#really theres so many things in this its difficult to label
Thinking about that guy that posted on reddit about how his dad got POA over his grandmother with dementia and “invested” (gambled) her life savings in cryptocurrency
I had a taxi driver who told me that he took a lot of money out of a savings account he shared with his wife to invest in some coin (without her knowledge), got rugpulled, and went into so much debt that he had to sell their house. Fuming, his wife took the kids to Pakistan to live with her parents, where she cought COVID and died.
I’ve heard a handful of stories of guys “investing” money they couldn’t afford to lose in cryptocurrency, because they believed it was guaranteed to go up, and about what happened to them when they realized it was not.
I’ve heard enough of these stories that I’m not sure where to place these guys. Are they all victims that have been lied to? Are they perpetrators of greed and blatant stupidity? Is the Kind Of Guy that buys into a stupid bubble actually a very important ecological niche in our economy, some kind of host to already fabulously wealthy wealth-extractors?
I guess the question I’m really trying to answer for myself is: “am I supposed to feel bad for these people or not?” And will a policy of compassion merely subsidize wealth extraction from lower classes, as this kind of shit happens once a decade?
I mean. yes. their lives are fucked because they fell for a scam. seems pretty straightforward to feel sorry for them, even if a) they made bad choices and b) they hurt other people doing that
Will compassion towards them subsidise further scams? Very dependent on implementation details. There are obvious problems with saying “oh no you got scammed, here, we’ll just make you whole out of the government’s pocket” (note that this is distinct from “we caught scammers and recovered the money, here’s yours”)
what can you do? financial literacy helps, but you can’t subsidise that enough that nobody ever bets their life savings on some bullshit (or indeed some non-bullshit that happened to get unlucky! “legitimate” investments can lose money too). there’s already complicated rules about who can invest on what things and what kinds of disclosure you need before some random person can invest in you, and scams still happen
and the further along you go on that scale, the more you’re curtailing people’s freedoms. which is in fact bad. if some people keep making bad decisions with money at some point all you can do is take away their power to spend their own money and give it to someone else (a relative, the government), but that is obviously ripe for abuse.
I don’t really have an answer. but i think it’s important to maintain a sense of compassion that these people really are victims and it’d be better if they were not scammed, because otherwise it’s very easy to fall into a trap of “well, if you’re stupid enough to fall for a scam, you deserve to” and sweep the problem under the rug.
Are they victims? They seem more like people who stole a lot of money from their loved ones and then lost it in an idiotic way, all with extremely gendered undertones.
I think these are just shitty men, and even with much more financial literacy in our society there would still be stupid assholes who do shit like this.
shitty men can be victims. if you lose all your money to a scam then yes you are the victim of the scam, that is what the word means.
if you also stole that money from someone else then that makes you an asshole too, obviously.
A rug pull is one thing, but I don’t want to say general investing in a speculative bubble is the same as a scam. Also, about rug pulls, If I buy something that emphasizes it’s lack of regulation & “code as law” as a selling point, what expectations am I allowed to have for that very same regulation when the code does something I don’t like?
does it actually matter if the terrible financial decisions that ruined your life were specifically a scam or just a shitty investment? life is ruined either way.
re: regulation and code as law. there’s a lot of schradenfreude when someone touts deregulation as a bonus and then appeals to the regulatory system to fix a problem, sure. it’s a great illustration of why financial regulation exists. even so, people’s life being ruined is bad. People’s life being ruined by their own terrible decisions is bad. The decisions being terrible, and even foreseeably, obviously terrible, still doesn’t make their lives being ruined a good thing, and it’d be a better world if we could prevent that, and we don’t have a lot of tools to do that that don’t go through a regulatory system or other government involvement of some sort. which have their own downsides, of course.
I find your argument compelling because a compassionate society is important to me, but I think the speculative bubble thing *does* matter. It’s a speculative bubble, you buy it because you think you can swindle someone else into paying more for it because they think they can swindle someone else into paying more for it, so like, when one finds out otherwise, they’re suddenly a victim?
Honestly, I look at these guys like victims of MLM scams and the stories are often pretty similar; most of the people who got in this deep weren’t terribly tech savvy and certainly don’t understand finance in any meaningful way, but that’s also true of people who take out tens of thousands of credit card debt because they’re “investing in their stock and will make it back if they nurture their downline” with herbalife or whatever.
I think it’s important to approach things like crypto/nfts/and MLMs as something analogous to social engineering. Really, I even kind of think this is true of some Return of Kings blackpilled incel stuff - it is taking advantage of the way the human brain works in order to sell something and make a profit and the people at the top basically never really believe what they’re selling but they know it’s important to sell the narrative to keep the income flowing.
That, and I think it’s important to acknowledge that there are addictive elements here; gambling addiction is a real phenomenon and I’m sure it seems more legitimate to squander your grandmother’s savings on an ‘investment’ than on a slot machine, but these are functionally the same thing. Critics of crypto speculation have pointed out that it’s gambling for a long time now, but they are shouted down. The “Self-created high control group” chapter of the Folding Ideas NFT video goes into some depth on the way these guys end up in insular communities that try to shout down any rational criticism - and yes, they are somewhat at fault for getting there in the first place, but once you’re surrounded by a bunch of people who have strong norms to keep holding failing assets and to never discuss the possibility of a loss it’s a lot harder to get a reality check.
Like, there are absolutely moms who threw their kids college accounts down the drain trying to realize a profit selling leggings; there are mary kay reps who have lost their houses to pay back unsold, expired inventory they bought to chase a pink cadillac. At some point they should have stopped, and they really hurt people when they didn’t, but they didn’t stop because they were being manipulated and lied to by people who have built very successful fraud empires.
