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CURIOUS THINGS ON WALL STREET…

Another nail in the financial industry’s coffin comes in the form of the arrest of one Bernard Madoff, a former chairman of the National Association of Securities Dealers Automated Quotes, a mouthful universally known as NASDAQ. He was nabbed when it was revealed that the hedge fund he runs lost $50 billion and he called the whole thing “one big lie” and admitted the fund had been insolvent for years. The curious thing, though, is that he was easily able to make the $10 million bail. So, you have to figure that whole “insolvency” thing didn’t actually apply to him, just the wealthy suckers who invested in his members-only Ponzi scheme.

Another curious thing about the case is that it was common knowledge on Wall Street that this fund was producing investment returns that were “too good for too long.” In other words, something was fishy, and nobody said anything. Which leads one to wonder if these financial gangsters swear an oath of Omerta, the Sicilian word for silence. That would explain a lot of what has been going on in the financial sector recently. And you further have to wonder what sort of ceremony these “Made Men” take part in when they swear their blood oath. Maybe over martinis in some private club on the Upper East Side? Do they administer paper cuts to new recruits to draw blood or turn on a tanning lamp real high to remind them they will burn if they break their oath?

Just like their small time imitators in the Mafia, these financial thugs have lawyers who seemingly materialize on the spot just in time to talk to reporters. Mr. Madoff’s attorney said, among amusing things, “Bernie Madoff is a longstanding leader in the financial services industry,” thus concisely identifying one of that industry’s main problems. He also said “He will fight through this unfortunate set of events.” An unfortunate set of events?  Stealing a king’s ransom? Not fight to restore the $50 billion he stole, of course, but fight to stay out of jail and keep as much of his own vast fortune as he possibly can. He faces up to 20 years in jail and a $5 million fine. Odds are he’ll get 18 months in a minimum security tennis camp and count out the $5 million fine from his pocket money.

Yet another curious thing is that he’s the only guy getting arrested on Wall Street. Madoff’s fellow “industry leaders” are collectively responsible for trillions in losses. A trillion is a one followed by 12 zeroes, or about $3,300 for every person in the United States. Were all of those losses honest mistakes? And if so, then how did people so stupid get to be in charge? Or could it just be possible that Madoff had a whole lot of company in the fraud business? The rest of them seemed to suffer only the indignity of having to go hat in hand to Uncle Sam to bail them out by throwing good money after bad. $700 billion ($2,310 apiece!) of our good money, the hard earned of Joe and Jane taxpayer, most of whom never had the money to play Monopoly on Wall Street. Well, we’re playing their game now, like it or not.

And as curious as it gets, all these industries are policed by a whole slew of regulatory agencies and subject to many laws defining exactly what they can and cannot do with other people’s money. Why was no one in these government agencies charged with dereliction of duty, taking bribes for looking the other way or at least fired for gross incompetence? It was also common knowledge that the Bush The Younger administration has consistently underfunded and understaffed regulatory agencies in the theory that greedy people are on their best behavior when no one is watching them, a very curious idea indeed. 

As the people in this worst-ever administration slink away into history they leave behind more damage to America in their 8 years of mismanagement than all our enemies combined have ever been able to inflict in our 232 years as a nation, and that includes every war we’ve ever fought. And like Bernard Madoff and his cronies in the financial services industry, the problem was the quality, or glaring lack of quality, of leadership. You have to wonder how many young people entered the financial services industry (and government service) under the watch of such greedy leadership and figured this was normal behavior, that this is what they were training to become. 

Are these youngsters ticking financial time bombs years down the road when it is their turn and their time to take over leadership positions? It might be a good idea to start putting a bunch of these thieving thugs in jail to show the Young Turks otherwise. Better yet, strip the guilty of their ill-gotten wealth. There is no greater punishment for the greedy and no greater lesson for the potentially greedy. Perhaps the most curious thing about all this is the fact that the lessons of history regarding the quality of leadership has been ignored in both the public and private sectors. Is there anybody alive who doesn’t realize that good leaders set a good example and lousy leaders set a lousy tone? What were we thinking? Not all that much, apparently.

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