Would you buy crypto from this guy?

A few years ago I did a post that asked the question Why do we think rich people must be smart? It was in response to a couple of embarrassing scandals then in the news involving billionaires: Robert Kraft getting caught in a massage parlour and Jeff Bezos sending dick pics to a girlfriend. Sure these guys were rich (Bezos was the richest person in the world at the time), but they obviously had more money than common sense. Still, I think most people tend to excuse bad behaviour of this sort, seeing it as just boys being boys and basically unrelated to the more serious business of acquiring ever more wealth.

But what then should we think of more recent headlines?

Item One: Elon Musk, who supplanted Bezos as the richest man in the world (at least for a time), bought Twitter. It’s not clear if he really wanted to buy Twitter, or if he sort of stumbled, in a very stupid way, into having to buy it. In any event, most expert opinion I’ve read says that he paid at least twice what the company was worth, and maybe as much as four times as much. That’s not smart. But what’s an extra $20 billion to Elon? And, as he said, he was just doing it for the LOLZ anyway.

The immense wealth of Musk, as has been widely reported, was built out of a lot of hot air and government money, which should have given Twitter boosters pause. And to be fair, a lot of business and tech types were pretty sure Musk didn’t know what he was getting into by buying Twitter. I don’t think any of them were forecasting the disaster that’s been unfolding thus far though. Musk doesn’t know what he’s doing, a fact that even he might slowly be becoming aware of. Meanwhile, was there nobody in his court to tell him just how stupid he was being? Evidence suggests not. Indeed, his courtiers were egging him on. It’s our old friend the bubble of privilege again.

Item Two:

Samuel Bankman-Fried, the CEO of the cryptocurrency exchange platform FTX experienced a rapid fall from grace when the company went bust. Indeed, the collapse of his personal fortune is thought to have set some kind of record. Reading his Wikipedia entry is good for a laugh:

Bankman-Fried’s net worth peaked at $26 billion. In October 2022, he had an estimated net worth of $10.5 billion. However, on November 8, 2022, amid FTX’s solvency crisis, his net worth was estimated to have dropped 94% in a day to $991.5 million, according to the Bloomberg Billionaires Index, the largest one-day drop in the index’s history. By November 11, 2022, the Bloomberg Billionaires Index considered Bankman-Fried to have no material wealth.

In fact, some reports say that his personal assets may now be below zero. Like I say, funny stuff. Unless, of course, you invested in FTX (which I’d previously warned against). But sticking with the point of this post, doesn’t this reveal that SBF was a Crypto Emperor (as the New York Times dubbed him) with no clothes? That he wasn’t some rebel financial genius, but in fact a moron?

John J. Ray III, the person appointed as CEO of FTX to guide it through bankruptcy, had some choice words for describing the corporate culture he found when he opened the books: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.” This from the guy who wound up Enron.

In both these cases we have billionaires not behaving badly in their downtime but demonstrating that they’re practically clueless when it comes to running a company (that is, doing their job). But both Musk and Bankman-Fried were beneficiaries of the deep-set myth of meritocracy in America. For more on this you can read my reviews of Twilight of the Elites by Christopher Hayes and The Tyranny of Merit by Michael Sandel. Suffice it to say here that great wealth has to justify itself somehow, and most often this is by using wealth as a proxy for intelligence, talent, a hard work ethic, etc. Because if you’re so smart, why ain’t you rich?

More often, however, great wealth is the result of luck, primarily through the accident of birth but also through happening to be in the right place doing the right thing at the right time.

The poster boy, idol even, of the collapse of such notions as money = brains is Donald Trump. But by now other examples are ubiquitous. Jeffrey Epstein was another supposed billionaire (actually he fell quite a bit short, but he was still very rich) whose wealth no one could explain. One longtime friend even dismissed Epstein’s intelligence by simply saying “He never knew nothing about anything.”

Now one thing that does stand out about a lot of these people is that they tend to be good at math. Being good at math, or being the product of a STEM education, is also seen as being a proxy for intelligence these days. But again, just looking at examples like Musk, Bankman-Fried, and Epstein one has to wonder. Intelligence takes many different forms, and just being good with numbers, while it may be a lucrative skill these days, is no sure sign of super-intelligence. If just means you’re good at math.

As Stephen Jay Gould once remarked, “I am, somehow, less interested in the weight and convolutions of Einstein’s brain than in the near certainty that people of equal talent have lived and died in cotton fields and sweatshops.” I think everyone understands this on some level, so why do we keep equating vast wealth with genius-level intelligence, especially given the weight of evidence to the contrary? I’m sure Elon Musk and Samuel Bankman-Fried are both reasonably bright guys, but that’s about it. They are also idiots. And, weirdly, I think that it’s by being idiots that they got so rich.

