The FTX debacle, starring Sam Bankman-Fried and a cast of other little people, has an enormous significance beyond its “Madoff” aspects. His role as wunderkind and philanthropist for “woke” and proper causes ended in a manner that makes the late Bernie appear as insignificant as a con man begging on a street corner. That it dwarfs the Enron fraud adds to its significance.
Bankman-Fried’s intentions were not pure! Jeffrey Tucker provides an excellent overview of this saga. Here is a part of his summary:
The rest of us are left with the bill for this obvious scam that implausibly links crypto and Covid. But just as the money was based on nothing but puffed air, the damage they have wrought on the world is all too real: a lost generation of kids, declined lifespans, millions missing from the workforce, a calamitous fall in public health, millions of kids in poverty due to supply-chain breakages, 19 straight months of falling real incomes, historically high increases in debt, and a dramatic fall in human morale the world over.
So yes, we should all be furious and demand full accountability at the very least. Whatever the final truth, it is likely to be far worse than even the egregious facts listed above. It’s bad enough that lockdowns wrecked life and liberty. To discover that vast support for them was funded by fraud and fakery is a deeper level of corruption that not even the most cynical among us could have imagined.
The absurdity of this scam likely means that history will view Bankman-Fried as an entrepreneurial villain, equivalent to Darth Vader or Hannibal Lector? Optimistically, I see the possibility of his serving an unintended Paul Revere role. The absurdity of this scam may provide the warning cry that wakes up this nation.
Let me explain why this unintended consequence might happen:
- The absurdity of the scam is obvious. The head pygmy was an obvious social misfit, as were his polyamorous cohorts. None appeared qualified or, in any sense, impressive. Few readers would consider any of them to be trustworthy enough to babysit! A simple understanding of maturity and immaturity was all that was required to run away. (Review any of the videos, assuming they still exist, to pass your own judgment.)
- The company operated and lived in a large house in the Bahamas. They didn’t hide the fact that they were sexually involved or business unsavvy. The group appeared to be little more than a cult for ugly people who knew nothing about what they were supposed to be doing.
- The company had extraordinary access and support from politicians. Both political parties (although primarily one) supported this company. Were the politicians involved too stupid to understand? Or were they benefitting so much that they would risk their own careers? Was the size of the payoffs worth it?
- Public interest in this fraud goes beyond anything associated with Madoff and Enron. Their schemes interested those harmed and financial types wanting to understand how the fraud happened. FTX has a bigger audience. Celebrities with fan bases in the tens of millions were involved. Mega sports stars Tom Brady and Stephen Curry involved. So were celebrities from other fields. Interest in this scandal is much greater than just those scammed.
- So-called financial “experts” (hedge funds, CNBC commentators, etc.) revealed themselves to be incompetent with their advocacy (sometimes, “worship”) of this scam. For them to not see the obvious and monumental fraud was inexcusable! Ditto for the news media, who praised the supposed generosity of the “woke” leader. In Hollywood terminology, this scandal has a vast audience, and it has “legs.”
- Finally, it is comic-book simple. Comic book characters created and starred in this story. Its complexity is comic book level. Comic book readers can relate to it and understand it.
In short, public interest in this scam goes well beyond those financially involved. Potential connections to the covid shutdowns and its damage expands the interested audience. The change in House leadership ensures an investigation that provides more information that only indicts government officials. (No, it will not be a complete investigation. The investigators will protect their own.)
Many will properly conclude that this Ponzi scheme could not have occurred without government involvement and help. This connection might turn Bankman-Fried into an unintended Paul Revere. Wouldn’t that be fitting and wonderful?