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Opinion GameStop is not a morality tale. People’s life savings are at stake.

A GameStop store in Manhattan last week. (Carlo Allegri/Reuters)

GameStop is not a morality tale. It’s not a parable. It’s not a modern-day David-vs.-Goliath saga in which scrappy underdogs have taken on the bullies of Wall Street.

And it is irresponsible for politicians and pundits, pandering to uninformed populists, to pretend otherwise.

If you’ve somehow missed out on the drama of the past week — and can’t wait until either of the two announced film adaptations comes out — here’s what happened: In a bizarre plan hatched on Reddit, individual retail investors decided to dump their savings into pumping up the stock price of GameStop (and a few other struggling companies). This led to an ailing brick-and-mortar video-game retailer with a 20th-century business model somehow becoming worth as much as most of the other stores at the local mall, combined. Some of the retail investors piling into the stock seemed to think that GameStop was actually a solid investment; others, at least based on Reddit rhetoric and various social media memes, seemed to think this was a fun way to stick it to Wall Street firms.

In real life, many Goliaths (the professional investors betting against the stock) and Davids (the amateur traders betting for it) in this story are likely to lose a lot of money. Most of the Goliaths will probably absorb those losses just fine, all things considered. Even those who work at funds that got squeezed are likely to be able to recover and raise money for future investment funds in the weeks and years ahead. And at least one of the biggest Goliaths — the financial firm buying the Davids’ order flow — will come away from this episode much richer, since it got a cut of most transactions.

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Meanwhile, aside from a handful of lucky individuals who’ve received outsized attention, the Davids may lose their life savings once the GameStop share price comes back down to reality.

Much of the public discourse about this story has been inane, celebrating a supposed “democratization” of financial gambling and the noble populist rebellion blowing up Wall Street. If these populists are blowing up Wall Street, they’re delivering the blast via suicide bomb. Regular, everyday people will lose their shirts because of some misguided narrative about “punishing” hedge funds that may, instead, end up making money.

Yet populist demagogues on the left and right alike can’t resist the narrative appeal of a righteous confrontation between banksters and the persecuted hordes. Especially one subplotted with conspiracy theories about shady forces scheming to block those hordes from striking it rich. Comments from some political leaders who claim to champion the proletariat have been especially confused.

Politicians can’t seem to decide if the problem in recent days has been the wild “casino-like” market swings caused by speculation from retail investors — or, instead, the measures that limit the wild, casino-like swings caused by such speculation (i.e., the fact that some retail brokerages temporarily limited trading of GameStop and other stocks when the stocks’ volatility apparently required brokerages to put up more collateral). In interviews, sometimes they pivot to some other unrelated anti-Wall Street talking point (no more stock buybacks!).

White House officials have been asked repeatedly about GameStop — often through some grandstanding question about “legalized gambling” or whether anyone should ever be allowed to bet that a stock will go down rather than go up. The answer, from officials such as National Economic Council Director Brian Deese, has pretty consistently been something like: The Securities and Exchange Commission works to protect the “integrity of the market,” and they’re on it; thanks for the question, but the White House is focused on fixing the broader economy.

That’s a punt, but it’s also … pretty much the right answer. The big economic challenge facing the country is whether families can put food on their tables, not whether it’s too hard or too easy for those families to bet their last dollar on black.

If members of Congress really want to help small-time investors accumulate capital income — which I’m skeptical should really be a top priority for lawmakers, especially at the present — they shouldn’t be egging on constituents to gamble away their life savings. If politicians simply must offer personal finance tips, a better place to start would be telling their constituents about a hot opportunity called a low-fee index fund.

Of course, that’s the boring, expected, technocratic answer — the kind of thing that seems to have fallen out of favor lately, at least among politicians eager to get a viral tweet or TV sound bite. It’s much more fun to cosplay as Robespierre than a financial literacy teacher. At least for a little while.

Read more:

Helaine Olen: How the GameStop army can really get even with Wall Street

Sebastian Mallaby: The good guys in the GameStop story? It’s the hedge funds and short sellers.

Helaine Olen: The GameStop folly isn’t just a get-rich-quick scheme. It’s a tale of inequality.

Maureen O’Hara: The GameStop chaos may be a ‘bubble,’ but what does that actually mean?

Amber Petrovich: Why we cannot and will not stop with GameStop

GameStop: What you need to know

The latest: The CEOs of Reddit, Citadel, Robinhood, Melvin Capital and the Reddit user who helped set off the GameStop stock frenzy testified before the House Financial Services Committee.

Read their testimony here: Reddit | Citadel | Robinhood | Melvin Capital | Keith Patrick Gill aka ‘Roaring Kitty’

FAQ: What you need to know about GameStop’s stock price chaos

Retail: GameStop is still struggling to stay afloat, despite record stock surge

Cashing in: A 10-year-old cashes in his GameStop shares

The meteoric rise of r/wallstreetbets: WallStreetBets, the Reddit forum at the center of the GameStop stock rally

AMC: AMC itself may have been bailed out by WallStreetBets

Reactions: Billionaire blasts ‘Robinhood market’ as Jon Stewart, others herald GameStop stock rebellion

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