FEATS

Elijah Schaffer is a C-list political pundit, one of many aspiring Rush Limbaugh-esque alt-right reactionaries. In the early afternoon of January 6, he tweeted a picture from behind a desk in Nancy Pelosi’s office. Congressional staffers had evacuated the room only moments before, leaving an email inbox still open on the desktop monitor. The Twitter caption read, in part, “BREAKING: I am inside Nancy Pelosi’s office with the thousands of revolutionaries who have stormed the building”. Shortly thereafter, edits of the original photo began to proliferate throughout Reddit, Twitter, and Instagram, many of them changing the content visible on the desktop screen. The first one to appear on my timeline, providing satirical reprieve from a feed of solemn riot commentary, showed the digital music production program Ableton Live superimposed on the desktop monitor, the image of which is supposed to (I think) evoke the idea of a certain trap music subculture of young music producers “in the stu[dio]”.

I won’t try to draw some tenuous connection between the Capitol raid and a niche trap music subculture. The meme is funny precisely because there is no connection between these images, both of which bear distinct cultural and political resonances which, in their combination, force a viewer to try to discern a substantive message, if only for an instant. The comedic climax lies in a sudden realization of the perversity of that effort, the absurdity of any imagined truth or meaning supposed to exist in the image, an instant resignation to the fact that the image is nonsense—a cognitive ‘short circuit’ of sorts.

That is, at least, according to the conceptual framework of the joke articulated by late 19th-century aesthetic theorist and philosopher Theodore Lipps, a framework which I posit for the sake of argument since it might help make some sense of a particular brand of meme-based humor. The thrust of any joking remark––or, in this case, joking image––is a contrast between meaning and meaninglessness; a joke is a joke if “we attribute significance to it that has psychological necessity and then, as soon as we have done so, deny it again,” Lipps theorized. We discern truth or assume sense, however momentarily, in the joke just as one would in a non-joking remark, thereby lending the joke logical or practical bearing on or relation with reality, when one knows that it cannot contain these things. The aforementioned ‘short circuit’, the essence of the joke as one would perceive it, occurs when we become aware of this contrast, recognizing the lack of sense, truth, and practical consequence where we had thought those things to exist just a moment before, instantaneously transitioning to “the consciousness or impression of relative nothingness”.

We can extrapolate here, applying this framework generatively to the greater category of jokes to which the capitol riot memes belong, a particular brand of internet humor breaching the realm of absurdism. At issue, more specifically, is a topical or (in some capacity) relevant satire of people, institutions, or events whose ‘punchline’, as in the Ableton meme, is nonsense. Think-pieces on the topic of meme humor––or, as many of them use interchangeably, ‘Gen-Z humor’––tend to miss this point, speaking far too generally on the entirety of picture-based jokes on the internet. Usually, these articles articulate a thesis to the effect of ‘Gen-Z uses meme humor as a coping mechanism for their mass trauma,’ where, in their formulation, Gen-Z’s experience growing up in the post-9/11 era and through the 2008 Financial Crisis constitute the most pertinent of their ‘trauma’. This trauma is said to manifest in nihilistic attitudes regarding politics, economics, society, etc. They point to moments when internet social spaces, dominated by their so-called ‘Gen-Z’, satirized dire, consequential events—like the Capitol riots—with memes, arguing that ‘Gen-Z’ chooses to engage with these events on the level of humor so as to avoid earnest consideration of the future.

The generational analysis employed in these arguments is sorely inaccurate; such sweeping generalizations ought to be met with skepticism, particularly when they border on generation-wide, mass psychological diagnoses. Moreover, I think there is another element to meme humor, specifically the nonsensical, absurdist meme humor at issue, that this argument misses. This is a more active, communicative purpose than a mere shielding of oneself from the world and the depressive psychic damage one tends to incur by engaging with it. Namely, this humor expresses an absurdist worldview; it does not simply make fun for the sake of making fun, but also for the sake of pronouncing an understanding of the world as absurd, chaotic, and meaningless.

If at the core of the comic process is a contrast between supposed meaning and actual meaninglessness, supposed truth and actual non-truth, then perhaps recasting discourse on major events, politics, and so forth, in joke form and, moreover, with absurdist overtones, is an oblique political or philosophical expression (as absurd as that might sound). This is an expression of disillusionment, an embrace of the absurd, pronouncing that politics, for instance, is in reality fundamentally nonsensical; that perhaps we have for so long lent politics “logical consequences in excess of its true content” and we are now to “deny these consequences” as we have “recognized the true nature” of politics, as Lipps might describe it. It follows, then, that politics, in its apparent entropic deterioration toward absurdity, is comical.

