Friday, December 19, 2008

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.

12 comments:

Dave S. said...

Love the song!

Regarding your suggested punishment, have you priced tar and feathers lately? The cost would be prohibitive especially considering the number of targets.

Finally, regulations work when regulators work. Simple as that.

TommyMac71 said...

I think he should be forced to watch The Sound of Music in a continual loop.

Betty Cracker said...

TommyMac's onto something, only I recommend "Cats."

Construction Staffing said...

thats funny

construction staffing

Dave S. said...

Perhaps all the perps should be forced to perform The Sound of Music and/or Cats while wearing nothing but HoHoHo boxers. TommyMac, does your supplier offer bulk discounts?

As the security word is "extraPSA" I will add "Please look both ways when crossing the street. Thank you."

Anonymous said...

NE going to get Bernied in snow today. Re Bernie Madoff, what were those folks thinking?

Anonymous said...

I have been saying “made off with the money” all week.It is amazing how far this scandal reaches.Where were the regulators????

Good post.

Have a great weekend.

TommyMac71 said...

Dave S. - I already got a bulk comment...they had to put extra fabric in the front of the boxers...

Dave S. said...

Sounds like you're wearing them backwards...

J. said...

And here I thought I was being original, Anonymous #2.

In answer to your question, the regulators were a) few and far between; b) overworked; c) underpaid; d) on the take (or somehow benefiting); or e) all of the above.

Great ideas, Tommy and Betty. Anyone else care to suggest a brand of musical torture? (Personally I consider ANYTHING by Andrew Lloyd Webber torturous.)

Moishie and Sheimoi, singing said...

We LOVE the song! Much better than the lyrics from the songs from "Spring Awakening"! We think you should call Mel Brooks and start working on the Broadway Show! Madoff's Millions! Make Way for Madoff! Mad About Madoff! We will be singing your song all day! Hooray!

Anonymous said...

This is such an outrageous disgrace. It's not only the investors but the Charities. I cannot understand how this man could sit at a dinner table with these people and look them in the face and steal from them.Greed is very,very ugly.