TGIF: SBF. FTX. WTF!
Sam Bankman-Fried goes for the scam. Russia nearly goes nuclear. Arizona goes for Hobbs. Mitt goes for the gays. All that and much more.
Welcome to T.G.I.F, your weekly roundup of all the news you may have missed while you were out working or gardening or whatever it is you people do all week while I mainline the headlines.
The baby is learning to smile and I think wants to babble at me. But I know she’ll understand why mommy needs to read about Sam Bankman-Fried’s polycule right now.
We had a banner week here at Common Sense. The story none of us could keep our eyes off of was, of course, the collapse of FTX and the fall from grace of its nerd-king, Sam Bankman-Fried. Michael Green, who used to run Peter Thiel’s portfolio, took us inside the implosion of the crypto exchange. FTX may have collapsed, but TikTok, the Chinese-controlled social media app, has taken over the world—or at least the brains of America’s kids. China reporter Geoffrey Cain explains why that is very bad, and why the U.S. should take steps to ban the platform. Could World War III be around the corner? Elliot Ackerman and Adm. James Stavridis lay out four scenarios that might light the spark. On Honestly, Lt. Gen. HR McMaster weighed in on the war in Ukraine—and how it might come to an end. For a lighter note, check out Freddie deBoer’s review of the new #MeToo movie starring Cate Blanchett, Tár.
We arrive again at the week’s end. TGIF. See you in the comments.
→ Trump announces the return no one wants: Donald J. Trump gathered a crowd at Mar-a-Lago to announce the inevitable: He would be running again in 2024. Clocking in at over an hour, the speech was a classic Trump ramble. In Biden, we have a president kept hidden away, so I’d forgotten what Trump is like on a tear, and to the mainstream media it was manna from heaven: “The 51 most outlandish lines from Donald Trump’s announcement speech,” roared a jubilant CNN. You don’t need me to tell you that every New York Times op-ed writer heard the bat call, spinning a thousand takes within hours. The media wants Trump to run. The media needs it.
All the smart Republicans are trying really, really hard to stop Trump this time. The National Review put out a big anti-Trump editorial headlined simply: “No.” (Not that their 2016 cover accomplished much.) The New York Post has made the full turn, covering Trump’s run with the unbeatable headline “Florida Man Makes Announcement.” But this time does feel different. His own daughter, Ivanka, was a no-show at the announcement, instead releasing a statement: “I love my father very much. This time around, I am choosing to prioritize my young children and the private life we are creating as a family.” I don’t blame her. And conservatives are quickly spinning away from him: Voters prefer Florida Gov. Ron DeSantis over Trump, according to a new YouGov survey.
As Trump’s announcement wore on, some in the audience wanted to leave the gold-plated room. They began moving toward the exits, but security guards kept them in, an unwinnable MAGA Escape Room challenge. They had to hear the whole megillah (or Magna Carta—pick your reference). May you never be trapped in a Mar-a-Lago ballroom with Trump at the podium.
→ Can Dems handle investigating FTX? The crypto wunderkind Sam Bankman-Fried seems like he’d be in a lot of trouble right now. It sure looks like he was running one of the largest financial scams in history, with his cryptocurrency “bank” at one point valued at $32 billion and Bankman-Fried on his way to being “the world’s first trillionaire,” according to the investment firm Sequoia Capital. But Bankman-Fried was also one of the largest donors to the Democratic party, second only to George Soros this past cycle. And so the touch from media and regulatory bodies has been extraordinarily, hilariously soft. SEC chair Gary Gensler, a former campaign finance chair for Hillary Clinton, has long been cozy with Bankman-Fried, helping his business grow (when you give that much money, it’s only fair to get a little something back). From Fortune magazine: “Cop-on-the-beat Gensler not only failed to spot the crime—he appeared set to go along with a legislative strategy that would have given SBF a regulatory moat and made him king of the U.S. crypto market.”
