Kentucky Fried Bankman

My life feels like one synchronicity after another these days. Just last week I wrote a post making the claim that works of fiction can and do say something about the real world. At that time, the collapse of the FTX crypto exchange was just hitting the news. It took me a couple of days to look into it but immediately my synchronicity meter started going off because it turns out that the shenanigans of Mr Bankman-Fried and his comrades is awfully similar to the plotline of my very first novel, Once Upon a Time in Tittybong.

The inspiration for that novel came from my love of names which match the properties of the thing they refer to.  For example, I once worked in a lawyer’s office and we received a letter from a debt collector in relation to one of our clients. The debt collector’s name was Mr Quick – as in, you better pay quick or I’ll send some boys around for a visit. These kind of names always make me chuckle.

So, when I first heard the name Tittybong (a real place name here in Australia), the first thought that came into my head was that it would be a great location for a stoner comedy. I’ll spare you the boring details of how the plot came about, but the super short version is that Australia was going through a banking scandal at the time. There was a Royal Commission that was uncovering some very shady practices. So, I combined this with the Tittybong concept to give me the basic antagonism “small town stoners vs dodgy local banker”. A comedic novel was born.

The main antagonist is the local bank manager in Tittybong. I called him Mr Gier (gier means greed in German). I pitted Mr Gier against a group of stoner high school students with the motivation that one of their parents had been screwed over by the banker in just the same way that some Australians had been screwed over by the banking industry (or for that matter in the GFC which wasn’t that long past when I was writing the story).

For the character of Mr Gier, I used the template of a Mafia boss. Mafia bosses are criminals and I suppose you could call them greedy. But it’s also true that Mafia bosses need to be smart. If you’re running a neighbourhood protection racket and you set the price too high, all the businesses will go broke. Successful Mafia bosses need to know something about their “customers” in order to make sure they don’t kill the goose that lays the golden eggs. They have a vested interest in understanding and maintaining “the system”.

Idealists look at systems in a different way. They see corruption, any corruption, and think that it needs to be stamped out. Of course, it would be nice to have no corruption. But in real world systems there is a price to getting rid of corruption and that price becomes higher the more you try to achieve no corruption. In systems talk, this is called optimising for one variable. But real world systems need to be resilient and resilience is only achieved when there is redundancy across all variables. For this reason, all real world systems that have been around a long time have some amount of corruption built in. It’s not that people want the corruption. It’s that if you try to get rid of it, you either fail or you destroy the system in the process.

The heroes of my story are idealists. They know Mr Gier is corrupt and they want to get him. They have a crazy idea to take him out by competing against his bank with a local currency. The comedy unfolds as they manage to get their crazy idea funded by the local Mayor. They go into battle against Mr Gier who, like any good Mafia boss, doesn’t mind playing dirty when necessary.

Which brings us to FTX. Now, recall that the bad guy in my novel is a banker with a German surname. The FTX story features a guy whose actual surname is Bankman followed by a German surname (Fried). That’s weird coincidence one. Weird coincidence two is that Bankman-Fried was portrayed by the media in the exact same role as the good guys in my story. He was supposed to be a young idealist fighting corruption in the finance sector. Except it turned out he was the corrupt one, exactly like the banker with the German name in my story. So, the FTX story is almost identical to my novel with FTX and Bankman-Fried playing the role of both the good guys and the bad guys simultaneously. Weird.

The media tried to pass Bankman-Fried off as a heroic crypto bro. I know a thing or two about crypto bros because I based the main character in my novel on exactly that archetype. But I also know several crypto bros in real life; mostly people who I’ve worked with in the past. I even know a couple that have the ultimate crypto bro story of woe: they bought Bitcoin right at the start but sold too soon. They could be millionaires now but they cashed out too early in the game. That’s life in the cryptocurrency casino.

The first thing that struck me about Bankman-Fried was his name. A crypto bro named Bankman? It’s too perfect. I may just use that in a future novel. But then there’s the second part of his surname. Fried is a German name but has a literal meaning in English. I originally read it as Bankman Fryed as in let’s deep fry some bankers. Sounds like a George Carlin skit.

When I started to look into the story of Bankman-Fried, it seemed very clear that this was an almost identical set up to the backstory of Greta Thunberg. Like Thunberg, Bankman-Fried is presented as a young, idealistic insurgent coming up from the streets with purely altruistic intentions. Also like Thunberg, the real story is that he is a child of elites who used his connections in the media, government and other elite circles to catapult to fame. Thunberg and Bankman-Fried are both manufactured.

Some others who have seen through the FTX story have concluded that the whole thing is a false flag designed to give government an excuse to regulate cryptocurrency or even destroy it to make way for a central bank digital currency. This is the same argument that was made for the corona lockdowns i.e. they benefitted the elites by transferring wealth to the 1% while also giving governments an authoritarian precedent to implement unpopular policies in the years ahead.

In the case of FTX, this explanation seems to me obviously wrong. Enormous amounts of money have been lost and people’s lives ruined. If there is any justice left in the US court system, the people involved should see jail time. Big names such a Bill Clinton, Tony Blair and others all put their names and faces to what is clearly a scam. To suppose that they all did so in service of some larger conspiracy is drawing a very long bow.

There is a more simple explanation and one that makes sense to me as somebody who has seen the inside of the IT startup world, the dodgy way things get financed, the suckers who get fleeced, the people who milk the system for personal gain etc. I’ve also seen how easily even intelligent, technically capable people get caught up in the hype of ideology and propaganda from within the IT industry. It looks to me like everybody involved in FTX was a True Believer.

