Snow jobs in the news: from Las Vegas to Bernard Madoff

On Wednesday, December 17, over three-and-a-half inches of snow fell on Las Vegas (with up to six inches reported in nearby Henderson), covering the Strip and forcing schools to close and airlines to ground flights. It was the most snow Sin City had seen in nearly 30 years. But it was far from the only major snow job that made front-page news this week.

I am referring, of course, to Bernard Madoff (pronounced "MADE off" -- as in "made off with your money") -- you know, the guy who bilked his friends, charitable institutions, and supposedly sophisticated investors (aka "the smart money") out of some $50 billion in what the media is calling the biggest Ponzi scheme ever.

I think the media (including the blogosphere) has written plenty on Bernie Madoff (though do check out Paul Krugman's Op-Ed in today's New York Times titled "The Madoff Economy" to get the bigger picture, or snow job that is the investment industry) and all the folks he duped out of millions, many of whom (I am alluding here mainly to so-called financial advisors and hedge fund managers) should have known better or at least suspected something was up.

But what I haven't heard a whole lot about (with apologies to "The Sound of Music") is how do you solve a problem like Bernie Madoff?

How do you solve a problem like Bernie Madoff?
Why didn't you catch this clown and pin him down?
How do you find a word that means Bernie Madoff?
A sociopath! A con artist! A clown!

Many a thing you know you'd like to tell him
Many a thing he ought to understand
But how do you make him pay?
Restore all the funds you gave?
How do you keep a wave upon the sand?

Oh, how do you solve a problem like Bernie Madoff?
How do you force the SEC to make a stand?

So what can we do to discourage such behavior in the future?

Clearly, regulations and/or regulators didn't and don't work (in part because people tend to look the other way when they too are being enriched). So what is left?

Jail time? Eh. That costs the taxpayers and these white-collar jails sound pretty painless. Community service? Better, especially if it involves helping the people and charities and institutions these people hurt.

The even better solution? Call me old-fashioned (or Draconian) but what about before sentencing the worst offenders to a life of community service we tar and feather them on primetime TV then throw them in the stockades for a few hours, with extended coverage on C-SPAN? If that seems too harsh (though really, what is appropriate punishment for someone who knowingly bilked his friends and charities for $50 billion?), then something equally revealing and embarrassing. The thing is to set an example -- and strip these people of the one thing they seem to care about (besides money/power), their pride, or egos.

How would YOU prevent more Bernie Madoffs (and similar Ponzi schemes) and better regulate Wall Street? Leave me a comment and let me know.

UPDATED AT 2:40 P.M.: Well, apparently one guy was onto Madoff, as far back as 1999, but no one would listen to him. Probably because it's tough to take seriously a guy whose last name sounds just like a child's pool game. Still, that's only one guy -- and a competitor to Madoff's, not a regulator or a fund manager doing due diligence.