all the better to frame WSB and the proles as the culprit, rather than information assymetry / under-regulation of short selling (why for example, is short interest data not available at higher frequency)
- "You hear that line? Line's for you. Don't make me laugh. We're one people. It's a myth created by Thomas Jefferson."
- "Oh, now you're gonna have a go at Jefferson?"
- "My friend. Jefferson's an American saint... because he wrote the words, "All men are created equal"... words he clearly didn't believe, since he allowed his own
children to live in slavery. He was a rich wine snob who was sick of paying taxes to the Brits...so yeah, he wrote some lovely words and aroused the rabble... and they went out and died for those words... while he sat back and drank his wine and fucked his slave girl. This guy wants to tell me we're living in a community. Don't make me laugh. I'm living in America, and in America, you're on your own. America's not a country. It's just a business. Now fucking pay me."
This applies to literally every country in existence. How many times have socialist revolutions simply descended into fascist feudalist states? Since the dawn of agriculture, there has been no egalitarianism. Our social groups have become too large for that to be practical. We can only really know about 150 people personally. Beyond that it's a whole different level of social dynamics, and a hierarchy naturally takes order. That's why you should never feel ashamed trying to get to the top of the hierarchy. If you don't someone else will, that's game theory for you. You're better off watching a revolution unfold rather than picking sides.
This is such a cynical view of humanity. Personally I believe it is worth striving to create a society that encourages and cultivates our best qualities rooted in love, rather than resigning ourselves to a social structure and way of thinking that encourages our most selfish and destructive ones.
You're never going to do that by taking down the current order of the day violently. Violent revolutions lead (whether social or financial) lead to violent societies. That's my main point. Don't assume that a violent revolutions wrapped in idealism is any less violent.
> This applies to literally every country in existence. How many times have socialist revolutions simply descended into fascist feudalist states?
This is an incredibly disingenuous view, as though Socialist/Communist states were simply allowed to exist and failed, and weren't targeted very explicitly by every Capitalist state on the planet with everything ranging from economic sanctions to intelligence manipulation and assassinations to actual boots-on-the-ground war, and that doesn't even take into account Capitalism's toll on the global south in general, which is bad enough to cause huge problems by itself.
All those states that failed had problems and many did terrible things too, but to say that Capitalism is required because everything else failed as though Capitalism in many cases wasn't there making sure they failed is intellectually dishonest.
I never said capitalism is required. You're arguing the wrong point. The point is about idealism based revolutions. They never workout the way they followers want them to. Never.
And "incremental reform" is being generous. Ultimately the very idea of "incremental reform" is obscenely presumptuous in its notion of linear progress, as if change wasn't a bidirectional graph filled with dead ends and cycles
The hope for humanity is that we're irrational. Yes, it comes with downsides... but it is our irrational nature that compels us to help a stranger even when it comes at our own expense.
No, you only think that's irrational because you can only see so far. In reality we help people because in the long run it benefits us more than not. A rising tide lifts all boats etc. You don't actually get as much out of being selfish as you think you do.
And thats the problem with American society. Its always easier to understand the (short-term) gains from being selfish, and difficult to understand the (long-term) edifying effects of being magnanimous.
"You're looking at it rationally - there are people who are useful to you, and people who ain't, and the people who ain't got to go. Me. I'm not rational. I don't care if you're useful or not. I feel like taking you out, Devo, so that's what I'm doing." - Trevor Philips
(No insights here, I just feel like quoting Trevor, cause he’s loyal one)
I've always found it kind of lazy to criticize someone's ideals on the basis that they themselves fell short of those ideals. Isn't setting your sights on what is today out of reach a critical element of progress?
In Jeffersons? He didn't just fall a little short. He fell way short in ways that both he and his contemporaries knew were monstrous. Jefferson himself wrote that it was too dangerous to support abolition, even if slavery was a moral evil. In comparison, Lincoln wrote that ending slavery was worth the total destruction of the entire wealth of the nation. Jefferson wasn't even willing to personally sacrifice. Ending slavery was absolutely within reach during Jefferson's lifetime. And he personally had the ability to free his own slaves even if broader abolition didn't come quickly.
Jefferson also betrayed his own ideals by failing to support the french revolution (a revolution that was actually about granting power to the people, though it had its own problems).
When did Jefferson sour on the French Revolution? I know he helped the Marquis de Lafayette write The Declaration of the Rights of Man. Granted that was very early in the revolution, before it turned on the liberal nobles like Lafayette.
