Is Madoff a Scapegoat Covering Up for Wall Street?

New York, NY, USA, 1 July 2009. As Bernie Madoff is sentenced to 150 years in prison some think he’s merely a scapegoat in what many call the end of capitalism. While his $65 billion fraud ruined the lives of thousands, Wall St titans have left all of us – and our children – with gargantuan debts.

New York, NY, USA, 1 July 2009. As Bernie Madoff is sentenced to 150 years in prison some think he’s merely a scapegoat in what many call the end of capitalism. While his $65 billion fraud ruined the lives of thousands, Wall St titans have left all of us – and our children – with gargantuan debts.

Think about it – the lack of regulation, oversight, and common sense on Wall St has wiped out far more than $65 billion, and had destroyed the lives of many more, worldwide. Estimates at the total wealth being wiped out in the current Financial Crisis range between $2 trillion and $4 trillion. Most of that bill is being footed by taxpayers, in the form of bailouts, guarantees and stimulus packages.[br]

Maybe Bernie just messed with the wrong people. Steven Speilberg, Kevin Bacon and Zsa Zsa Gabor were all hit hard by his fraud. Just to meet Bernie you had to get refered to him. This was an exclusive club only the elite could be ‘lucky’ enough to belong to.

Which is frankly, fine by most of Main St, because they had the more plebian sub-prime mortgage scam or ordinary lay-off plan to satisfy their membership to the financial ruin club. The only difference is that they got taken legally.

Generally, the caveat emptor type of sale, meaning buyer beware or ‘on your head be it’, only works on the normal poor folk, not movie directors, A-list actors or – horrors! – other fund managers .

Bernie preyed on the wrong crowd. One victim had reportedly been making 30% a year for the past 20 years off of Madoff’s Ponzi scheme. If it ain’t broke don’t fix it is the mantra, especially if you’re rolling in more profits that your principal. No, don’t ask how it’s possible you can be earning all of this, just take it.

This is the guy who developed the technology which became the NASDAQ. He is a self-made man who started his career as a sprinkler installer, lifeguard, and a plumber. He was a prolific philanthropist and served on many boards. So how could what he was doing be wrong?[br]

If he took the fall for Wall St it’s because he’s the only guy in the world to ever be the poster child for the Old Boys’ Club – those rich guys who have houses in Lower Manhattan and Palm Beach – who could take them for all they’re worth at the same time.

And let’s face it, Wall St can’t be put in jail. And for what? Wall St followed the rules of good capitalism.

You can still rip people off, but not your friends. Just ensure you have fine lobbyists to regulate (or de-regulate) to make what your scheme legal, top notch lawyers who write disclaimers in fine print, and Madison Ave marketers who can convince you that 20% plus interest rate credit cards are a wonderful thing to have in your pocket.

The moral of this story is simple. If you are looking for a get-rich-quick scheme, make sure you learn the rules and go through the proper channels.

First of all, your ‘clients’ have to be real working people, not rich old ladies with drivers and maids.

Second, you need to make it legal. Unless you invented NASDAQ people will see right through another Ponzi. Do it as well-known credit card company or mortgage firm. Better yet, invent your own structured financial ‘product’, slice, bundle and grade, all with the comforting knowledge that the government will back you up because you are ‘too big to fail’.

Then its heads you win, tails they lose. This is American socialism in action – privatize the gains, socialize the losses, and have a Madoff or two around to distract the rest of us when things get wobbly.

Hiroko Mirafiori, EconomyWatch.com