Trick Mirror

by Jia Tolentino

  In June 2017, McFarland was arrested and charged with fraud. Aside from scamming his festival attendees, he had completely falsified Fyre Media’s financial position—earlier that year, he’d claimed that the company took in $21.6 million in revenue over a single month, and that it owned land in the Bahamas worth $8.4 million. He had stiffed and cheated a slew of companies and workers, many of them Bahamians who had placed their livelihood in his hands, believing his promises that Fyre Fest would be an enormous annual venture. And still, undaunted, McFarland kept scamming: later that summer, he holed up in a penthouse and sold, through a company called NYC VIP Access, $100,000 worth of fake tickets to exclusive events, some of which he had made up completely. According to a 2018 federal complaint, McFarland actually retargeted Fyre Fest attendees from behind the shield of his new venture, drawing from a spreadsheet that identified the customers with the highest annual salaries. When I read that detail, I felt something close to admiration. I thought about how, in the midst of the real-time social media frenzy, Ja Rule had tweeted that Fyre Fest was “NOT A SCAM.” The phrase functioned like a ribbon-cutting ceremony. It announced McFarland, whom The New York Times described as “Gatsby run through an Instagram filter,” as the scammer of his generation, and Fyre Fest as not just a scam, but a definitive one—America’s first major all-millennial scam event.

  Fyre Fest sailed down Scam Mountain with all the accumulating force and velocity of a cultural shift that had, over the previous decade, subtly but permanently changed the character of the nation, making scamming—the abuse of trust for profit—seem simply like the way things were going to be. It came after the election of Donald Trump, an incontrovertible, humiliating vindication of scamming as the quintessential American ethos. It came after a big smiling wave of feminist initiatives and female entrepreneurs had convincingly framed wealth acquisition as progressive politics. It came after the rise of companies like Uber and Amazon, which broke apart the economy and then sold it a cheap ride to the duct tape store, all while promising to make the world a better and more convenient place. It came after the advent of reality TV and Facebook, which drew on the renewable natural resource of our narcissism to create a world where our selves, our relationships, and our personalities were not just monetizable but actively in need of monetization. It came after college tuition skyrocketed only to send graduates into low-wage contract work and world-historical economic inequality. It came, finally, after the 2008 financial crisis, the event that arguably kick-started the millennial-era understanding that the quickest way to win is to scam.

  The Crash

  In 1988, twenty-seven-year-old Michael Lewis quit his job at Salomon Brothers, the investment bank that sold the world’s first mortgage-backed security, and wrote a book called Liar’s Poker. It was a portrait of Wall Street in the years following federal deregulation, a time when the industry blossomed with savvy, cynical, lucky actors who stumbled into a world of extreme manipulation and profit. Lewis, as an inexperienced twentysomething, had found himself in charge of millions of dollars in assets without fully understanding what was going on. Revisiting that period in 2010, he observed, “The whole thing still strikes me as totally preposterous….I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud.” He had thought that Liar’s Poker would live on as a period piece, a document of how “a great nation lost its financial mind.” He didn’t expect that, after the 2008 crash, eighties finance would seem almost quaint.

  Lewis writes about this crash in The Big Short, which chronicles the unspeakably complicated mechanisms that bankers created to inflate the mid-2000s housing market, and then to monetize skyrocketing levels of homeowner liability, until, inevitably, the whole system collapsed. Laws against predatory lending had been overruled in 2004, which allowed mortgages to be extended to people who would never be able to pay them; this, in turn, made the pool of potential homeowners basically endless. Housing prices rose in some markets by as much as 80 percent. People financed their homes with home equity credit, a scheme that worked as long as prices kept rising, which they would as long as people kept buying. To keep the system going, mortgages were granted willy-nilly: it was possible to get a loan without supplying financial documentation, going through a credit check, or putting money down. One type of subprime loan was called the NINJA, which stood for the borrowers having no income, no job or assets. The financial industry disguised the instability of this arrangement with obscure terms and instruments: CDOs, towers of debt that would be recouped through payments on rotten mortgages, and synthetic CDOs, towers of debt that would be recouped through insurance payments on that rotten debt. In The Big Short, a young banker tells Lewis, “The more we looked at what a CDO really was, the more we were like, Holy shit, that’s just fucking crazy. That’s fraud. Maybe you can’t prove it in a court of law. But it’s fraud.”

  I was in college while the housing bubble was expanding, and everything else about the country seemed to be on the same turbo-powered track. Goldman Sachs and McKinsey came to campus and recruited my most intense classmates to the sort of life that ensures money for down payments and private school. I watched America’s Next Top Model and Project Runway, shows that were all bustle and glitz and giddy-up, and Laguna Beach, where the world looked like long granite countertops and lamplit stucco, palm trees and infinity pools. Upward mobility felt like oxygen—unremarkable, ubiquitous. I wrote a thesis proposal about the American Dream. Then, in 2007, home prices started rapidly declining. Homeowners started defaulting in great waves. Every time I passed by the TVs in the student center, they seemed to be broadcasting news footage of families guarding their possessions on the sidewalk outside foreclosed homes. I found myself staring at my laptop late at night, embarrassed, revising. I’d been writing about immigrants, and how uncertainty was central to the magic spell of America. But the backdrop had suddenly changed from prosperity to collapse.

