people can’t afford to pay the costs. You know, one of the ways that we’ve managed to scale this level of socioeconomic inequality is by… I guess, how would I describe it? Having more dishonest transactions, right, that’s the only way that we’ve managed to be able to do it. So of course, people are going to be more willing to accept ads and all sorts of other ways of extracting revenue from your user base because they can’t afford to pay you for it. It’s the same thing with, you know, reducing the nutritional value of food. It’s a way to offset the costs of it.

Demetri Kofinas 25:20
Another thing I just want to comment on, before we discuss the surveillance capitalism component, is just the observation that we really are in a extremely precarious political moment, I don’t think any of us can really appreciate how bad it is, this is the most corrupt America has ever been in my lifetime, a lot of people are on the take. And so it becomes very difficult to reform a system when so many people stand to lose from it. And it also becomes increasingly corruptible. The tools of power become more amenable to abuse and use by populist demagogues. So we’re at risk of having that happen in politics. And we can see as that’s bleeding over in the kind of discussions we talked about, whether you’re talking about an Elan, Musk or Chamath, Davey Day Trader is a little different, he certainly stokes the flames in a way. And ultimately, I just can’t help but notice that who’s not here? The regulators, they’ve checked out, they’re not here, the people in charge aren’t in charge. And people know that. They sense it, and they become more and more aggressive.

Michael Casey 26:17
You sort of talk about the massive anger and the corruption of our political system. And that’s one of things I think that’s quite telling about this moment is, you know, the Wall Street Bets, situation does kind of cross the political spectrum. I mentioned AOC and, and Ted Cruz, it’s capturing this ‘is it left? Is it right?’ problem. And maybe what comes out of this, therefore, not just this episode, but everything else you’re referring to, is a real reckoning with the two party system. That’s just one thing to throw out there.

Michael Casey 26:43
With regards to the surveillance capitalism stuff, I think one of the reasons why people just are so easily manipulated in terms of you know, whether it’s populist demagogues or whatever it because they don’t really understand what is happening to the information they’re absorbing, because it is being manipulated. It’s a red feed, blue feed scenario, you know, if you’re a conservative, you only read your feed is looks this way, if you, if you’re a Democrat, it reads that way. And that becomes your truth. These are algorithms that are serving the interests of advertisers. And they’re basically corralling you into these ecosystems, these echo chambers, and people don’t get it and how could they know that? Because that’s the whole point is he not supposed to know about it? It wouldn’t work. otherwise it wouldn’t sell, the ads wouldn’t sell unless I could do this. So the system is designed in this way. The point I was simply making was like he bring into that. Things like super PACs with all of the opacity that comes with that. And the whole system is a ruthless machine. I suppose one question is like, how do we untangle that?

Demetri Kofinas 27:44
It’s a wicked problem, exactly because of the informational dynamics and the control that a small handful of individuals, you know, we talk about these in terms of corporations, but corporations are made up by people, the organizational structures, there are some very powerful people in the world, and they have tools at their disposal that previous generations would have only been able to describe as magic, the ability to herd people in physical space completely outside of their conscious awareness. And so I think there are some people doing good work in this area.

Demetri Kofinas 28:16
First of all, to be clear, I think the only way that we really solve a problem like this, we need government regulation, and government policy, I do not believe that the solution to this problem is going to come from the free market. And I think that when I see again, when I see certain people who may align themselves with more decentralized solutions coming out, and inciting the mob with Wall Street Bets, I hesitate to trust that solutions are gonna come from that area. I definitely think that blockchain technology and distributed ledgers… Decentralization, quote, decentralization, because that’s a very loosely worded term, can be helpful, but I think ultimately, we need to be able to craft regulations. I mean, you mentioned Citizens United, that’s been a huge part of, of this problem, and the amount of money that super PACs are able to raise through corporations, etc, and wield power. And I think there are people working on this problem. But you know, again, there is a lot of corruption in Congress. And you have to wonder whether the only real solution is ultimately a demagogue or a populist, strong man, who happens to be perhaps more benevolent than malevolent. You could say we sort of had that with FDR. And I feel odd kind of talking about this, to be honest with you. When I say talking about this, I hear myself advocating for an FDR type presidency, and it goes against everything that I’ve ever believed. You know, I’m not, I’m not a progressive in terms of my economic policies. I was on the fence about voting for Ron Paul. I voted for Obama in 2008. But, you know, I really loved Ron Paul’s messaging about liberty and responsibility, but I just kind of think we’re in a place we’re in a really bad way. And we need to have a government led solution to this problem and I could talk all day about this. I also think the government has a role to play in investment as well. And that’s not something thing that we’re really seeing today either,

