Bernie Madoff, Scapegoat
Elie Wiesel called him a "God." His investors called him a "genius." But, proving correct that old adage from the country and western song, you never really know what goes on behind closed doors.
Bernie Madoff, for at least 20 years, ran a Ponzi scheme on thousands of clients, among them the people you and I would consider the best and brightest. Business leaders, celebrities, charities, even some of his own relatives and his defense attorney were taken for a ride (this has to be the first time a lawyer was hosed by the client).
We're clearly in one of those historic, game changing years: up is down, red is blue and black is president. Aside from Obama himself, no person will provide a more iconic face of this end-of-capitalism-as-we-know-it year than Bernard Lawrence Madoff.
Which is too bad. Yes, he stole $65 billion from some already quite wealthy people. I know that's upsetting to them because rich guys like Bernie are not supposed to be stealing from their own kind. Crime, thievery, looting -- that's what happens on the other side of town. The rules of the money game on Park Avenue and Wall Street are comprised of things like charging the public 29% credit card interest, tricking people into taking out a second mortgage they can't afford, and concocting a student loan system that has graduates in hock for the next 20 years. Now that's smart business! And it's legal. That's where Bernie went wrong -- his scheming, his trickery was an outrage both because it was illegal and because he preyed on his side of the tracks.
Had Mr. Madoff just followed the example of his fellow top one-percenters, there were many ways he could have legally multiplied his wealth many times over. Here's how it's done. First, threaten your workers that you'll move their jobs offshore if they don't agree to reduce their pay and benefits. Then move those jobs offshore. Then place that income on the shores of the Cayman Islands and pay no taxes. Don't put the money back into your company. Put it into your pocket and the pockets of your shareholders. There! Done! Legal!
But Bernie wanted to play X-games Capitalism, run by the mantra that's at the core of all capitalistic endeavors: Enough Is Never Enough. You have the right to make as much as you can, and if people are too stupid to read the fine print of their health insurance policy or their GM "100,000-mile warranty," well, tough luck, losers. Buyers beware!
It would be too easy -- and the wrong lesson learned -- to put Bernie on TIME's list all by himself. If Ponzi schemes are such a bad thing, then why have we allowed all of our top banks to deal in credit default swaps and other make-believe rackets? Why did we allow those same banks to create the scam of a sub-prime mortgage? And instead of putting the people responsible in the cell block in Lower Manhattan, where Bernie now resides, why did we give them huge sums of our hard-earned tax dollars to bail them out of their self-inflicted troubles? Bernard Madoff is nothing more than the scab on the wound. He's also a most-needed and convenient distraction. Where's the photo on this list of the ex-chairmen of AIG, Merrill Lynch and Citigroup? Where's the mug shot of Phil Gramm, the senator who wrote the bill to strip the system of its regulations, or of the President who signed that bill? And how 'bout those who ran the fake numbers at the ratings agencies, the lobbyists who succeeded in making sleazy accounting a lawful practice, or the stock market itself -- an institution that's treated like the Holy Sepulchre instead of the casino that it is (and, like all other casinos, the house eventually wins).
And what of Madoff's clients themselves? What did they think was going on to guarantee them incredible returns on their investments every single year -- when no one else on planet Earth was getting anything like that? Some have admitted they did have an inkling "something was up," but no one really wanted to ask what it was that was making their money grow on trees. They were afraid they might find out it had nothing to do with gardening. Many of Madoff's victims have told investigators that, over the years, they have made much more than the original investment they gave Bernie. If I buy a stolen car from the guy down the street, the police will take that car from me regardless of whether I knew it was stolen. If I knew it was stolen, then I go to jail for receiving stolen property. Will these "victims" give back their gains that were fraudulently obtained? Will the head of Goldman Sachs reveal what he was doing at the meetings with the Fed chairman and the Treasury secretary before the bailout? Will Bank of America please tell us what they've spent $45 billion of our TARP money on?
That's probably going too far. Better that we just put Bernie on this list.
Moore's new documentary on the wonders of capitalism will be in movie theaters this fall.
