The Tide Is Going Out, and Nobody Brought Trunks

Let’s begin with something you already know and will never say aloud: you’ve built an entire class identity around being the smartest man in a room you paid to enter. I’ve been an engineer at companies of every size, which is to say I’ve spent a career in the cheap seats, and on the rare occasions I get hauled into the room where decisions happen, I find myself watching expensively-credentialed people who could not reason their way out of a wet paper bag decide the fate of systems they don’t understand, for users they hold in open contempt. I’m not angry about the work. I’m angry about the performance. The pretense. The way four decades of extractive disaster keeps getting dressed in the vocabulary of innovation and rigor while it immiserates everyone who touches the actual economy. I’m going to walk you through how we got here, why it’s accelerating, and why the correction that’s coming will be more morally clarifying than any earnings call. Plain terms. Some game theory. Some philosophy. Some observable data. And if you’re one of the financialization cosplayers who mistook luck for merit, you’re about to feel seen in a way you will not enjoy. Ready?

First we declared war on labor. Not metaphorically—we stripped bargaining power, froze wages against productivity, offshored manufacturing, converted pensions into 401(k) roulette, and then, because cruelty enjoys a garnish, baited the survivors with pizza. The pizza party is the perfect artifact: a negligible marginal cost that announces, “I acknowledge you are a human being with a digestive system, and I will not be compensating you for the value you create.” While we ate Domino’s in windowless conference rooms, the present value of our futures was being extracted, securitized, and sold back to us as debt. That’s the whole playbook. Strip labor of agency, financialize every remaining asset, and then act genuinely surprised when the social compact begins to decompose. Who could possibly have seen it coming, other than everyone?

Then we declared war on customers. I watched it happen inside more than one company sprinting toward acquisition—roadmaps abandoned, QA gutted, technical debt run up like a drunk with a fresh credit card, all because the only figure that mattered was the revenue multiple at close. We stopped asking what we were building, or why. We just needed the graph to point up and to the right long enough for the founders to hit their earn-out and the VCs to spray champagne on a boat. The customer stopped being a relationship and became a conversion event. And the genuinely funny part—funny in the indictable sense—is that the people running this maneuver believed they were doing something intellectually sophisticated. What, exactly, did they imagine the sophistication was?

The people in the financialization racket carry themselves as extremely serious men, and I need to be precise here, because I’ve spent real time in micro-economic game theory, and I think you’ve gotten far too high on far too much of your own short-term supply. What I am not saying is that you won’t get rich. Con artists get rich. Lottery winners get rich. Legions of undeserving nobodies get rich every single day. Consider crypto: a pet rock with a power cord, principally useful for laundering money and for generating narrative for people whose entire financial thesis is “number go up” re-recorded in the language of liberation. I’ve read the whitepapers. I’ve studied the consensus mechanisms. I’ve endured the podcasts. It’s a greater-fool relay race whose only genuine innovation is the efficiency with which you offload your bag before the music stops. Getting rich proves precisely nothing about your intelligence or your contribution. It proves you were standing in the right place during a liquidity cascade. Not skill. Not merit. Position. So why do you keep confusing the three?

Getting rich proves you were standing in the right place during a liquidity cascade. Not skill. Not merit. Position.

The trouble starts when you make the leap to causality—that’s where it tips from tedious into insidious. You didn’t crack Enigma. You walked into a rotten economy floated on speculation and greed, and in a greater-fool market it’s only a matter of time before the first mover meets the winner’s curse. Roll’s hubris hypothesis holds that the winners of corporate takeovers are precisely the people who overestimated their own ability to extract value, and so overpaid—the “victory” is itself the symptom of the delusion. The risk-shifting problem shows that under limited liability you are actively incentivized to take insane bets, because you keep the upside and post the downside to everyone else: heads you’re a genius, tails the creditors and pensioners eat it. Tournament dynamics describe a system that selects not for competence but for the most overconfident bidder—the one willing to bid highest precisely because he’s least tethered to reality. Call it a winner’s-curse-driven risk-shifting equilibrium. Competition selects for the most overconfident man in the room, and limited liability guarantees he won’t personally bear the cost of being wrong. The cost gets pushed outward and downward, onto people whose money is locked inside an opaque system they don’t control. Elegant, isn’t it? For him.