Sheila Warren 30:01
You know, in the face of it all right in the face of perhaps one could argue it evidence to the contrary, I remain somewhat idealistic about the potential of government to address massive societal problems. And I think this actually, in large part because of some of the things that I vehemently disagree with what happened under the previous administration. And I think that we demonstrated this, you could argue for much in reverse with the previous administration. And certainly, we’re seeing that in terms of, you know, people’s lives. Forget the first 100 days, day one was hugely impactful in the issuance of executive orders, an unprecedented right amount of movement on topics that were deemed of critical importance. And we, you know, we talked in our kind of Biden episode, if you will, with Kristin (Smith) and Amy (Davine), you know, about how realistically, I don’t think that, you know, without GameStop, I’m not sure that anything beyond kind of stimulus payment type of approaches, COVID-19 response was going to be the rapper, I think on the first 100 days, as I would argue, it really should be, I mean, that’s remains like the most critical crisis that’s driving, you know, our current economic situation is being driven by this pandemic, more than other kinds of factors. Once that, vaccines, these kinds of things are sort of in hand, I do think we’re gonna see significant action and movement from, you know, this administration. Now, I do think we’re going back to a little more of… Old school seems crazy after four years, but, you know, a model of government, where I do think that President Biden himself is going to really drive the agenda. And I think that this sort of massive delegation in a way, right that the previous ministration did, and these agencies were kind of, oftentimes, like, at odds or driving their own sort of agenda driven by personal, you know, views and things like that, I think we’re gonna see a little less of that. And I’m hoping that now that we have a more effective, I think this is very safe to say, manager, you know, in the executive office, there’s going to be a little more coordination across some of these different initiatives, at least that is my hope. That is my fervent hope. Also, you are getting appointees, many of whom know each other, have known each other for many, many years have worked together in different contexts over a long period of time, and in many cases, have a lot of trust, you know. So I think it’s a different. It’s a very different administration, not just in terms of agenda and priorities, but also in terms of just the ability, I think that they’re going to have through each of these previous relationships are three very strong executive function to coordinate across that is all by way of saying, Yes, we have Gary Gensler, we also have Janet Yellen, we also have, right, we’re going to have OCC like these different groups, I think are going to be encouraged to think holistically about this, maybe in an even more open way. So all the kind of speculation that a lot of us had like, Oh, you know, what did the OCC letter and the fincen? Notice, were those like, oppositional? Or were they not? I know, you had some, some views on this, Michael, that there was coordination happening behind the scenes, I think there’s going to be more of that overt, you know, kind of coordination and understanding of a more holistic view of regulation, which is certainly what I’m hoping to see. So I’m not really getting at the heart of your question. But what I want to say is, I don’t think at any particular individual in this administration is going to be the person who really is able to drive, you know, an agenda all the way through without bringing along in some way their peers or colleagues who might have different views. And I think we already know that there is a diversity of viewpoints on the topics related to financial regulation and crypto in the cabinet, let alone and the next level down of appointees.