The Capitol riot was not satirized in nonsensical memes in order to cope with the ‘trauma’ of the event (it seems unlikely that the creators of these memes felt personally affected by this event), nor to avoid seriously processing the moment. Rather, these memes were precisely the medium through which one processes the event; for those who engage with this

kind of meme humor, their intuition tells them there is an essential absurdity there, at Nancy Pelosi’s desk temporarily occupied by a rioter, at bodies scaling the capitol walls in fanatic service of a conspiracy theory propagated by a deranged media machine, at the fact that no amount of fact-checking or appeal to reason could have subdued such profound conspiratorial rage. The whole event was an attempt to achieve nothing in particular by a group whose ostensible motivation to “stop the steal” is premised on a total lie. Surprisingly––but also unsurprisingly––we now know that many rioters didn’t even vote. Presuming, for the sake of argument, that the rioters sought something material and meaningful in preventing Congress from certifying the election, it’s clear that upon breaching the Capitol they proceeded to thrash about, haphazardly looting souvenirs and brawling––or in some cases, taking selfies––with cops. Consider the Tweet containing the source image for the meme we considered earlier. That one would even suppose this hysterical mob to be a group of “revolutionaries” is funny. And so the whole thing is quite hollow; there is so much built on so little––almost no truth or reason or meaning beneath what, at first, looks quite substantive. Through this absurdist lens, the whole event appears to be, by Lipps’ definition, one big joke.

Such an event, viewed through such a lens, could only warrant a jesting response. One can only engage with the absurd event on the level of the event itself––with equally absurd humor. Anything else would take the event far too seriously, would lend too much credit to the supposed motives and reason behind the attack. One immediately rolls their eyes at the grandiose language with which figures like Biden met the ordeal in its aftermath:

“At this hour, our democracy is under unprecedented assault, unlike anything we’ve seen in modern times, an assault on the Citadel of Liberty, the Capitol itself … An assault on the most sacred of American undertakings, the doing of the people’s business.”

That deranged moshpit of petty larceny and Pagan cosplay (you know, the guy with the horns) is totally inconsonant with Biden’s assessment of the event as an “assault on the Citadel of Liberty… the most sacred of American undertakings”. While Biden’s speech is surely more serious than a photo of Ableton running on a Congressional desktop, as perhaps the President’s words ought to be, the latter must be, from the absurdist point of view, a more sincere commentary on the riot, as perverse as that may seem. The desktop meme reckons and engages with the riot on its own, fundamentally comic terms. Biden, on the other hand, seems to have fooled himself, not because his assessment is incorrect or inaccurate per se, but because he and the surrounding political establishment, insulated in their stately, comatose myopia, seem to miss the absurdity of the whole thing. Biden fails to see in the riot a glaring contrast between meaning and meaninglessness, between truth and non-truth––which the absurdist eye spots in an instant––and in this sense doesn’t quite get the joke of it all. To stand up and assert the moral high ground against the Capitol rioters is to miss the point entirely. And it’s kind of cringe. What do we make of perceived deterioration of reason and order in politics, society, economics, and so forth, toward an absurd world if, in fact, the memes really reflect as much? There are certain contemporary phenomena that might confirm the unreality recognized in this perception: the ubiquity of impossibly complex and abstract financial systems which wreak very material havoc or, as I have already alluded, the efficacy of the various political mechanisms of Trumpism, particularly those relying on conspiracy theory and persistent lying, etc. It’s hard to say, in any objective sense, whether society and (geo)politics are really any more chaotic or absurd than they’ve been in past eras. All that can be said for certain is that our access and relationship with that absurdity––that is, the spectacle of the absurd thing, whether it be the Capitol riots or something else––has shifted fundamentally.

An event like the Capitol riot would not, on its own, elicit such nonsensical and jesting responses as the meme we considered if not for its particular spectacularization via social media. Granted, the Capitol riot and the spectacle of the Capitol riot are inextricable; the riot would not have happened if not for its presence in various media and the riot can only bear any trace of reason if understood as a spectacle, a symbol of upheaval, and nothing more, certainly not a “revolution”. Nonetheless, the way people saw images of the riot, wherever they were in the world, added yet another dimension––permeating, intimate, and disturbingly vicarious––to the absurdity. Consider, for instance, the countlessly many Facebook, YouTube, and Twitch point-of-view livestreams, broadcasted directly from the phones of the rioters themselves. If one was so inclined, they could enter the mob and participate virtually, in real time or retroactively, in the smashing, the looting, and the brawls. As the spectacle of the event effectively becomes an unmediated first hand experience of the event, the absurdity of it becomes simultaneously more pervasive and normalized in our collective psyche. These live streams are, in and of themselves, absurd, especially in light of the fact that many of them were monetized; on top of it all, streaming platforms and livestreaming rioters profit, however marginally, from the spectacle of American political decay.