  In September 2008, Lehman Brothers became the first to file for bankruptcy. AIG soon followed, and was bailed out with $182 billion of federal money. (Despite posting a $61 billion loss at the end of 2008—the worst quarterly loss for any corporation in history—AIG gave out $165 million in bonuses to its financial services division the next year.) Then came a global recession. Unemployment and economic inequality skyrocketed. From 2005 to 2011, median household wealth would drop 35 percent. Other countries might have jailed the bankers who did this. Iceland sentenced twenty-nine bank executives for misdeeds leading up to the 2008 crisis; one CEO was sent to jail for five years. But in America, all the bankers were bailed out by the government. Many were richer by the end of the ordeal.

  The financial crisis was a classic con—a confidence trick, carried off by confidence men. The first person to earn the official con-man designation was William Thompson, sometimes referred to as Samuel, a petty criminal whose misdeeds were reported by The New York Herald in the summer of 1849. “For the last few months a man has been traveling about the city, known as the ‘Confidence Man,’ ” the first article begins. Dressed in a respectable suit, Thompson would approach strangers, make polite small talk, then ask, “Have you confidence in me to trust me with your watch until tomorrow?” The Herald’s ongoing coverage of Thompson was so entertaining that the “confidence man” epithet stuck. But Thompson, actually, was a pretty bad con man: opportunists by other names had been working better angles for a long time. Real con men don’t have to ask you for your watch, or your confidence. They act in such a way that you feel lucky to give it to them—eager to place a sure bet on a horse race or park your money in an impossibly successful investment fund, eager to fly to the Bahamas for a party that doesn’t exist.

  In 1849, three days after Thompson was arrested, the Herald published an unsigned editorial called “ ‘The Confidence Man’ on a Large Scale,” which sardonically expressed condolences that Thompson hadn�
�t gotten the chance to work on Wall Street.

  His genius has been employed on a small scale in Broadway. Theirs has been employed in Wall Street. That’s all the difference. He has obtained half a dozen watches. They have pocketed millions of dollars. He is a swindler. They are exemplars of honesty. He is a rogue. They are financiers. He is collared by the police. They are cherished by society. He eats the fare of a prison. They enjoy the luxuries of a palace….Long life to the real “Confidence Man”!—the “Confidence Man” of Wall Street—the “Confidence Man” of the palace up town—the “Confidence Man” who battens and fattens on the plunder coming from the poor man and the man of moderate means!

  The op-ed continues, providing Thompson with caustic advice:

  He should have issued a flaming prospectus of another grand scheme of internal improvement….He should have got all the contracts on his own terms. He should have involved the company in debt, by a corrupt and profligate expenditure of the capital subscribed in good faith by poor men and men of moderate means….He should have brought the stockholders to bankruptcy. He should have sold out the whole concern, and got all into his own hands in payment of his “bonds.” He should have drawn, during all the time occupied by this process of “confidence,” a munificent salary; and, choosing the proper, appropriate, exact nick of time, he should have retired to a life of virtuous ease, the possessor of a clear conscience, and one million dollars!

  The con is in the DNA of this country, which was founded on the idea that it is good, important, and even noble to see an opportunity to profit and take whatever you can. The story is as old as the first Thanksgiving. Both the con man and his target want to take advantage of a situation; the difference between them is that the con man succeeds. The financial crisis of 2008 was an extended, flamboyant demonstration of the fact that one of the best bids a person can make for financial safety in America is to get really good at exploiting other people. This has always been true, but it is becoming all-encompassing. And it’s a bad lesson to learn the way millennials did—just as we were becoming adults.

  The Student Debt Disaster

  After the financial crisis, nearly one in four homes with mortgages in the United States were underwater, valued at less than what their owners owed the banks. Sixty-five percent of homes in Nevada were underwater; in Arizona, it was 48 percent; in California, more than a third. (Predictably, most of these borrowers had bought new homes between 2005 and 2008.) Homeowner debt is the biggest source of household debt in America. For a long time, the second biggest source was car debt. But in 2013, student debt—the second generation-defining scam—took car debt’s place.

