World’s Finest Scum, by Mike Gold – Brainiac On Banjo #109
March 16, 2009 Mike Gold 20 Comments
That guy smiling out at you is Charles Ponzi, and he’s had a lot of press lately. Actually, compared to his greatest disciple he’s looking good.
By now you know what a Ponzi Scheme is. Essentially, a con game is run on a pyramid of investors and the early marks are paid just enough of the money that’s coming in from the next generation of marks to attract even more marks. Eventually, the con man has to work too hard to find more suckers so he stops paying anything to anybody, takes all of the money that’s left (the great majority) and buys real estate in a country without an extradition treaty.
Back in 1921 – a time of economic opportunism not unlike that we’d just gone through – Charlie showed some creativity. His hustle was based upon speculation in international postage stamps. He told investors that he could provide a 40% return in 90 days by managing the flux of foreign currency. The scheme was so successful it actually clocked a $1,000,000 intake during one three-hour period. It turns out Ponzi had only purchased $30 worth of stamps, just enough to show people the product.
You really can make this stuff up, but why bother?
Bernie Madoff, an old man whose future medical bills will be covered by the taxpayers, was so far beyond the stamp king that we really shouldn’t call his a Ponzi scheme. Madoff defrauded friends, charitable foundations, small investors, large investment companies, municipalities, pensioners, dogs, cats, amoebas… anybody who would offer him some money. He swindled the Steven Spielberg Foundation. He swindled the Elie Wiezel Foundation for Humanity. Wiezel is a holocaust survivor, author and professor who won the Nobel Peace Prize. He fights aggressively against genocide all over the world.
Madoff pretty much wiped the Wiezel Foundation out. Over $15,000,000 bucks, burnt in the ovens of Madoff’s soul.
People have been filing complaints against Madoff with the Security and Exchange Commission for years, but under the Bush Administration the policy was pure Objectivist: no regulation, no oversight, anybody who gets ripped off was too stupid to have the money in the first place. You know, like peanut butter purchasers and victims of fraudulently presented mortgages.
There’s no difference between the people who were ripped off by Madoff and those who were ripped off by the banks, except that after Jon Stewart went after CNBC I doubt Rick Santelli will shout from the floor of the Chicago Board of Trade that Madoff’s marks deserved what they got.
But that’s the attitude of the day, thanks to the late Ayn Rand, the soulless and morally bankrupt societal fantasist whose work has so greatly influenced Alan Greenspan, Ronald Reagan, George Bush, Milton Friedman and other heartless bastards. Bernie Madoff’s success was due to their policies, their actions and their inactions.
But Rick Santelli and his fellow travelers want victims to be put out on the street. Welcome to Neocon America, the cage match of the cocksuckers.
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Mike’s Weird Scenes Inside The Gold Mind rants can be heard every Monday and Friday on The Point podcasts, available right here at www.michaeldavisworld.com, as well as at comicmix.com, getthepointradio.com, zzcomics.com, and ravenwolfstudios.com. You can subscribe to The Point at iTunes by searching under “The Point Radio.”
Jeremiah Avery
March 16, 2009 - 6:10 am
If there ever was a case for waterboarding, I think this would be it.
The government is too busy helping out their top bribers, excuse me, “campaign contributors” to help out the charities and people who were screwed over by this guy.
Mike Gold
March 16, 2009 - 7:07 am
There’s a difference between torturing for judicial vengeance and torturing for information. The latter doesn’t work; the torturers are doing it just for fun. The former gives us a warm, feel-good aura — but, of course, should therefore only be used after a conviction.
Jeremiah Avery
March 16, 2009 - 7:24 am
It may be excessive to some, but I think it’d send a message to some of these other high-end lowlifes. May not be a deterrent (greed knows no bounds) but at least it’s better than a slap on the wrist at some white collar institution.
I enjoy a good con movie (“The Sting”, the tv show “Leverage”, etc.) but not in the real world when people’s retirement accounts evaporate. I read an article about how some guy who is around 90 has to go back to work somehow since his savings were part of the ponzi scheme. I think it was Madoff’s scam, could have been Stanford’s.
Conviction first, then punishment of course. I’m not saying go all French Revolution on them but this government lately has no spine. Money evaporates, corporations get our money, blow it, ask for more and get it. So much for reigning in wasteful spending.
marc alan fishman
March 16, 2009 - 9:03 am
I imagine even atheists pray that there is a hell so Madoff can truly get what he deserves. I know Tevye says “if we live to fight an eye for an eye and a tooth for a tooth… the whole world would be blind and toothless!” … but maybe in this case, we can make an exception.
