Instead of a prophet of the future of the blockchain, Bankman-Fried, whose crypto exchange FTX declared bankrupt Friday looks more and more like Ozymandias 2.0. Starting from a $32 billion valuation earlier this year, his empire is in free fall following an exposure of his finances by CoinDesk. (The matter is complicated, but they essentially had the assets showing that Alameda Research, Bankman-Fried’s trading firm, had a significant amount of cryptocurrency issued by FTX. This undermined faith in both companies and ultimately led to a run against the cryptocurrency bank.)
Rival Binancewho initially said he would take over FTX, his cryptocurrency exchange, quickly changed his mind and said things seemed incomplete. A fountain saying the Wall Street Journal that FTX had used client funds to speculate, and depositors fear they will not get their money back. Washington regulators ranging from the Securities and Exchange Commission of the Department of Justice they are sniffing
But if the warp speed of what went wrong is unique, a part of this saga is not. Time and time again, Americans fall prey to the myth of the billionaire genius, the man (because he’s almost always a man) who is better than us mere mortals, able to solve any business, political, or philanthropic problem that comes his way: until which, suddenly, is no longer there.
There is the continuing spectacle of Elon Musk, the world’s richest man, who with his seemingly impulsive purchase of Twitter, like my colleague catherine rampell memorably put, it burned down $44 billion. Musk’s Acolytes Insist He Knows What He’s Doing, But I Have To Say Things you don’t look promising. Musk, the CEO of SpaceX and Tesla, is apparently grabbing virtual straws, laying off then firing people when he realizes the company needs them, and laying out a dizzying number of plans to profit from checkmark subscriptions. . drive a plan to turn the service into a financial technology, and threatening bankruptcy. Most of the high-level employees have left, and the Federal Trade Commission is expressing concerns.
Or take Mark Zuckerberg, who was once spoken of as future president — before it became clearer that his company was raising money by providing a platform for fake news, hate speech and extremist organizing, fueling political and sometimes literal conflict around the world. Now he’s burning money too, pouring Facebook funds into a metaverse. Few want to live. Zuckerberg’s idea of a rethink is to tell his employees “There’s probably a group of people in the company who shouldn’t be here.” before cutting 11,000 mostly non-metaverse oriented employees this week.
As for Bankman-Fried, the now 30-year-old former billionaire went from anonymity to celebrity seemingly overnight, with his halo of unruly hair recently gracing the cover of Fortune. “The next Warren Buffett?” the slogan said. He became a major political donor, pouring millions of dollars into overwhelmingly Democratic campaigns, until suddenly his wallet slammed shut. He stated, when asked: “I think the primaries are more important..” Now it seems possible that something else was going on.
I do not deny that some billionaires are brilliant entrepreneurs. But they are much less special than they are often told. (Some are just heirs or lucky Powerball winners.) As our businessmen become more prominent and wealthy, they enter a feedback loop. Flatterers flatter rather than challenge them. This affects your ability to hear criticism. And that makes them more likely to cling to the ass-lickers that feed their now-inflated self-image. Too often, the end result is bigger and bigger mistakes and more ethically questionable behavior.
Nonetheless, it’s still as American as apple pie to admire these titans of wealth. The period before the Great Recession saw CEOs and bankers anointed as voices of wisdom. (This year brought not one but two books about the late CEO of General Electric, Jack Welch, once famous, now believed to have run his company: and our economy — over a financial cliff.) The financial meltdown of 2008, which you might have thought would have put an end to this peculiarly American form of worship, has just given us a new round of potential saviors. Heck, we even elected a billionaire, or a man who claimed to be, as president. He has continued to wreak political havoc every day since.
It would be nice to think that the sad story of Bankman-Fried would finally put an end to this once and for all. But I wouldn’t, uh, bet on it. We don’t have hereditary kings in this country, but the cult of celebrity combined with our admiration for making money often leads us astray, even when, as in the case of FTX, the true superpower of billionaires is turning their money into cash. fools gold.