Reviewing Selling the Dream by Jane Marie, A History of Multi-level Marketing Scams
Hey Hun! Jane Marie’s new book, Selling the Dream, discusses how Multi-Level Marketing schemes work and how to avoid them. This book is packed with information about a legal scam that steals billions of dollars from Americans every year.
The author’s investigation into Multi-Level Marketing scams (MLM) began in 2019 with her podcast, The Dream.
MLMs trick people into “starting a business,” but really, they resell expensive products.
MLMs claim they use “network marketing,” but really, they ask sellers to recruit their family and friends and offer recruiters a percentage of their sales profits.
MLMs promise stable, passive income but always fail to deliver.
The author synthesized her years of interviews, research, and investigation into a brisk non-fiction book that details the history of direct selling and proves that MLMs are a drain on society andone of the most profitable industries in America.
Supplements | Photo by Michele Blackwell on Unsplash
Classic Scams
Early direct-selling scams like Avon, Tupperware, and Nutralite (now Herbalife) pioneered the grift, and they’re still going strong. The founders of these companies all got rich, but the people selling the products are footnotes in the company’s origin stories. Marie’s book details the fiction of these company origin stories.
Women, in particular, are targeted for these scams. Friends and family recruit them. The asks start out small. Just buy some makeup, host a party, and take these vitamins…
But the money adds up fast.
The author demonstrates dozens of examples where people lose tens of thousands of dollars to these scams. Sources told the author that years of their life were wasted trying to sell useless junk.
The book offers two reasons why people stay stuck in direct-sales scams.
The sunk cost fallacy. They have already lost money and believe they must earn it back.
Big number blindness. There are not enough people on earth for everyone to recruit their quota. If everyone recruits 5 people, within just 15 cycles, the entire world is out of people.
Multi-level marketing scams teach their sellers to ignore all outside criticism. Sellers are told they’re “bettering themselves” and learning how to run a business. “Positive thinking” is rebranded as cutting ties with family and friends.
The scammers also leverage that if you give up, your social network might be mad at you because you recruited them into a scam. Truly evil stuff!
The author points out that as people became more desperate for flexible work (like during COVID lockdowns), America saw increased direct selling scams. These scammers preyed on people’s desperation.
Perhaps the evilest direct-selling company is Amway, hilariously short for the American Way.
Ironically, this court case paved the way for legal pyramid schemes. As long as the company can prove it sells products and doesn’t only incentivize recruiting, it’s fine. They can do both: sell products and incentivize recruiting.
It’s a legal scam that goes up to the executive branch.
Jane Marie’s book is the perfect introduction if you want to learn more about direct selling scams. It’s a great pick for readers of Cultish by Amanda Montell, the Reddit board r/antiMLM, or anybody who wants to know why their friend has a bunch of boxes in their garage full of junk they can’t sell.
MLM Red Flags
I’d be remiss if I didn’t include these red flags to help others avoid getting caught in an MLM.
🚩 Upfront Costs: It’s a scam if you must buy the product you’re selling or pay to sell the product.
🚩 Markups: A scam company sells normal products—like pills, clothes, or makeup—at a steep markup. The only differentiating factor is the MLM logo.
🚩 BYOC: Bring your own customers, like friends and family. If they want you to sell to your “network,” it’s a scam.
🚩 Complicated referral schemes: If you get paid a downline or a percentage of sales from your referrals, erroneously called commissions, that’s a scam.
🚩 Any Product: An MLM can sell any product or no product, including makeup, natural cures, essential oils, leggings, sex toys, water ionizers, “financial products,” and some “pass around money.”
Thanks to the publisher and Netgalley for an advanced review copy in exchange for a review!
Reviewing Oliver Burkeman’s Four Thousand Weeks and revealing the futility of time management
I’m staring down a to-do list twenty tasks deep. What if I can’t get it all done? What if it sucks? What if everyone gets mad at me?
I take a deep breath and remind myself of three simple truths.
“Nobody cares. Nothing matters. We’re all just dust on a space rock.”
Then I get to work.
A book that reshaped how I see the world and helped me find comfort in the futility of time management is Four Thousand Weeks by Oliver Burkeman. This self-help book strives to teach the advantages of approaching time not as a resource we have but as an experience we get.
It might be the only time management self-help book that reminds readers to face the facts.
