Bernie Madoff, Our Convenient Scapegoat

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

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By Jay Michaelson

Published March 24, 2014.
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Has anyone been punished for this trillion-dollar theft from the American heartland? Hardly. The same Republicans who created the financial crisis through deregulation are now resisting any effort to achieve a fairer sharing of the burden. This is now a matter of philosophy, with names like Milton Friedman, Friedrich Hayek, and even Ayn Rand engraved upon the frieze of neo-conservatism – an ideological movement, incidentally, overpopulated by Jews. As Madoff himself said, “I’m not a great fan of redistribution of wealth.”

As a result of this ideology, one-percenters have made billions of dollars – each – since 2009, while real wages have stagnated and the middle class slouches toward insolvency. And while some of those one- and ten- percenters have been generous to Jewish institutions that now bear their names, the amount they have donated pales in comparison to the amounts they have obtained from a rigged financial-political system.

Of course, few rabbis will call out these people for profiting from a system that’s been jury-rigged to their advantage. They’re the donors who write the checks. Even if we could understand the perverse incentives, financial-political complex, and ponzi schemes of the ultra-rich, most of our leaders would not condemn them. Because they depend on them.

And what of Madoff’s institutional victims? Were they as innocent as they now insist? I’ve sat on several for-profit and not-for-profit boards, and I cannot understand how these organizations’ finance and audit committees approved the Madoff investments. The phony paperwork Madoff provided was ludicrously thin, and should never have passed muster.

People and institutions invested with Madoff because they were sloppy. They saw a great money train passing by, and wanted to jump aboard. They didn’t adequately evaluate the risk, and now they complain that their “trust” was violated. Trust? Responsible investing is based on due diligence, not trust.

Did any negligent board members and financial advisors go to jail? Did they even lose their jobs?

Madoff is not the victim here – but he is a scapegoat. It’s a lot easier to blame one dislikable thief than to wrap one’s mind around a venal, rigged and corrupt system of hyper-capitalism that would make Adam Smith blush in shame. We naively suppose that there are good guys and bad guys, and that it’s easy to tell the difference between them. But that story is make-believe.

Instead of Madoff, maybe we should learn from the actual scapegoat, the one in the Torah. In the scapegoat ritual, it’s not that the goat is guilty, of course; rather, all of the sins of the people are projected onto it before it is banished to the wilderness. All of us are culpable. Of course, unlike Madoff, scapegoats are meant to be silent.


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