Mike Gold
March 16, 2009 - 9:31 am
Yeah, Stamford’s would have been a big, big deal if not for Madoff. But if you’re looking at wasteful spending, Jeremiah, look to the administration that gave these thieves the money without ANY oversight, ANY negotiation. I’d have bankrupted them and THEN given them the money. All these multi-million dollar contracts with executives who got us all in trouble in the first place, all those contracts for multi-million dollar parties and such… all that would have been invalidated. But the previous administration just wrote them a check. I think it’s too late to bankrupt the companies now, certainly not without attracting the bullshit charge of socialism. Or the too-late charge of nationalization.
Speaking on behalf of atheists all over the world, Marc, I’d have to say that I’m not wishing hell upon Madoff — in fact, I wish him a very, very long life. And a big, burly and highly oversexed 18 year old cellmate who is not at all ageist.
Vinnie Bartilucci
March 16, 2009 - 9:57 am
When my wife described him as “the new Shylock”, I modestly proposed a miikadoesque renumeration system that would allow Madoff’s investors to get something back.
The proceeds would be hard to preserve, of course. I think there are some chemical processes that could prevent spoiling, and then perhaps being sealed in perspex or some other airtight container.
It would make a nice paperweight, or certainly a conversation piece. Give a sense of closure.
Bear something in mind – in order for pyramid schemes to work, SOMEbody has to actually get their money, otherwise the pyramid never grows. Mark my words, there will be people demanding the people who actually got paid out by Bernie be required to RETURN the money, to pay back the losers. And watch the fireworks.
“There’s no difference between the people who were ripped off by Madoff and those who were ripped off by the banks, except that after Jon Stewart went after CNBC I doubt Rick Santelli will shout from the floor of the Chicago Board of Trade that Madoff’s marks deserved what they got.”
Some likely did.
I’m certain many went into Madoff’s arms with hesitation, even doubt that it could be legitimate, but the promise of the returns made them turn a blind eye. That’s not everybody, but it’s some, and it makes it hard to paint the whole band as “dew eyed innocents”, to borrow one of Stewart’s Cramer-attacks. Similarly, there were lots of people getting dodgy mortgages, knowing full WELL they would balloon if anything happened to the interest rates, but were only going to hang onto them long enough to flip the house, so why worry? They’re the ones who are leaving the keys in the mailbox and walking away, as gets reported on the news.
Greed, at multiple levels, is at the core of our current kettle of fish. It’s just not that easy to find one place to point our finger at.
I’ve made the comparison to the Comics glut of the 90’s. Million copy print runs, money flowing like champagne, which in turn was flowing like water, and nobody was considering that all these books were wildly overvalued, and all getting sold to the same (approximately) 168 people. And when all it went down like an ugly girl on prom night after her 15th jello shot, people had the nerve to be surprised.
When you attempt to turn a long-term investment into a short-term one, you are risking messing up the system. Period.
Much like my points to the Artistic Warfare column, almost all political models fail as soon as people are added to the mix. Greenspan, Reagan, et al’s model would work perfectly…IF all people had that moral compass that said “This is enough money – if we cut too much we may hurt others.” Communism would work IF people were able to say “Well, I know I’ll get my bowl of soup whether I work or not, but I’ll go ahead and work because I want everybody to benefit”.
They don’t. OK, SOME don’t. ENOUGH don’t, so some governmental oversight is required, or at least the threat that quick and efficient oversight could be enforced at any moment. Sleeping giants move very slowly and sluggishly when they are awoken, and there’s still lots of time to get away between “Fi” and “Fum”.
The challenge is to throw a line on that pendulum to keep it swinging too far the other way. Let’s see how that goes.
Jeremiah Avery
March 16, 2009 - 10:02 am
I’m not saying the previous administration is innocent, you can follow the trail through several administrations and see where things should have been dealt with.
I wouldn’t have given them any money to begin with. If you drove your business into the ground, why should I think you’ll do better with even more money at your disposal?
If these politicians actually cared about the people as they claim this bail-out is to help, then why not cut everyone a check with the money instead of giving it to companies that lay off people and give themselves bonuses? Giving money to the CEOs is “assistance”, but helping out the people whose 401Ks are gone, that is socialism?
pennie
March 16, 2009 - 10:05 am
I’m with you all the way. If there is any justice, there is a special room reserved in hell for Madoff and his cousins, the greedy sonsabitchassholes who stomped on the lives and dreams of so many…Maybe a room filled with gold that turns molten hot in their hands as they grab it.
