So Bernie* is pleading guilty to fraud. What else is new? (*I call him “Bernie” because I feel like I know him, he’s such a smooth operator, such a massive, unbelievable liar, yet he could be anyone’s uncle.)
Disgraced 70-year-old financier Bernard Madoff and his decades-long Ponzi scheme “plunged some investors who thought they were wealthy into poverty and forced numerous charities and foundations to close,” as Amir Efrati and Robert Frank put it today’s Wall Street Journal. They go on in an especially felicitous phrasing of our present situation, “As a result, Mr. Madoff has become an especially stark symbol of the financial crisis, in which millions of Americans lost their homes to foreclosure, the banking system is wobbling, and stocks are in their most dizzying descent since the Great Depression.(emphasis mine, I really like their phrasing)
Mssrs. Efrati and Frank have the sequence right: foreclosures cause wobbly banks which causes stocks to drop. But Bernie has nothing to do with it. He didn’t sell any mortgages. It’s just that the scary times caused too many people to want to cash in their investments with him, and of course he had no investments to sell – all the money had been paid out to early comers to the scheme. So in that sense, his scheme should not be equated in the common mind with the crisis.
But then it occurred to me that Bernie had actually screwed everyone with his cheating. Here’s why: What if that $64 billion (or whatever) had actually been invested in something productive, like a business that made something you use? Or even in Treasuries, so it was helping to support the national debt? But no, it all went back to other rich people as fake earnings, and yes, a few charities, but it built no businesses and thus created no wealth. See, that’s what the poor people forget – the rich have their money invested in something that produces more wealth, not just in gold-plated toilet seats (which I imagine need built-in heaters, or they’d be very cold!). And when you try to take too much of their earnings in taxes, they go invest somewhere else where they get a better deal.
Anyway, thanks Bernie, and screw you – schmuck who will die in prison.