Fun fact I learned from the Revolutions podcast. Lafayette was imprisoned by the Austrians after trying to escape France through enemy lines. The US learned of his situation (this was during George Washington's presidency) and granted him back pay for his service during the revolutionary war. And that is how he survived those ~5 years in an Austrian prison.
But his point is exactly that those were not his ideals, but just pleasant rhetoric to invoke the action of those beneath his position to benefit him. It's not a criticism of the idea that "all men are created equal". It's a criticism of Jefferson's actual belief in said ideals.
Gambling or trying to participate in what is increasingly "the economy", because work sure as hell ain't the way to make any money. Unprecedented bull run during a pandemic with record high unemployment.
Observing that "X doesn't lead to the desired outcome" and "Y is not X" does not imply that "Y will lead to the desired outcome". If you want to accumulate money, gambling on games with negative expected value is not the way to do it.
There are different ways to treat "expected" - in one sense, by definition every stock has neutral expected value in the short term, that's what the market price is. And in the longer term, it has the expected value of the rate of increase of the overall market. Given what we've seen the overall market do in the past year, and the unprecedented combination of massive government relief spending and low interest rates, owning stocks at all right now seems to be a great idea.
If you use a different way of calculating "expected", then everyone expected Gamestop to be worth very little based on all the traditional markers of a stock, future cash flows, etc. But those people were wrong for quite a while and many of them lost a lot of money, and many people who bet against the common wisdom made a lot of money. Even today the price is still a factor of 10 higher than what most analysts recently had it at.
Basically, if you're so sure that this was a "negative expected value" bet for everyone who went long on gamestop, why wouldn't you short it today and make a ton of money?
I agree that this stock run-up was a form of gambling, but it's dishonest to write all these people off as making bad decisions because it's not like there is a true expected value that anyone can calculate with certainty ahead of time.
"Expected value" is a well-defined term from statistics: "In statistics and probability analysis, the expected value is calculated by multiplying each of the possible outcomes by the likelihood each outcome will occur and then summing all of those values." This explanation is from investopedia no less.
Anyway, shorting gamestop has some probability distribution that includes every outcome from making a bunch of money to losing your shirt because of a viral meme (shorting losses have no theoretical limit). That distribution can simultaneously have positive expected value and also be an unattractive bet because of the risk involved...and that's before we talk about shorting fees.
Yes thank you I am aware. The comment I was replying to made no sense in the context of a statistical expected value, because by definition that is just the current price, that was the first half of my comment
This sentence doesn't make any sense. Return on capital is a percentage, and one that doesn't even translate to something comparable to a return on labor.
More people trading reduces the rate of inequality expansion, if people go into the market generally. More people playing dumb games with huge risk is only going to increase inequality.
Yeah I think more people, especially younger generations, see the current wealth gap and know that getting lucky on a big bet is their only way to escape 40 years of toil for a modest existence. I can't blame them for wanting to gamble, as dumb as it may be.
I don't know if it's a gambling binge, but I'll tell you the returns from capital seem to far outstrip the returns to labor in our modern society. Seems like you are either part of the investor class or the lower class in America and I think people have caught on, willing to take chances to get into said investor class.
I made more money on some savingss in 2020, by literally doing nothing and just watching it grow, than a lot of people earn in 9-5 jobs. I'm happy about it of course, but it seems wildly unfair. I'm not what you'd call a Marxist, but it's pretty obvious that there is a serious socioeconomic imbalance here and something needs to be different.
Savings or investments? As for the bull market, it won't past forever. Can you also make that work in a bear market? At any rate a great number of people benefit from the markets via 401Ks and stock comp.
It is easy to see it as "doing nothing" but the reality is your risked your money during a period of time which was very uncertain. Uncertainty = higher risk in terms of stocks.
The reality is you took a big risk and you got a big return because you kept your money in the market.
Eventually the stock market will crash and the imbalance will be corrected. People who are invested in risky stocks will likely be bankrupted as those companies fail. Likewise for people who used lots of leverage. Then the working class will be seen as smart because they made 50-100k from working while joe investor lost 500k in the market.
I did not for one moment believe that my money was at significant risk, given that my investment time horizon is on the order of decades.
The only circumstances I could imagine that would have caused me to lose a significant amount of money in 2020 were on the order of "global catastrophe resulting in widespread death and destruction", greater than what Covid appeared to be even at its worst. At such a point, the last thing on my mind would be the performance of my investment accounts.
