PrintJanuary 21, 2009
Ponzi Needs A Stimulus
There is little doubt that if Bernie Madoff had dropped dead in late November he would have been eulogized as a great man. A respected and successful businessman, a noted philanthropist, and generous benefactor of multiple charitable and education institutions, for over forty years (since the Nixon administration!) he built and maintained a business empire that generated wealth for thousands of individuals and families. Then literally overnight a unique financial calamity occurred forcing Bernie to admit it was all a mirage, a fraud of epic proportions.
Bernie Madoff, (and now in a similar circumstance, Ramalinga Raju in India) was compelled to confess that his deck of bogus cards was built on the weak and shifting sands of other people's money, money moved from person to person, place to place, but somehow never truly invested. That Bernie could run his fraud for over forty years reveals many enthusiastic enablers happy to show a blind eye toward the obvious as long as Bernie worked his magic on their behalf. And unlike larger scam operations that thrive on phantom transactions like Citibank, Merrill Lynch, Goldman Sachs, and AIG, Madoff could not rely on friends in high places to provide "bailout" money.
Taking money under the pretense of investing it, using it for other purposes and then apologizing when the money is revealed as squandered -- such behavior is rightly condemned as evil. Unless, of course, you take the money from taxpayers.
Bernie's real misfortune was a credit line all dried up. If he were a politician under similar circumstances he could have taken "bold action" and fleeced his investors further without their consent. The problem was that he was called out. That sometimes happens in the commercial world. Unlike a politician, he could not extort money from the public to get out of his jam. His enablers gave him money willingly and enthusiastically. When panic occurred they called for their money back, money that didn't exist. But the credit line of government can never be exhausted, fed by a nominally legitimate but criminal enterprise known as the tax code, controlled and executed by the very same benefactors that borrow and spend.
Applauded and hailed for their "courage" to make "tough decisions" our new President and our new Congress will tackle the economic "crisis" brought on by insane borrowing and spending habits by borrowing trillions of dollars more to spend (oops, I mean invest) on the nation's "infrastructure" and "pump" billions more to shore up large financial institutions that even Bernie would deride as profligate and crooked.
Just like Bernie's investors, we turn a blind eye to the reality before us. Hope replaces common sense, and wishful thinking presumes that maybe time will heal our self-inflicted wounds. Trillions of dollars in debt, our federal government reflexively spends and spends. It is the only thing it knows how to do. Yet history teaches spending on "problems" never works. Has spending cured poverty? Has spending improved education? Has spending cured our energy dependence?
Experience and wisdom seem to have no relevance. Real political courage, the courage to say "Stop!" is missing. With a history-ignorant media focusing exclusively on the color of a man's skin rather than his experience or ideas, besotted with themselves for their tolerance and inclusiveness, drunk on the excitement of federal power flowing through every part of our economy, the promise of a New-er Deal is almost certain.
Following in the path of FDR means ten years of Depression followed by World War. Is that really the Keynesian blueprint we have to follow?
Like the investors in Bernie Madoff, no one wants to upset the federal gravy train. Not the banks, not the media, not the big auto companies, not the voters anxious for another "stimulus check." No one. The truth, though evident to every thinking person, is seemingly too painful to bear. The United States Government does not produce wealth, it does not create opportunities, it does not educate, and it is not a beacon of hope. It was not meant to be. It was established,
"... to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity."
Twelve trillion dollars of debt and growing is hardly a blessing to leave to our posterity.
Bernie's crime is business as usual in Washington DC