As for that cellmate, consider the choice–tight right hand or a loose crusty old asshole…Hell, use the left or a pillow!
Then again, that cage match of cocksuckers thing might do the trick.
Better Dead Than Red
March 16, 2009 - 10:28 am
Mike Wrote… “People have been filing complaints against Madoff with the Security and Exchange Commission for years, but under the Bush Administration the policy was pure Objectivist: no regulation, no oversight, anybody who gets ripped off was too stupid to have the money in the first place. You know, like peanut butter purchasers and victims of fraudulently presented mortgages.”
Should I assume that you let the past transgressions, of previous presidents, pre Bush 2 off the hook? Short term memory, or not “on point” enough, for your article?
For example… A New York Times article from Sept. 1999 and Los Angeles Times article from May, of 1999… State that Fannie Mae had been under increasing pressure from the Clinton administration to expand mortgage loans among low- and moderate-income people and that the corporation loosened its lending requirements to comply. I have the “Best Of” the articles below.
Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
…In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s
In 1992, Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains. It has aimed extensive advertising campaigns at minorities that explain how to buy a home and opened three dozen local offices to encourage lenders to serve these markets. Most importantly, Fannie Mae has agreed to buy more loans with very low down payments–or with mortgage payments that represent an unusually high percentage of a buyer’s income. That’s made banks willing to lend to lower-income families they once might have rejected.
And now to bring us more up to date….
Frank, chairman of the House Financial Services Committee, rejected a BUSH administration and Congressional Republican plan for regulating the mortgage industry in 2003, saying, “These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis.” According to a New York Times article, Frank added, “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
I am certainly no Bush apologist, and realize the idiotic damage he caused elsewhere. But, this type of garbage goes way back. You know it and I know it, Mike.
Practically all politicians are void of anything except for the hunger of greed and power.
Reg
March 16, 2009 - 12:09 pm
Took a while to respond to my earlier request on this topic, but I’m glad to read the dialogue about the Baron Bernie Madonnen. 😛
But let’s not forget the SEC should be sitting right along side him…as abettors.
And I’m still waiting for the other shoe to drop as to what compelled his son to blow the whistle.
Jeremiah Avery
March 16, 2009 - 12:15 pm
He wasn’t gonna cut his son in on the money?
pennie
March 16, 2009 - 12:25 pm
His son was coming out as a Democrat?
Mike Gold
March 16, 2009 - 12:47 pm
BDTR: We can trace this sort of thing all the way back to the Buttonwood stock hustlers, who met around a tree at Wall Street near Broad in Manhattan back in 1792. Their system was built on greed and false advantage from its very inception.
However, in order to maintain relevance to the question being discussed I only went back six months, to the waning days of the Bush Administration. And here I’m not claiming thievery per se, just willful incompetence so they could get their buddies off the hook without “undue” oversight.
Oddly, despite the cynical underpinnings of some of my writing (and ranting on The Point), I know and have known quite a few politicians and I firmly and honestly believe the majority are simply trying to improve the nation or, at least, their district along the philosophical lines to which they hold. Even people with whom I abjectly disagree — I don’t think, for example, whiny Joe Lieberman is a greedy powerluster. I think Joe acts out of his own moral convictions, which he tries to ram down the throats of a so-called free society.
And I’m sure Joe appreciates this endorsement.
pennie
March 16, 2009 - 1:16 pm
@Mike G,
Not to challenge the politicians you’ve known/know, I do think in more than a few cases, integrity and politicos melt oxymoronic. Expediency becomes identity (like Mourning becomes Elektra).
I don’t think one can paint all politicians with this fresco, but the list of bad boys confounds bandwidth. Boston and Chicago just spawn contemporary overachievers…
As for (“say it ain’t so) Joe, he should open a 7-11–mid-shelf politics are real convenient…}’;>)
Russ Rogers
March 17, 2009 - 8:26 am
Where is the Government bailout for Bernie Madoff’s Investors? Just because his scheme is a confessed fraud they get nothing? While the Investors in AIG Insurance derivatives get billions from the Government and then billions more in payouts from AIG (who got those Billions from the Government)? In effect, the Government is paying AIG clients TWICE.