Life is finite.
No one is owed time.
You won’t finish everything.
Nobody really cares what you get done.
Things only matter if you think they matter.
Embracing life’s limits will help “manage” your time on earth. In this post, I distill some of the lessons that resonated with me, hoping you can apply them to whatever you need to get done and finally do it!
A Life in Four Thousand Weeks
First, a sobering truth. If you’re lucky, life is about four thousand weeks long.
The book’s title refers to the average human lifespan in weeks. Four thousand weeks equals about 77 years or 28,105 days. It sounds short, but it’s actually the longest thing you’ll ever experience.
In fact, humans have existed for hardly any time at all. Burkeman explains how the entire recorded human history is only about 6000 years or 312,000 weeks. While the earth and the universe have existed for much longer, humans are brand new in comparison.
Do you want to spend your 4000 weeks notching off a never-ending to-do list? Probably not.
Getting things done doesn’t mean you have fewer things to do; the opposite is usually true. The more you get done, the more you get assigned. Every time you finish a task, you prompt more tasks. Burkeman calls this “Sisyphus’ Inbox.”
Sisyphus Opening His Email For Eternity — Credit: Microsoft Designer
Replying to emails can feel like pushing a boulder up a hill for eternity. You reply to every email in your inbox today. Then tomorrow it’s full again. Quickly replying to emails sets the expectation that you are always quick to reply.
What if you just don’t? What if you do what you must and forget the rest?
All Time is Free Time
If time is limited, what’s the best way to spend it? Perhaps it’s best not to spend it at all and instead experience it.
Mass agriculture and industrial production provide living essentials for billions of people. To keep these things running, society became increasingly complex, so clocks and standardized time were developed to keep everyone working on the same schedule. As such, we think of time as a resource, something we spend.
When we say we “spend” time, it implies that time has a physical quality, like money. Except it doesn’t. No one owns time. You could go to work, watch TV, or, unfortunately, get hit by a bus.
Avoid the urge to think of time as a resource. Burkeman explains,
“Once time is a resource to be used, you start to feel pressure, whether from external forces or from yourself, to use it well, and to berate yourself when you feel you’ve wasted it.” (18)
The saying goes, “Time waits for no man,” but perhaps it’s more accurate to say time isn’t owed to anybody. It might seem like your boss owns your time, but the unsettling truth is that time is not guaranteed.
In a way, this implies YOLO: You Only Live Once. But rather than an excuse to act recklessly, think of time’s finitude as an imperative to act deliberately. Knowing what you’re doing and why you’re doing it is the way to manage your time and your fear of the inevitable.
Instead of YOLO, what we really need is…
NOMO: The Necessity of Missing Out
When you dedicate yourself to finishing something, you are also dedicated to not doing something else.
Instead of feeling FOMO (fear of missing out), embrace NOMO (necessity of missing out). Burkeman explains it this way,
“Once you truly understand that you’re guaranteed to miss out on almost every experience the world has to offer, the fact that there are so many you still haven’t experienced stops feeling like a problem.” (35)
Sometimes, it seems like there’s not enough time because we choose to focus on too many things. Adding things to a to-do list gives the illusion of productivity, just as starting projects gives the illusion that they’ll eventually finish. It’s like that Onion headline.
Instead, we all must prioritize getting done what is really important. Burkeman articulates Three Principles of Prioritization:
Pay Yourself First — Make it a point to spend part of each day finishing the most important thing to you. If it’s being a good parent, spend time with your kid! If it’s losing weight, work out! If it’s writing a novel, write your pages!
Limit Your Work in Progress — Focus on the tasks at hand. Don’t let yourself get caught up in the fantasy of doing lots of stuff. Instead, choose a maximum of three projects to work on simultaneously. Once you finish the three,
Resist the Allure of Middling Priorities — Once you know what you want to achieve, ignore everything else. Maybe you can’t have a clean kitchen and a finished novel. If the novel’s more important to you, remember that nobody really cares about the dirty kitchen!
The urge to consume extends toward leisure time, too. Ever notice how some vacations leave you more exhausted than going to work? Knowing that you will only be somewhere briefly prompts regret and longing.
But what if it didn’t? What if you prioritize relaxing, having fun, and experiencing something new? It’s much easier said than done, but we’ll always remind ourselves to live in the moment.
