Madoff...But Why?

[LisaNova]

I don't know how many of you are following the Madoff scandal, but I am fascinated by it. I guess the question or discussion i would like to have is...How does someone do this? I know it seems simple, but why or how does someone do this to friends and good people. Day in and day out for 20 years, completely premeditated - How does this happen?

[Dortas7777]

This horrible creature barely fits into the definition of a human being.
I think that People who are able to do things like Madoff did,lose their right to live.
I've heard about his punishment today,he's going to be like 150 years in prison (he will die there),great!!!!!

-Dor

[Donald Rilea]

Dunno myself. If Madoff's admission in court to-day was any indication, then certainly greed, as well as the idea he had that he could get out at any time, were among the strongest reasons for his deeds.

Also, once one starts lying, etc, and finds that one can get away with it, and make a nice living in the process, can see where the pattern needs to be kept going, lest one be found out for the fraud that one is.

Does any of what I said above excuse what he and his associates did???? No. Absolutely not.

They lied, cheated and stole, and all for what were essentially short-term pleasures and profits.

There are those in this world who do those, and far worse, and get away with them. Dr. Henry Kissinger is a prime example of this.

But, not always. There are those out there who would like to see Mr. Madoff and Co. get strung up, and I can't say I blame them.

But, I think that being sentenced to a long prison term, with the loss of all property and privileges, is an even greater punishment for such people, as having enjoyed all the perks and privileges that come with money in this culture, being reduced to absolute poverty and powerlessness is an incredible humiliation for people like Madoff.

Yeah, if one must steal, steal big, a la Madoff, 'cos if one's caught, it theoretically should at least be of some small consolation in prison.

More than likely not, though, and just as well.

Best not to steal and lie to others, and, most especially, to oneself.

[Donald Rilea]

Jeez, Thanks, Mr. Sheetz. I strive for accuracy, though don't always get there.

[S Ghosh]

Current estimates for the number of sociopaths in the human population range from 1:8 to 1:40. If we take even the upper end to be true, then there are somewhere on the order of 7.5 million sociopaths in the USA, and something like 11 million throughout North America (Canada, USA, Mexico). With our integrated economy, and the fact that sociopaths often tend to have average-above average intelligence as well as a tendency towards self aggrandizing and power-seeking, it is quite likely that the world of business in North America has a fair percentage of these people. A sociopath by definition lacks empathy and also seems to misunderstand the emotional impact of his/her decisions. Madoff is sociopath.

In a world where capitalism is overwhelmingly prevalent but also overwhelmingly failing, it is obvious that placing value on material goods (rather than simply seeing them for what they are, material that can be used for a given purpose) results in anti-altruistic behaviour. Or, simply put: being greedy is celebrated until a sociopath shows the most efficient and cold-blooded way to be greedy, and then everyone gets upset. Greed is bad, sorry Gordon Gekko. A little greed is a little bad, a lot of greed is a lot bad. But we made our bed, so we have to lay in it. And lie in it. Reminds me of what's happening with the environment. Or the useless wars and genocides/mass slayings that are going on throughout the world.

Humanity is worth saving, but I'm not quite sure how we're going to save ourselves, or if that's even possible. Madoff is just a buffoon who demonstrated the dirty side of capitalism. There are others like him, just a little less talented in pulling off such a stunt. Madoff is what happens when people are so afraid of the world "socialism" that they fly off the handle and go nutters in order to protect the free-market system...as if the two concepts of social democracy and entrepreneurship are incompatible. Nonsense. If the market is only free, we end up with Madoff and his ilk running things. They're more clever, they're scheming, and they are completely unfazed by harming others to get what they want. If the market is free and FAIR, and if the market is just a means to an end rather than the end itself, then people will exchange resources in a constructive manner, and helping each other will mean more than simply looking out for oneself.

The truly sad thing in all this is that no one, not a single person, called Madoff on this catastrophic scam during a period of 2 decades. Goes to show that greed begets greed and if everyone is so blinded by the process of making money, as if the symbol of financial power means anything beyond the mere representation of something intangible, then the Madoffs of the world will always win. Catching him now doesn't make up for 20 years' worth of destroyed savings/funds/lives.