Sunflowers and soup. (Juststopoil.org)

Recent demonstrations, or protests, or acts of vandalism, have been getting lots of media attention, particularly in the U.K. Activists have been throwing soup on famous paintings (which are behind glass and so remain undamaged) and gluing themselves to highways, shutting down traffic.

There have been various groups doing this in recent year, with names like Extinction Rebellion and Last Generation. The latest round has come courtesy of Just Stop Oil. As you’d guess, the broader cause has to do with saving the environment and fighting climate change.

I agree with the point being made. The environment is an important issue for me, and I try to live in such a way that reflects my concern for what’s happening. But I wonder about the value of these stunts.

I’m not questioning the point that’s most often made: that acting out like this only alienates the people one is hoping to persuade. Instead, I question whether the basic premise behind such activism is valid.

That premise is that what’s needed is more attention and publicity given to environmental issues. This is the whole point behind throwing soup at a painting or blocking traffic: getting the media to notice. We live in an attention economy, and it’s felt that the environment is being ignored. If people only knew the nature of the crisis we face they’d act differently.

I don’t think any of that is true. In the first place, there’s a certain segment of the population — not a majority, but a significant number — who have made up their minds and will never believe the lying fake media or the consensus of a scientific elite no matter how loud the warning. Demonstrations will have no effect on them whatsoever.

A much larger cohort are already aware of the problem but don’t think there’s much they can do about it, or care enough to bother trying. George Monbiot starts off his column defending the protestors like this: “What does it take? How far must we go to alert other people to the scale of the crisis we face?” Again: I don’t see being alert to the scale of the crisis as the problem. We know there’s a problem. The media does report on it. It’s not an issue of attention and publicity, attracting eyeballs and getting clicks, but of persuading people to make changes to the way they live.

As I said twelve years ago in a review of Annie Leonard’s The Story of Stuff:

To say that Leonard is right in pointing out the dangers of not doing anything, of just continuing to live the way we live now, is almost beside the point. We know smoking is bad for you – a major cause of cancer and heart disease – but people still smoke. We know fast food will kill you, but that hasn’t stopped billions of people from eating it.

And these are examples where the ill effects of our behaviour are personally and (relatively speaking) immediately felt! The fact of the matter is that we are not a rational species, and we’re even worse when it comes to planning for the future.

Look: Unless they’re hiding their heads in the sand, everyone knows about climate change and global warming. They know the basics of how it works and they have a general idea of the steps that have to be taken to stop it. They just don’t want to take those steps and make the sacrifices that will be necessary.

Meet the new boss.

The two signal political events of 2016, at least in the English-speaking world, were the often-paired British vote for Brexit and the election of Donald Trump in the U.S. With six years’ worth of hindsight, I think it’s pretty clear that both votes were disasters. Ever since, much ink has been spilled trying to understand why and how they happened.

I’ve read more books on Trump than I can count, and I think I can say I have a general understanding of the Trump phenomenon. A bunch of different factors, including some long-term and others more immediate, played into his election, and continue to keep his name in the news. America is in a bad place, with political polarization leading to a dangerous level of extremism, including violence and the more-or-less open disavowal of democracy and the rule of law by one of the country’s two main parties.

I haven’t read as much about what’s been going on in the U.K., which is probably why I’m having trouble understanding what’s happening over there. In many if not most ways Britain is in even worse shape than the U.S. Economically I think this is certainly the case, and it may be politically as well. In a recent piece in The Atlantic, “Britain’s Guilty Men and Women,” Tom McTague points a finger at the country’s leadership and its ruling party: “For the past 12 years, Britain has been led by a succession of Conservative prime ministers — each, like Russian dolls, somehow smaller than the last — who have contrived to leave the country in a worse state than it was when they took over.”

To this list has now been added one Rishi Sunak, a very rich guy who used to work for Goldman Sachs and who voters apparently trust to be able to manage the economy. Because that’s something rich people just understand.

Given how bad things have gone in the U.K. over the course of the last six years, what I can’t figure out is why the Tories haven’t sunk to basement-level polling numbers. On some level I “get” the Trump voter, but the Tory voter is a beast I know nothing about. In my review of The Lost Decade 2010-2020 by Polly Toynbee and David Walker (one of the few books I’ve read on the subject) what stood out for me was the level of voter apathy and the effect of a generational split. And I suppose the forces that are driving anger in America — social inequality and the rage machine of social media — are also at play. I’ve heard the British news ecosystem is bad, but as bad as it is in the U.S.? This I don’t know.

I just find it remarkable that after over a decade of misgovernance, incompetence, and outright failure the Conservative Party has any defenders left at all. The shock of 2016 was one thing, but at least in 2020 the U.S. tried to correct course (for how long we still don’t know). Why are the Brits still digging?