It’s terrible that these people have hurt the people around them, have devastated their families and taken away their security and safety (and fuck, that taxi driver’s story is rough), but they are also the victims of a campaign specifically targeting vulnerable people who aren’t financially literate enough to know that what they’re doing is gambling and who are surrounded by people who say “everyone who says it’s gambling is just mad that they aren’t going to be rich like you.”
It’s very bad and predatory and I hate it and I can’t particularly feel sorry for people who have ruined other people’s lives through their ignorance but I also can recognize that the fact that they were able to participate in these schemes in the first place is indicative of a failure outside of themselves. Like, this is very clearly something that should have been regulated well before it started eating people’s lives and people often get sucked into scams because they think that if it was a scam it would be illegal, so an offer to invest must therefore be legitimate.
OH ALSO
A lot of these people DON’T think they’re fucking the person in their downline.
They don’t really understand that the money isn’t infinite, or that the market will get saturated with too many people selling wax melts, or that there’s got to be a bigger fool.
It’s like the Nesara Gesara thing; people think that there’s this one weird trick that can actually make everyone wealthy and they don’t understand why their friends and family are resisting this thing that is obviously good for society.
There is a baseline ignorance of economics involved that is really fundamental and impossible to ignore; the “We’re all going to make it” crew doesn’t realize that it is impossible for *everyone* to get rich the way that they plan to.
Yeah…
Also, when you are married you are usually considered a single economic entity under law. So they aren’t technically stealing from their spouse. And this is exactly the kind of arguement that originally led to Prohibition laws against alcohol. The husband would get paid, spend it all on booze, and then the wife and kiddies would have no food. There are a bunch of silent film shorts around this subject from the 1920’s-1930’s.
This is variably true in different places but it IS important to note that any names on a shared bank account all have the exact same rights and access and that the only way to limit that access is to close the bank account.
I’m saying this because it’s important that you are extremely careful who you agree to share a bank account with. My literary magazine closed its doors when one of the editors went out of the country and began using the magazine account - that had like 500 and was supposed to pay for the next printing, so not a LOT but more than we could afford to lose - to pay for his travel expenses out of our account and started overdrafting it, which cost the rest of the editors on the account money until me and the copy editor were able to meet up and go to the bank together on a Saturday to shut it down, by which point he’d already added up three hundred dollars in overdraft fees that we had to pay to close the thing.
And I’m also saying this because if you have a solo account that your spouse is NOT on then they do NOT have legal access to that account. There’s some flexibility to that (so if the money in the account is considered a 'shared asset’ you can maybe still be sued for it so that someone filing for bankruptcy can’t just hide money in their spouse’s account to get out from under debts) but your spouse cannot legally access a personal checking or savings account that is yours unless their name is on it or you are dead.
I actually think that it’s really, really, really important to normalize keeping separate bank accounts even after you get married. It’s worthwhile to have one joint account for household expenses, but you and your spouse should have your own money that you aren’t accountable to each other for.
One of the ways that people end up being financially abused is by a partner saying “I want our whole lives to be together; don’t you trust me? We should do everything together” and then ending up in a situation where their partner can not only take all the money in an account but can also observe any spending on the account or observe changes (like different pay deposits if you start trying to stash money in another account.) I think we need to make it normal to say “I *do* trust you but I am an adult and I want a place for money that is *my* money, not *our* money so that I can use it for things for myself, not for us.”
If your partner feels betrayed or threatened by the idea that you want to keep some of your own money separate from a joint account (as long as everyone’s living expenses in the household are met) then you maybe shouldn’t be with that partner.
There was an article going around a little while ago that was basically like “my husband and I fight about me spending more of my paycheck vs him saving more of his, so we set ourselves allowances!” and the whole time I was reading I was like “why the fuck do you not have personal bank accounts that pay a set amount for bills into a joint account???”
Like the assumption that you should fully merge your finances went unquestioned, even though it was the main cause of the problem!
This wasn’t “we can’t pay the bills” level and it wasn’t “we’re saving up for something and the contributions are super inequitable” level, it was literally just that one of them spent a bit more than the other on a weekly basis. Your partner shouldn’t even be able to see that to start fights over it!
Also, regarding the people who lost money in Crypto, and in MLMs…
We live in a society where even people who are ‘middle class’ and own a house, etc. are generally only one disaster away from poverty (especially in the US where health care is so expensive).
When you’re living in that kind of precarious situation, and you’ve been working all your life, and you seem to have done everything ‘right’ but you know you’re still struggling, or could easily be pushed into struggling if someone gets sick or your car breaks down, it’s pretty fertile ground for scammers and schemes like this.
You have that little bit of extra income (or savings) so what if you just used that to make your life better! You’ve seen all the Silicon Valley people who are lauded as amazing entrpreneurs and what everyone should aspire to be jumping on the bandwagon and making a lot of money!
You’ve seen the people at the top of the MLM getting incredibly rich!
So why shouldn’t you? Maybe it’s what you need when normal business and financial systems don’t seem to be working for you.
And that’s what a lot of these things rely on! NFTs are only valuable because people were expecting to be able to sell them for a profit. Which is great if you’re a rich tech bro getting in on the ground floor! There’s tonnes of people wanting to buy them! But as the hubub dies down… you get normal people who aren’t that rich who thought they were buying something for their future.
It’s like with a lot of apartments and houses bought as investments - they’re bought so they can be sold on. While they’re being held as empty buildings (or as Air BnBs) they don’t have an occupier paying tax or rates (I’m in the UK so I don’t know the equivalent anywhere) so there’s less money being spent on the local area, so it gets more run down. It basically becomes property pass-the-parcel but the person holding the parcel at the end just gets a scrunched up ball of paper.
And we live in a society that currently is really primed for this sort of scam. Lots of desperate people and lots of rich people willing to fleece people to get richer.
