Pesky questions about Bernie Madoff

By Jim Stergios
December 15th, 2008

Okay, volatile times have taken a different coloration with the news of the Bernie Madoff affair. How can you do business in a climate where you cannot trust people? is probably the first question that comes to mind, but perhaps that is too easy. Many people I respect note that my view that morals and business culture were a big part of what we are living through is overstated. I’ll accept that because they know business history better than I. But allow me to ask a few basic questions about the Madoff affair.

How is it possible that people would read statements that were, according to some, questionable and inconsistent in content and still invest in Madoff Investments? (Possible answers are: (1) they were in fact solid-looking statements and people are covering their derrieres by making this claim; (2) certain investors are inebriated with the thought of an absolutely fool-proof investment vehicle, like, for example, some real estate investors, or perhaps IT investors pre-2000…)

Should we now finally let Carlo Ponzi (see here the wonderfully colorful description of Ponzi’s wonderfully colorful life from arriving on the East Coast with $2.50 in his pocket, to setting up a banking scam in Canada, to setting up shop in Boston and living in Lexington, to running off to Florida to start another scam, to jail and repatriation to Fascist Italy) out of jail free and start calling pyramid schemes Madoff Scams? I mean, Bernie blew through $50 billion.

If Ken “Kenny Boy” Lay became a poster child for Republican corruption, does that make Madoff a pretty good ringer on the Democratic side? Consider a quick look at the OpenSecrets website for a long list of beneficiaries of the Madoff family’s largesse. There are a handful of Republicans in there but by far the greatest winners in the scramble for his family’s (oops, investors’) money were the Chuck Schumers and, ahem, Edward Markeys of the world.