Saturday, December 20, 2008

Bunko Bailout Coming

From the Truly Terrible Ideas Dept., courtesy of the Associated Press: 'Let's use taxpayer money to bail out the rich people who were scammed by Bernie Madoff to the tune of $50 billion.'
Robert Schachter, an attorney with New York-based Zwerling, Schachter & Zwerling, which is representing several Madoff victims. "If we're bailing out Wall Street and the auto industry, maybe these individuals should be bailed out too."
We're as sympathetic as anyone to the charities and pension funds and universities and even entire cities that got taken by Bernie Madoff. The fact is, however, almost everyone who gave money to him knew Madoff was a crook. They just assumed he was their crook.

It's an old, old story. As the legendary con artist Yellow Kid Weil wrote eighty-five years ago:
The men I swindled were also motivated by a desire to acquire money, and they didn't care at whose expense they got it. I was particular. I took money only from those who could afford it and
were willing to go in with me in schemes they fancied would fleece others.
Alexander Cockburn, of all people, has more:
Of course many of them thought Madoff’s famous model was dubious. After all, how could the laws of financial gravity be defied, year after year, producing an unending yield (for the fortunate) of 10 to 12 per cent annual returns on capital invested. But the thought came with a knowing wink, that Bernie was scoring these huge returns, by being in the know, running on the inside track, using insider knowledge. As my father pointed out to me many times, many people have a bit of larceny in their bloodstream, and it’s what con men trade on, as Gogol imperishably described in Dead Souls.
Actually, there's a strong possibility that most of Madoff's investors will be getting bailed out by the Treasury Department, as Bloomberg News explains. All they need to do is convince the IRS that they suffered "theft" losses, not "investment" losses.

That could be good news, indeed, for all of those rich people who, as the Times describes it, fell for "that special lure — the sense that they were being allowed into an inner circle, one that was not available to just anyone." The reality, though, as Len Fisher writes today in Wapo is that many of Madoff's investors "must have suspected that he was a cheat but continued to invest because they thought they were benefiting from that cheating."

They were "complicit" in his cheating because they thought it would enrich themselves. Does that sound like a victim to you or a get-away driver?

1 comment:

Bryan said...

"You can't cheat an honest man."

written and performed by W.C. Fields, 1939.