The Sucker Complex

One is killed every minute

As new drivers we are taught the rules of the road and at first we usually follow them all - we wait in traffic, we pull over for ambulances, we merge into our desired lane ahead of time even if it means waiting longer to exit, etc.

But eventually we see cheaters who ignore the ambulance, who wait until the last second to cut in to the exit lane, who drive on the shoulder to skip traffic.

As time goes on and we see that these cheaters are almost never caught or punished and the result is we feel like suckers for doing the right thing and are tempted to become one of these cheaters.

Something similar thing is happening in society on a massive scale because we are not punishing public malfeasance.

On the very public, high end, you have

• Hunter Biden, the President’s son who has never sold a piece of art in his life, recently “debuted” as an artist with a widely panned art show where he will sell art for $500,000 to buyers whose names will not be disclosed

• Donald Trump profited from his DC hotel that only became popular after he became president (I enjoyed eating there before he was elected, place was a ghost town despite an absolutely amazing bacon appetizer)

• Elon Musk said that he was taking his company private with secured funding, in violation of SEC regulations regarding MNPI and, presumably, rules about having to tell the truth. I take Elon’s side in a lot of his causes de jour (this was objectively amazing), but he basically got off scot free and the SEC said he needed to maintain an independent “twitter sitter,” which they never really followed up on.

• Senator Warren lied about being Native American to advance her career and get into Harvard and the only person to face repercussions are the people that call her out on it.

• Innumerate politicians who themselves mandate harsh covid restrictions living their lives ignoring their own mandates - serial violators Gavin Newsom and Phil Murphy got re-elected!

• Richard Blumenthal, the man who recently spoke at a communist awards ceremony, lied about serving in Vietnam before he was elected Senator.

• Chris Brown beat up singer Rihanna, was sentenced to time served in rehab, still has a massive career in music, and still batters women today, 7 years later.

• My congressman, Tom Malinowski was actively trading stocks and options during the pandemic, shorting stocks and then not disclosing his trades by trade disclosure deadlines. He won his election in a squeaker and disclosed his trades shortly thereafter, but remains a congressman.

My friend, a former Navy SEAL, used to tell his AOICs “If you drink two beers the enlisted guys will drink ten. If you punch a dude in the bar, the guys will kill someone. It doesn’t matter if you don’t think it’s a big deal.” At the end of the day, leadership by example is so incredibly important and ours are systematically failing.

Then there are public examples of small-time people getting away with bad behavior

• Fallout from Summer 2020 mayhem is a prime example. Over 90% of all charges against rioters and looters were dropped including hundreds in NYC, where only 18 people were convicted of lesser crimes like trespassing which carry no jail time.

• Flash mobs in San Francisco are now killing people, and the city is still dropping charges for the non-violent participants who are caught.

• People who don’t pay their rent are getting back-rent forgiven or paid off by taxpayers, same with people who haven’t paid their mortgage in 18 months.

• VA benefits - When I was being discharged from the Navy, there was an advocate who tried to convince me to put in for disability, because I’d receive checks for the rest of my life and access to VA medical system. They literally pitched me by saying that everyone else was doing it and at the end of the day the government has plenty of money. I protested that I wasn’t disabled! It didn’t matter, they said. While I said no, many have said yes and these people place a large strain on a system that was designed to support truly disabled veterans.

• PPP loan abuse - we’ve seen tons of stories about hedge funds like Ross Gerber’s keep filing for multiple PPP loans, the money seemingly outweighing whatever shame accompanies this.

I think we could just keep going with this list but you get the point. If you followed the rules you feel like a sucker. People realize when misbehavior goes noticed but unpunished.

The psychological effect on most is that they start to feel like suckers for not pushing the envelope themselves and it’s dangerous because a country of jaded people is not one that can work together to solve common problems.

Picture your cousin invited you to go do a little looting last summer and you demurred. Eventually he shows up with a bunch of new Nikes but is later arrested only to have his charges dropped and record expunged. How does that make you feel?

How do you feel if your friend from business school just took what you know to be a worthless company public via SPAC and cashed out millions of dollars on something that has lost ~80% since they tweeted “trust the process” at the top? And this guy gets to stay rich?

Chamath Palihapitiya @chamath

Trust the process.

If you’re a director of a public company who is focused on turning a profit, why are you not also constantly tweeting bullish stuff since nobody seems to care whether you do or not?

Just yesterday the CEO of Ford, doing his best Jordan Belfort/Elon Musk impression, told people not to sell Ford stock. That feels somewhat new!

*Walter Bloomberg @DeItaone

*FORD CEO SAYS THERE'S 'A LOT OF UPSIDE, DON'T SELL FORD STOCK' $F

Every SPAC merger I’ve looked at has been immediately followed by massive waves of insider selling. Nancy Pelosi’s husband is day trading his way to tens of millions of dollars in profit and there’s not even the beginnings of a thought of censuring her. In fact, she has the gall to ask, rhetorically, why people feel a sense of lawlessness.

Steve Herman @W7VOA

"There's an attitude of lawlessness springing up in the country from I don't know where," says @SpeakerPelosi when asked by a reporter about the for-profit smash-and-grab attacks on retail stores in San Francisco and across the country. "It has to be stopped."

Jimmy Carter was a bad president but a great role model. He sold his peanut farm before he took office, which set a standard of behavior for the rest of America to follow. He isn’t particularly wealthy today and he spends his capital raising money for Habitat for Humanity.

For a long time, people didn’t feel like suckers for acting ethically, they felt honorable.

Some notable exceptions to this, and their starkness really highlights how rare these cases are:

• Cuomo was ordered to return the $5.1M he made from his “how I beat the pandemic” book (we’ll see if it happens)

• The Federal government didn’t drop the case against the privileged lawyers who committed terrorism during the NY looting period, and these lawyers recently pleaded guilty

• Jussie Smollett staged a hate crime, and was convicted of such.

I don’t have a grand conclusion, other than this is specifically an unexplored area of societal erosion and letting people publicly get away with illegal or immoral activity has massive repercussions that we aren’t really considering.

It feels like we’re in an accelerating vicious cycle right now, where a cohort of people take full advantage of what they can get away with - which in makes bystanders feel like “suckers” and eventually turns more of them into “takers” and which in turn alienates other bystanders, etc.

This only gets worse if we do something crazy like forgive massive amounts of debt, whether it’s student or mortgage. The psychological effect on the people who have lived within their means and met their obligations will be radicalizing.

All that is required to beat this, honestly, is a few people serving as positive role models with transparency and not abusing their authority. I can manage my little corner of the universe but I’m not holding my breath on the rest of the country.