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This piece appears in this week's Time magazine (and in full at Time.com) as part of their annual "Time 100" issue highlighting their choices for "The World's Most Influential People."
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I predict ol' Bernie Madoff will get less than a decade, in spending some real genuine, quality time with Uncle Sam ..LOL
http://www.ShawnDrewry.com
http://www.YouTube.com/DrewryOnlineLive
Weekends at Bernies will never be the same without all of that cash.
I love Michael Moore!
I used to have big American dreams and now I feel like they're just slowly fading away and it makes me so sad that sometimes I even get tears. Especially when I've put so much trust in our government and even big companies. I've even gone as far to think that maybe people in the top tiers of society are all good people with good ethics. To discover that there are some very prominent figures in these groups that are greedy, liars, and don't care about the society as a whole is so disheartening. I'm trying very hard to hang on to what little hope I have left and it keeps me alive. I hope that someday this can all be just a very distant memory.
We probably should have taken our chances with total collapse. Instead of addressing the illness at its core, we're simply putting on better bandages.
You can say a couple hundred million US citizens end up victims just like the criminals and that can't happen. But if we dismissed government or its responsibility to its citizens, we let the fox into the hen house. Or we could argue that public servants like Clinton, Graham, Bush used an autocratic power against which we had no influence. But that says there really is no democracy.
'the end of capitalism as we know it" is an understatement.
We had NO obligation to these banks. NONE! In fact, they had an obligation to US -- the violated the consumer's trust!
Jump ahead to TARP:
Now the TWO of the three most corrupt FIRMS on Wall Street want a deal to avoid the Pre-Payment Penalty on TARP and from Geithner's track record it can be assumed he will give it to them.
Where are the Pre-Payment Waivers for Main Street Obama. In fact where is the real foreclosure relief you put in the TARP Plan in September 2008 and that almost delayed the debates?
It has now been 8.5 months since the TARP discussion of foreclosure relief and the only relief has come from a few criminal cases and foreclosures are going up every month.
After the election you forgot about Main Street, Obama!
Yes Madoff was small potatoes compared to the 10 to 15 year scheme cooked up between Wall Street and Washington.
Was the CRISIS simply ignorance among the brightest minds in finance?
No! It was a long meditated process with many pieces and laws put together carefully over a ten to fifteen year period involving Greedy Bureaucrats, Wall Street Elites, Congress, and the President(s).
It involved buying politicians with $5 Billion in campaign funds over ten years. It involved PhD level bureaucrats working with financial geniuses from Wall Street to figure out how to put it all together to divorce Risk from Investing for a SURE WIN! It involved new legislation, a corrupt FED management, and a shrewd and patient implementation of the complex steps. Clinton helped laid the ground-work but Bus proactively went on TV in 2002 to promote minority housing (Video available) enlisting the help of the Investment Banks and also Fannie and Freddy to but the garbage "Sure Fail Trick&Trap" loans by the $Billions.
P T, you can go back to uncle ronnie maybe further, but your point is well taken and voiced by few that it really doesn't matter what party is in control of washington, the fat cat5 run the show and us 99 % are just running scared. that's why no one is marching in the streets. fear fear fear, based on you'll lose your healthcare, job, you name it we are affraid to lose what little we have left.
That is what the Rich are counting on to keep us quiet!
There are very few signs that the new administration is doing anything to help Main Street
For $1 to Main Street $284 goes to Wall Street!
Great article Michael!!! How about a movie to educate people.
We need a complete investigation, which it does not seem likely. I was a strong supporter of Obama, but I think he selected the wrong people for financial advise. I am still hoping he will figure it out.
It takes time to get a movie released; he will educate you in Oct.
Correct me if I am wrong but did not this same type of rabid capitalism lead towards both the Russian and French Revolution, except of course they were royalty back then (but really rich).
