Friday, March 13, 2009

I may be the only person in the world...

...who doesn't want to see Bernard Madoff drawn, quartered, tarred, feathered, shot or at least sentenced to years of torture for running a Ponzi scheme that cost a lot of investors all or part of their savings.

Oh, I think he should go to jail, all right. I also think his considerable assets should be used to reimburse those who trusted him with their money.

But I can't quite work myself into the kind of rage that has gripped some people, including writers in the New York Post.

It's not that I feel any sympathy for Madoff. He screwed up, big-time.

But the part of the story now being forgotten by those who howl for his blood is this: those who invested with him knowingly took the risk. They were promised the near-impossible, which is regular huge returns on their investments, regardless of other economic conditions. I've heard profit numbers in the 40% range being tossed about as examples of what Bernie promised his clients.

Where I come from, if someone promises you a deal that good, it makes sense to be skeptical, to ask questions and look at the fine print.

Madoff's investors didn't do that. What a surprise.

No, they took their profits year after year -- this has supposedly been going on since the early 1990s -- and never wondered what magic ol' Bernie was performing.

And now, they are whining. Some people put all their money in Bernie's bogus funds, a choice which even I, who knows nothing about investing, can see was dead stupid. They lost it all. Other, more prudent, types are down to their last few millions.

If Madoff had promised risky investments that might return 20% in a good year and cheated his clients, I'd understand their anger. But nothing I know of increases in value by enough to generate a 40% return, unless it's based on the obscene interest rates those "payday cash loan" places charge their customers.

These were not stupid people. They just weren't very smart, which is a different thing.

Except, maybe, for those who claim they trusted Bernie because he is a member of their religion. Now that's stupid.

So I'm happy to see him go off to the cooler for a few years, just as I was happy to see cheats like Michael Millken do time in the Graybar Hotel.

But Madoff is no worse than the rest of the high-flying financial crooks, so spare me the sob stories about his "victims" and the calls for retribution instead of punishment, please.

In fact, I think Madoff is less guilty of massive fraud than those who are now saddling us with trillions of dollars in debt for our children and grandchildren to pay off and funneling the proceeds to their favorite contributors, cronies and various "protected" groups around the country.

Madoff, at least, will go to jail. The president and his cadre of greedheads in Congress will most likely get away with it.


Ramsey said...

you're right about Obama and his cadre of lackies getting away with it. i wouldn't/won't call him the prez since President Polosi is in office now.....

Justfly said...

I agree they knowingly took a risk.
My analogy would be if I lent my friend $20. It would be a risk lending him money. If he just forgot to pay me back, I could live with that. If he knowingly took my money to spend it on liquor or to take other friends out, than I would be very unhappy.

Yes, the people took a risk. They did not expect him to put it towards a lavish lifestyle or use it wrongly.

I would like to see the guy tarred and feathered.

MrScribbler said...

JF -- I agree to an extent. But plenty of other investment-types have pretty lavish lifestyles. I wouldn't have looked at that as suspicious if I had invested with Madoff.

From what I've read, his investors accepted some pretty shaky paperwork, and kept cashing the dividend checks, never questioning his operations.

Doesn't justify what he did, but I still say some of the hatred directed toward him is born of people lashing out because they feel stupid for having participated in his scheme.

John0 Juanderlust said...

It is definitely a case of selective justice. Teddy K gets knighted, Obama is worshipped, Madoff gets the cooler and his accomplices may get nothing.
As far as worked up, I tend to back up when a band wagon starts rolling. I don't weep for Spielberg or the others, as I'm sure I should. For some reason I don't care if he does time or not. Look what is happening in DC, with people's full approval.
Actually I think the crimes of Johnny Sutton are worse and more heinous. Where is the tar and feather outcry for that one?

Wizardress said...

I don't think he deserves to continue his lavish lifestyle and live in his 10 million dollar nyc apartment after all he has done.

If that were someone with less financial means who managed to pull of something like that, I would imagine they would not receive the same treatment. I hope they put him away for a long time, but you are right, those who iinvested their money also knew it was a huge risk. After all, there were enough red flags that would have had me running for the hills.

I guess what they say is true- if you play with fire often enough, you get burned, but even though the risk was there- I do still feel a little bad for the people who lost so much.