Michael Casey 33:29
Demetri, any thoughts on that? But first of all, I just reflect a little bit on your commentary, you’re surprising yourself that you’ve come he has a position here, because I was a little surprised, like to see to hear you. You’ve always had a fairly balanced view of things. But there’s a different agenda here. I’d be interested to know what brought you to that also, like, you know, you sort of come up with some pretty extreme comparisons in, in comparing the WSB guys to terrorists. I think it’s really a fair comparison?

Demetri Kofinas 33:54
No, no, I don’t mean to, I think my point was that they have the capacity to terrorize Wall Street, right, by pumping stocks, that Wall Street is short for, let’s say, reasons that they think are valid, operating with a traditional framework. And now all of a sudden, you have this kind of convexity in the outcome of positions that normally really wouldn’t be in the distribution of outcomes. That’s sort of what I meant, although I do think maybe I’ll answer that as part of your previous question, which was, how did I come to this view…

Demetri Kofinas 34:25
I’ve come to this view, was that quote by Mark Twain, gradually, then suddenly, you know, it was gradual, gradually, then suddenly, then all at once. As you know, like I’ve covered a lot of serious varying topics that sort of all follow a similar thread. The surveillance capitalist stuff is serious look, I mean, the last four years have brought me to this moment, gradually, and then I think suddenly, the events at the Capitol Building were important, and not entirely for the reasons that people might think.

Demetri Kofinas 34:57
First of all, I don’t think that the Capitol Building was a coup. You know, I disagree with that everyone can have their point of view, you know, because you’re not going to run a coup by inciting a mob of people on social media to come and stormed the Capitol. You control the military, you need to have like a really organized coup d’etat. I was obviously deeply disturbed by the images by what we learned afterwards. But I was also I was disturbed by the sort of tone deafness, to be honest, when Joe Biden came out and said that this was the worst attack on our democracy in I think what he said, like 100 years, something like that. I was like: Are you serious? This is worse than what we saw in 2008. Are you kidding? You know, like, we had to watch you guys stand up on podiums and lie to us. We all knew you were lying. And I remember thinking to myself, all I wanted, I sat back afterwards, because it really upset me. And I was like, what is it that I want? And, you know, in this particular, this part with Biden, I think I’ve always wanted from Joe Biden is just at one point. And in many moments, there have been moments in debates as well. What I wanted to hear was an apology, something along the lines of you know, I’m sorry, I failed you, we failed, you know, maybe this is a bit, you know, naive of me, but give us a chance to make a right. And I feel that the country is radicalizing. And the media, “the media,” people in media, lots of talking heads are capitalizing on it, rather than try and quell it come together. You’ve got people with millions of listeners and viewers on television on both sides of the political spectrum, feeding into the division, and it concerns me deeply.

Demetri Kofinas 36:29
I don’t think political terrorism is out of the question. You have foreign countries that we know, are operating active measures in the country on social media. And is it possible that other countries with offshore bank accounts were buying calls in GME, to test run a political warfare machine on the United States? I mean, you know, warfare in the 21st century isn’t straightforward. You know, I again, I’ve done I’ve done episodes on this stuff, but like, there’s all sorts of unconventional ways in which we can find ourselves in a war. And what worries me is that we sleepwalk into one, you know, it’s very serious, we need to come together, we’re not. We’re indulging in hate and self immolation. And I just don’t think we have the time for it.

Demetri Kofinas 37:12
So that’s what I think brought me to this feeling of saying, you know, what, as much as I despise the people who more or less stole money over all these years in all sorts of different ways. And even though I’m not responsible for that, and I don’t deserve to have to pay for their sins, at the end of the day, we are where we are. And I can either continue to sort of stay firm and be like, this is mine, you can’t have it. And this is the life I’m building, and I’m going to protect me and my family. And the rest of you can go burn. Or I can just say, Okay, I’m willing to make sacrifices here. I’m willing to come forward and participate in a brokered solution to move our country forward. Because there are a lot of beautiful things in this country that I love and in the world, and I don’t want to see them, see us burn them all up, you know. So that’s kind of how I got to where I am.