Pain, Distractions, and the Future
And yet, doing stuff is hard! We still (hopefully) have 4000 weeks to do stuff. So a lack of time isn’t the only thing preventing us from accomplishing our goals.
Other psychological blocks prevent us from getting things done. Burkeman names these in hopes that identifying them can help us overcome them.
Pain — Doing good work hurts. It brings shame and inadequacy, “What if everyone hates this!” We must accept that nothing is perfect, and striving for perfection is a path to guaranteed pain. If you can accept that you won’t be perfect and embrace that you might suck, that can actually get you over the hump.
Distractions — A tiny computer in my pocket constantly calls me to watch a funny cat video. This is a great excuse for not getting things done. It’s social media’s fault! I’m not to blame! And yet, eventually, I must take ownership of my actions. I’m choosing to look at the funny cat videos because doing difficult things is uncomfortable. It hurts to be bad at things. If I can accept this and remember I’m in control of my actions, I can get more done.
The Future — Ultimately, the pain of inadequacy and the urge for distractions could be seen as fear of the future. What if I get it all done and still have more to do? What if I get everything done, and it sucks?
The pain of failure, the distractions of pleasure, and the anxiety that haunts the future prevent us from achieving our true purpose in life. But what if they stopped? Or, what if we could control how we react to these things? Could this get us closer to achieving our dreams?
Time Trades
If I can convince you of anything in this post, I hope it’s this: spend three minutes and twenty-six seconds listening to “Time Trades” by Jeffrey Lewis.
“Time Trades” by Jeffrey Lewis
I really like this song. A lyric that resonates with me,
“You have no choice you have to pay time’s price
But you can use the price to buy you something nice”
This song asks us to embrace our finite lives! We must accept that we won’t get everything done or do everything cool. And that’s fine. If we’re gentle to ourselves and struggle through the difficulties, perhaps we can do something amazing. We can trade time for what’s most important.
A review of Parasocial, a graphic novel that’s Stephen King’s Misery for the TikTok era
In Parasocial, a fan kidnaps her idol, and in the process, we consider the exploitative, transactional nature of fandom.
Writer Alex De Campi created some great exploitation comics in her Dark Horse series, GRINDHOUSE. And she previously collaborated with Erica Henderson on their Blaxploitation-homage, DRACULA MOTHERF**KER! I loved that book, too, with its moody pastel pallet.
A panel from Dracula Motherfu**er! by Alex De Campi and Erica Henderson — Credit: Image Comics
The pair developed a working rhythm because Parasocial is a standout work for both creators.
Now, I can tell you with words why this comic book has deep themes and thought-provoking content.But this is comics! Parasocial has impressive illustrations. The story is told visually, combining words and images in ways only comics can.
Consider this four-page car crash:
Two Pages from Parasocial — Credit: Image ComicsTwo More Pages from Parasocial — Credit: Image Comics
Incredible! The layout utilizes dynamic fonts and onomatopoeia, so sounds jump off the page, and you can hear that 18-wheeler’s horn. The headlights on the truck and car illuminate the scene in a halogen glow. As our driver loses consciousness, the panels snap away from the grid, and moments start overlapping, moments and slow, drowsy repetitions. This action is much more visceral than contemporary superhero junk.
Henderson’s style reinvents itself on every page. At one point, I checked to see if there were multiple artist credits. So many styles are represented, but when the characters embrace, and it’s rendered like a 90s Shojo manga, I knew this must be one of the year’s best comics.
Three Panels from Parasocial — Credit: Image Comics
Unlike its celebrity protagonist, Parasocial is not all just surface-level good looks. The work wonders a provocative question: why might a fan deserve revenge on her idol? The introduction uses a montage to show all the people at the fan convention and the scope of the event. For a moment, the focus is on one crying person offering a deeply revealing confession.
One Panel from Parasocial — Credit: Image Comics
Fandom is a pay-to-play. You belong to the community as long as you can afford to belong to the community. You can’t be a fan if you can’t afford the new thing. Fan conventions and costumes, merch, signings, and photographs cost money. This background character is getting into five figures of credit card debt so she can see her friends and pretend to be a cat.
You belong to the community as long as you can afford to belong to the community.
