Web Letters | The Nation

Web Letter

While I am appalled by Madoff's (pronounced Made-off--as though he were a Gilded Age character concocted by Twain), I find the lack of outrage at how Madoff swindled so many to be more indicative of the moral bankruptcy of this moment. Madoff was considered exclusive, a man to curry favor with to be invited into his investments, someone with a magic secret. Is anyone else appalled by the notion of black box trades--the idea that an investment banker approaches clients and they in turn place money into something about which they willingly do not ask, save but to read their quarterly earnings statements? The Madoff scheme went a long way to expose the enthusistic participation by many elites in such secret dealings, not out of "trust" as the NY Times is choosing to spin it, but probably something more corrosive and sinister. Swindling is swindling only when it happens to you, right?

Nor am I sorry for many of the "victims." Some who built businesses and invested to retire on the money (including a man ill with cancer), and the charities, yes, but for many in this luxuriant, over-privileged class (how does a former mayor of a small city retire with $5 million?) I feel nothing.

Melinda Gonzalez

South Pasadena, CA

Dec 23 2008 - 5:04am

Web Letter

One aspect of the Madoff Ponzi scheme that has been neglected in the press is the question of who the early beneficiaries of the fraud were.

A Ponzi scheme by definition is only a transfer. Early "investers" are paid a return greater than what the fund earned (I'm sure that some of the money actually was invested if only in temporary money market funds). Later "investers" are bilked.

Madoff becomes then only an agent for those at the beginning of the scheme.

They might have been aware of, or even designed the scheme. The early ones were certainly beneficiaries of the crime.

The summary of those bilked, as described in the press, include institutions across the board, focused on Jewish institutions and not, for-profit and not-for-profit.

There are many investment schemes that function as Ponzi schemes, even if not originally intentionally designed to be fraud. In ways, all speculation on commodities, homes, etc. are more transfers of assets than distribution of an institution's earnings.

Richard Witty

Greenfield, MA

Dec 18 2008 - 7:00am

Web Letter

There was a time that people worked for their money and their was a sense that for a cetain amount of work, people should be paid a certain amount of money. I guess these days are past: now we consider making money through money an honorable occupation. Until this year, when suddenly we start to see that all this making money through money isn't as honorable as we thought. I don't think it's just an accident and maybe there is a connection with our moral values. When I read that many "nonprofit" organizations are suffering from the Madoff financial scandal, my first thought is: what "nonprofit," they involved themselves in a system that promised them profits that were beyond reasonable and even if those profits were meant to go to the arts or other noble causes, the means to obtain those profits are immoral. It's sad when a country has become dependent on immoral action in order to be able to support all its government refuses to take care of.

Vladimir Chelkov

Chelyabinsk, Russia

Dec 18 2008 - 6:34am

Web Letter

As this article notes, we need to protect government pension funds from the hands of private enterprise. I am not a trusting soul, so I avoided 401(k)s when they were offered as a partial replacement for my government pension. Wall Street people are not real business people but high stakes gamblers with other people's money. Any government money given to Wall Street is going down a black hole, never to return. Any government pension fund or healthcare fund should be put into an independent government agency, which Congress or any other branch of government cannot spend or borrow from. Congress is run by combination of corporate-fascist Republicans and their fellow travelers the corporate Democrats, who are both "free traders" and could care less about this country and its people. They are beyond contempt! It is my opinion that they are committing economic treason. My only consolation is these idiots are destroying their own wealth. When you are dealing with sociopaths, you need to go for the throat!

Pervis James Casey

Riverside, CA

Dec 17 2008 - 6:23pm