Welcome to the casino economy From bullshit jobs to crypto

This month’s crypto liquidation event, the largest in history, was like turning on the lights in a roach-infested apartment. A flash $17,000 drawdown in the price of Bitcoin and a 10% to 20% drop across major cryptocurrencies produced cascading liquidations throughout the market, particularly in leveraged futures and alt-coins, revealing that the space had become dependent on borrowed money (used to place outsized bets on cryptocurrencies going up). Influencers posted suicide-note screenshots and cries for help. 

Even if the crash wiped out only a vocal and desperate minority of leveraged retail traders, it revealed how dependent many Americans, especially young men, are on various forms of gambling for income. Other symptoms of this dynamic included the “Liberation Day” mini-crash in April and the Gamestop stock craze in 2021. The risks that retail traders are taking seem more and more dramatic; a few make millions and post their winnings on Reddit; thousands seek to emulate these gains and get wiped out.

The economy of the 2020s is marked by a nervous, Zyn’d up desperation. The emergence of prediction betting markets like Polymarket, Kalshi, and Robinhood, moreover, suggests that an entirely novel economic system — the casino economy — has emerged from the information economy, the same way the information economy emerged from the midcentury industrial economy. 

Platforms like DraftKings, Robinhood, or Kalshi clearly incentivize us to engage in gambling behavior. And an extremely fragile labor market and future for labor means gambling to survive is increasingly necessary. The crypto crash illuminated, but did not create this reality; gambling (like OnlyFans, to cite another adjacent phenomenon) happens in proportion to a decay in dependable, salaried wage labor.

We are pushed and pulled into the casino economy. This is an enormously complex phenomenon, but it’s worth trying to understand why this is happening and what the ramifications are.

One factor is that the information economy — sometimes known as the economy of bullshit jobs or email jobs — de-conditioned millions of college-educated Americans to tangible toil, as technical or laboring jobs were shipped overseas or taken by cheap migrant labor at home. These shifts, determined by Wall Street, the cheap-labor lobby, and neoliberals in both major parties, were of immense public consequence; yet the public had little input into them. Between 2008 and 2023, the real economy shrank. Young people entering the labor market either managed to secure email jobs (IT, management, human resources, and the like) or fell into an abyss of service-sector precarity; many straddled both sectors, serving as adjunct philosophy teachers by day and as baristas by night. 

The Obama economy’s rebound after 2008 was partly driven by the lottery-like dynamics of NGO jobs and tech jobs — by private and public email jobs. Getting an email job at a startup that succeeded could mean being set for life, while the runners-up would remain economically insecure. These jobs were also ideologically aligned, meant for and granted to so-called coastal elites with the requisite progressive views. This was the economy of New York, LA, DC, and Seattle (the heartlands were buoyed by natural gas, but those jobs also came under attack from the green agenda).

The problem with the Obama-era version of the information economy was that the products minted by NGOs and tech companies and advertising firms didn’t help us do anything — didn’t improve our quality of life. NGOs too often took up niche causes (while laundering their donors’ money). Tech companies visibly eroded quality of life (addictive social feeds, for example, mean going to restaurants where people at the same table scarcely look at each other, let alone, you know, talk). Private equity and hedge funds asset-stripped the real economy, piling debt atop debt to buy up legacy firms, refusing to invest in them, and thus dramatically boosting the likelihood of bankruptcy.

Getting an email job in 2011 was like winning the lottery (especially when those jobs came at startups that vested equity in the company); but the “good” jobs that Millennials found or created in the early Obama era were largely fake in the sense that they what they “produced” was bad for everyone who didn’t work in tech, finance, or advertising. These jobs contributed to the erosion of community life, and detracted from the well-being of Americans at large, and so there was never growing prosperity, or — to borrow the buzzword du jour — collective “abundance.”

The Millennials who were doing well in the Obama economy were doing so at the expense of many  others who weren’t. The product manager who made Facebook more addictive enriched himself at a cost to its users. NGOs that pushed ideological propaganda into school districts or hospitals or the arts achieved narrow victories for themselves, but inflamed social tension, disempowered parties and other mass-membership organizations, and eroded the quality of discourse. 

This economy was value-negative, and its economic benefits, what there were of them, were not well-distributed geographically or across class lines. It was an economy of gross inequality. It now appears to be giving way to something else. Between 2009 and 2019, the top 1% of US households captured roughly two-thirds of all wealth gains; median household wealth, by contrast, barely returned to pre-recession levels. During the same period, private-equity assets under management mushroomed to more than $5 trillion, up from about $1 trillion, and tech giants became Leviathans.

As the email economy falters, and as email jobs are either cut in Washington by a populist Trump administration or replaced by AI, elite laptop-class and credentialed coastal professionals are still habituated to expecting a lot for not a lot of work. That’s where the gambling mindset comes in. Stated bluntly, whether you got into the email job economy and are now feeling precarious, or whether you, like myself, never made it in, you have incentive to gamble.

Yet we have neither the skill nor the taste for the daily, dependable, reliable labor of our grandfathers and grandmothers. The insignia of the information economy — bloated degrees, bloated grades, bloated accomplishments, ideological hypothyroidism — are increasingly useless, and probably should be useless.

The casino economy stands at the threshold of the information economy and whatever comes next. What’s less clear is whether it’s transitional or semi-permanent. It may define the whole next era. Americans have some agency yet in this historical unfolding.

While the long-term success of the Trump administration’s economic agenda is far from guaranteed, there’s a refreshing long-termism in the integrated platform of tariffs, corporate reinvestment, and public stakes in private companies — especially companies related to national security, chips, heavy metals, aerospace, and defense. Reduced dependence on migrant labor, which suppresses wages on the lower rungs, would also have long-term benefits. The Trump administration would like to get America back to making things, and for those things to be made by Americans. (On the other hand, Trump’s embrace of crypto and rampant speculation provides reason to be skeptical. There’s a worrisome, even loathsome, enthusiasm for vapor over material abundance.)

And the revitalization agenda is somewhat bipartisan. The most salutary aspect of both parties’ economic ideals is connected to re-embracing the real, rather than the informational, fake product and fake productivity. The general popularity of economic visions predicated on material, street-level reality is encouraging (in contrast to the 2010’s emphasis on ideological and digital “progress”).

At the same time, both parties and politicians across the spectrum are speculators themselves, trading inside information for massive stock gains. (Members of Congress consistently outperform the market by 6% to 12% annually). The casino economy has also been casino politics for a long time.

As for me, I buy dividend stocks, having gotten burned by day trading in 2021. Occasionally I’m tempted into losing money on a football or basketball game. I really enjoy my weekly poker games and the friends I’ve made playing poker. But what I’d like is to not be quite as excited as I am when I can buy groceries with my poker winnings, and for my friends to not be worried about the price of Etherium as it drops in real time during our game. I’d like gambling to be fun (again).

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