7 BIG BANK DERIVATIVES MONOPOLY PLANS
WS BANK=Monopoly on Derivatives Trading=Private Exchange
Geithner=let Banks write their own legislation
7 Big Banks=seek Monopoly on Derivatives Market
7 Bank Monopoly=Deutsche Bank+Barclays+JPM+Goldman+Credit Suisse+Morgan+Citigroup
7 Banks=Over $125Billion bailout money+AIG Pass-throughs=Our shares AIG=FED holds
Derivative=reduces risk of loss from underlying asset such as mortgage loans
Derivatives=Staggering $600 trillion
7 Big Banks quest=small+mid-sized derivatives players=cut out from Insurance
7 Big Banks whose derivatives bets=Unleash a global recession=Monopoly “sole” dealers
PR Firm=Prism Public Affairs=hired for derivatives campaign=lobbying to lobbyists+SIFMA
SIFMA=Securities Exchange and Financial Markets Association
All of these exotic gambling instruments are but symptoms of our financial cancer. It begins with the Federal Reserve's capacity to set the fractional reserve standard for banks. Now 10% which allows the banks to create through ledger entries vast sums of money to feed Wqall Street gambling casinos, mindless consumerism, and public and private lending for debt rollover.
Moreover, the Federal Reserve also authorizes the printing of Federal Reserve Notes and interest bearing bonds. The latter are used to finance this economy. Yes, it's all "fiat" money. And yet the public is charged interest. This year debt service 9just interest payments) will approximate $800 billion.
It dosen't have to be that way. We never needed a Central Bank. The Federal Government can print money and does not need to issue interest bearing bonds. We need to do what Lincoln did; He told Eastern bankers that he would not borrow $400 million at 20-26%. Instead he printed "Greenbacks" to fund, rather than finance the Union's war, and much more.
This sorry government of ours needs to do the same thing if our children are to escape being debt slaves to the central bank.
You're not going back far enough yet. It goes back to the 80's and Reagan and the P2 scandal and the Roberto Calvi murder and the Vatican, see: http://www.thisislondon.co.uk/news/article-7053419-details/A+son%27s+quest+for+truth/article.do
And now there is the international guardianship swindle, which the public still has not found out about yet.
Crime Must be punished or it will ONLY GROW GROW GROM
1989 RTC Savings and Loan Scandal
1990 Enron hires Jeff Skilling
2001 Enron Skilling Resigns and soon after Ken Lay Resigns
2002 Bush Video to start the Sub-Prime Crisis
2007 Sub-Prime Collapse
2008 Massive Collapse of Wall Street Banking
2008 Beginning of $12.8 Trillion Government Funding of Wall Street
NEXT ONE - FAR WORSE without criminal investigations, Changes, and Full Prosecution of All involved.
A poet once described Detroit as "a riot in slow motion" - what do we call this almost two-decade financial disaster? A "collapse in slow motion"?
Speaking of covering up the bigger schemes than Madoff, did anyone who wtaches CNBC notice that one of their regular hosts suddenly isn't there anymore? Dylan Ratigan, who hosted Fast Money, a show where traders discuss the market, made comments on CNBC near the end of March that apparently cost him his carreer.
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(From Wikipedia)
In Ratigan's final CNBC broadcast from the floor of the NYSE he reported on what he called "an important story developing" that Goldman Sachs and "a variety of European banks", in his assessment and that of his guests, essentially "perpetrated securities fraud" and an "insurance fraud scam" against AIG—and, by extension, the government and taxpayers funding that insurance company's "bailout"—by insuring their questionable investment vehicles and, upon their devaluation, making claims on them to be paid by AIG "at 100 cents on the dollar" despite all of the markdowns "being forced upon every other" entity including the government, banks, shareholders, bond holders, taxpayers and homeowners. [3]...........
.....for full story and comments look up Dylan Ratigan on Wiki..
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Wouldn't it be nice if we had a media that did investigative reporting instead of being a corporate sponsored propaganda machine. The moral of this story is "Don't look behind the curtain if you want to keep your job."
Very interesting. Yes, it was obvious that Wall Street owned CNBC, which Jon Stewart pointed out in his great interview with Cramer.
You are too smart for this. Must be for the little people
...dollars worth... (3000 dollars worth of shares. Typing too fast.)
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