That's part of what bothers me about it. If I felt like I was actually taking a risk, I'd a lot feel more "entitled" to what I've received.
I think the interesting part about "capital returns" in the past year, is that they're almost all on paper. There's relatively little actual wealth being transferred.
Almost nobody is actually realizing returns by pulling money out of the market, because there's nothing meaningful to spend the money on in 2020. Even the people pulling money out to buy a house, are mostly buying reasonably sized homes at inflated prices. Or to pay inflated education costs, which people without such large nominal wealth often wouldn't pay in the first place (or have forgiven via IDR etc).
Obviously each of the new tech millionaires with 50+% gains COULD cash out and buy, I dunno, a semi-truck full of flatscreen TVs. But they won't. And if any meaningful % of them did, the paper gains would evaporate in a heartbeat.
So I dunno. There's a lot of fake gains showing up in bank accounts, but I'm unconvinced that meaningful wealth accumulation has happened, or that most millionaires are actually converting that wealth into a higher standard of living. I think society is in a holding pattern, with inflated capital investment prices for lack of anything better to spend money on.
IDK the stock market has millions of sales every day, nearby homes are bought and sold every month. The asset appreciation seems genuine to me. Maybe people didn't consume as much in the past year cause of COVID and that money pumped up the asset prices a bit more than usual but it's not like things are totally detached from the laws of supply/demand.
> How do you know they're inflated? Maybe that's just how much homes in economically productive areas are going to cost from now on.
My understanding of GP's thesis is that they're inflated because the homes, and even their surrounding neighbourhoods and infrastructure, actually haven't changed meaningfully while the price went way up.
That's it exactly - the hamster wheel of this whole thing. I've made more money than I expected as a programmer and gotten better investing returns too. And yet the prices of homes keeps going up and inflation in other areas is almost certainly going to follow as monetary velocity is increasing.
I've never been a gold bug, but I get pushed a little further in that direction each day.
> Almost nobody is actually realizing returns by pulling money out of the market, because there's nothing meaningful to spend the money on in 2020.
After a certain point, how much money can one meaningful spend in general? From @aninhumer:
> If we suppose that the goal of society is to produce the greatest utility, and that the utility wealth provides an individual is sub-linear (i.e. twice as much money makes you less than twice as happy), then inequality is inefficient resource allocation.
I think that's partly why we're getting more concentrated wealth generally: the folks at the top had a lot, but they can't spend it all, and so they let it ride and so it compounds.
Yup because we are currently in an innovation boom due to new emerging technologies. If the innovation slows down then the returns will shift in favor of labor while capital generates negatives returns.
This brings up an interesting thing I thought about, and I don't know if it was by design or just a side effect. It used to be that people's retirement was based on Social Security and a company pension plan. But now pensions have gone away, Social Security won't pay enough for most people, and we have 401K plans that encourage long-term stock market investments.
Now I've always felt that increases in the stock market don't actually reflect a better economy (it may be a lagging indicator -- more people healthily employed == more consumer spending). But a lot of the higher stock prices could be related more to B2B health, not B2C, or due to things like low interest rates, etc.
So the effect of 401K is that regular people care more about the stock market than they normally would, therefore vote for politicians that support business-friendly policies even if that is against the overall interest of the voter. And it also happens that people closer to or in retirement care more about the stock market than younger voters, and older people tend to vote more. So is this the main master plan behind 401K, or is it just an interesting side effect?
At the risk of sounding dumb; why not? As long as you put money in you're willing to lose it seems it's better to take a calculated risk on a stock or cryptocurrency in hopes for a return. When you're poor and can make as much as a paycheck in a single lucky trade it almost doesn't make sense not to try.
When you're poor and inexperienced, you probably don't have much of a basis of estimating the risk versus reward of all the potential options you could put that money into. There are a lot of influencers selling courses saying that trading forex, crypto, and meme stocks will make you rich in 10 easy steps, and it's very easy to get mixed up in an echo chamber that's trying to extract money from you instead of helping you grow your money.
It's not calculated risks for the poor though. It's putting their paycheck on hot tips from Wall Street and tech bros who think losing large multiples of a poor person's paycheck is hilarious and ending up struggling to pay rent because it turns out their advice wasn't so good. When you haven't got much capital, the amount of good luck you need in investment to not be poor is enormous, and losing more than you can afford by trying is near certain.
When you're poor, a share in GME is not the sort of money you're willing to lose, and it makes no sense at all to participate in a rich person's subculture that sees losing several times your income as a cause for boasting.