Money's just a metaphor, not anything of value in and of itself. Let none of us ever get hoodwinked by a Madoff-like sociopath ever again, and let's just spread the wealth far and wide. We'll all be happier for it, and the rewards will return to us a thousandfold, in ways we'd never even guess.

[Josh Van Buren]

I completely agree that deregulation and a hands off attitude towards the market by the Republicans was the greater cause. A whistleblower did warn of Madoff, but no one at the SEC listened. They must have thought that the free hand of the market would take care of it.

http://www.msnbc.msn.com/id/28310980/

[CJT621]

This all sounds very good and in a perfect world spreading the wealth and social democracy etc might be fine but we don't live in a perfect world. Capitalism isn't perfect either but on the whole it is preferable to Socialism. Historically speaking Socialism usually goes in one of two directions. The first path occurs when the "masses" figure out that by placing Socialists in power they are basically able to make the government supply all of their wants and needs and the only effort they need to put forth is voting for the right people. This is the "Bread and Circuses" approach, it's what the "Tax the Rich" crowd generally promulgates. Too bad for society that what they really end up doing is taxing the middle class; taking money (or Capital) from one group to pay for the support of another group (essentially what Madoff was doing only on a larger scale). While draining the producing class to keep the support of the consuming class may seem like an easy way for the ruling class to maintain power sooner or later you always end up confirming the TANSTAAFL Principle (look it up Keyword: Heinlein) and society collapses under its own weight.
The other historical path of Socialism is for power to eventually concentrate at the top with an elite few who ruthlessly grind down the Proletariat. This is Communism my friend and again it generally collapses under its own weight.
As far as the envrionment goes all you have do is compare the living conditions of countries like the US and Canada to that of various current and former Socialist/Communist nations such as China, N Korea, or the former USSR. Would you rather live here or in Kiev, or Pyongyang, or any of a huge number of "worker's paradises" where you're more likely to glow in the dark than not?
Our system isn't perfect nor is it eternal, sooner or later entropy will catch up with us but until then I'm glad I live where I do. I may not like everything about it but at least I have the freedom to bitch about it (so far).

[James]

I believe it is symptomatic of the "kill or be killed" attitude on Wall Street, and, to some extent, in big business in general.

Supposedly, Madoff was generous with people around him. He knew them. They were "real" to him, and not just names on a spreadsheet. He tried to give his employees a bonus right before he had his sons turn him in. I don't think that was posturing - it fits in with the personality. Good to people he deals with personally and knows, deadly to people he never meets.

If you make a good stock trade and make money, do you worry about the person you bought from, and whether he/she lost money on their trade? No. You just take the money and run. It's all anonymous. Impersonal. Cold and sterile.

When you divorce your business dealings from personal relationships, it is easy to lose any sense of ethics. Those you are dealing with aren't "people" you will ever meet - they are represented solely by tickers on a stock sheet, and by names in ledgers. I've known guys who were pious in private and with those they met, but still ruthless in business dealings. They have a reputation as "nice guys," and I just shake my head. It is part of the culture - all is fair in trying to succeed financially. Madoff just pushed it to the maximum extreme, and never really absorbed his religious teachings. All too common these days.

So, an indictment of Madoff is an indictment of modern business culture. Anonymous transactions with faceless entities remove all ethical restraints from some people. It is "succeed whatever it takes." It doesn't matter if you go to Church or Temple or wherever. It doesn't matter if you know the Torah or the Bible. A con man is a con man. Easy to lose your way, when personal and professional ethics diverge. His did in a big way. Too bad for his victims.

[James]

Well, first, I really appreciate your thoughtful reply. What you say has crossed my mind as well. It's tough to reach beyond the crime and try to uncover the man. And yes, I may have been too generous to Madoff. Maybe he just saw his death approaching and the guilt got too much for him. I don't know. I don't think anyone does.

My comments just come from experience I've had with people in Madoff's culture. He isn't all that unique. In fact, he sounds fairly stereotypical. Big man in the religious community, using that to finagle investments in his firm, acting pious in public, actually sociopathic in private dealings. That general outline describes several swindlers that I can recall, from Ted Haggerty to Aimee Semple McPherson.

Anyway, I just tried to give another possible perspective on the man, sort of the case for the defense. When someone has stolen your money, the temptation is to think that everything about him is evil and bad. Anything contrary to that seems calculated and phony. But if he were a complete sociopath, he would have been killing people, and at least he didn't do that. Instead, he was a simple criminal, just like others, only on a massive scale.