  Adjusting for inflation, college tuition at a private university is currently three times as much as it was in 1974. At public schools, tuition is four times as expensive. Car prices, in comparison, have remained steady. Median income and minimum wage have hardly moved. At some point in the mid-nineties, it became mathematically impossible for a student to work her way through college, and financial aid has nowhere near kept up with the disparity between what students need and what they have. Within the life span of the millennial generation, the average debt burden has doubled: for the class of 2003, average debt at graduation was around $18,000; for the class of 2016, it was over $37,000. More than two thirds of college graduates have student debt at graduation, and almost a quarter of postgraduate degree holders with debt owe $100,000 or more. The situation often gets so punishing that it seems fit only for an actual crime. If you borrowed $37,000 on a thirty-year Stafford loan, you would end up paying over $50,000 in interest. The Public Service Loan Forgiveness program has rejected 99 percent of applicants. It is very easy, these days, for student borrowers to end up underwater—indebted for a degree that’s worth much less than what they paid.

  There are lots of similarities between the housing bubble and the tuition bubble. Like subprime mortgages, student loans at for-profit colleges are nearly always extended in bad faith. The Obama administration nationalized most of the student loan industry as part of the 2010 Affordable Care Act legislation, and so this web of securitized debt is government business, and it is expanding rapidly—student debt ballooned to over $1.5 trillion in 2018. But there’s one major difference between housing debt and education debt: at least for now, if you hope to improve your life in America, you can’t quite turn away from a diploma the way you can a white picket fence.

  In the meantime, tuition increases have done little to improve the education students receive. Faculty jobs, like most jobs, have become unstable and precarious. Salaries are stagnant. In 1970, nearly 80 percent of college faculty were employed full-time; now less than half are full-time. Colleges, competing for tuition dollars, spend their money on stadiums, state-of-the-art gyms, fancy dining halls—the cost of which is reflected in tuition. The institution’s need to survive in the market, in other words, ends up hampering the student’s ability to do the same after they graduate. And, as protections and benefits and security are steadily stripped away from the labor market, it gets correspondingly harder to pay off this sort of debt.

  In 2005, 30 percent of American workers were contingent workers—contract employees, or part-time employees, or self-employed. Now the number is 40 percent and rising. From 2007 to 2016, the number of people working involuntarily part-time (meaning that they’d prefer full-time employment) increased by 44 percent. In the years following the recession, I kept hearing the little factoid that people my age would change careers an average of four times in our first decade out of college. Stories about how millennials “prefer” to freelance still abound. The desired takeaway seems to be: Millennials are free spirits! We’re flexible! We’ll work anywhere with a Ping-Pong table! We are up for anything and ready to connect! But a generation doesn’t start living a definitively mercurial work trajectory for reasons of personality. It’s just easier, as Malcolm Harris argues in his book Kids These Days, to think millennials float from gig to gig because we’re shiftless or spoiled or in love with the “hustle” than to consider the fact that the labor market—for people of every generation—is punitively unstable and growing more so every day. I’ve been working multiple jobs simultaneously since I was sixteen, and I have had an exceptionally lucky professional life, and, like a lot of Americans, I still think of employer-sponsored health insurance as a luxury: a near-divine perk that, at thirty, I have had for only two years in my career—the two years that I was working at Gawker, which was sued into the ground by the dropout-loving, suffrage-hating, Trump-supporting billionaire Peter Thiel.

  In the current economy, for most students, colleges couldn’t possibly deliver on providing hundreds of thousands of dollars’ worth of anything. Wages aren’t budging, even though corporate profits have soared. The average CEO now makes 271 times the salary of the average American worker, whereas in 1965, the ratio was twenty-to-one. Healthcare costs are staggering—per capita health spending has increased twenty-nine times over the past four decades—and childcare costs are rising like college tuition, even as the frontline workers in both healthcare and childcare often receive poverty wages. A college degree is no guarantee of financial stability. Today, aside from inherited money, such guarantees barely exist. (Of course, as we saw in 2019’s “Operation Varsity Blues” scandal, plenty of exorbitantly wealthy parents still place enough value in a college education that they will commit outright fraud in order to game the already rigged admissions system and give their children an education that they, of all people, do not actually need.) And still, colleges sell themselves as the crucible through which every young person must pass to stand a chance of succeeding. Into this realm of uncertainty has come a new idea—that the path to stability might be a personal brand.

  The Social Media Scam

  The most successful millennial is surely thirty-five-year-old Mark Zuckerberg, whose net worth fluctuates around the upper eleven digits. Lowballing it at $55 billion means that Zuckerberg has nearly five m
illion times as much money as the median American household, which is worth $11,700. He is the eighth-richest person in the world. As the founder of Facebook, he effectively controls a nation-state: with a quarter of the world’s population using his website on a monthly basis, he can sway elections, and change the way we relate to one another, and control broad social definitions of what is acceptable and true. Zuckerberg’s most prominent characteristic is a lack of a discernible personality. In 2017, he took a tour around America, seeding rumors of a possible presidential run while giving off the aura of an alien trying to learn how to pass as one of us. The dissonance at the heart of Facebook is at least partly due to the fact that it was this man, of all people—this man who once said that having different identities showed a “lack of integrity”—who understood better than anyone that personhood in the twenty-first century would be a commodity like cotton or gold.