Madoff and the perversion of the American Dream

I’ve been following the trial and conviction of Bernie Madoff for his role in scamming thousands of clients in what is known as ponzi scheme.

Now I have to say up front that I feel sorry for all of those who has lost money in this fraud. Many of these people are retired people who have lost everything in this scheme. They are left trying to pick up the pieces of their shattered lives. It is truly a sad time for them.

Yet, there are a couple of things that should be said that may be interest. One is did any of these thousands of investors ever look at their reports on their returns and compare them to the market?

Then again can we really blame them? Bernie Madoff came around like a Wild West Medicine Man, providing his clients with an elixir of easy retirement and wealth. People believed it. Madoff’s reputation as a genius gave him the opportunity to work his snake oil charm and get away with it.

The main reason Madoff got away with it and the economy is such a mess that it is in is our lack of understanding history.

The people who suffered through the depression are dying off. For years they remembered the circumstances that led to Black Friday and the subsequent banking failure in later years.

These older Americans kept the watch over the economy and how we spent the money in the years following WWII and fueled the growth in the 1950’s and early ’60’s.

When I grew up in those years, I remembered that the houses were smaller, the necessaries payed for and luxuries eschewed, unless there was an opportunity to get alot of money. Even then, saving was the watchword of the  day and people celebrated new wealth with caution.

In the late ’60’s and in the 70’s, while there was a lot of good to come out of those dramatic days, there was some forgetting of what made us a thrifty nation. We giggled at the rock stars that thrashed hotel rooms and snorted cocaine off $100 bills. In our disdain of materialism we lost the sense of value of our possessions. Homes became just houses, money became a vehicle to gain more money, and not to achieve some sense of security. The sense of values became distorted.

The Reagan revolution in the 80’s further changed the thinking of how we could improve our money making ways. We started to deregulate and ignore the things that protected us from the abuse that led us to what we have today.

The American culture itself began to change, We became immersed in television show like ‘Dallas’ and ‘Knots :anding.’ fantasying how great our lives would be if we had that much money.i

Reagan, Clinton, Daddy Bush and Sonny Bush; all were forgetful of some of the lessons learned in the ’30’s and 50’s. We deregulated and enlarged the markets. We made houses that became castles and Wall Street became a wild west show.

The American Dream used to be: Have a nice home. A good job, a nice family, and a little cash to retire with. Today the dream is to gather as much money and power possible and the heck with anyone else,

We are suffering because of our lack of foresight and thought. We need to consider our houses as homes, rather than building for investments. Maybe we need houses that are a bit smaller and affordable than the castles that we build and even require that be built today.

We need oversight and regulation so that our markets will be not only free, but fair to all and will allow steady growth. The growth we get night be slow, but perhaps it will be a more realistic growth, rather than than quick, wild growth based on values built on sand.

We need to consider the economy as we would when driving a car. When we drive, we go with the flow of the traffic. When the traffic is light, we can cruise along with out a care in the world. Yet when traffic is heavier, we tap on the brake, slowing the car down. It may take us longer for us to get where we want to go, but get there we will.

Regulating the markets and banking is like using the brakes on a car. It will stop us from careening off the road. The returns will be less and slower than we have experienced in the last few years, But it will keep the markets operating on a steady, manageable level. Heck. Even the Indianapolis 500 has rules of the road. Wall Street and banking has to have some rules of the road, too.

We also have to build houses that are smaller than the houses we build today. How big a house do you need? How much can you afford?

In the end, we have to start looking at our economy as a slow steady progress to getting everyone in this country comfortable. Not necessarily wealthy, but comfortable enough to be free from want and able to lead productive lives. We have to have a commitment to preserving our economic platform in the best possible way, not in boom and bust, but in steady growth for all.


Post a Comment

Required fields are marked *

%d bloggers like this: