#noah millman

What interests me primarily about the collapse of FTX is this business could ever have been idealized. The premise behind FTX is that, even though nobody is totally sure what crypto is ultimately good for, people love to trade it, and to concoct ever more elaborate schemes for leveraging waves of investor enthusiasm. Someone in a position to feed that beast could make a whole lot of money, and FTX aimed to be that someone. Which is to say, FTX’s business model depended on crypto being ripe for bubbles, and even for scammers. If you read or saw The Big Short, you may recall the point where the “heroes” of the story meet one of the guys who is one of their biggest counterparties, who has been taking exposure via derivatives to the most toxic mortgages, and securitizing them for investors who care only about yield. Through sheer transaction volume, he’s been making them more liquid, and therefore more attractive, than less-toxic stuff, and thereby driving the market to greater and greater heights of insanity, making a killing all along. That’s akin to what FTX’s legitimate business was, and who SBF was, before he drove himself to bankruptcy and the possibility of prosecution for fraud. There have always been guys like this, but how did this one become any kind of culture hero?

Be Like the Past

A wonderful article that makes two points the American politicians do not understand.

...let your own discretion be your tutor: suit the action to the word, the word to the action; with this special overstep not the modesty of nature: for any thing so overdone is from the purpose of playing, whose end, both at the first and now, was and is, to hold, as ’twere, the mirror up to nature; to show virtue her own feature, scorn her own image, and the very age and body of the time his form and pressure. Now this overdone, or come tardy off, though it make the unskilful laugh, cannot but make the judicious grieve; the censure of the which one must in your allowance o’erweigh a whole theatre of others. O, there be players that I have seen play, and heard others praise, and that highly, not to speak it profanely, that, neither having the accent of Christians nor the gait of Christian, pagan, nor man, have so strutted and bellowed that I have thought some of nature’s journeymen had made men and not made them well, they imitated humanity so abominably.

It’s not that we need to get rid of cash to usher in utopia. We may need to get rid of cash just to get back to adequate management of monetary policy. We may need to run faster just to stay in place.

It’s useful, I think, to imagine the Book of Job beginning with an argument between, say, Zeus and Hera. We have no expectation, reading stories about Zeus, that he will be portrayed as primarily concerned with our welfare. The Greek gods were jealous, petty, capricious, vain. But they are also powerful, and noble. If they made a bet about a mortal, and put him through numerous trials, just to see if he could overcome them, that would make perfect sense. They wouldn’t worry about whether they were being fair. They would be giving the mortal a chance, by passing the test, to earn their favor, and thereby become a hero – because that’s what a hero is: someone who passes these kinds of arbitrary trials. In the Greek value system, the worship of gods who behave in this fashion makes perfect sense. The Greek gods were not worshiped because they were good, or because they loved us. They were worshiped because they were powerful. In the Israelite framework, though, and in the subsequent Jewish and Christian traditions that spring from it, this is inadequate. In monotheism, the character of God determines the character of reality itself. A monotheist who worships God simply because He is powerful is, effectively, worshiping power itself, in a kind of spiritual fascism.