The Stock market, even the gamestop event, is far better use of money than the various government powered lotteries. it is very difficult to tell people gambling is bad when you see the amount of advertisement that state lotteries are permitted to spend on let alone the national cooperative versions.
at least with the stock market your bets are pretty much not going to leave you broke if you choose wrong but 99.9% of the time a state lottery is a losing bet.
So many people I know immediately took their stimulus check, dumped it into some dumb crypto meme, and lost all their money. There is something to be said about money allocated for low level economic activity is instead obliterated into the worldwide ether, sometimes at massive electricity costs just to rub salt into the wound of our warming world. I wonder if in the future we will see national economies shrink as people dump more local fiat into economically useless, speculative crypto that is distributed globally.
> The GameStop surge was just one of the ways Americans have renewed their love of gamblng.
There is nothing about Americans specifically. Check out Telegram/Discord channels, there are more non-Americans shilling GME than the total number of American users in those groups.
In my opinion, it really is gambling for the vast majority of participants. The same millenial peers of mine who talk about sports betting endlessly seamlessly talk about crypto and stock options within the same sentence. They are all just more things to bet on when there isn't a game on TV. It's the same crowd of people who wouldn't hesitate paying for UFC pay per view to live bet, or ending the night at the nearest casino in any city they are currently binge drinking in. There is a whole subset of millennials who follow the words of David Portnoy and/or Joe Rogan and others like some sage prophets, echoing their rhetoric and chasing their bets.
These people aren't sticking it to the man. They are looking for their next bet to hit, and taking fools and the resulting media circus with them. The celebration of hedge fund losses is rooted mainly in memes rather than an actual coherent class struggle, since if you have enough money to blow on dumb bets constantly without going broke, chances are you are living somewhat comfortably to begin with.
I would just like to remind here that if your goal is to create the wealth for the long term then being lazy and investing in good-old (boring) index funds is a better way. NYT has a nice article published recently on this: https://www.nytimes.com/2021/02/04/upshot/stock-market-winni...
It's year 3 so far, there's no clear winner yet. My win condition: 10 years for my own stock picking. My lose condition: if I'm getting abysmal lower returns on my stock picking (e.g. 20% of index funds).
Or maybe, just maybe... you could do a "hybrid" approach?
I have my 401K and Roth IRA maxed, an emergency fund set aside, all my debts paid off, and the vast majority of my income being set aside in safe index funds and bonds.
As such, I feel like it's completely responsible for me to take a small percentage of my annual income and devote it towards "high risk investments". I call it my "gambling money".
In the past 6 months, by trading and holding various cryptocurrencies, I managed to turn $100 into $1000, then $1000 into $5000.
This is essentially just "play money" for me, and I don't feel guilty about throwing some of it at online sports betting or online poker or GME/AMC/BB or Dogecoin or whatever.
It's money I can afford to lose, but it also has the potential to give me 100x gains while my index funds never will (at least not within my lifetime).
I think it's important to maintain a balanced portfolio, and having some "gambling money" set aside for high risk investing is an important part of that.
The saga reminds me of Korean cryptocurrency craze of 2017[1], when the government decided to crack down on the exchanges and people were decrying that they were being robbed of their only viable way to middle-class life.
Well, the following price dip proved the government's point. If the government had looked the other way, there could have been millions who would've watched their life savings evaporate. (Also, if you really wanted, there was nothing seriously stopping you from pouring your money to BTC or ETH or whatever. The government's action mostly worked on those angry horde who couldn't tell Satoshi from Nvidia.)
There's a lot of inequality. That doesn't mean the government should encourage (or even tolerate) get-rich-quick schemes that prey upon desperate, financially illiterate people. Because when a few of them become millionaires and one third of them just lost their next month's rent, you made inequality worse, not better.
This seems like it would partly be a result of near zero interest rates. Don't have anywhere to park your cash and get a modest return? Of course people are going to start speculating their money on crazy, stupid shit.
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[ 3.8 ms ] story [ 205 ms ] thread- "Oh, now you're gonna have a go at Jefferson?"
- "My friend. Jefferson's an American saint... because he wrote the words, "All men are created equal"... words he clearly didn't believe, since he allowed his own children to live in slavery. He was a rich wine snob who was sick of paying taxes to the Brits...so yeah, he wrote some lovely words and aroused the rabble... and they went out and died for those words... while he sat back and drank his wine and fucked his slave girl. This guy wants to tell me we're living in a community. Don't make me laugh. I'm living in America, and in America, you're on your own. America's not a country. It's just a business. Now fucking pay me."