Something disconcerting is going on here. When our celebrity protagonist, Luke Indiana, is tied to a chair in his #1 fan’s kitchen, he asks why he should remember her. She points to her bulletin board.
Two Panels from Parasocial — Credit: Image Comics
I count five pictures of Luke and Lizzie together, so they met five times. He even hugged her. Each time, she probably paid $100 to get those photographs. That’s $500 for five minutes of his time.
And he still doesn’t even know she exists. That’s cold. Despite this, the fans persist.
They dream of getting with their celebrity crush. Parasocial bluntly points out that the only way that is actually going to happen is your crush is kidnapped and hogtied.
Is it any surprise Lizzy’s filled with rage? Celebrities treat their fans like servants yet rely on them for financial support. Like all good exploitation stories, Parasocial blurs exactly who’s exploiting who.
A Page from Parasocial — Credit: Image Comics
The work is short, yet every panel counts. I loved this book and immediately reread it.
MaybeI should kidnap the creators and tell them how much I loved their new graphic novel?!?!
It’s out now, so get it from your comic shop or an online retailer.
Thank you, NetGalley and Image Comics, for providing an advanced review copy in exchange for an honest review.
Parasocial by Alex De Campi (writer) and Erica Henderson (artist) Image Comics, 2023
Reviewing Nishioka Kyodai’s Kafka: A Manga Adaptation
I’m a Kafkahead, or a monstrous vermin, as we Kafkaheads call each other.
Pushkin Press released a collection of eleven Kafka stories adapted to manga by the artist Nishioka Kyodai.
This book marks Nishioka Kyodai’s first English translation, and I hope more English translations come out someday. Kyodai is a pseudonym for a brother (writer) and sister (illustrator) who have been publishing surreal manga since 1989 about things like wonder laboratories, sadness, and hell.
And who is Kafka?
Who is K.?
Who am I?
These are all big questions befitting big text.
Kafka is arguably the most influential European author of the 20th century. He’s a serious author, often considered depressing, but the real heads know his work is funny. Kafka is paranoid, sad, strange, weird, and unforgettable.
Kyodai’s illustration style is a perfect match: unnerving faces, thin lines, and abstractions on top of unconventional panel layouts with densely inked background patterns. Many of their pages remind me of paintings, quilts, and mandellas.
The illustrators hold Kafka in high regard. The collection includes an essay where the author explains resisting the idea of adapting “The Metamorphosis” because Kafka objected to visualizing Samsa’s transformation.
We often think of the monstrous vermin as a cockroach because of visual adaptations. It’s not necessarily a cockroach. Instead, Kyodai uses isometric room drawings to portray Gregor as a looming absence in the Samsa family.
A panel from “The Metamorphosis” in Kafka by Nishioka Kyodai — Credit: Pushkin Press
“A Vulture” is the source of the collection’s cover image. The description of the man becoming a puddle (see above) of darkness when observed by the vulture is strangely relatable. The vulture’s facial expression is rendered so perfectly.
A panel from “The Vulture” in Kafka by Nishioka Kyodai — Credit: Pushkin Press
“The Country Doctor” appears, and so must the young boy’s wound. The doctor’s happenstance is bizarre when illustrated as stick figures in a bed.
A panel from “The Country Doctor” in Kafka by Nishioka Kyodai — Credit: Pushkin Press
What a wound!
I thought the collection’s boldest choice came in “The Concerns of a Patriarch,” also translated as “The Cares of a Family Man.” Check out Wikipedia. That Adorandak can mean anything! The illustrators choose to visualize the Adorandak as a Star of David.
A panel from “Concerns of a Patriarch” in Kafka by Nishioka Kyodai — Credit: Pushkin Press
“The Hunger Artist” in 2023 hits differently. As we all deal with our own planned obsolescence: getting replaced by AIs, overseas contractors, or austerity. Life can feel like wasting away in a cage of our own making.
A panel from “The Hunger Artist” in Kafka by Nishioka Kyodai — Credit: Pushkin Press
“In The Penial Colony” reads prescient in 2023, a story about a horrible colonial island where the military officials subject themselves to an arcane torture device.
A panel from “Concerns of a Patriarch” in Kafka by Nishioka Kyodai — Credit: Pushkin Press
I immensely enjoyed this collection, and if you like surreal Japanese comics like Junji Ito or contemporary art comics like Michael DeForge, this is up your alley. Heck, if you’ve never experienced the joys of Kafka, this is a fine place to start.
