Madoff woes

One is perhaps not inclined to feel very sorry for the clients of Bernard Madoff. Surely there are people worse off in the bleak, bleak economy. They were, after all, wealthy enough to invest.

But the havoc he has wrought among certain communities of (especially) Jews is hard to overstate. He lived in a town that bordered on my hometown (well, one of his three homes was there) on Long Island. And he finagled the local community, especially the Jewish community, into investing with him. As my mother breathed on the phone to me this morning, "It's everyone." Not my parents (phew!), but so many people my parents knew had something invested with him. One friend lost three quarters of his wealth. College funds for children - gone. Retirement accounts - vanished. And so many charities, again particularly Jewish charities, have lost so much. It's really unbelievable how the greed of one man, a man with no real political power, can cause such grief.

Lessons to be learned:

1. Investments should perhaps not be outsourced. This guy actually falsified statements, so even clients following their money carefully were duped. Investing requires know-how, and if one wants to do it, one should learn about it.
2. That the SEC is so useless that even receiving multiple letters over the course of nine years tht claimed that Madoff's investment firm is a giant multi-billion dollar Ponzi scheme is not enough to motivate the SEC to even begin to check out whether Madoff's investment firm is a giant multi-billion dollar Ponzi scheme.
3. That something is terribly wrong with a culture of philanthropy that relies so much on the naming and honoring of large benefactors. Madoff played himself up to be quite the philanthropist, and was actually stealing from some charities to give to others. I'm not sure if anonymous donations are the answer - surely charitable donations would drop, and those things have a way of leaking out anyway (as per Curb Your Enthusiasm!). But it does point to a special kind of sickness in the charitable world.