The Famous Los Gatos Pyramid Parties

In 1980, financial "pyramids" hit our town pretty hard, but only for a little while.

Early in 1980, a strange, new phenomenon swept through the Bay Area and, for several months, took a firm hold in Los Gatos, pyramid financial schemes, or rather, parties ... pyramid parties.

Having always to be very careful with the few dollars I earned, I never participated in these parties so what I know about them is second hand, but I did see how they proliferated throughout town and I was asked if I wanted to join them many dozens of times.

I’m from a background where people made money, paid their bills and put money in the bank. I never learned much about investing. All of the adults in our neighborhood liked to go to Lake Tahoe when they weren’t working hard and play with money at the casinos in Stateline. They would park us kids in these hideous babysitting warehouses next to the casinos where one or two adults would show us 30 or 40 abandoned children two or three “Three Stooges” shorts and a passel of cartoons, and play them over and over again until your head was turned into mush. I still hate the Three Stooges.

As I grew older, I was able to weasel my way out of these horrible trips to the “Lake,” but my revulsion to casinos, glitz, glamor and polished slot machines has never left me. I hate those places and all that they stand for. Most of all I hate the mind numbing haze they are designed to proliferate and promote. Yuck!

This was pretty much about as much gambling as the parents of our area would do. I never heard of any of them playing the stock market.

So when these pyramid parties sprung up in Los Gatos, I had a built-in aversion to them. Even for all the fancy explanations that people devised to explain how the pyramids worked so righteously, they were gambling, pure and simple. It always amazes me when folks try to take a pure and simple thing, an obvious thing, and try to dress it up hoping they can sell it as something else. As they say, “a duck is a duck.” Plus, my simplistic belief that you make money by producing something for it, had me distrusting these parties right from the start.

As I understood it, you would get invited to one of the pyramid parties, go to it and give somebody some money then you would throw a party, and people would come to your party and they would give you a bunch of money. And then the people you invited would throw their own parties and make money, so on and so forth.

Everyone was throwing parties and handing over money, but nothing was exchanged. Money is an exchange medium, but nothing was exchanged. The money was simply handed over. It made no sense to me and to most of my good friends.

None of us participated in this fever that swept through town for several months. We were just too simple minded. You worked and made something for your money and you spent it on real stuff you needed. The money had value. It wasn’t empty and hollow. It was tangible.

For as senseless and irrational as these parties were, it was simply amazing how seriously so many sane and rational people took them. I had nice, normal friends who were raising good kids and keeping nice, normal households and when you turned down an invitation to their pyramid party, they would look at you numbly, dumbly, like their ears had a special blockage for the word no. They couldn’t hear your refusal to their invite. And once you had made them understand, they would take personal offense and ask whose pyramid were you in. Was I doing better in that one? Maybe they could join that one? How much had we made?

No, we were not in any of the pyramids. We were not involved in any of this stuff. You would be confronted with the same dumb stare that the casinos evoked. What was happening to our town? This phenomenon seemed to be changing so many people into pyramid zombies.

Then some people were starting to get discouraged, they had lost a few hundred dollars. We had to wonder ... would anyone admit to losing more than that, once they shook off the pyramid haze? Some, however, had made small fortunes and had no humility, for, indeed, their success validated the invalid practices. It wasn’t long before the police stepped in and started busting the pyramid parties, while it was reported that cops had been seen at the parties themselves, just some weeks earlier.

Leave it to the cops to squelch the fun. The pyramid parties died out as quickly as they had sprung up. This freaky aberration on the town’s lifeline mellowed into a nothing, but not without one, last little, mocking hiccup.

Rick Tharp, a graphic designer and the town’s premier theatrical party promoter, had some t-shirts printed up along with some special invitations and he contacted the local newspapers. For all the artists in town who hadn’t participated in the past several month’s pyramid parties, and for those who did attend the early ones, lost and wanted to lick their wounds, Tharp was going to hold his own pyramid party, the “Very Last Los Gatos Pyramid Party.” He even invited the police.

On the day of the party, making your way to Tharp’s front door, a table was set up on the front porch, attended by a pretty girl. When you payed the $1.98 required for entry, you were handed a “Very Last Pyramid Party” t-shirt and roughly hewn xerox of the “Last Party Pyramid” buck. This buck was your exchange media. He had made a funky chart showing what your potential maximum return would be on the perfectly played pyramid buck. I seem to remember something like $12. But, then, the beer and hot dogs were free.

We turned up the stereo and played our rock and roll and had a great time. Just before sunset, a reporter showed up from the Los Gatos Times Observer and she had a photographer with her. Tharp, the ever active promoter, had us all suck it up, get straight and we climbed all over each other, under the promoter’s direction, to form our own, large human pyramid. Luckily the photographer got off a fairly decent photograph before the unstable assemblage of Los Gatos humanity tumbled to the grass, laughing our asses off.

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Jeanne Rajabzadeh November 14, 2012 at 03:03 PM
$12.00 is not too bad of a loss. I know people who lost hundreds of dollars, such a scam.


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