Kafka: A Manga Adapatation By Nishioka Kyōdai Pushkin Press, 2023
Kafka by Nishioka Kyodai — Credit: Pushkin Press
Thank you Pushkin Press and NetGalley for providing a copy in exchange for a review.
Many confuse leftist writer Naomi Klein with right-wing writer Naomi Wolf. There’s a rhyme on Twitter.
Credit: X, @markpopham
It’s also the framing story for Klein’s new book. Naomi Klein sees Namoi Wolf as her doppelgänger, a German word for an uncanny evil twin. When Wolf became one of America’s biggest sources of COVID-19 disinformation, Klein went on a personal research journey across health, history, fascism, colonialism, the climate, and the future. She finds eerie conclusions.
Wolf vs. Klein.
Naomi Klein is painfully aware she always gets mistaken for Naomi Wolf. They have similar names, looks, religions, and careers, and both write “big idea” non-fiction books, sometimes with overlapping topics!
Yet, Klein doesn’t hate Wolf; she’s obsessed with her, surveying every media appearance the woman made for years, and she knows a lot about double.
Wolf’s first book, The Beauty Myth (1990), a feminist argument on the expectation for women to look and dress a certain way (and buy cosmetic products), is an example of society subjugating women. I agree with Wolf’s point; in 2023, this seems widely accepted.
Wolf’s career had ups and downs. She consulted as a feminist advisor on the 2000 Al Gore presidential campaign and published a book-length libertarian listicle about fascism rising in America, The End of America: Letter of Warning to a Young Patriot. Ironically, fascism in North America and warnings are a topic of Doppelgänger.
In 2019, something interesting happened. Wolf wrote a left-wing book about governments banning gay love based on her doctoral thesis. It got pulped and never came out. She went on the BBC to promote the book, and the interviewer called out her research as incorrect. Wolf misread historical court records and didn’t consul basic newspaper archives. Klein marks this as Wolf’s Jokerfying moment (my word).
Jokerfied Naomi Wolf — Credit: Made in Canva by the author
Mainstream media rejected her, so Wolf became reactionary. Platformed as “an exile of the left,” her rhetoric got increasingly deranged: microchip vaccines, 5G polluting air, real feminists like the abortion ban. All nonsense. Twitter suspended her, and X invited her back for now!
Many publicly humiliated Wolf on Twitter. She continues to be humiliated on the app to this day. Humiliation keeps app users returning as an audience. Their schadenfreude, a German word for pleasure from someone from another person’s misfortune, is a troupe in a shared dialect. A shared symbol saying, Look at this crazy person!
Ironically, vilifying right-wing writers offers them a monetization opportunity. Wolf can take haters and make herself famous, creating a network to broadcast disinformation.
Vaccines, Autism, Fitness and COVID Disinformation
COVID was terrible, an acceleration of every bad thing happening in the world, and there’s reason to be deeply skeptical of everything you hear to stay inoculated against bunk information. Klein concedes this.
She recalls knocking on doors for her husband’s parliamentary election with the NDP. She had doorstep conversations with hippy-dippy peace and love flag owners who were very hostile against mandatory vaccinations and lockdowns. These voters distrusted public institutions.
What politicized them? The material events of COVID and competing sources of propaganda. COVID-19 did disrupt people’s lives, often to their detriment. Unemployment, isolation, and, most of all, getting sick with the potential for death or lifelong consequences were radicalizing events. The theoretical ideas of “access” and “bodies in spaces” became literal regarding airborne infection, lockdowns, and work.
Yet COVID was a prime opportunity for disinformation. People took advantage of the confusion to make things up for profit. Klein cites The Disinformation DozenEditSignEditSign, twelve online influencers that researchers traced back to COVID-19 false information. A strange pattern emerges.
Six out of twelve COVID disinformation accounts are accredited medical professionals: Doppelgänger doctors and alternative health experts who told people to ignore the CDC.
There’s a former pharmaceutical executive, pediatrician, gynecologist, chiropractor, osteopath, and holistic psychiatrist, among other “alternative medicine entrepreneurs.” Even Naomi Wolf bills herself as a doctor because she has a Doctorate of Philosophy in English literature and a discredited thesis.
