Bernie Madoff, Our Convenient Scapegoat

It’s Easier To Blame One Thief Than a Corrupt System

GETTY IMAGES

By Jay Michaelson

Published March 24, 2014.
  • Print
  • Share Share
  • Single Page

You couldn’t dream up a better villain. Bernie Madoff, the man we all love to hate, is back in the news, opining from his jail cell on matters political, ethical and financial, this time in an interview with Politico magazine.

Madoff won’t win many friends with this new interview, and may even gain a few more enemies. Yet our fixation on him as the villain of the 2008 financial crisis is erroneous, counterproductive, and even immoral.

By now, you probably know the facts. Madoff, once the darling of the American Jewish upper crust, was convicted in 2009 of running a massive ponzi scheme. When the pyramid collapsed, dozens of individuals and many Jewish institutions lost everything they had “invested” with him.

Those victims will be pleased to hear, perhaps, that Madoff says he has “nothing to live for.” Although many said in 2009 that Madoff could never atone for his crimes, he has suffered greatly since: one of his sons committed suicide, another is in jail, and another is battling lymphoma. His wife barely speaks to him. Surely, no matter how much money was lost, Madoff has now lost more.

Yet that’s not the part of the interview that’s made headlines. That honor goes to Madoff’s statement that “I don’t feel that I betrayed the Jews, I betrayed people… I betrayed people that put trust in me — certainly the Jewish community. I’ve made more money for Jewish people and charities than I’ve lost.”

Ouch. This after Madoff’s fraud bankrupted or severely hurt Yeshiva University, Hadassah, the Jewish Community Centers Association of North America, the Elie Wiesel Foundation for Humanity, and the Chais Family Foundation. Add that to Madoff’s kvetches about his sentence (“For all intents and purposes, it’s a life sentence” – duh) and the boredom of prison life, and it’s hard not to loathe the guy.

But Madoff the man is less important than Madoff the symbol. And that’s where we’ve gone off the rails.

In the six years since the world’s financial markets crashed, Madoff has become a symbol of the collapse. He’s an easy villain: a liar, a thief, and someone whose regret remains, even today, equivocal. And even though many of Madoff’s victims have recovered much of their original investments, many others – including vulnerable, trusting bubbes and zaydes, lost everything.

Many more people, however, lost much, much more in the 2008 financial crisis. And Madoff had nothing to do with it. That crisis was brought about by Republican-engineered deregulation of the financial industry, which enabled enormous mergers and incentivized financial institutions to take on too much risk. New security “products,” themselves ponzi schemes of derivatives upon derivatives, were sold by supposedly trustworthy banks and financial advisers to customers who didn’t want to miss out on the next big thing.

And while many in the industry were swept along by the current of usury, many others knew it was all a shell game. Infamously, for example, Goldman Sachs bet against the very securities they were selling to their clients.

Eventually, like Madoff’s scheme, Wall Street’s house of cards collapsed. But who went to jail? Nobody. Most of the big banks were bailed out (“too big to fail”), and the major malefactors of great wealth settled with the government. They wrote it off.

Most likely, the 2008-09 bailouts rescued the world from global economic collapse – not to mention the U.S. automotive industry. They were a very good thing, Occupy’s outrage notwithstanding. But they also went through without teeth, enabling business-as-usual bonuses to be paid to financial service executives, and, with only a modicum of additional regulation, business-as-usual risk-taking to resume with hardly a hiccup.

Oh, and it gets worse. How has the 1% done in the last five years? Just fine, thanks. More than fine. In 1983, at the height of “Greed is Good,” the wealthiest 1% made about 131 times the median income. Now, they make 225 times the median. That same 1% controls over 30% of the wealth in the United States – with the next 9% controlling another 30%. That’s 60% of the wealth owned by 10% of the people.


The Jewish Daily Forward welcomes reader comments in order to promote thoughtful discussion on issues of importance to the Jewish community. In the interest of maintaining a civil forum, The Jewish Daily Forwardrequires that all commenters be appropriately respectful toward our writers, other commenters and the subjects of the articles. Vigorous debate and reasoned critique are welcome; name-calling and personal invective are not. While we generally do not seek to edit or actively moderate comments, our spam filter prevents most links and certain key words from being posted and The Jewish Daily Forward reserves the right to remove comments for any reason.





Find us on Facebook!
  • "I’ve never bought illegal drugs, but I imagine a small-time drug deal to feel a bit like buying hummus underground in Brooklyn."
  • We try to show things that get less exposed to the public here. We don’t look to document things that are nice or that people would like. We don’t try to show this place as a beautiful place.”
  • A new Gallup poll shows that only 25% of Americans under 35 support the war in #Gaza. Does this statistic worry you?
  • “You will stomp us into the dirt,” is how her mother responded to Anya Ulinich’s new tragicomic graphic novel. Paul Berger has a more open view of ‘Lena Finkle’s Magic Barrel." What do you think?
  • PHOTOS: Hundreds of protesters marched through lower Manhattan yesterday demanding an end to American support for Israel’s operation in #Gaza.
  • Does #Hamas have to lose for there to be peace? Read the latest analysis by J.J. Goldberg.
  • This is what the rockets over Israel and Gaza look like from space:
  • "Israel should not let captives languish or corpses rot. It should do everything in its power to recover people and bodies. Jewish law places a premium on pidyon shvuyim, “the redemption of captives,” and proper burial. But not when the price will lead to more death and more kidnappings." Do you agree?
  • Slate.com's Allison Benedikt wrote that Taglit-Birthright Israel is partly to blame for the death of American IDF volunteer Max Steinberg. This is why she's wrong:
  • Israeli soldiers want you to buy them socks. And snacks. And backpacks. And underwear. And pizza. So claim dozens of fundraising campaigns launched by American Jewish and Israeli charities since the start of the current wave of crisis and conflict in Israel and Gaza.
  • The sign reads: “Dogs are allowed in this establishment but Zionists are not under any circumstances.”
  • Is Twitter Israel's new worst enemy?
  • More than 50 former Israeli soldiers have refused to serve in the current ground operation in #Gaza.
  • "My wife and I are both half-Jewish. Both of us very much felt and feel American first and Jewish second. We are currently debating whether we should send our daughter to a Jewish pre-K and kindergarten program or to a public one. Pros? Give her a Jewish community and identity that she could build on throughout her life. Cons? Costs a lot of money; She will enter school with the idea that being Jewish makes her different somehow instead of something that you do after or in addition to regular school. Maybe a Shabbat sing-along would be enough?"
  • Undeterred by the conflict, 24 Jews participated in the first ever Jewish National Fund— JDate singles trip to Israel. Translation: Jews age 30 to 45 travelled to Israel to get it on in the sun, with a side of hummus.
  • from-cache

Would you like to receive updates about new stories?




















We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.