The GameStop saga proves that populism is here to stay

During my long-running battle to take the U.K. out of the European Union, I often talked about the unholy trinity of big banks, big business and big politics. This alliance still exists, of course, which is why when major retail stockbrokers prevented their clients from making further purchases yesterday, I tweeted “They are all in bed together.” The point is that populism wasn’t simply about the electorate following one or two strong figures. It is so much more than that.

For one thing, there is an overwhelming sense in many major cities that those who are in charge of our lives are completely divorced from the reality of our worlds. A common view is that these authority figures look after their own interests only. This feeling has been especially strong since the 2008 financial crisis. What divides the elites from the rest of us is that when they get into financial trouble, as happened in 2007-8, taxpayers bail them out; when the rest of us hit the skids, we are left to go broke. The events of Thursday, January 28 only support that fact.

That GameStop reached a share price that day that overvalues it massively against its current assets and earnings is not the point. Markets are often irrational. As John Maynard Keynes allegedly remarked, “The market can remain irrational longer than you can remain solvent.” Those buying GameStop shares this week were ordinary folks. There were huge numbers of them and they were motivated not just to make a quick buck, but also to take on the Wall Street billionaires and hedge funders who had “shorted” this stock and several others.