These hucksters claim medical professionals are untrustworthy, yet ironically, they themselves are untrustworthy medical professionals. Again, a doubling.
Why did so many credentialed medical professionals spread COVID-19 denial?
Klein cites profit as the obvious answer: they make money by saying don’t take free vaccines. Buy expensive powders, pills, herbal supplements, and essential oils instead. Their credentials might play into people’s programming to trust doctors. Also, those credentials might make it easier for them to feel overconfident in their own reasoning skills since they went to medical school, and that false confidence causes them to misinterpret complex studies into nonsense.
The body is both universal and personal, another doubling. Wellness is not neutral. Who’s “well” and how we should treat the unwell is a political question of power.
Bodies Hiding Fascism
Klein extends the argument, citing theory and history to show a link between the individual’s hyper-focus on the body and fascism.
Runners carrying the Olympic Flame — Credit: Wiki Commons, German Federal Archive
Klein cites recent research into Hans Asperger, the 2018 book Asperger’s Children: The Origins of Autism in Nazi Vienna. Asperger’s was a doctor of cognitive development, the former namesake of Asperger’s Syndrome. In the 1920s, he advocated for people with cognitive differences.
Then in the 1930s, when the Nazis came to power, something changed for Hans Asperger. The double appears again.
New proof shows Asperger collaborated closely with Nazi extermination programs and signed execution warrants for children as young as two. Consider that the Nazi party banned vaccines for Jewish people because they wanted Jewish neighborhoods to get sick.
The lie that vaccines cause autism takes on eerie double meanings in these contexts.
Calls to Action
We are on the cusp of fascist control! That’s a rhetorically attractive idea for writers because then they have something to write against. They can write a book with a title like this:
When Everybody Just Stops Doing The Thing In the Book’s Title, We Will Evoke Change Together!
Klein wonders if a book’s call to action is hubris. A book can identify a trend but not stop it.
Klein acknowledges she previously wrote books making such bold proclamations. So did colleagues who quit writing and started non-profits because writing did not spur real-world action. All of Klein’s previous calls to action were ignored.
No Logo (1999) warned against the multi-billion dollar branding industries, yet in 2023, everyone and everything is a brand. Branding one’s self is how you get a job.
Shock Doctrine (2007) extolled community mobilization to stop privatization and profiteering. Yet, COVID Has Made Global Inequality Much Worse, “Global billionaire wealth grew by $4.4 trillion between 2020 and 2021…more than 100 million people fell below the poverty line.”
In This Changes Everything (2014), Klein argued the world’s leaders needed to act immediately to stop catastrophic mass deaths from the climate crisis. America pulled out of international treaties and refused to decarbonize.
Knowing that the world is in crisis and our leaders refuse to address the problem creates its own sort of double world. The eery vibe of doom-scrolling, seeing the projection of our shared fate but powerless to stop it.
Doppelgänger avoids straightforward answers, perhaps in reaction to the previous books. This call to action is more optical. See the mirror world around you. See the double in yourself. Acknowledge it exists.
Like in the Jordan Peele film Us, take the vision quest and “Find Yourself”
Us (2019) — Credit: Universal Pictures
Ask who owns the cages. Who’s locked inside? Who profits off conquest? Who sells the guns, the missiles, the bananas, and the consulting firm’s billable hours?
The book’s call to action is also personal: try not to judge others quickly or too harshly. In a world where digital platforms exist to make us angry and whip us into a frenzy, being kind is a radical act.
Call out dehumanizing generalizations like “all Palestinians,” “every Russian,” “those migrants,” and “the city’s rioting looters.” These generalizations lead to fatal ends.
Klein offers good ideas: be kind, be caring. Cynically, these calls to compassion are sure to be ignored by leaders in business and government. While these ideas are actionable, they require devotion, discipline, and community, three things the world currently lacks.
To conclude, a last call to action from a classic double movie is mentioned in the book.
Dictators free themselves but they enslave the people! Now let us fight to fulfil that promise! Let us fight to free the world — to do away with national barriers — to do away with greed, with hate and intolerance. Let us fight for a world of reason, a world where science and progress will lead to all men’s happiness. Soldiers! in the name of democracy, let us all unite!
