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What I Gained by Losing in Madoff

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I was standing in my kitchen wondering what I was going to have for lunch when my friend Taj called.

"Sit down," she said.

I thought she was going to tell me she had just gotten the haircut from hell. I laughed, said, "it can't be that bad."

But it was. Before the phone call I had thirty years of retirement savings in a "safe" fund with a brilliant financial guru. When I put the phone down, my savings were gone and my genius financial guru, Bernie Madoff, was in handcuffs. I felt as if I had died and for some odd reason was still breathing.

Since Madoff's arrest in December on charges of running a $50 billion Ponzi scheme, I've read many articles about how we Madoff investors should have known what was going on, how believing in Madoff was no different than believing there were WMD's in Iraq. And I wish I could say I had reservations about Madoff before The Call. I wish I could say I knew better about getting such consistently good returns, but I did not. Besides, everything about which I "knew better"--stocks, smart financial advisors, real estate--was also disastrous. Our financial advisor embezzled a quarter of our money ten years ago, I lost another third in the stock market during the boom times, and we bought our house at the top of the market and sold at the bottom. Considering my track record, Madoff seemed like a sensible respite: his fund showed occasional losses along with small steady gains. (I'm keeping a list of people who want to be notified of our next investment so they can sprint in the other direction. Feel free to add your name.)

It was always more important for me to find work that I loved than to be rich. I know this is a ridiculously privileged attitude since so much of the world has to be more concerned about food than finding meaningful work. But I was (and still am) one of the privileged: I've always had clean water, clothes to spare, enough to eat. And so I spent years washing dishes and being a maid so that I could write poetry. Then I spent more years as sales clerk and an avocado and cheese sandwich maker in a health food store so that I could write non-fiction. I lived out of the back of a station wagon, brushing my teeth and washing my face in public bathrooms so that I could keep writing.

I started my first groups for emotional eaters, a topic about which I've written six books, in someone else's living room. I chose to do what I had to do for money so that I could do what I wanted to do for love. And when the money started coming in, when my book was on The New York Times Bestseller List, it was like getting a paper bag filled with monopoly money. I had no way of relating to the fact that I now had hundreds of thousands of dollars. Or, as James Grant, editor of Grant's Interest Rate Observer says, "Insofar as there is a lesson in history, it's that human beings are not good with large sums of money, anything over $136."

Did I hear that diversification was smart? Absolutely. Did I choose to ignore that advice because I also got conflicting advice about Madoff being, as someone said, "the Jewish equivalent of T-bills"? Yes. I chose to find very smart people who (I thought) were as smart in their fields as I was in mine and I chose to listen to them.


Since The Call, I have chanted the mantra of "How could you, why did you, what's the matter with you?" Another, even meaner version of this is: "It serves you right. You thought you were above it all, different than everyone else. Well, guess what honey, you're not." I have also veered towards blaming someone else -- anyone else-- for the mess I am in: my friend Richard, who offered to allow my husband and me into his Madoff fund, my accountant who encouraged me to put all the money in one place, my friends who all did the same thing.

Where does the blame end? My father taught me to take risks, to accumulate. He said it didn't matter how I got there. But this was after forty members of his family were killed in Auschwitz and his motto became, "God abandoned us. There is no such thing as morality and it's every man for himself." Do I blame my father who has been dead for eight years? Or is it Hitler's fault that I put my money into a Ponzi scheme?

Unlike many people who lost everything in Madoff, and unlike most of the world, I still have money to live day-to-day. I am still teaching and I am still writing and there is still nothing else I would rather do.

Nonetheless.

I go to sleep at night oscillating between ranting about Madoff and being terrified that we won't be able to keep our house. But then I realize that the real suffering (for me) is not living without money; it's living inside this ranting mind.

Years ago, I was lucky enough to meet Nelson Mandela and the people with whom he spent 26 years in prison. Their humility and open-heartedness stunned me. I couldn't stop myself from asking them a thousand questions: weren't you angry? Weren't you bitter? Didn't you want to lash out against the people who hurt you? And even though Mandela was almost blind from years of hard labor in the sun-blinding quarries of South Africa, and even though his companions lost half their lives in prison, each of them told me, in their own ways, that if they had gotten angry and bitter they would have been no different than their jailers. They said, "we would have been not only living in an external prison, we would have been living in the prison of our minds."

My loss cannot compare to Mandela's; I lost money, not freedom, but the mind of blame is always the same. When I start blaming myself (or someone else) it is like saying, "If I had been smart enough to see that Madoff was too good to be true, then I wouldn't have to feel devastated now." The devastation is horrible, but if I don't allow myself to feel this, then I will not see that I participated in the fraud by being willing to close my eyes about what Madoff was doing.

I often asked Richard, the head of our feeder fund, how Madoff made such consistently good returns. Although Richard tried to explain it to me, it was clear that he didn't know either, because I'd leave our meetings still unable to explain to anyone else how it worked. And so, rather than put my money where my values were--into real things, real people, real companies--I allowed myself to be part of this insane leveraging of money upon money. I allowed myself to be sucked into the belief that as long as I was giving large chunks of money away, as long as I was doing good work in the world, it was OK to participate in a venture that was not contributing to anything in which I believed. I engaged in the money split to which we as a culture subscribe: we say we believe in wind energy but we put our money into oil. We say we believe in education and health care but we put our money into advanced weaponry. We say we want to stop violence but we allow genocide in Darfur. I can't change the culture's behavior, but I can change my own.

Over and over again, I've asked myself: why didn't I secure the most basic of all things-- shelter itself. Why didn't I pay my mortgage off? And if I don't engage in blame, I see the answer clearly: because I believed in something else more. I believed in accumulating. And when you believe in accumulating, you see what you don't have, not what you do. You lose touch with what you value more than money.

The truth is that my relationship to money was no different than my relationship to food, to love, to fabulous sweaters: I never felt as if I had enough. I was always focused on the bite that was yet to come, not the one in my mouth. I was focused on the way my husband wasn't perfect, not the way he was. And on the sweater I saw in the window, not the one in my closet that I hadn't worn for a year.

Although I never would have chosen this path, and although it still feels terrifying at moments, I know I can never see the whole picture in the chaos of the moment. Sometimes it feels as if a bomb exploded in my chest. And sometimes, sometimes I am aware that there's an unimaginable unchartered world on the other side of this loss, like stepping through the Narnia wardrobe.

On this other side of loss, there is the necessity -- the urgency -- of staying in the moment. This breath. This step. This splash of sun. The money is lost but if I wander into fear--what if my husband or I get sick and we can't pay the medical bills, what if there is an accident and we can't work, what we will do when we get old -- I'm lost as well. Being fierce about staying in the present -- where there already is enough -- is an unexpected GOM (Gift of Madoff).

Having lived through a life-threatening illness of my own earlier this year and being shockingly grateful at the luminosity and kindness it evoked, I am certain there is a phoenix in these ashes. There is plumage to be revealed, soaring to occur. I just don't know what it all looks like. Yet.

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