Guest post: Invasion of the Critical-Thinking Snatchers
Originally a comment by Artymorty on There’s a sucker born every minute.
I’ve never in my life heard of anyone paying for a life coach’s services, and that’s puzzled me more and more; I seem to come across a self-declared life coach online at least once a week. Who the hell are they coaching?
Now I have my answer: like Amway salesmen, life coaches are their own target demographic. The only people gullible enough to buy it are the people gullible enough to get roped into selling it.
It feels like everything is a pyramid scheme these days. In the information-overload/hypertechnology age, we’re all feeling lost at sea and searching for safe harbour. In this environment, people everywhere are throwing themselves behind dubious “life changing” schemes. When you look at it that way, getting into “life coaching” isn’t all that different from getting into gender ideology.
I would say the same about Bitcoin, or NFTs. They’re pyramid schemes that sell the promise of life improvement through investment in junk products.
I happen to believe Canada’s entire economy has become swept up in one such pyramid scheme, a craze that promises to change everyone’s lives but which is centred around junk products: the real estate speculation bubble. Countless Canadians have redirected their savings into investing in the condo craze. Many people have even quit their jobs to become full-time real estate speculators. Prices have ballooned far above anything remotely rational, and now the entire country is deep in debt, trying (and failing) to keep up with their preposterous mortgage payments. Millions of Canadians now depend on food banks; there’s a national boycott of our chief grocer (resentment at sky-high grocery prices is a side-effect of people finding they don’t have enough money to eat after the rent/mortgage bill comes out); there’s a catastrophic spike in homelessness; international students and recent immigrants are turning around and leaving; storefronts are shuttering. No one can afford any discretionary spending, leading to mass layoffs in the service sector, leading to a cascade of job losses throughout the economy. All because of the get-rich-quick condo investment pyramid scheme. The true believers are adamant that the problem is simply a temporary increase in interest rates, but the true problem is the principal on these home loans, not the interest: everybody’s real estate valuations need to be cut in half, coast to coast, to make life liveable again in this country. There is in fact more for-rent housing and more for-sale housing on the market right now than there has been in decades, so the problem is certainly not supply. The problem is that the prices are too high for anyone to afford, and the normal machinations of supply and demand haven’t yet succeeded in bringing the prices back down to earth, because everyone — including policymakers in the federal government — is desperate to put off the inevitable reckoning with reality.
It feels like I’m living in a bizarre dream where everyone around me has succumbed to some cult or other. It’s Invasion of the Critical-Thinking Snatchers, and the few of us un-snatched remainers are laying low, just trying to hold on until something comes along to save us all.
During the frenzy just before the great Wall St crash of 1929, a young JP Morgan (as I recall) went to have his shoes shined. During this process, the shoe-shine-boy told him how exciting he found it all, what stock he was into, and enquired as to what JP’s share advice might be.
When JP got back to his office, he told his senior staff that he wanted complete liquidity and to be rid of all his share portfolio as soon as possible. He said that when the shoe-shine boy starts talking share market, it’s time to get out.
The Bitcoin Bubble provided numerous cases of people who were just a bit too late in their rush for the exit. Unfortunately, there is one born every minute.
NB: As I recall, that story was told in The Great Crash by JK Galbraith. I did have a copy, but I must have lent it to some ambitious young mountaineer.
JP Morgan wasn’t very young in 1929. In fact, he died in 1913.
https://en.wikipedia.org/wiki/J._P._Morgan
Even his son JP Morgan, Jr was 62 in 1929.
https://en.wikipedia.org/wiki/J._P._Morgan_Jr.
@ #3, #4: Ah well. Probably someone else then. Could easily have been.
A bit o’ Googlin’ turned up the actual shoeshine customer: Joe Kennedy.
A few decades back, comic and fantasy author Neil Gaiman gave a sobering speech at a string of comic-book conventions. At the time, there’d been a steady increase in the number of speculators in the market–people hearing tales of rare #1 issues, or misprints, or Big Event issues, or even gimmick comics (ranging from foil embossing to the KISS comic book that was allegedly printed with ink containing a bit of the band’s blood–seriously!) being sold on the secondary market for thousands, or even more, had led to a curious cycle. Non-fans started buying up comics that had the number 1 on the cover, or had something funky about the printing, well in excess of the actual demand for the book, because they’d heard it was a ‘good investment’. The industry, which was going through a hard time due to rising costs, opted to feed into this market, increasing the number of specialty covers and launching new titles (often still starring the same old reliable characters, mind you) so that they could have Issue #1 all over again. And these were bought on the premise that they’d at LEAST double in value, and so the publishers did it again, and again, and….
So there was Gaiman, observing all this, and he threw a huge splash of cold water on everyone with a speech about the Holland Tulip Crash. It wasn’t well-liked by a lot of folks, especially the speculators, but I think he may have induced just enough caution to keep the industry from completely folding in on itself once everyone realized that there were more Death of Superman comics still in their black bags than there was remotely a market to read them.
This was back in the 90s, not long after the era of Beanie Babies, so I’m going to suggest that this phenomenon isn’t as new as it seems, though perhaps it’s becoming more ubiquitous; if so, I’d suggest that it’s likely a sign of things to come–after all, Ponzi made his money in the 20s, just prior to the stock market crash, so it seems plausible that con games and speculator markets are a natural outcome of late-stage capitalism and desperate people trying to stay afloat.
Freemage, it was also a belief in being able to beat the market that led to the end of guaranteed pensions, with everything being put in the stock market. The Gen Xers fought for it; now it isn’t certain they’ll be able to retire. A lot of baby boomers are staying in their jobs because of the lack of pension funds in an uncertain market. That means Gen Xers, Millennials, and whatever comes up behind them are not going to get those better jobs until they’re too old to be promoted.
Thinking you can get rich quick is as old as capitalism, and probably older.