DEFINITION of ‘Ponzi Scheme’ according to Investopedia:
A fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors. These schemes usually collapse on themselves when the new investments stop.
Ponzi schemes are illegal, but many fraudulent firms cover up this little detail by calling themselves multi-level marketers, AKA the Pyramid Scheme. Sellers of a product make some money by selling it; they also make a cut of the profit from the next patsy they can con into selling the product and so on and so forth.
This eventually comes crashing down when sellers run out of other sellers to recruit. Typically, the starters of the “business” make a killing, while the laggards are left with a whole lot of useless sh** and nothing to do with it.
Eric Lipton and Jennifer Steinhauer from the New York Times uncovered the truth behind conservative front groups that seem to be raising money for conservative politicians.
The reality is that the money raised ISN’T being spent on supporting conservative candidates (to be fair, most politicians from either side of the spectrum who have a shot at winning are already caked in corporate dough. Your chump change might allow him to wax his SUV one more time, I suppose) or even support causes that conservatives care about.
Instead, the money is used to support… well, I already defined the Pyramid Scheme for you didn’t I?
Take Ben Carson’s presidential campaign for example; he’s second place in national polls and ahead in Iowa. Small donors are raising lots of moolah for him, though the sad irony is that most of this money gets spent on… fundraising. You’re basically giving him money so that he can solely use your money to ask other people for money- a campaign-donation version of the Ponzi Scheme.
Your valuable donation does NOT get spent on policy staff, a campaign apparatus or a field operation which are necessary and productive uses of your money…
Instead of achieving real policy progress or building a sizable movement, you get the appearance of something moving and growing… the crowd of fundraisers, as more donations go towards hiring more of them, is the only thing that makes any gains, like hoards of zombies intent at getting your brains… until every American becomes one of them. Or until every American stops donating. When the whole thing collapses, the consulting operations that started these groups need only to start up a new group and the cycle repeats.
This Article (Conservative Politics Is Literally (Mostly) A Pyramid Scheme) is free and open source. You have permission to republish this article under a Creative Commons license with attribution to the author(CoNN) and AnonHQ.com.