And the maddening part—the part that makes me want to quote Hobbes on the state of nature purely to have something dignified to hold while the building burns—is that we live in a system rigged for the rich, one that essentially never penalizes white-collar crime, unless you happen to be Martha Stewart or Elizabeth Holmes. Sit with what those two have in common, and with what the broader moment keeps confirming: the people who reliably face real accountability tend to be women who threatened the existing order, and even then the punishment functions mostly as a spectacle designed to persuade the rest of us that the system works. Meanwhile the private-equity partners strip-mining nursing homes, the bankers who laundered cartel money, the executives who lied about emissions, lied about opioids, lied about the safety of their aircraft—all still flying private. Different crimes, identical outcome. Notice a pattern?

The one who lied about the safety of his submarine, though…

The SpaceX IPO is the finest case study of these dynamics in plain sight, so let me lay it out without the jargon fetish. Start with adverse selection—the lemons problem. The idea is simple: when the seller knows more about the goods than the buyer, the seller only sells when selling is good for the seller. The people with the most information about the true value here—insiders, early investors, the rocket man himself—are the ones selling into an offering priced at $135 a share, at roughly ninety-four times annual revenue. Sit with that number, because it’s worse than the “earnings multiple” people casually toss around: there are no earnings to multiply. The company lost nearly $5 billion last year. You’re not paying ninety-four times profit; you’re paying ninety-four times sales, while it bleeds. They know more than you. They will always know more than you. Structurally, you are the sucker in this arrangement. One question before you wire the money: if it’s such a bargain, why are the people who know most the ones selling?

Then signaling—the message a price is engineered to send. The classic move is to underprice the offering so the stock pops on day one and everyone cheers. Here they flipped it: rather than leave money on the table for a nice headline, they priced it to extract nearly every cent of hype-fueled demand, effectively telling the market, “we believe it’s worth every penny, and you’re getting no discount for showing up.” The reverse signal is uglier still: the float—the slice of shares actually released to the public—is being managed not to raise capital for productive investment but to maximize insider exit windows at a valuation that already prices in a decade of flawless execution. So what happens to the price the first quarter execution isn’t flawless?

The principal-agent conflict in the underwriting syndicate means the banks are paid to close the deal, not to get you a fair price. An agent is meant to act for you; these agents act for the issuer who signs the fee check. Their incentive is to flatter that issuer, manufacture enough demand to clear a $135 tag that would make a value investor physically ill, and collect on volume—long-term performance being, by design, someone else’s problem, specifically anyone with a 401(k). You remember the bag they left you holding when they took your pension? They’d like that bag back, please. Fuller this time.

The sharpest instrument is the agency cost of concentrated control. After the offering, one man holds over eighty-two percent of the voting power while owning a smaller slice of the actual economics—a dual-class structure, where one tier of stock carries vastly more votes than the other. Which means the people bearing the diffuse downside, the retail investors and index-fund holders, have essentially zero governance leverage over the decisions that generate that downside. You own the risk. You do not own the company. You’re a silent creditor with all of equity’s volatility and none of its power. Remind me which box on the brochure that was.

Then the Grossman-Stiglitz paradox, applied to passive money. It runs like this: markets are only “efficient”—prices only reflect reality—because active traders do the expensive work of digging into companies and betting on the truth. Index funds skip the work entirely and free-ride on the price discovery others paid for. Fine, until too much of the market goes passive. When the share of money that simply buys whatever the index holds gets high enough, fewer and fewer people are actually checking whether the price is sane, the information content of prices degrades, and you get misallocation at scale—everyone trusting a thermometer that nobody is calibrating. Comforting thought, next time you open your retirement balance.

Finally, the winner’s curse, retail edition. SpaceX targeted a thirty-percent retail allocation, far above the usual five-to-ten, and demand ran frothy enough that some 244 million shares changed hands on the first full trading day. In an oversubscribed, hype-driven offering, the retail investors who actually get filled are disproportionately the most optimistic and least price-sensitive—structurally identical to auction theory, where the “winner” of the bidding is simply whoever overpaid the most. The people with the best information hold the option to exit at the top; the people with the worst information, via 401(k) index exposure, are structurally conscripted to be the counterparty, with no vote and no opt-out. That’s a real distributional and governance problem worth being angry about, and it needs no exaggeration to qualify. Congratulations on winning, by the way. You paid the most.