This is an incredibly disingenuous view, as though Socialist/Communist states were simply allowed to exist and failed, and weren't targeted very explicitly by every Capitalist state on the planet with everything ranging from economic sanctions to intelligence manipulation and assassinations to actual boots-on-the-ground war, and that doesn't even take into account Capitalism's toll on the global south in general, which is bad enough to cause huge problems by itself.
All those states that failed had problems and many did terrible things too, but to say that Capitalism is required because everything else failed as though Capitalism in many cases wasn't there making sure they failed is intellectually dishonest.
This is why I can't give up hope.
(No insights here, I just feel like quoting Trevor, cause he’s loyal one)
In Jeffersons? He didn't just fall a little short. He fell way short in ways that both he and his contemporaries knew were monstrous. Jefferson himself wrote that it was too dangerous to support abolition, even if slavery was a moral evil. In comparison, Lincoln wrote that ending slavery was worth the total destruction of the entire wealth of the nation. Jefferson wasn't even willing to personally sacrifice. Ending slavery was absolutely within reach during Jefferson's lifetime. And he personally had the ability to free his own slaves even if broader abolition didn't come quickly.
Jefferson also betrayed his own ideals by failing to support the french revolution (a revolution that was actually about granting power to the people, though it had its own problems).
Fun fact I learned from the Revolutions podcast. Lafayette was imprisoned by the Austrians after trying to escape France through enemy lines. The US learned of his situation (this was during George Washington's presidency) and granted him back pay for his service during the revolutionary war. And that is how he survived those ~5 years in an Austrian prison.
There are different ways to treat "expected" - in one sense, by definition every stock has neutral expected value in the short term, that's what the market price is. And in the longer term, it has the expected value of the rate of increase of the overall market. Given what we've seen the overall market do in the past year, and the unprecedented combination of massive government relief spending and low interest rates, owning stocks at all right now seems to be a great idea.
If you use a different way of calculating "expected", then everyone expected Gamestop to be worth very little based on all the traditional markers of a stock, future cash flows, etc. But those people were wrong for quite a while and many of them lost a lot of money, and many people who bet against the common wisdom made a lot of money. Even today the price is still a factor of 10 higher than what most analysts recently had it at.
Basically, if you're so sure that this was a "negative expected value" bet for everyone who went long on gamestop, why wouldn't you short it today and make a ton of money?
I agree that this stock run-up was a form of gambling, but it's dishonest to write all these people off as making bad decisions because it's not like there is a true expected value that anyone can calculate with certainty ahead of time.
Anyway, shorting gamestop has some probability distribution that includes every outcome from making a bunch of money to losing your shirt because of a viral meme (shorting losses have no theoretical limit). That distribution can simultaneously have positive expected value and also be an unattractive bet because of the risk involved...and that's before we talk about shorting fees.
More people trading reduces the rate of inequality expansion, if people go into the market generally. More people playing dumb games with huge risk is only going to increase inequality.
The reality is you took a big risk and you got a big return because you kept your money in the market.
Eventually the stock market will crash and the imbalance will be corrected. People who are invested in risky stocks will likely be bankrupted as those companies fail. Likewise for people who used lots of leverage. Then the working class will be seen as smart because they made 50-100k from working while joe investor lost 500k in the market.
see dot com crash for an example
The only circumstances I could imagine that would have caused me to lose a significant amount of money in 2020 were on the order of "global catastrophe resulting in widespread death and destruction", greater than what Covid appeared to be even at its worst. At such a point, the last thing on my mind would be the performance of my investment accounts.
That's part of what bothers me about it. If I felt like I was actually taking a risk, I'd a lot feel more "entitled" to what I've received.
For those interested, check out Thomas Piketty’s books.
Almost nobody is actually realizing returns by pulling money out of the market, because there's nothing meaningful to spend the money on in 2020. Even the people pulling money out to buy a house, are mostly buying reasonably sized homes at inflated prices. Or to pay inflated education costs, which people without such large nominal wealth often wouldn't pay in the first place (or have forgiven via IDR etc).
Obviously each of the new tech millionaires with 50+% gains COULD cash out and buy, I dunno, a semi-truck full of flatscreen TVs. But they won't. And if any meaningful % of them did, the paper gains would evaporate in a heartbeat.
