05/28/2009 05:12 am ET Updated May 25, 2011

Ponzi vs Madoff: Stealing from the Rich

NEW YORK: Being a mid-thirties school girl has its advantages -- like being forced to ponder things that are normally off my radar. In my American Studies class today, guest lecturer Steve Fraser, author of Wall Street: America's Dream Palace was invited to give us a crash course in the history of that legalized gambling temple. Of course the stock market shenanigans have become blazing headliners of late, and I've had my run-ins with Kenneth Lay at home in Colorado, but it was only this weekend that I learned that a Ponzi scheme isn't a trick invented by a guy in a Park Avenue Penthouse.

Steve Fraser explains that Charles Ponzi was one type of confidence man of the historic Wall Street scoundrels of the Jazz Age. People like Charles Ponzi rose from obscurity and came and went relatively quickly after being caught stealing from poor people. By the summer of 1920, Charles Ponzi was rich and famous, and by the end of the summer, he was behind bars for fraud.

Taking the bait, a favorite American History Professor, Casey Blake, asked "What's the difference between Bernie Madoff and Charles Ponzi?" The answer: Charles Ponzi swindled the working poor. Bernie Madoff swindled the Uber Rich -- the ones in-the-know. Well, apparently not so in-the-know.

This is not a stunning epiphany for you, I'm sure. It's simply a sober reminder that if those-in-the-know don't even know, then who knows? Apparently the AIG in-the-know corporate execs might know, even though Alan Greenspan didn't know. Hmm. I'm spending nearly all my savings on tuition to learn that nobody knows.

The other disadvantage of being a mid-thirties back to school girl is that at the sound of the bell, I had to scramble off with my backpack to catch up on my reading for the next class. So I couldn't ask about Fraser's comment, "If it's too big to fail, then there's something wrong with the system." His (mostly) solid support of Barack Obama's actions beg more questions than I had time to ask. Good thing is that I support him more after learning a bit about the scammers he's dealing with.

So if you're interested in a brief, entertaining account of the peculiar history of "The Street," read Steve Fraser's Wall Street to find out just how much nobody knows. If stealing from in-the-know insiders is as easy as sending an embossed invitation, then who is looking out for Ponzi's crowd? I sure hope that Obama knows...