What probably happened is that this otherwise fairly ordinary guy got into financial trouble and took some highly unethical and illegal actions to save his career at one point, then got trapped by those decisions. He couldn't get out of them, his promises were too big, his assets too small. It's called a pyramid scheme for a reason. To keep it going, he had to draw in more and more suckers. But to him, they were just marks needed to keep the scheme going until maybe he could find a way out. All very ordinary, the wonder is that he kept it going for so long. Posing as a big religous type probably helped.

Does that make him the worst criminal of all time? Judging from the reaction, some think so. But I'm just trying to point out that in fact he maybe was nothing special at all, just a garden-variety schnook who made some very bad decisions to save himself and lived to pay the price. It's almost Faustian. The difference is that Faust only hurt himself, Madoff hurt thousands of others and then himself.

I think he belongs in prison, for the rest of his life. He should lose every cent he ever earned from these schemes. His wife should be kicked out on the street, his kids left destitute. But to infer that everything he ever did was evil and malevolent, I can't go that far, life isn't like that and the only thing that separates him from a common liquor store thief is the magnitude of the crime. He may have been genuinely sorry. It's at least possible.

[Donald Rilea]

Actually, Mark Twain made note of such people and practises in his time, among others. Can't think of specific examples from his and others' works from the Gilded Age, which is the period of US history which the past thirty-plus years we've been through most strongly resembles in a number of ways.

It's actually very easy to disregard others' interests and feelings from a distance, or behind their backs, for many people. If one doesn't know the person with whom one's dealing well, or not at all, it's quite easy to say and do horrible things about and to them. After all, he or she's not a relative or close friend, so it's just that much easier to dismiss them and treat them as objects.

Perhaps one of the biggest failings, not just of US or even Western European culture in general, but Judeao-Christian-Muslim civilisation, is the often great gap between the rules and rhetoric we feed ourselves and others and the reality thereof.

Much of the struggles carried out by working-class and poor people, racial and ethnic minorities, women, disabled people and many others over the millennia in various countries have been, I believe, at their core, at bridging that gap between our ideals, rhetoric and reality.

Part of that means, as much as can possibly be done, is to imagine, craft and implement public policies that ensure that people are well-paid and -treated, whether they work for others or themselves, and not exploited and treated like toys to be played with one minute and discarded the next.

That's neither a quickly done nor easily pulled-off task to do. But, I think it's at least worth the attempt.

[Rick]

Its human nature. If an opportunity to take advanage of a situation, say no over-site, presents itself to you everyday, perhaps the first couple of weeks, months, or years, you do the right thing. By no over-site I mean you won't get caught or even questioned about your wrong doing. However, things change, your needs change. Its now easy to relationlize taking advantage of the situation that has been presenting itself to you all this time. And all this time you have done the right thing. Its time to reward yourself for your good behavior. The first time, you feel a little bad about it, maybe even guilty. As time passes, the guilt goes away and you do it again than again. Before you know it, you think you deserve your ill gotten gain or reward. Even though its wrong and you know its wrong!
Its my thought, that over site keeps honest people honest. No matter what line of work your in.

[Mike]

Your question inspired a video. Here are the words:
I'm grateful for this chance to speak, your honor.
To share the details of my Ponzi scheme.
I promised I would out perform the market,
Give my investors anything they dream.

Split strke conversion's what I called my gimmick.
As I held their investments -- just for me.
My clients grew, while others asked to cash out.
I paid them returns no one thought they'd see.

I printed phony trading confirmations.
I even fooled those dupes at SEC
I stole the wealth of families cross the nation.
I even stooped to rob some charities.

Soon economic times made me grow nervous.
Confessed to sons who told the FBI.
Please let my wife just hold onto our assets.
Don't send me off to prison 'til I die.

[Lorn Mullenix]

Isn't this the same thing our 'government' is doing? Creating a house of cards with a whole lot of money that doesn't exist. Except Bernie limited himself to ripping off and ruining a limited number of people. Our leaders in 'government' are bankrupting this entire nation and all of our children, too. Just so their greedy butts can be rich and fat. Who is John Galt?