Sheila Warren 37:56
Yeah, isn’t this sort of the challenge of America though, right? It’s always this balancing between the need for collective action for moving forward versus our prioritization as a culture on individual success, you know, whether that’s achievement orientation, whether that’s just the way that we operate in the world, we’re a very individually focused culture, which is dramatically distinct from, you know, Michael, unsurprisingly, I’m gonna bring up China again, right, like, very different from the way that China’s organized both culturally and you know, in terms of governance, isn’t this just the ongoing challenge in the latest incarnation of this ongoing challenge that we face in America since the inception of our Constitution, since we put this whole thing together, that we recognize that we want people to have the opportunities for life, liberty, pursuit of happiness, and to define to some extent, what that means for them, but at the same time, we recognize that we do need to have coordination around, you know, various topics we do, you need to recognize that we are all interconnected in a society as well, in my mind, you know, we’re exposing cracks that need to be exposed and equities that need to be exposed that many people were very aware of. And now I think it’s… I don’t know where you’ve been if you’re not aware of these things at this point, because they’ve come up and you know, health and financial system and housing and they’re all over the place, education, this pandemic, again, like I’ve said many times, you know, really has illuminated these realities in a way that makes it impossible to ignore unless you are very deliberately, I would say, choosing to do so. But isn’t this the latest incarnation of things that have happened over the course of time, to your FDR kind of point, when would have hoped I think that the pandemic would have been seen, like, you know, like a war, right, where we all kind of had to come together, we had to think about our labor force. I mean, there’s a reason that women went into the labor force at a huge rate are and we’re watching because we had soldiers and all these kinds of things. And you would think that there would be, we would have responded in that fashion. And we didn’t, I have views on why that happens to be the case that are very political in nature, so I’ll perhaps refrain from from saying them here. But yeah, I’m just would love to get Your thoughts on that? Is this really that different from some of the things we’ve seen over our long, longest history in this country?

Demetri Kofinas 40:09
I do think so now I was very young, I would have been like a 10 year old kid. In the early 90s, when we had the bombing of the Oklahoma city building, Ted Kaczynski, and you had the rise of this sort of domestic insurgency after the fall of the Berlin Wall, this feels much more precarious, because the world is very different, like at the time, the United States could indulge in those kinds of internecine conflicts because it was a top dog, You know, no one was going to challenge the United States. Today, that’s not the case. So the battlefield has expanded. And that concerns me. Yeah, you mentioned if the Oregon that made me think about another similar dynamic as well, today, I’d have to go back to then I’d have to go back to the early 20th century, because I think the populist forces pull from that period, the wealth issues, the dramatical reorganization of American life. Yeah, you know, that happened with the Industrial Revolution, similar to today, people’s conception of time and space was radically changed over the course of a lifetime, through the railroad, through the telegraph, etc. And there was also this rise of… I don’t mean this in the communist sense of internationalism, but in the sort of literal sense of, there was an expansion of the notion of statehood and nationhood and citizenship, among particularly a very elite class of individuals. And those individuals, ultimately, were the ones that gave us international institutions, foreign policy, think tanks, etc, etc, etc. And while those things are good, there are diverging interests between the two. I think that we’re seeing that similarly, again, there’s a labor versus capital dynamic here. And you have a lot of these really wealthy billionaires today.

Demetri Kofinas 41:53
Michael Sheila, you guys can remember what it was, like 30 years ago, this is crazy.

Michael Casey 41:58
Sadly.

Demetri Kofinas 41:58
there weren’t this many billionaires, there wasn’t this level of concentrated wealth, you know that there’s a radically different society.

Michael Casey 42:05
There is a middle ground here. I think both of you are right, that it was a different reasons. But there’s elements, right. So clearly, these tensions have always existed, since we’re talking about 2008. And the challenges of Wall Street, whether or not I think there’s an equivalence there or not, I think maybe it’s apples and oranges between Biden’s comments and 2008. I’m so glad you said what you said Demetri, because I felt like too few people understood how much that episode exposed how we are completely being at the hostage, at the control is institutions, that our entire political apparatus was caught up the too big to fail concept was essentially a form of blackmail, that the system has has built on us. And that understanding was there, it was a rich discussion about it, and then we buried it, we didn’t properly deal with it. And to me, it was an absolute tragedy, a lost opportunity.

Michael Casey 42:53
That to me speaks back to Hamilton. You know, I think Hamilton actually was an incredibly successful and, and helped build this country significantly. But the tensions around that the power of the financial system and the power of the banks. That’s an age old problem that we’re dealing with, where I think it’s different. And Dimitri, you touched on some of this in terms of the fact that the US is no longer this great single power, that there are other forces of power. That is a function of globalization. But it’s also, most importantly, a function of the internet. The internet has changed the dynamics of how we organize the whole conversation we’re having here about Wall Street bits. And by the way, the very reason why crypto is a concept is because there is this idea that you can form organizations that don’t and don’t need to abide by the jurisdictional structures of nation states. What’s more, because of the challenges of identity within that environment, you can weaponize that you can weaponize that power, which is why we worry about are these bots doing things with Wall Street bits or with our power grids or whatever. Because the capacity to manage all of that is has suddenly been blown apart by this flat structure that the internet has enabled, whatever solution comes forward, whoever it is, and this is where I just pray that this administration is able to just have that real awareness that we’re in a completely different paradigm. And we need to think about where power lies within that. And what the structure is. Is it a multilateral solution, Sheila, is it a multi party, blockchain governance solution, but ultimately, the rules have got to be written around this new model?

Sheila Warren 44:23
I don’t disagree with that, Michael, but I think it’s all a matter of the lens you’re taking on history, how far back you’re looking. And so I think we’ve all anchored on certain periods of history. And when you think back to like the steel titans and the railroads, there was a tremendous amount of monopolistic control. And this is when our concept of antitrust, you know, monopoly busting arose, because there was so much concentrated power. And if you think that power was not being expressed politically, I mean, I got news for you, right? It very much was so because this was a cabal of people that all knew each other and elected themselves to positions and forget lobbyists, they just picked up the phone and called themselves right. So… So this sort of yes Nothing’s happening, you know, at massive scale, we just have like our population has exploded since those times, you know. But my point in that kind of making the comment about ‘have we not been here before?’ is that we have been here before. It was a while back and the context looked different. But you know, we did come through this, and there were certain things, I think we would behoove us to kind of look back and learn from those episodes. But yeah, to your point, Demetri, you know, I certainly am not positing that things like Oklahoma, the Trade Towers, or all these kinds of things are obviously both symbolically important, but also like, really significant in terms of how we’re approaching some of these problems. But the frame on this, I think, is a frame that goes way back to the roots of our country.

Michael Casey 45:41
We have to wrap this up pretty quick, just in closing thoughts on that, tie this whole thing up in a nice bow for us here, maybe some optimism because this kind of dark.