So I dunno. There's a lot of fake gains showing up in bank accounts, but I'm unconvinced that meaningful wealth accumulation has happened, or that most millionaires are actually converting that wealth into a higher standard of living. I think society is in a holding pattern, with inflated capital investment prices for lack of anything better to spend money on.
Being able to afford a house, or giving your kids a start in life without having any student load debt to pay off are definitely not "fake" gains.
>reasonably sized homes at inflated prices
How do you know they're inflated? Maybe that's just how much homes in economically productive areas are going to cost from now on.
>Obviously each of the new tech millionaires with 50+% gains COULD cash out and buy, I dunno, a semi-truck full of flatscreen TVs.
The ones that have sense will buy multiple homes, take exotic vacations, and retire early.
My understanding of GP's thesis is that they're inflated because the homes, and even their surrounding neighbourhoods and infrastructure, actually haven't changed meaningfully while the price went way up.
In other words, we see inflation in private school tuition, homes, etc, that is correlated with this bull market.
I've never been a gold bug, but I get pushed a little further in that direction each day.
After a certain point, how much money can one meaningful spend in general? From @aninhumer:
> If we suppose that the goal of society is to produce the greatest utility, and that the utility wealth provides an individual is sub-linear (i.e. twice as much money makes you less than twice as happy), then inequality is inefficient resource allocation.
* https://news.ycombinator.com/item?id=14505342
I think that's partly why we're getting more concentrated wealth generally: the folks at the top had a lot, but they can't spend it all, and so they let it ride and so it compounds.
https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...
Now I've always felt that increases in the stock market don't actually reflect a better economy (it may be a lagging indicator -- more people healthily employed == more consumer spending). But a lot of the higher stock prices could be related more to B2B health, not B2C, or due to things like low interest rates, etc.
So the effect of 401K is that regular people care more about the stock market than they normally would, therefore vote for politicians that support business-friendly policies even if that is against the overall interest of the voter. And it also happens that people closer to or in retirement care more about the stock market than younger voters, and older people tend to vote more. So is this the main master plan behind 401K, or is it just an interesting side effect?
When you're poor, a share in GME is not the sort of money you're willing to lose, and it makes no sense at all to participate in a rich person's subculture that sees losing several times your income as a cause for boasting.
at least with the stock market your bets are pretty much not going to leave you broke if you choose wrong but 99.9% of the time a state lottery is a losing bet.
There is nothing about Americans specifically. Check out Telegram/Discord channels, there are more non-Americans shilling GME than the total number of American users in those groups.
These people aren't sticking it to the man. They are looking for their next bet to hit, and taking fools and the resulting media circus with them. The celebration of hedge fund losses is rooted mainly in memes rather than an actual coherent class struggle, since if you have enough money to blow on dumb bets constantly without going broke, chances are you are living somewhat comfortably to begin with.
It's year 3 so far, there's no clear winner yet. My win condition: 10 years for my own stock picking. My lose condition: if I'm getting abysmal lower returns on my stock picking (e.g. 20% of index funds).
Also, 10 years is a pretty short time horizon considering this recent bull market is approaching that age.
Good luck, though.
I have my 401K and Roth IRA maxed, an emergency fund set aside, all my debts paid off, and the vast majority of my income being set aside in safe index funds and bonds.
As such, I feel like it's completely responsible for me to take a small percentage of my annual income and devote it towards "high risk investments". I call it my "gambling money".
In the past 6 months, by trading and holding various cryptocurrencies, I managed to turn $100 into $1000, then $1000 into $5000.
This is essentially just "play money" for me, and I don't feel guilty about throwing some of it at online sports betting or online poker or GME/AMC/BB or Dogecoin or whatever.
It's money I can afford to lose, but it also has the potential to give me 100x gains while my index funds never will (at least not within my lifetime).
I think it's important to maintain a balanced portfolio, and having some "gambling money" set aside for high risk investing is an important part of that.
Well, the following price dip proved the government's point. If the government had looked the other way, there could have been millions who would've watched their life savings evaporate. (Also, if you really wanted, there was nothing seriously stopping you from pouring your money to BTC or ETH or whatever. The government's action mostly worked on those angry horde who couldn't tell Satoshi from Nvidia.)
There's a lot of inequality. That doesn't mean the government should encourage (or even tolerate) get-rich-quick schemes that prey upon desperate, financially illiterate people. Because when a few of them become millionaires and one third of them just lost their next month's rent, you made inequality worse, not better.
[1] https://news.ycombinator.com/item?id=16121434