Is Madoff Wall Street’s greatest villain? The knee-jerk reaction would be: Obviously. But time and context do a lot to obscure our vision, and, in reality, there is a healthy debate over who’s the worst Wall Street crook.
In fact, a debate is exactly what they are having on The New York Times opinion blog. Here’s what some of what Mitchell Zuckoff, author of “Ponzi’s Scheme,” had to say:
even the equation of huge money plus celebrity doesn’t fully explain why the Madoff mess went nuclear. That’s where it gets interesting.
For all the attention paid to the scam, it affected relatively few people (though certainly the numbers are multiplied by the foundations, charities and endowments whose investments with Mr. Madoff would have helped untold others). More important, there was a widespread perception that the affected investors were the sort of people who are usually insulated from huge reversals. Put another way, for once the tornado wiped out the houses on the hill and missed the trailer park in the valley.
At the same time, Mr. Madoff’s unmasking came amid an overall market meltdown that had a direct, personal effect on people at every rung of the financial ladder. Most have no idea whom to blame for the subprime crisis, credit default swaps or collateralized debt obligations. Bernard Madoff didn’t cause any of that, but he is a convenient personification of all the greed and mistakes that have crushed the economy.
When Charles Ponzi pulled off his scheme in 1920, he tapped into a widespread belief that prosperity was a new American birthright. When it collapsed, the public’s outrage was as much about the fear that some people would always be denied the brass ring as it was about the money he lost. After years of Americans believing that the stock market was a rising tide that would lift all boats, Bernard Madoff is living proof that the tide has gone out.
The money line is that Madoff “is a convenient personification of all the greed and mistakes that have crushed the economy. Please, don’t confuse that with being a scapegoat. Jews often have been blamed for many financial calamities that weren’t their doing, but Madoff is no martyr.
Other participants in the debate were David Shapiro of John Jay College of Criminal Justice, Stephen Gillers of N.Y.U. School of Law and Stephen Mihm, a history professor at University of Georgia. You can read their thoughts here.
Thanks for the link, Amy.