How Sam Bankman-Fried Weaponized Wokeness To Dupe Progressive Investors

Less than one decade ago, Elizabeth Holmes was the darling of Silicon Valley. After dropping out of Stanford University, she launched a startup called Theranos, which claimed to have mastered the extraordinarily complex biochemistry problem of testing for a variety of diseases from a single drop of blood. Only after she secured a $9 billion valuation for her company and deceived the nation’s most important power brokers, from James Mattis to Hillary Clinton, was her venture revealed to be utterly fraudulent. She is now on her way to federal prison.
Around the same time, fintech entrepreneur Dan Price made headlines for giving himself a massive pay cut to ensure that no employee at his company would ever earn less than $70,000, a move that The New York Times called a “swashbuckling blow against income inequality.” More recently, however, the Gravity Payments executive resigned his post amid charges of fourth-degree assault, fourth-degree assault with sexual motivation, and reckless driving. The purportedly big-hearted executive allegedly cornered a woman in his Tesla, attempting to kiss her and grabbing her throat when she declined his overtures.
What do these two failed entrepreneurs have in common? They knew how to make woke go broke. A post-mortem of the Holmes affair would conclude that, among other blind spots, Silicon Valley was desperate for a female technology legend, allowing her to win over the ultra-progressive startup world. In a similar vein, liberal customers and investors desperately wanted to link arms with a man-of-the-people business leader like Price, who seemed to worry more about dividing the pie than making it larger.
Enter Sam Bankman-Fried, the 30-year-old cryptocurrency wunderkind who turned exchange platform FTX into an overnight success. Even as he purchased luxury real estate in the Bahamas alongside his possibly polyamorous cohort of roommates, the young entrepreneur made headlines in the United States as an “effective altruist” devoted to giving away every last penny of his $15 billion fortune. The house of cards collapsed when the world learned that Bankman-Fried, who allegedly pulled money from FTX to fund his gambling addiction at adjacent trading company Alameda Research, had been generous with other people’s money. 
Unlike Holmes and Price, Bankman-Fried admitted to the entire scheme. During a direct message conversation with Vox reporter Kelsey Piper, the likely fraudster said that the environmental, social, and governance movement, also known as ESG, has been “perverted beyond recognition.” Bankman-Fried also acknowledged that his effective altruism was mostly a front, boasting that he convinced “woke westerners” to like him by saying the right things.
FTX somehow earned a stellar “leadership and governance” from one ESG ratings agency Truvalue Labs. Yet John Ray III, a former attorney for individuals harmed by Enron, described the cryptocurrency exchange as the most “complete failure of corporate controls” in bankruptcy filings. Among other “systems that did not exist” were cybersecurity and risk management.
Later reports revealed that the entire progressive establishment was in the pocket of Bankman-Fried. He contributed millions to Democrats in the most recent midterm elections and millions more to left-of-center media outlets. Suddenly, the glowing coverage and subsequent kid-glove treatment of a Massachusetts Institute of Technology graduate who admitted he does not “even know how to code” makes much more sense.
The story of how entire institutions embraced an incompetent con man has not yet fully unfolded. On one hand, the evidence thus far suggests that ideology certainly played a factor. On the other hand, however, financial incentives were at play. As the book of Proverbs says: “A bribe is like a magic stone in the eyes of the one who gives it; wherever he turns he prospers.”
In any case, there is no indication that progressive Silicon Valley and Wall Street elites have learned their lesson. Center for Cultural Leadership senior fellow Jerry Bowyer told The Daily Wire that institutional investors have not yet discovered how to recognize progressive charlatans because their own money is not at stake.
“Large asset managers are more on board with ESG and other forms of ideological investors because they get social kudos and have an excuse to charge higher fees,” the investor and author contended. “There’s a similar problem with celebrity financial pundits who never lose their media perches no matter how much they flog investments which later flop. Also, virtue signaling business brands don’t want to give up a story which is too good to be true.”
The cult-like behavior of liberal asset managers has become especially clear amid the current macroeconomic headwinds, during which many funds have persisted in financial self-immolation. Harvard Management Company, which oversees the elite university’s endowment, reported a $2.3 billion loss in the most recent fiscal year and admitted that efforts to achieve net zero emissions through oil and gas divestment “weighed upon performance,” even though the organization remains “proud to be deeply engaged in the issue of sustainability.”
Bowyer added that investors with their own money on the line will be quicker to learn their lessons than those charged with acting as fiduciaries. “ESG investing was already suffering a catastrophic collapse in credibility coming from the bottom up,” he continued. “Real investors have already caught on. The collapse of FTX, which was built partly as the ESG-sensitive version of cryptocurrency world, just adds downward momentum to an investment fad already in freefall.”
Go to Source How Sam Bankman-Fried Weaponized Wokeness To Dupe Progressive Investors
The Daily Wire
December 2, 2022