In recent days, there has been a misconstrued effort to blame the GameStop stock surge – which has upended financial markets and inflicted billion-dollar losses on major hedge funds – on Trumpism.

CNN said the saga had “its roots in Trumpism”. As a former Trump voter and a long-time lurker in the ‘WallStreetBets’ Reddit forum that led this audacious assault on the Wall Street establishment, I think this entirely misses the point.

To me, the GameStop short squeeze and the election of Trump are both symptoms of a larger problem. Both the people who elected Trump in 2016, and those who are now jumping on the Wall Street bets bandwagon, see an opportunity to fight back against a system they believe to be rigged against them.

The extraordinary GameStop story started in the middle of January, when a group of people on the ‘WallStreetBets’ subreddit (WSB) noticed that stock in GameStop – a US chain of videogame stores – was undervalued because some hedge fund managers were holding incredibly large short positions.

These Redditors decided to buy the stock to force the hedge fund managers to cover their shorts, which would drive the price higher, meaning the Redditors could sell for a large profit.

Short squeezes happen all the time – usually a result of rival hedge fund managers attacking each other. This time, though, it was David vs Goliath – and David was winning. The opportunity to join the fight and use the financial system to fight the establishment was very appealing, as the trading volume shows.

The Redditors’ plan worked, and as news broke of their initial success, more than five million new members flocked to WSB.

For the original WSB traders, this was just about making a profit. There was no political motivation – just an opportunity for some little guys to make money at the expense of a hedge fund manager who made a rookie mistake.

But, as the situation developed, what the GameStop stock surge showed us was an evolution of class warfare. Hedge fund managers put themselves in a vulnerable position through incredibly foolish decisions to short, by some reports, up to 140% of the available shares. If the roles were reversed, no one would be calling for regulation – the people who lost their money (in this case, retail investors) would just be called stupid and reckless.

Yet the reaction to these retail investors taking control has been very interesting. Very quickly, the establishment came to the defense of the hedge fund managers.

Powerful brokerages including Robinhood, TDAmeritrade, and WeBull halted buy orders, which meant retail traders could only sell their positions. These actions drove share prices down from highs of almost $500 on Thursday 25 January – up from around $20 at the start of the month – to $193 by 28 January.

Other companies took drastic measures too. Discord de-platformed WSB – blaming hate speech on the subreddit – though it U-turned a day later and announced it would instead be helping to moderate the server. There were also attempts (since corrected) by the Financial Times to falsely connect WSB to the alt-right and the Capitol riot on 6 January 2021.

Growing distrust

In recent decades, there has been increasing distrust of the financial sector. We’ve seen hedge fund managers not be held accountable following the dot-com bubble in 2001, or the mortgage crisis in 2008. We’ve seen short-sellers such as Bill Ackman pre-empt a market crash to make billions of dollars as COVID-19 hit.

And, perhaps worse still, we’ve seen our elected officials, such as former Georgia Republican Senators, Kelly Loeffler and David Perdue, make millions by selling off stocks after attending classified briefings on the pandemic – whilst telling the American public not to panic. I believe this is a large part of why both lost their seats to their Democratic challengers in Georgia’s January 2021 runoff elections.

In the US, there are many people who believe a conspiracy theory that elections are held only to trick people into thinking they have a choice, when in reality the ruling class decides the outcomes.

Trump’s victory in 2016 was something that the ruling political elites would never have allowed if they were truly in control. That he became president after standing on a platform of disrupting the establishment showed many of his voters that they can have a voice, and that if they band together, they can influence.

Fueled by the frustrations that Trump failed to deliver any meaningful disruption to the establishment, beyond his offensive speech, I think many of his more moderate supporters realized he was just another billionaire businessman who didn’t really care about the little guy.

Fast-forward to January 2021, when regular people banded together on social media to essentially take down a hedge fund worth billions of dollars. In response, the establishment came out in full force trying to beat the little guys back into the corner by changing the rules and launching a smear campaign.

This has created a situation where a bi-partisan cohort of Congressmen and Senators is calling for investigations into the actions of the brokerages. Both Democrat Representative Alexandria Ocasio-Cortez and Republican Senator Ted Cruz – sworn political enemies on most issues – have voiced support for the Redditors.

I don't know what the end game will be for the GameStop short squeeze, and many of the people in WSB don't either. But it’s a symptom of a problem that won't go away: inequality.

People believe they are fighting against a system designed to protect the elites and hold the little guys down. For the first time in a long time, the little guys are seeing success. It will only fuel their desire to fight harder.