— Charlie Chaplin, The Great Dictator (1940)
Reviewed: Doppelgänger: A Trip Into the Mirror World By Naomi Klein Farrar, Straus and Giroux, 2023
A star-studded Hollywood biopic put the Gamestop Stock Short Squeeze back in the news. Two books were published about Gamestop mania, soI read both books, and this post considers their viewpoint, accuracy, and historical rigor. Can we finally evaluate the 2021 Stonks Squeeze? P.S. This book review is financial advice. Do as I say, or your money gets hurt.
The Antisocial Network (2021) by Ben Mezrich
Should you see Dumb Money, the movie? Probably. It looks funny, it’s full of stars, and Paul Dano pretends to be Keith Gill.
Should you read the book Dumb Money, first published as The Antisocial Network (2001)? No. It’s a conventional retelling of what happened with GME that sides with “the Reddit masses” but doesn’t go deep enough to figure out who scammed money off those masses. Dumb Money oversimplifies the story, condenses the timeline, and covers the same ground as Wikipedia articles about the GME Squeeze. It was churned out quickly and seems designed for a movie adaptation.
The book does a good job of making stocks exciting, cross-cutting Wall Street, Main Street, and Keith Gill, a.k.a. DeepFuckingValue, a.k.a. RoaringKitty. Yet the narrative is uncritical of the story’s major players. We learn a lot about Gill’s running aspirations and his plan to buy his hometown an indoor track; we don’t learn about Gill’s history as an accredited broker for the life insurance company MassMutual, his experience at a fin-tech startup, or his stint at a legal case crowdfund program, LexShares. There’s no investigation into why Gill left his job and decided to risk his own money.
Gill’s MassMutual headshot compared to his meme-man headshot
I find it strange that these details were omitted. Gill was a finance professional. His GME analysis was aimed at other finance professionals to invest their money in an undervalued equity. Two rich investors, Ryan Coen and Michael Burry, came to similar conclusions. Perhaps they even read his analysis and invested in the stock. Describing Gill as a plucky retail investor is technically true, but relatively few retail investors run rigorous earning report analyses or spend $54,000 on one trade.
As the squeeze gets going, the book conflates retail investing to internet trend investors, citing the memes and the sea shanties to pretend degenerate Reddit gamblers are typical retail traders. Stock obsessives are outliers. Typical retail investors have 401K contributions that they set and forget. Arguably, they do not benefit from manufactured meme volatility.
The book’s cited example of the single-mom nurse that follows meme stocks seems like another outlier over-analyzed to seem significant. Sure, some Redditors went from r/theDonald to r/Wallstreetbets and fancied themselves amateur investors. But I’d wager that pre-2021 Wall Street Bets had a higher percentage of finance professionals than other Reddit boards, as it’s a chat room for people who spend their days trading stocks. To his credit, Mezrich does stress the distinction that apes are typical retail traders at the end of the book during the Congressional hearing, and admittedly, the book grasps this nuance better than many elected Congress members.
The strangest part of the book is the section about Elon Musk. A cheeky sci-fi fan fiction story about the billionaire, describing Musk’s underground space base where he eats aliens he caught on Mars. I think this voice would be cute for a novelty book from Urban Outfitters, but it was jarring in a nonfiction book about a major financial event. It misrepresents Musk’s role in the Meme Stonk saga and re-entertains Musk’s tiresome narrative that he’s some superhero evil genius. It’s Elon PR. In fact, Musk’s tweets about stocks have been the subject of SEC litigation in 2018 as well as in 2022 when he purchased Twitter. Shifting to a fan-fiction retelling of Musk avoids detailing Musk’s culpability of getting retail traders to make risky bets.
This book seems written to make the internet happy and nobody mad, especially not any billionaires. It gives a TL;DR analysis of the event in broad outlines but little of the why or how this happened. This book is only for true GME obsessives. Thankfully, there’s a better book.
The Revolution That Wasn’t (2022) by Spencer Jakab
Spencer Jakab, a Wall Street Journal reporter, provides a clearer explanation of the Gamestock phenomena. His book surveys a larger timeframe, more sources and provides a deeper analysis to explain the financial machinations that caused the GME squeezes.
His thesis is clear and depressing. Wall Street investment firms made more money from GME than retail traders did, and everything worked as planned. The whole scenario was capitalized on as a ploy billionaires used to get dumb money into the market. Jakab writes, “If something stirs up the retail crowd, it’s almost always good for the industry as a whole.” He quotes Wolf on Wall Street Jordan Belfort for emphasis.