It’s noteworthy, then, that the source image for the meme we originally considered was a photo taken by a rioter and published to Twitter in real time. In the face of all of this, whoever superimposed a window of Ableton Live running on the desktop computer in the original image––along with the scores of people who published other edits of the same photo to different online spaces––underscores and satirizes not only the absurdity of the event, but the absurdity of the spectacular form of the event. Internet commentators, by coopting and subverting its POV and livestream format, thereby simultaneously compounding and poking holes in the spectacle; Thus online jokesters, in a feat of rhetorical genius, engage with and undermine the spectacle on its own terms, rendering impotent the self-proclaimed “revolutionary” who posted the source image in earnest––in other words, it makes that rioter/pundit Elijah Schaffer look very stupid.

This is the strength of the Meme (as opposed to the meme), by which I refer to the social-psychological, sociocultural phenomena of replication and mutation, and not just a funny picture on the internet. One image of Nancy Pelosi’s computer screen multiplies virally, mutated by edits with each new iteration; such a memetic proliferation of this absurdist critique is very successful at hijacking the same spectacular forms of the riot itself, taking part in the absurdity. Here, those expressing the absurdist worldview, all too aware of the entropic trajectory of the world, society, and politics, dive headlong into the endlessly interwoven complex of online memetic propagation, perhaps the most chaotic of things.

JUSTIN SCHEER B’23 hates to be that guy.

WE LIKE THE STOCK

WallStreetBets after the fall and the future of retail investing

content warning: suicide mention

A post titled “FOR ALL THE BIG FUCKING HEDGE FUNDS MONITORING US, THIS IS A MESSAGE FROM US TO YOU, WE FUCKING OWN YOU NOW, FUCK. YOU. GO BUY THE FUCKING NEWS. LIKE AND COMMENT SO THEY SEE THIS POST. FUCK YOU MELVIN CAPITAL. FUCK YOU CITRON RESEARCH. YOU HAVENT CLOSED SHIT. THIS IS GONNA GO DOWN IN HISTORY,” written by user Flexinzack, topped Reddit’s WallStreetBets community on January 27.

On January 28, the stock price of GameStop—a financially troubled retail video game store—hit a high of $483 per share, up from only $20 a month before. The gains were largely attributed to WallStreetBets, a high-risk stock discussion community, in which users had aggressively promoted purchasing and holding the stock.

Hedge funds suffered huge losses: Melvin Capital bet heavily against GameStop, losing 53 percent of its value in January. The firm exited its GameStop position on January 27 after Citadel and Point72 invested $2.75 billion in an emergency influx of cash to stabilize the fund, according to the Wall Street Journal.

Images posted to WallStreetBets painted the stock’s surge as the ultimate David and Goliath story; a group of scrappy Reddit users worked to beat the mighty hedge funds through solidarity, and they had won. The community rejoiced. “I want to thank you guys for saving my best friend’s life!” Reddit user MasterTheGame wrote, claiming that earnings from GameStop paid for his dog’s surgery. “I find myself in a position to pay for a service that I hope I never need to use,” user psytokine_storm wrote, captioning a screenshot of a $5,000 donation to a children’s hospital.

This dynamic rapidly reversed. On the day the stock hit its peak, Robinhood, a popular no-fee stock trading platform, restricted trading of 13 companies’ stocks (including GameStop) “due to ongoing market volatility,” allowing users to sell but preventing new purchases. Robinhood, often praised for its mission of ‘democratizing finance,’ had reneged on its end of the deal, provoking outrage across the political spectrum. Users quickly provided resources to join class action lawsuits and file complaints with relevant financial authorities.

New winners were quickly crowned. Companies like Citadel and Robinhood, which make money simply by processing stock trades, profited immensely from the boom in trading. Institutional investors like BlackRock, which owned 13 percent of GameStop, had opportunities to sell with immense gains. Where Reddit’s uprising had hoped for a bang of hedge fund bankruptcies, the surge instead ended with a whimper of panic-selling in the wake of trading restrictions.

For some who sought a sense of revenge or justice in their trades, such restrictions confirmed their deeply held beliefs; the little guy never comes out on top. David, a 27-year-old self-identified Marxist-Leninist user of WallStreetBets whose name has been changed for privacy reasons, said the hatred toward hedge funds represented larger skepticism of the economy’s fundamental fairness, a distrust rooted in the aftermath of the Great Recession.