The old-school crypto bros do not come from the establishment. Many of them are tied up with anarchist and libertarian ideas that are popular among hardcore IT geeks. They see crypto in exactly the way I portrayed them in my novel: a way to stick it to the man and to overcome the obvious corruption of the US financial and political systems.

Bankman-Fried and his comrades are not genuine crypto bros. In fact, they couldn’t be more establishment if they tried. Check out this long twitter thread which simply lists all the people related to Bankman-Fried or FTX. It’s a who’s who of the US “elites”. They went to the best universities. They’ve worked for establishment companies. They know people at hedge funds and major banks. They have deep connections with the Democratic Party.

What we have in FTX is the establishment pretending to be the insurgents. It’s the same scam they pulled with Greta Thunberg. It’s a way to win political support from clueless young people by promising to Save The Planet. Note that Bankman-Fried was going to “give all his money away” and he was all about effective altruism. He was saying that all while stealing the money of real people to try and prop up his scam. It’s hard to think of a more perfect example of the current state of modern western society; propaganda as a cover for criminal stupidity and negligence.

In a broader sense, FTX looks to me like a concerted effort on the part of left-leaning “elites” in the US to take over the crypto space. The fact that it involves ties with government is not surprising at all since all major corporations in the United States spend enormous money lobbying government to rig the system in their favour. That’s just business as usual these days. FTX was trying to create a leading crypto exchange using fraudulent money to create the illusion of a genuine market while simultaneously trying to attain regulatory capture in the background. The whole thing is completely nuts, which is why many can’t believe it is real. I disagree. It looks to me like an idea that simply got out of control.

It got out of control in the same way that corona got out of control or the sub-prime loan scam got out of control; social contagion. What’s fascinating in that twitter list of relations to Bankman-Fried is how often connections to pandemic or climate emergency NGOs pop up. Bankman-Fried’s own brother is the founder of something called “Guarding Against Pandemics”.

What a coincidence then that FTX looks of a hell of lot like the corona vaccine debacle: a bunch of idiots running around like chooks with their heads chopped off implementing something that could never work; the same thing we see with renewable energy. The level of cluelessness on display here is truly extraordinary. It’s world historical.

And this brings us back to the idea of the Mafia boss. Mafia bosses who are clueless do not stay in business very long. A good Mafia boss must know how to run a proper conspiracy, one that delivers the goods. They know when something needs to be handled quietly in the background to keep the system up and running. Bankman-Fried was spilling his guts on social media about everything, including his amphetamine use!

This is yet another weird correspondence with my story. In the novel, I made the young rebels dope smokers who are fighting against the uptight bank manager. In the crazy real world story of FTX, Bankman-Fried and his fellow “elites” were openly tweeting about taking amphetamines. Check out the videos with Bankman-Fried and you can see that he taps his foot incessantly and he’s shaking all the time. Excitement? Nerves? Maybe. But if somebody tells you they’re on amphetamines, why not believe them. (Another coincidence: the word fried is slang for being wasted on drugs).

Why did Trump get elected? Because he is a Mafia boss. He said something like this: “I am not a nice guy. I am a gangster. I know how the system works. I will keep the system going.” Note also that Trump is a teetotaller. That’s the price that the true Mafia boss must pay. Keeping systems afloat takes extraordinary discipline. You can’t be drunk at the wheel. (At the risk of violating Godwin’s Law, I might add that there was another famous world leader who failed miserably and was a heavy amphetamine user).

Financial systems are some of the most complex systems in existence. Thinking that you can capture the market by building one from scratch if you just hire a bunch of eggheads with university degrees is the same as thinking you can eliminate a respiratory virus with an untested pharmaceutical product. It’s completely mad. But it’s the prototypical insanity of our modern “elites”. I think FTX is probably the perfect story to show just how dumb these people are.

Just as corona was a massive own goal that has probably shortened the period of western hegemony by decades, FTX was a massive own goal for everybody involved, some of whom should end up in jail. There is no grand conspiracy theory here. No geniuses. Klaus Schwab is not a Mafia boss. He’s just one of the bigger nodes in a giant network of utter stupidity.

Our modern “elites” no longer even have an instinct of self-interest or self-preservation. It would actually be preferable to be ruled by Mafia gangsters because at least they would keep the system going. Our current elites will not keep the system going. They are too arrogant and ignorant not to kill the goose which is laying golden eggs for them.

The best way to think about the modern “elites” is that they are members of a religious cult. They really do think they are Saving The Planet. Just like members of a cult, they will self-destruct rather than change their ideology.

How many more of these kinds of stories will we have to experience before some kind of sanity prevails? That’s very hard to know but the time between stupid decisions being made and their consequences being felt seems to be getting shorter. Even a Mafia boss like Trump can’t really do much because the entire establishment is filled with True Believers and even the best mob boss needs trustworthy associates who can actually get things done. If somebody can’t come in and steady the wheel, the US might eventually end up with somebody far more gangster than Trump, and not in a good way.

If all that sounds depressing, don’t worry. It’ll work itself out one way or another. Best to batten down the hatches and ride out the storm. And, hey, I’ve got a great comedy novel that is guaranteed to cheer you up in the meantime!

I might add that the novel is also an exploration of the concept of local currencies. When I wrote it, I had no idea about central bank digital currencies or any of the other loony ideas our elites have cooked up over the last few years. So, I think the plotline of the novel is even more relevant now.

If you’re interested, Once Upon a Time in Tittybong is available at Book Depository, Bookshop (US/UK), Amazon and most other online retailers.