It’s a family operation. Bankman-Fried’s parents are Stanford Law School professors and deeply involved with Democratic party leadership. His mother, Barbara Fried, has helped raise tens of millions for Democrats through her PAC, Mind the Gap. His father, Joseph Bankman, helped draft tax legislation for Elizabeth Warren.
So the media has decided for now that the young Bankman-Fried was just a goofy overextended do-gooder. As the NYT put it this week: “His ambitions exceeded his grasp” and he was just super “overextended.” Same thing happens when I make too many work commitments—I end up in the Bahamas with a billion dollars. SBF is still on the line-up to speak at an upcoming NYT event with Janet Yellen, Secretary of the Treasury.
The man who cleaned up Enron—John Ray III—has been dragged back in now to clean up FTX. And here’s what he said in bankruptcy filings: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”
(Enron lost its shareholders $74 billion.)
For his part, Bankman-Fried is being pretty honest about who he is, which is a con artist. A Vox reporter had this exchange with the crypto mogul:
Never trust a grown man who writes “hehe.”
You’d think after saying something like that, the gloves would come off. Nope! The Vox reporter goes with the same old line that Bankman-Fried was just in over his head: “Why didn’t Bankman-Fried realize what was happening until it was too late?” she asks. That’s a question I’m sure his defense lawyer will use a lot. The poor child had no idea what was happening, your honor. This gentle, credulous treatment is 100% unrelated to the fact that Bankman-Fried has funded that very Vox vertical, a collaboration the company says is “on pause.” Ok.
Just in case, though, Vox is being sure to distance Democrats from Bankman-Fried with another article, headlined: “The impact of Sam Bankman-Fried’s support for Democrats is massively overstated.” See, it’s not such a big deal to be the party’s second largest donor who just spent $36 million supporting Dems in the midterms.
Last note on this is to point out that his mom, Barbara, is a major ethicist at Stanford who doesn’t believe in free will, personal responsibility, or blame, which is very much the mom you want in this situation. “The philosophy of personal responsibility has ruined criminal justice and economic policy. It’s time to move past blame,” Barbara wrote in the Boston Review.
Anyway, once you know this man is a complete scammer, this video interview is so much funnier:
→ Mormons for gay marriage: The Senate is getting ready to pass the Respect for Marriage Act, which will enshrine same-sex marriage into federal law. It already passed the House with support from 47 Republicans. Some conservatives say this new bill is an unnecessary provocation since gay marriage is already the law of the land. But that’s a hard argument to make after Supreme Court Justice Clarence Thomas suggested marriage rested on the same shaky grounds as Roe. The new law, which repeals the Defense of Marriage Act, will allow states to decide for themselves whether to grant same-sex marriages—but every state will be bound to recognize marriages done and valid in other states. A clever work-around and a nice way to increase Alabama to California tourism.
What’s amazing is how mild the opposition is. Here’s Utah Sen. Mitt Romney: “While I believe in traditional marriage, Obergefell is and has been the law of the land upon which LGBTQ individuals have relied. This legislation provides certainty to many LGBTQ Americans, and it signals that Congress—and I—esteem and love all of our fellow Americans equally.” Even more incredible is the Mormon Church came out in favor of the bill, writing: “much can be accomplished to heal relationships and foster greater understanding.”
Progressives don’t think the bill goes far enough (every state should have to grant same-sex marriages, they argue), but no one is paying much attention to that. Because this all already is an unfathomable social shift from even a few years ago.
→ Speaking of Roe fallout: Pro-life strategists are telling politicians to wait a year or two before going after IVF and contraception. And every week there are more headlines like this one in the Daily Mail: “Former Ms. South Carolina, 35, reveals she was forced to carry unviable fetus for seven weeks and fly 500 miles to D.C. for an abortion after Roe v. Wade was overturned.” The backlash to horror stories like these is rightly severe. Thanks to overturning Roe, Republicans lost the midterms and, soon, gay marriage will be enshrined into federal law.