“You just have this entire generation that was traumatized and disillusioned with capital from the beginning and never saw justice for the people who orchestrated that, and the people who took multi-million dollar bonuses the year after it happened with the money that we all financed,” David told the College Hill Independent. “[Hedge funds] made a bad bet and the rules of their own game meant that they were going to be bleeding out of their eyeballs for it, and that’s very satisfying to a bunch of people.”

The story of GameStop reflects the greater reality of our current financial system—even when it seems like the underdog might be winning, those with capital usually come out on top.

A report from the Financial Industry Regulatory Authority found a surge of new investors in the pandemic, the majority of whom were under 45. These new investors have lower incomes and are more likely to be racially or ethnically diverse than those who owned investment accounts before 2020.

Recent innovations in the stock market have facilitated such increased access. For example, Robinhood’s largest source of revenue is payment for order flow. In this system, market makers like Citadel pay Robinhood to complete its orders, allowing it to offer fee-free trading to its customers. Another innovation, fractional share purchasing, allows customers to own stock without paying the price of one entire share. Many brokers have also followed Robinhood’s practice of eliminating account balance minimums, which has increased access.

Economics Lecturer Brad Gibbs B’93, who currently teaches Corporate Finance at Brown and previously worked as a managing director at Morgan Stanley for 13 years, told the Indy that the disparity between returns on capital and returns to labor have presented a compelling case for the democratization of finance and more participation in stock ownership.

This disparity is not accidental; broader trends of weak regulation, increases in corporate power, and decreases in labor union participation shoulder some of the blame. Perhaps equally significant, however, was the legalization of “stock buybacks” under President Ronald Reagan. The practice allows a company to use profits to buy back its own shares, creating demand for its stock and subsequently raising its price instead of increasing salaries or investing in essential business functions. Because participation in the stock market is heavily correlated with wealth, these gains have accrued unevenly. The rich get richer, and the working poor don’t benefit. Increased participation of lower wealth investors might allow them to benefit from some of these gains, but increased access may also expose first-time investors to more risk. “The flip side is: I’m concerned about financial literacy, I’m concerned about not fully comprehending leverage, and perhaps not a fulsome enough recognition that stocks can go down as well as up,” said Gibbs.

A section of WallStreetBets lists “YOLO” posts, which typically show screenshots of particularly risky bets on large sums of money in trading apps like Robinhood. A post on February 1 depicted a $1 million order of GameStop at an average of $257 per share. Another, from January 28, showed a $194,000 investment at nearly $375 per share.

While Robinhood CEO Vlad Tenev repeatedly boasted the financial gains of Robinhood’s investors in his testimony to the House on February 18, he declined to report such gains as a rate of return; even if investors overall profited on Robinhood, they may have made significantly more money investing in index funds like the Dow Jones or S&P 500 which are more stable and likely to grow in the long term.

It remains unclear whether Robinhood actually benefits first-time investors. A complaint filed in December 2020 by the Massachusetts Securities Division alleged Robinhood used “aggressive tactics

to attract new, often inexperienced investors” and “strategies such as gamification to encourage and entice continuous and repetitive use of its trading application.” In his testimony before the house, Tenev noted that 13 percent of Robinhood users perform trades involving stock options, a particularly risky investment vehicle, on a monthly basis. Robinhood’s interface also centers around individual stocks which, combined with fee-free trading, may facilitate day trading, a strategy centered around short-term price fluctuations that has repeatedly been shown to lose average investors money.

In the absence of substantive financial literacy materials, Robinhood’s suite of advanced financial tools may also pose a danger to less experienced investors unaware of the risks of certain trades. In June, 20-year-old Alexander Kearns died by suicide. Kearns’ parents estimated he only had about $5,000 invested initially, but his Robinhood account showed a negative balance of $730,165 after trading risky and elaborate options contracts. Kearns may never have owed so much; while Robinhood did not release the details of his account, the value may have represented an intermediate step of a complex trade. Regardless, shortly after, Kearns received an email requesting “immediate action” and payment of more than $170,000. Kearns’ subsequent response to customer service went ignored until after his death, when Robinhood notified him that he did not actually owe any money. While impossible to know all factors contributing to a suicide, Kearns left a note that was shared online by his cousin. “How was a 20 year old with no income able to get assigned almost a million dollar’s worth of leverage?” the note reads. “There was no intention to be assigned this much and take this much risk, and I only thought I was risking the money that I actually owned.” Kearns’ family filed a lawsuit against the app in February. “A painful lesson,” Kearns writes, closing the first paragraph of his note. “Fuck Robinhood.”

