How A Man Makes A Living Is None Of My Business

The Zola System in Action

I can’t actually remember the cause or events that would focus the Old Man on waxing philosophic about career tracks.  Usually, that advice was a single sentence and it probably as we went to the track or the Schvitz.  Perhaps it came after he told us about one of the Rabbit’s con games and my brother’s and I would recoil because our midwestern upbringing told us it was the proper way to behave.

“How a man makes a living is none of my business,” he would say over and over again.

So, on December 11, 2008, the world recoiled in horror as Bernie Madoff, investment Counselor extraordinaire, was arrested for running a large Ponzi scheme involving many prominent New Yorkers.  My first reaction was exactly what my father put into my head.  However he chose to make his money was none of my business.  I know I didn’t invest anything with him and that should be enough.

Over the course of the next few days, the scope of the con Madoff had run over the course of 48 years became apparent to the public in general.  It wasn’t simply a Ponzi scheme but possibly the largest the world has ever seen.  Bernie Madoff had managed to bilk nearly 8,000 people of their money before his sons turned him over to the authorities.  The fallout was immediate with one investor committing suicide and others, such as New York Daily News publisher Mort Zuckerman taking to their bully pulpits to besmirch the reputation of a man who managed to have his sons blow the whistle on the fact that he had no reputation to begin with.

Bernie Madoff was a con man who worked a specific circuit, one that he knew best: the rich Jewish country clubs of New Jersey and Long Island.  His clients included Steven Spielberg, former New York Governor Eliot Spitzer and various charitable foundations.  When the scam came into the light of the day, those that were hurt by this man were the rich, not the little guy. However, the House of Representatives has convened hearings and the SEC is being called on the carpet to explain just how a man like Bernie Madoff could have been running his scam for such a long period of time.

The funny thing is, when you look at the people who got hurt, they could afford it.  In a way, Bernie Madoff reminds me of the Michael Caine character in the movie Dirty Rotten Scoundrels or Omar from The Wire.  Every one of his marks was chosen carefully due to the size of their pocketbooks.  No citizens, no middle class or working poor, nor retirees.  Bernie Madoff was Midas to the very wealthy.  He made them even more money than they already had.

There were regulatory eyes on Madoff for at least sixteen years but nothing came of it.  Even in 2005, when one Harry Markolpolos, a SEC financial investigator, found several violations in the Madoff investment method, people didn’t blink. They kept begging the man with the golden touch to take their money.  According to ClusterStock.com, even well known investors thought Madoff was just using Insider Trading techniques and so they kept giving the man money.

So now, as the New York Daily News publishes editorials entitled ‘Burn Bernie Burn’ and CNN/MSNBC and FOX all call for his head, I wonder why.  Yes, Bernie Madoff is a crook, a con man, a sociopath, a man who raised his kids to do better than he did and when they found out they couldn’t steal as much as he could, they turned him into the police.

Just for a second, compare Charles Keating to Bernie Madoff.  Keating sold junk bonds to California retirees.  He then used those bonds to create Lincoln Saving and Loan in Colorado, which promptly failed during the Savings and Loan Crisis of 1988.  Those people lost their life savings and were at a point in their lives where they couldn’t work anymore.  Keating consigned a large group of folk on a fixed income to a life of poverty after they had worked and saved all their lives.  Madoff took rich people who thought they had found a guy who was doing something illegal but it was making them money so why should they care.

I’m sure more people will come forward to tell how they lost vast sums of money to the Madoff Ponzi Scam.  But I have no sympathy for them.  Mort Zuckerman of all people should understand that if you play with fire, you will get burned.

Charles Keating did 4 ½ years of Federal Jump The Shrub time and has made millions from real estate deals in the Phoenix Metropolitan Area.  Whither Bernie Madoff in the justice system of 2009, I think his fate is best described by this quote form Bob Dylan: “steal a little and they put you in jail, steal a lot and they make you king.”