When did we, as a society, sign off on fleecing every member of it? The elderly, the children, the sick, the orphaned—everyone. And the government rides along the whole way, not because it’s coerced but because it’s complicit. This will correct. It will correct hard, and people will be ruined, and it’s already begun. Credit-card delinquencies are climbing. Car repossessions are surging to levels unseen since the Great Recession. Consumer-credit usage is spiking. Buy-now-pay-later firms, whose loan books largely sit off the balance sheet, are simultaneously a mystery and a horror story—shadow banking for the paycheck-to-paycheck class, which is to say most of the country. Foreclosures are ticking up. In plain terms: people are stretched to translucency and can’t afford food, let alone an emergency. Their houses, cars, and possessions are being repossessed, and perhaps you don’t care, because it isn’t your stuff—but those same people pay into the system that keeps the whole thing upright. When the majority can’t afford food, or a car to get to work, the cost of everything climbs and the cycle tightens—all because a man who was merely a billionaire decided he had to become a trillionaire. How much was going to be enough? There was never a number, was there?

There’s an old line: you find out who’s been swimming naked when the tide goes out. Well—the tide is going out, and the financialization set brought nothing to the shore and left with everyone else’s towels. Your studied disdain for humanity is going to be visited back on you, with interest. Do unto others is the old formula, and it’s roughly fifteen years too late to start now. People remember who stood up for the vulnerable. People remember who built things. People keep score of who contributed just as precisely as they keep score of who didn’t. Short-term gains carry no durable value; investing in people and relationships is where the actual value lives—and I say that as a functional nihilist. Not the edgy-teenager kind. The grown-adult-who-read-Durkheim-and-recognizes-anomie kind. Durkheim saw that when shared norms break down—when the division of labor outruns our moral integration, a condition he named anomie—you get a society of isolated individuals chasing ends that can never satisfy. Jacques Maritain saw that a civilization making profit the supreme rule of human activity is already in decay. Hannah Arendt taught that the banality of evil isn’t monsters; it’s functionaries who stopped thinking. Hume noted that reason is the slave of the passions—so all your elegant models are just appetite with a math coat on. And Hobbes knew that without a common power to keep them in awe, men’s lives turn solitary, poor, nasty, brutish, and short. You’ve simply engineered a version that’s short for everyone else and luxurious for you. For now. How long do you imagine “for now” lasts?

…the life of man, solitary, poor, nasty, brutish, and short.

When your only measure of a person is how much you can extract from them, you’ve become the thing every major religion names as the highest form of evil. I’m not religious—I spent years studying the biblical texts and came out convinced the divine is a narrative technology for social cohesion—but I can still read a moral arc. You’ve become the financialization class. You are the thing the prophets warned about, the thing Christ threw out of the temple, the precise thing the Torah’s jubilee laws—the periodic forgiveness of debts—were written to prevent. You are a systemic sin made flesh. And the awkward thing about the jubilee is that it existed at all: three thousand years ago they already knew exactly how your part of the story tends to end.

I used to be a genuinely ambitious operator, because I was in fight-to-survive mode, hiding my ASD-1 through a decade of masking that cost me more than I can properly calculate—only to watch those same traits become briefly fashionable before the 2024 administration put hatred back on the menu and shoved the neurodivergent, the LGBTQ, minorities, and anyone else who doesn’t fit the template right back into hiding. So here’s my position: prioritize your own life over the corporate grind. Fight for people who aren’t in your privileged position. Mentor anyone who needs it into a better place in their career—not because it photographs well, but because it’s the only thing that will matter when the tide is fully out. Partly out of shame for who I used to be. Mostly because it’s the right thing to do.

The system is rigged, the correction is underway, and the people who only ever learned to extract will be left holding the one thing that can’t be taken from them: nothing. So build. Connect. Protect. And when the financialization class finally asks why it’s so reviled, you can read them this: you mistook a liquidity bubble for a meritocracy, and now the water’s going out. Hobbes was right about the state of nature—but you built it. You chose the war of all against all and filed it under “efficient.” The rest of us are going to remember exactly what you did. And no, we’re not going to be quiet about it. Enjoy the swim.