Robinhood’s actions proved to be immensely controversial. The company claims it restricted purchases of stocks like GameStop to reduce the collateral demands on it imposed by the National Securities Clearing Corporation. Robinhood reports that the NSCC demanded it post $3 billion in collateral to process Robinhood’s trades. Tenev noted in his House testimony on February 18 that the company has raised $3.4 billion as a cushion from future market volatility, repeatedly referring to the GameStop surge as a ‘black swan’ or ‘five sigma’ event, meaning it has a one in 3.5 million chance of occuring.

Many users were unmoved by this explanation, instead convinced that executives on Wall Street were manipulating the market to take advantage of retail investors on Main Street. Andreas Repeta, a 27-year-old private investor from Sweden and WallStreetBets user, told the Indy he believed that Robinhood was induced by its business partners to impose restrictions on buying. Repeta said he thought prices would have risen much higher without such restrictions, which undermined faith in the fairness of the market. “I think [the hedge funds] should have felt the pain and they should have been held responsible and realized ‘we’re responsible for our trades, if we put on a bad trade, and we didn’t hedge it with options or liquidate it, [that] we’re going to go bankrupt if we took excessive risk.’” Repeta’s suggestion—that wealthy investors pocket gains when high-risk investments increase, but cheat their way out of losses when such investments go belly up—shows the way hedge funds and other wealthy investors may play by different rules than normal people.

GameStock’s price hovered around $40 for most of the beginning of February. Robinhood removed all buy restrictions on February 5. On February 24, the stock surged again to about $100 in the wake of news about the departure of the firm’s Chief Financial Officer. As the volatility continues, the impact of GameStop’s first surge has raised numerous new questions about investment strategy and the regulation of financial services.

Regulators have also begun to reconsider the legality of payment for order flows. This is the basis of Robinhood’s business model; Citadel pays Robinhood to route and complete its trades. Citadel makes money doing so because, as long as it processes roughly the same number of orders to buy and sell, it can sell to and buy from itself, making money on the ‘spread’ between bids and offers.

The practice has proved controversial in the past; pioneered by fraudster Bernie Madoff, Citadel itself called the practice “anti-competitive” noting it “creates an obvious and substantial conflict of interest between broker-dealers and their customers” in a letter to the SEC in 2004. “Payment for order flow, at the end of the day, is legalized bribery that appears to incentivize brokers to violate rules,” Dennis Kelleher, president of a firm which lobbies for more stringent financial regulations, told the Wall Street Journal.

The role of WallStreetBets also reinvigorates debates about the use of social media in market manipulation. GameStop’s stock price peaked shortly after Elon Musk tweeted, “Gamestonk!” Stock prices for companies have unpredictably surged in the wake of Twitter trends in the past; Clubhouse Media Group’s stock surged from about $2 in January to nearly $15 in February after Clubhouse, an unrelated invite-only social network, trended on Twitter. Repeta noted that, while he already believes hedge funds have influence over traditional media, many may invest time and resources into influencing subreddits like WallStreetBets in the future.

Potential for manipulation aside, WallStreetBets’ efforts brought many obscure concerns about the stock market into public view. In his testimony to the House, Reddit co-founder and CEO Steve Huffman seemed optimistic. “WallStreetBets may look sophomoric or chaotic from the outside, but the fact that we’re here today means they’ve managed to raise important issues about fairness and opportunity in our financial system,” Huffman said. “I’m glad they used Reddit to do so.”

The uproar around GameStop has allowed for much more imagination about the future of our financial markets and how our economy might be more just. ‘Democratization of finance’ must include more earnest efforts to teach financial literacy and push users toward longer term growth investments, even if these infrequent trades are less profitable to companies like Robinhood. New regulatory scrutiny toward particulars like settlement dates, payment for order flow, and stock buybacks is a positive step. Companies like Reddit must also double down on their commitment to investigate potential vote manipulation on their sites as social networks have increasing sway on financial markets.

Ultimately, it is hard to imagine many of these changes coming about when money and power are concentrated in a few large firms, who exercise immense influence over the political sphere. For now, companies who facilitate such trades will continue to accumulate wealth, even if it leaves their customers in financial ruin. In the end, the false David and Goliath narrative of GameStop’s rise obscures the reality that the system still benefits the most powerful companies, even if one or two hedge funds are burned in the process.

In the meantime, WallStreetBets will continue to be its offensive, crass, reckless, and, at times, endearing, self. In lieu of financial prudence (deemed “boomer strategies”), many users eschew faith in markets or underlying value for preference and camaraderie. Ask WallStreetBets users why they bought GameStop, and many have a simple answer: “We like the stock.”

LUCAS GELFOND B’23.5 thinks Anonymous Hedge Fund Manager should run the SEC.