Krugman wonks out

Gambling — on sports, stocks and crypto — is the new opioids

But the main way in which policy has contributed to America’s gambling epidemic isn’t what policymakers did, but what they didn’t do. As technology made gambling and speculation essentially frictionless, fueling the rise of predatory “limbic capitalism,” policy did nothing to protect Americans from their self-destructive instincts.

And while ordinary gambling can and does ruin people’s lives, gambling that takes the form of asset speculation can suck in far more people, because, as Robert Shiller pointed out long ago, widespread optimism about an asset’s price can for a while be self-fulfilling, because it initiates a “natural Ponzi scheme”: