What happened with some Reddit investors blowing up a hedge fund the last week was certainly entertaining, but it was hardly the manifestation of a new sentiment. It was a symptom of the angst that has plagued working-class Americans for years. It’s how you got Donald Trump in the White House. That undercurrent was never going to go away with his exit from public office, and what you saw on Reddit was another step in the culture war.

Be sure to click here, here, and here for more background on what transpired.

Meanwhile, The Federalist’s Sean Davis dropped a revealing thread this morning on this whole saga that I think is worth the short read.

What’s happening right now is Wall Street realizing that retail investors, whom Wall Street mocks as nothing more than dumb commission factories for big brokerages, actually have some power that Wall Street believes it has a divine right to wield. That cannot be allowed. (2/x)

— Sean Davis (@seanmdav) January 29, 2021

Wall Street, you see, is allowed to make money no matter what. That was the lesson of 2008. Who cares that it’s Wall Street who destroyed the housing market/economy by lying about the risk of their garbage mortgage derivatives? They were entitled to bailouts. (4/x)

— Sean Davis (@seanmdav) January 29, 2021

Tying this back to the financial crisis of 2008 is very apt. What Americans saw at the time was massive bailouts given to big banks and Wall Street firms because they chose to make bad bets on mortgages. They were simply “too big to fail.” After that episode, voters were promised a changing of the guard and more accountability. Instead, all they got was more of the same. Now, we are seeing those same market forces that took taxpayer money in bailouts crush retail investors. You see, only the elites are allowed to make real money in the stock market. They can manipulate stocks and crush companies for profit, but don’t you dare return the favor. That was the message that was sent loud and clear when investing apps started shutting down trades to cause GME to drop so the hedge funds could reposition. If a certain class of investor gets in trouble, the game can be rigged to save them. If you buy a bad stock, well you are just on your own.

So don’t get conned by those claiming hedge funds are just trying to protect the markets and price transparency and efficiency and blah blah blah. This is a war between corrupt institutions and normal people, and the institutions simply will not allow the normals to win. (6/6)

— Sean Davis (@seanmdav) January 29, 2021

Davis’ last tweet is likely a veiled shot at Ben Shapiro, someone with whom I typically agree. Yesterday, on Shapiro’s show, he essentially made the case that retail investors driving up the price of stock is bad and that hedge funds are good because they help set the prices of stocks. That’s beside the point, even if it were true. As Davis notes, this is about normal people crossing a line the elites didn’t want them to cross. No one made these hedge funds short GME at 140%. Likewise, when those Reddit users decided to drive the price up and make money, they had every right to do so as long as they were transparent about why they were doing it (which they were).

If anything, this exposes our market for what it is, which is anything but truly free. Maybe we should aspire to making it that?