Saturday, December 27, 2008

News you WANT to read: True American folk hero

Perhaps there is no revenge so sweet than watching the scammers get scammed. Most of us aren't smart enough to do this; but, when a man like Bernie Madoff makes a fool of those entitled to rule by virtue of their superior intellect and breeding, I must give credit to even evil geniuses.

Bernie did not care a hoot that people who have been screwed by the Masters of the Universe would derive immense satisfaction from his shafting the elite. But I shan't let that keep me from savoring the moment. He was no doubt a lover of the game. I say 'well done' Bernie and thanks for the laugh.

I only wish the people had someone as clever as you on their side.

Bernie Madoff
(actually pronounced made-off)
True American Folk Hero

By John Kelley
While most folks on the bottom get the shaft, Bernie Madoff made it big. Madoff started his firm with $5,000 in 1960 at 21 years old. He supposedly earned it from installing sprinklers and working as a life guard, a pretty daunting task at 1960 wages even in Long Island. Bernie has now admitted to swindling rich folks out of $50 billion. Now if any of these people had any idea of how hard it would have been to save $5,000 in 1960 at those kind of jobs they never would have invested with him to start with.

Because he makes the rich look foolish, he is not in jail. Madoff is now grounded by the court, the con goes on. He can only go out of his $5 million dollar Manhattan home from 7am until 9pm and is restricted to Connecticut, southern New York State and the city. He did have to turn in his passport, and can no longer visit his two estates on Long Island, or the one in Palm Beach, or the one in France. That was because he couldn’t find four friends to co-sign for his bail.

Pictures of Bernie out for a stroll seem to make him seem like someone those of us on the bottom might even admire. You see Bernie, on his way up learned something a lot of people, rich or poor, don’t know. The rich aren’t any smarter than the rest of us. Of course they want to believe that and they just want you to believe that. Hence the title, Masters of the Universe.

His victims were long established wealthy families, hedge funds, big charities, big players on Wall Street, and as the New York madam said, the rest of the list will be revealed. Some of these brilliant people invested their whole family savings with Bernie. They represent la crème de la crème of the moneyed social circuit who created this financial nightmare.

Most of that wealth was acquired by inheritance or by actions like the stark avarice of the wizards on Wall Street. The result of such inheritance is the production of whole generations of George Bushes in the halls of financial power and government. Bernie screwed those guys, the ones who were screwing the rest of us.

It is difficult to have much sympathy for these folks; they participated in the mugging of the rest of the country. If you are making great returns, especially every quarter, the less you want to know. It’s easy, it’s not much different then not wanting to know that item you just bought was made by slave labor in some polluted third world country.

Bernie knew how to work snobbery built on greed and one-up-manship that has no relation to how the rest of the world lives, and could care less. He appealed to their eager desire to join even more and more exclusive groups. You know the ones, where people supposedly get to make better returns because of their special god given superiority.

In a Dec. 18th article in the New York Times, Christine Haughney writes, “Jeffrey R. Gural, chairman of Newmark Knight Frank, the brokerage firm, said Mr. Madoff had turned his family down as investors about eight years ago because they would not invest at least $20 million. For years, he said, colleagues introduced to Mr. Madoff through relatives or country club friends had sung his praises.

“People used to brag how they were getting these great returns when everybody else was struggling,” he said. “They thought Bernie Madoff was a genius, and anybody who didn’t give them their money was a fool.”’ Now commercial real estate, already looking at sliding over the cliff in 2009, gets a push from real estate outfits who had pledged investments with Madoff as collateral for 100s of millions of dollars.

Madoff also suckered (supposedly) other rich investors who managed funds to place them all with him. They sold access to their funds to invest in his fund of funds, their job complete due diligence. They collected millions in fees for carrying clients to Madoff, now they are crying victim too, poor rich bastards. Madoff’s sons and other family members all claim no knowledge; in fact Bernie says he fooled them all, taking full blame.

The Watchdogs

In 1999 Financial analyst Harry Markopolos asked the SEC to investigate Madoff, stating it was impossible to make his profits legally, he supposedly liquidated every asset every quarter to avoiding reporting investment information and only had one accountant, who didn’t do audits. The SEC investigated Madoff twice and found nothing wrong, so much for due diligence.

The New York Times reported that Michael Markov, a hedge fund consultant hired to evaluate one of Bernie’s rich shills’ investment companies, Fairfield Sentry, he said their returns were “statistically impossible to replicate.” The only other fund he could find that would produce the same returns was the Bayou Fund, prosecuted and shut down for fraud in 2006.

So the money is gone, Bernie is walking on the sidewalk, knowing at worst he’ll get time in a federal penitentiary. He’s 70, he knows he’s had a better life than most. He knows that all those rich schmucks are walking around dazed and confused. They thought they had the connection, the magic one that, they had made it to the promised land, the elite of the elite, who get to make more because they are special.

The market took a turn that Bernie couldn’t survive. As long as the folks that he was able to scam could keep scamming the folks below them, the game was on. No one ever asked what would happen when the folks at the bottom ran out. Except Bernie, he knew, that’s why he didn’t run. Maybe for Bernie the best is yet to come. There is the trial, the book and of course the movie. Without their money who will the rest be, but Bernie, he will go down in history. Maybe he could have even kept it going. Who knows? Maybe it just wasn’t fun anymore unless you could share it.

John Kelley is the Publisher and Managing Editor of We the People News ( a monthly progressive news magazine that focuses on the local impacts of national policies and exposes local government and business corruption. His writing can regularly be found on such sites as Cyrano’s Journal, Dissident Voice, OpEd News, the American Muslim, and has been selected at times by Common Dreams, Alternet and TruthOut. He wakes up each day worrying about what kind of world he is leaving his grandchildren

The Social Justice of Mad Madoff

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