“I think what the average investor doesn’t understand is that Wall Street likes volatility, they make money on volatility, on volume, up or down. It’s nice to have a bull market but when volume dries up and there’s no activity, that’s when Wallstreet suffers most.”
— Jordan Belfort, the Wolf on Wall Street
Jakab argues that GME was a consequence of reckless gambling encouraged by investment banks, clearing houses, and especially gamified brokers like Robinhood. Financial trends precipitated the GME’s squeezes, and the author argues if these things hadn’t happened, the video game pawnshop would not have enticed the world into buying its worthless stock. Trends like…
ZIRP (Zero Interest Rate Percentage)
Ubiquitous smartphones
Commission free trading
Payment for Order Flow
SPACs, OTC, and Crypto trading (unregulated assets)
The 2020 COVID flash crash
“Donny Pumps” or Donald Trump’s immediate business bailout and money printing
If the government wasn’t printing money to keep the stock market afloat, and if Wall Street hadn’t spent the previous decade making it easier for anyone to place bets on stocks, we wouldn’t have seen this short squeeze.
Jakab also points the blame at rich influencers who really made money from the 2021 Meme Stocks.
Like Ryan Coen, the Chewy.com CEO who became a billionaire from his GME trades. Today, he’s under SEC investigation for telling retail investors to buy Bed Bath & Beyond as the company headed to bankruptcy.
Dave Portnoy, a spokesperson for the online gambling industry, made big bets on meme stocks for clout. He lost, but he profits from an environment of stupid retail traders. This is the guy who picked stocks to rally from a Scrabble bag. His BUZZ ETF tracks popular stocks, and it’s down 30% from ATH (on 9/15/23). Whether ETF commissions or gambling app referrals, the man always tries to score points on the vig.
When Robinhood filed for its IPO, it revealed 2021 was massively profitable and saw the creation of thousands of new accounts. Ken Griffin, CEO of Citadel Securities, ended 2021 as the world’s 37th richest person. Options sellers reported the largest profits in history, as did investment banks like Morgan Stanley and Goldman Sachs.
The evidence is overwhelming: retail did not win on the GME short squeeze. Only a small minority of people made money. Nobody stuck it to the hedgies, the market functioned as designed, and Wall Street won from meme stock mania.
Future Market Predictions
Did the market makers collude on 1/21/21 to screw over retail traders when Robinhood stopped selling Gamestop shares? Not exactly. Both books agree that financiers and lawmakers collude to screw retail traders as much as the law allows (a lot). But halting buy orders on Robinhood is not illegal nor irrational for the broker. Both books agree that Robinhood has the legal right to reject buy orders on a volatile equity if they can’t afford to fulfill the order. It’s like a store without inventory; buyers are free to go to another brokerage and buy it.
Jakab cogently argues Robinhood screwed retail way before 1/21/2021 by using Pavlovian conditioning to gamify stock trading and get their users addicted to dopamine hits from options gambling. This trend makes more money than the blip any market professionals “lost” on covering Gamestop shares.
Since publication, the Reddit board r/GME_Meltdown shows the consequences of meme stocks. The men who bought GME, BBBY, AMC, and other meme stocks seem like people trapped in cults, multi-level marketing schemes. Insisting the stocks of bankrupt companies will go up seems no different than having nutritional supplement powders in your garage. It’s hard to know who’s telling the truth on message boards, but posters have reported losing their entire savings, their jobs, homes, and families. Did these men win by getting the opportunity to invest recklessly?
“We should stop pretending that’s what’s going on is investing,” said Benjamin Edwards, a professor at the University of Nevada in Las Vegas who has studied securities law. “It’s just gambling.”
— Wall Street Journal
So what does this mean for the future? I predict more of the same. More market shenanigans that benefit a few thousand people who work in the FIRE (finance, insurance, real estate) industry at the expense of billions of people who don’t. More ways to trick know-nothings into feeling confident enough to waste their money on complex financial instruments. The Gamestop Stock Shorting Scandal of 2021 is the perfect example of how inefficient markets are at running an economy. GME reinforced the truth that markets are designed to enrich the few while impoverishing many.