Demetri Kofinas 45:50
So I’m not a pessimistic person. And I’m very optimistic about the surveillance capitalist component, actually, because I think there’s a bipartisan consensus on the issue. And I think also the public has become really educated on it, which is great. And so many people doing great work, Ronna Farquhar, and Shoshana Zubov, Kathy O’Neill. But lots of people, they also happen to be all women, which is really interesting. And you know, as the host of a podcast, I’m sort of very attuned to what people populate which fields. And I find it really interesting that when it comes to cultural socio economic aspects of technology, it happens to be women that dominate the field in terms of the best work that’s being done, which is interesting. So a few thoughts to wrap up. One is when we think about 2008, and I think I fall prey to this also, we tend to view threats as external. But I think that one of the risks is that the greatest danger to the stability of our country now lies internally because of a broken social contract. Similarly, to how in Russia, so much of what Russian politics and society is about today, is what happened in 1991, and the dissolution of the Soviet Union, and the way in which that wealth was divvied up. And so much of what they’re dealing with today is a result of that. And they’re a failed state in many ways. And so I worry about us going down that road, because we fail to address, honestly, the sources of the discontent and why would we fail? Because the corporate interests are so corrupted, that they simply don’t have an incentive to fix the problem. And that’s the concern. So I just want to point that out. Also, when it comes to talking about decentralization, I was on another podcast and the hosts made this point about the network state and maybe we don’t need governments, I am sure you would agree, Michael, with your experience traveling the world, Sheila, also with your, your background in public international institutions, the entire global economy, is underpinned by the American Empire, by American military hegemony, by the naval supremacy of the US. Its capacity to ensure and protect global sea routes. I mean, this is a huge part of how the world works. So I think that no matter what, we need to find a diplomatic international solution to transitioning into this new world, because it’s extremely risky, in my view, to transition from a power like the United States, to the ones that are on the wings, right now. There isn’t an equivalent, like the US an open liberal democracies with tons of faults with the US has. And then in terms of optimism, like I said, I think that when it comes to surveillance capitalism, which is I think, the most important issue, because it informs everything else. And it’s it’s how people get their information. It’s how they learn about things. I’m very optimistic about it. I think a lot of people are doing a lot of good work in that area, and the public has become really educated on the matter. So that’s one area where I definitely I sleep well at night.

Michael Casey 48:44
Good. Well, I’m glad to hear that because the whole point of that model, in some respects, is to obscure, so the idea that human beings fighting back and actually getting themselves educated, is actually really encouraging I think. We have to wrap up first want to point out like anybody out there who was listening to this thinking, Oh, this is gonna be a little conversation about a weird Reddit site and some traders, and we ended up talking about the power of US hegemony and military might and the sort of the big arc of history I brought you on because I saw one of your tweets to Demetri where you said, Oh, my God, this thing’s huge. It lit a fire under a lot of us because we like all there’s so much to this story. And so you haven’t in any way disappointed.

Demetri Kofinas 49:24
It’s an indicator of how broken our society is, I think.

Michael Casey 49:27
Yeah, because it is a peeling back right when you get to the bottom of it. So look, thank you so much, first of all, Dimitri, where can folks find you and you know, obviously hidden podcast and you’re on Twitter, a little bit about it?

Demetri Kofinas 49:38
Yes, they can search hidden forces on any podcast application, they like to find me. They can also go at www.hiddenforces.io and check out our content library and they can find Michael twice, as he mentioned, as well as many other great guests ranging from the Secretary of Defense, to the creator of Microsoft Explorer to all sorts of people and big Follow me on twitter @Kofinas, my last name or @hiddenforcespod.

Michael Casey 50:08
Fantastic Sheila, another great episode. Thank you so much as always, till next time, bye for now.

Adam Levine 50:23
You’ve been listening to coindesk money reimagined this episode featuring Michael jKc, Sheila Warren and Demetri Kofinas. Our theme song is Shepherd and this episode was edited by Michel Musso. produced and announced by Adam B. Levine. Have any questions or comments? Send us an email at podcasts@coindesk.com or leave us a review on your favorite podcast player and from all of us at CoinDesk and the money reimagined team thanks for listening.

Demetri Kofinas is an insatiably curious media entrepreneur and financial expert. His mission is to make the connections that help you see the bigger picture, empowering you to make smarter investing decisions.

He also hosts the “Hidden Forces” podcast, where he gives his listeners an edge by using his critical thinking approach to challenge the consensus narratives structuring our world .

You can follow him on Twitter at @kofinas, check out his podcast at hiddenforces.io, and sign-up for more in depth content and analysis at Patreon.com/hiddenforces.

Find Michael Casey on Twitter or Clubhouse (@mikejcasey)

Find Sheila Warren on Twitter or Clubhouse (@sheilaw)

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