My understanding of the AIG debacle is they were selling Insurance Policies to Investors without having the capital to back up those policies. How is that ANY less of a fraud than Madoff’s? Now these same SCHEMERS are getting “Retention Bonuses” worth hundreds of Millions! Because we NEED to retain the same “brilliant” minds that engineered the LARGEST Quarterly Corporate Loss in History! 64 Billion!
64 Billion! Poof! Gone in three months. One quarter. Madoff took decades to steal only 50 Billion. And it wasn’t even that much. That’s just how much Madoff’s Ponzi scheme SAID the investments were worth. The original capital invested is estimated at only 14 to 18 Billion. Admittedly, that’s still several butt loads of cash. And if those Investors had put their money into Treasury Bonds (something dull and secure) they would have a bit more than that.
I just don’t understand the Macro Economics of it all. I can’t wrap my head around the figures. My tiny pea brain can’t handle it. It stains the limits of my shock, outrage and nausea. I’m reminded of an old saying, : Figures don’t lie, but liars do figure.”
marc alan fishman
March 18, 2009 - 10:07 am
This is why I only invest in Pumpkins. Buy in January, sell in early October. Another life lesson provided by the Simpsons.
Mike Gold
March 19, 2009 - 10:23 pm
Penny:
Just to clarify, in case that’s needed (I’m in California right now, so my brain’s a bit soft): I believe the majority of politicians I’ve known and worked with or worked against, including Joe The Joker Lieberman, are motivated by their beliefs and not by greed or personal gain, even in the case of people LIKE Joe The Joker Lieberman and the many many others who represent philosophies I personally find repugnant. A lot of the so-called earmarks are important, useful and valuable to people from the district represented by the earmarker.
This applies to the Chicago politicians as well, and I can speak to this first-hand as the majority of politicians I’ve known throughout my (gasp) 43 years of political activism were from Chicago. Most of the corrupt Illinois governors that have been convicted were from other parts of Illinois, not from Chicago per se. Blago might be the first, if he’s actually charged and convicted. Even Ryan, who is presently in prison, commuted the sentences of all the death row prisoners in the state — a politically fatal decision (ask Mario Cuomo) made out of conviction right when he needed public support the most.
The problem is, in politics you can not accomplish anything without trade and compromise. You vote for my bill, I’ll vote for yours. That’s not a good system, it’s not even a “system” at all: it’s gravity. Often people corrupt their worldviews (but not necessarily their souls) one trade at a time.
pennie
March 20, 2009 - 10:26 am
@ Mike G,
I believe there are earmarks that are generally helpful to local interests and there are some that are not nearly as well-intentioned but motivated by a design and direction to benefit a specific individual or group, i.e. create a windfall. For me this is far different than benefiting the general welfare. I could use the Iraq War as a prime example that not only helped specific groups but also killed and damaged so many innocents.
Mike, it could be that I am still reeling from 8 years of this type of gross display.
Political realities being what they are, I understand compromise governs Washington, although right now we are not seeing much evidence of that. Things around the beltway appear to be quite polarized rather than bi-partisan.The “scratch-my-back, I’ll scratch yours” give-and-take –I agree it’s not much of a system, and is often the sure path to an inevitable corruption of what was at first a moral center.
So at first, while good intentions may impel an individual’s grassroots desire to effect positive change, in my view, it is a rare person who survives the ravages of the Beltway while trying to keep the customers satisfied.
Mike Gold
March 20, 2009 - 2:19 pm
You know, I actually wish the horrors of Iraq were earmarks instead of non-competitive bids awarded to Cheney’s buddies. At least somebody might have been able to look at them if they were buried at the end of a bill.
It’s hard to imagine the Republicans sticking to their legislative blockades. Ever since the Democrats took a majority in the Senate the Re-pubs have filibustered more than twice as much as before. People are losing their houses, their jobs, their health and the Re-pubs are blocking without offering any alternatives other than the horribly failed policy of tax breaks for the rich. If they don’t want a 61-39 split in the Senate, they better do something they can point to other than yelling “The Commies are coming! The Commies are coming!”
pennie
March 20, 2009 - 4:11 pm
Truly, the elph-ants are working on a coal mine–goin’ down, down, down…what a legacy…The Party of “No!”
Like millions of others, I’m outta work. A tax break is all they have to offer as a solution to more than 15 million of us? A number growing exponentially with each passing week…
Wooooo
fucking
hoooooo!
We don’t have any money to take for taxes to get a break with.
That’s real stimulative.
I’m so excited about these tax breaks I’m clenching!
I believe the elph-ants think the G-spot is a hundred dollar bill…};>)