Bears vs. Serpents

 It is a trite observation of Donald Trump at this point that he is the quintessential con man. His recent business ventures, such as hawking golden tennis shoes and $60 Bibles have only underscored the point. We are used to it by now. It has long been a familiar observation among us that Trump is doing for American politics what generations of hype-men, multi-level marketing scam artists and Ponzi schemers have done for American capitalism. 

But with Trump's latest foray into securities fraud, he seems to be making the analogy obsolete. No longer will we need to argue that Trump's political career is like a financial scam. Because now, Trump is simply perpetrating a classic financial scam in tandem with his political ambitions. The whole plan to take Trump's preposterous media company "Truth Social" public, after all, has been a classic pump-and-dump scheme; except happening candidly, blatantly, out in the open. 

The idea behind running up the stock price of this venture, after all, has transparently been to solve Trump's financial problems caused by the half-billion dollars in liability that he incurred from recent civil damages claims. People on Trump's platform have more or less openly been sold shares of the company on this premise. 

And if the scheme is meant to provide Trump with liquidity, and the surging share price has nothing to do with the company's underlying value or profitability (which it plainly does not), then the plan is obviously for Trump to cash out his shares at the earliest possible opportunity and pocket the cash. This is how every pyramid scheme operates: feed the irrational enthusiasm for a speculative investment with zero chance of real profit. Then, when the price is high, exit, and leave other investors holding the bag. 

This is what Trump is obviously going to do, as soon as the board allows it. This is baked into the plan. We know he needs to turn at least half a billion dollars of his shares into cash, and soon. So what are people doing investing their money in this scam? Maybe they think that they can pull out early too. They will get the timing right and leave other suckers to bear the loss, as the price inevitably comes cratering down. Or, maybe others are so drunk on the Trump Kool-Aid that they are willing sacrifices. 

This is, after all, what Trump is really offering them: risk your savings to help bail me out of a financial jam created by my own terrible behavior. And, cults of personality being what they are, a lot of his followers seem willing to take the bait. They will hurl themselves gleefully upon the Trump pyre.

Maybe some of them are simply dazzled (as people always are, in pyramid schemes) by how quickly the price has surged. They think they are getting rich, and will cling to that delusion even as the value of their investment starts to disappear again once Trump pulls up his stakes. They will then hang on, to their own destruction, out of belief in the sunk cost fallacy. And Trump will gladly encourage them in this delusion: "the price is coming back any day now; just have faith!"

This is the eternal rallying cry of the con artist after all. I was reading Herman Melville's great and deeply strange novel that introduced the term to the American lexicon, The Confidence-Man, and the titular scam artist is forever luring people with this same siren song. "Just trust; have faith." By demanding that they put their "confidence" in him, he is able to exploit their good nature; by invoking the virtues of "faith," he is able to assume the mantle of religion. 

In his financial frauds, Melville's "Confidence-Man" plays on the same belief that undergirds every pyramid scheme. Even if people know, on some level, that their investment is valueless, the scheme still appears to be "working," people still seem to be making money, so long as the irrational faith of others can be sustained. And so, people start to think, if only everyone would believe, if only those whom Melville's character derides as "bears" and "gloomy philosophers" would keep silent, everyone would win. 

But the bears are right. The stock price for Trump's venture will eventually come crashing to Earth. And the most trusting, gullible people—the people who bet everything on the strength of Trump's word—will lose the most. Retirees, disaffected young people—people with the most to lose, who staked their life savings on the silver tongue of a false prophet—will be the ones left impoverished and cheated. (But even then, they might not blame Trump; they might choose instead to blame "the bears.")

In this way, even as Melville's "Confidence-Man" clothes himself in the rhetoric of religion and faith, he is really more like the serpent in the garden of Eden; and indeed, the imagery of the snake and his temptations appears more than once in Melville's novel. He whispers honeyed words and gets people to part with their hard-earned savings, feeling justified and entitled to it all the while. That is what Trump is doing—and frankly and blatantly so. 

Oh ye investors, beware of false prophets! And false profits too! There is no way to win from sinking money in Trump's Ponzi scheme, unless you cash out with such perfect timing that you abet the ruination of other, even more vulnerable investors. And then Trump will be left with the last laugh, licking his forked tongue and gloating over the parents of humankind he deceived yet again. I quote from the poet Ralph Hodgson's rendition of the tale of the Fall, and endorse his sentiments: 

Oh had our simple Eve
Seen through the make-believe!
Had she but known the
Pretender he was!