A battle between Wall Street and a small group of mischievous investors on Reddit has breathed new life into a left-right populist coalition with the potential to scramble old political alliances across the spectrum, with some Republicans and Democrats positioning themselves in favor of the little guy against the financial establishment.
When Robinhood and other brokerages froze purchases of stock in the video game retailer GameStop as the Reddit users helped bid up the price, the negative reaction was swift and bipartisan. Rep. Alexandria Ocasio-Cortez, a New York Democrat and liberal darling, protested that curtailing retail access “while hedge funds are freely able to trade the stock as they see fit” was “unacceptable.”
“Fully agree,” Sen. Ted Cruz, a Texas Republican and leading conservative, concurred in a tweet.
“What we’ve seen I think with this GameStop meltdown that Wall Street is having now, these folks at home, these day traders, retail investors — they’ve got more criticism, more scrutiny than the people who crashed the entire financial market in 2008, and they got bailed out. The government bailed out all of those people,” Sen. Josh Hawley, a Missouri Republican, told Fox News. “I mean, it shows you that the fix is in.”
Hawley added that they’ve gotten “too big to fail … and now the big hedge funds, they don’t want any competition.”
“This entire episode has demonstrated the power of technology to democratize access to American financial institutions, ultimately giving far more people a say in our economic structures,” said Rep. Ro Khanna, a California Democrat, in a statement. “This also showed how the cards are stacked against the little guy in favor of billionaire Wall Street Traders.”
Donald Trump Jr., the son of the former president, also weighed in, tweeting: “It took less than a day for big tech, big government and the corporate media to spring into action and begin colluding to protect their hedge fund buddies on Wall Street. This is what a rigged system looks like, folks!”
“The elites are bent out of shape that a bunch of average, ordinary users have figured out how to make themselves billionaires,” declared conservative radio talk show host Rush Limbaugh. “There are those who are allowed to make a lot of money and those of you who aren’t.”
The strange bedfellows political coalition on this issue suggests that the populist backlash may not have ended with President Biden’s victory over former President Donald Trump.
“In the conclusion section of our book, [Washington Examiner columnist] Salena [Zito] and I predicted that politics would not be the last sector of the American economy to be upended or at least affected by the populist realignment,” said Brad Todd, a Republican political consultant and co-author of The Great Revolt. “The centralization of American commercial and political leadership, coupled with the simultaneous egalitarian baseline of voice afforded by technology, has set us up for all kinds of organic revolts.”
The outcry was similar to the coalition that formed against the Wall Street bailouts after the financial crisis in 2008. Both major-party presidential candidates, including the eventual winner Barack Obama, joined with then-President George W. Bush in supporting federal assistance for the big banks over the opposition of Occupy Wall Street on the Left and the nascent Tea Party on the Right.
Some conservatives also supported the mostly left-wing protests against the World Trade Organization meeting in Seattle in 1999.
“We Americans alone should decide issues of vital significance to our destiny and our national security,” Pat Buchanan said at the time. “No global organization is ever going to be allowed to impose its rule against the sovereignty of the United States of America.”
The perception that the Obama administration did not fully capitalize on public anger with Wall Street helped fuel socialist Sen. Bernie Sanders’s Democratic presidential campaign in 2016. Though a real estate developer and reputed billionaire, Trump rode a similar populist wave to the Republican presidential nomination in 2016 and later to the White House.
In 2016, some Sanders voters actually supported Trump in the general election. Others stayed home or voted for third-party candidates, such as Green Party nominee Jill Stein, helping Trump edge out 2016 Democratic presidential candidate Hillary Clinton in critical Rust Belt states. Last year, these voters helped Biden across the finish line. But Biden has brought some corporate-friendly Democrats into his administration, such as Treasury Secretary Janet Yellen, who was paid over $800,00 by a hedge fund involved in the GameStop controversy. The president himself represented Delaware, a major banking state, in the Senate for 36 years before becoming vice president under Obama.
Even the fight between Robinhood and GameStop underscored how difficult bipartisan cooperation can be in the current polarized climate. Ocasio-Cortez promptly tweeted that she did not want Cruz’s help, blaming the Texan’s support for election challenges for the Jan. 6 attack on the U.S. Capitol. Hawley was an ally of Cruz’s in that debate.
Yet, the potential for similar future dust-ups remains high.
“Everyone in America now has all the knowledge in the globe in their pocket and an ability to connect with anyone who sees it the same way — and make those views known to elites in any industry,” Todd said.