“It’s unbelievable. Goldman … no one has any criminal convictions—the whole new regulatory reform is a joke. The whole government is a Ponzi scheme.”
Here are some brief excerpts from a story in New York Magazine called The Madoff Tapes. The story runs to nine pages, so consider this just a taste and read the whole thing when you have the time. I thought Steve Fishman did a terrific job of letting Bernie talk and of presenting his thoughts in a orderly manner without a lot of interpretation and editorial intrusion. He has real talent as an interviewer, and seems a natural reporter.
But while you read this bear in mind that you are seeing reality interpreted through the eyes of Madoff, a master manipulator and pathological liar, an individual perhaps in deep denial, but the question is, to whom.
His psychiatrist in prison tells him he is not a sociopath because he has remorse. I think his major remorse is that he was caught. The article implies that he is a narcissist. I think he is all of the above, and much, much, more.
Always full of self-pity and the quick deflections of a classic con man, he seems to blame his corruption on the failure of his father's business, and a personal vow never to let it happen to him, a resolve that became an obsessive compulsion. Besides, everyone was doing it. He just did more of it, more quickly and with an automated efficiency that turned into raw fraud when the easy gains evaporated. It is a microcosm of the US financial sector today.
Sometime in the future someone is going to do a thorough analysis on what was common in the background of these fellows who were drawn to Wall Street in the 1980's and beyond, and what made them the way they are. But we can discover what set them free to do their worst, and that was the undermining of regulation, of the government, and the 'regulation is bad and greed is good' meme that has brought an entire society to its collective knees in a number of countries. Once the monied interests have traction with the government the corruption gets rolling and the feeding frenzy begins.
“Our government teaches the whole people by its example. If the government becomes the lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy.” Judge Louis D. BrandeisAt times Bernie Madoff sounds like a less articulate version of a former Fed Chairman, that is, less able to rationalize his way, with a prideful sneer, out of nearly anything and everything, with a practiced verbal acuity and evasiveness.
I think he is emblematic of an empire in decline, a decline that found a voice and became respectable with Thatcherism and Reagonomics, and into full flower with the repeal of Glass-Steagall and the undermining of the regulators, in a campaign led by a few New York bankers using plenty of lobbying money and sophisticated public relations campaigns, with the resulting institutionalization of fraud and mass plunder by the financial interests that continues today. No one wants to be the one eyed man in a land of those blinded by greed, especially when the greedy are holding most of the carrots and the sticks. So even the seeing pretend to be conveniently blind. Go along to get along.
The only difference between Madoff and many of the others like him on the Street is that Bernie ran out of rope, and was caught. The others seem to be hanging on and are trying to bluff their ways out of similar predicaments by keeping the game going, at any cost to the country, unto the destruction of the dollar and bond, the misery of families, and the pure corruption of all that has made America great. It is almost never the money; it's the will to power, and pride.
The rationale will be like the one offered by Madoff: a cheap apology, a spreading of blame to everyone and therefore to no one, the enablers and beneficiaries knew something was wrong, and they took the deals anyway. There will be other lower level financial men offered up to the the law as a diversion for the crowd, and if is gets worse some of the oldest scapegoat cards in history may yet be played, an unforgivable act. And it will be a shame, because the men behind the scenes will live on to roll out their frauds once again on a new generation of the unsuspecting.
New York Magazine
The Madoff Tapes
By Steve Fishman
“How could I have done this?” he asks. “I was making a lot of money. I didn’t need the money. [Am I] a flawed character?”
“Everybody on the outside kept claiming I was a sociopath,” Madoff told her [his prison therapist] one day. “I asked her, ‘Am I a sociopath?’ ” He waited expectantly, his eyelids squeezing open and shut, that famous tic. “She said, ‘You’re absolutely not a sociopath. You have morals. You have remorse.’ ” Madoff paused as he related this. His voice settled. He said to me, “I am a good person.”
As he [Andrew Madoff] tells friends, his rage at his father, far from dissipating, has metastasized. To friends, he’d described his father as a bully and a gifted manipulator. Madoff was a family man, yes, but to Andrew, that was yet another manifestation of his narcissism. The family served the needs of Bernard L. Madoff.
I had more than enough money to support my lifestyle and my family’s lifestyle. I allowed myself to be talked into something, and that’s my fault. I thought I could extricate myself after a short period of time. But I just couldn’t.
From the beginning, Madoff, who’d moved to Queens at age 7, had a chip on his shoulder, along with a certain contempt for the industry [securities] he’d chosen. “It was always a business where you had to have an edge, and the little guy never got a break. The institutions controlled everything,” he said in a voice surprisingly thick with emotion. “I realized from a very early stage that the market is a whole rigged job. There’s no chance that investors have in this market.”
By 2000, as spreads and profits were squeezed in the market-making business, Madoff had a chance to sell for $1 billion or more. But he refused. “As far as my sons and brother and my wife were concerned, they thought I was nuts for not selling out,” he told me. His family was “livid,” and he didn’t dare explain it to them. “I couldn’t at that time, because it would have uncovered this other problem [the fraudulent nature of his business] I had.” (Nice illustration of the credibility trap that now hampers the entire US economy from the top down - Jesse)
The boys had their separate spheres, but Bernie didn’t hesitate to get involved. “He didn’t have a filter,” as one observer put it. He’d say things to his sons that other employees thought shocking, even abusive. His version of an explanation was, “Because I said so.” More than once, the boys thought, 'He’s a bully.'
Later, they wondered what fraction of that love was sincere. They’d always known their father was a master manipulator, one quality that had helped him succeed on Wall Street.
Madoff says that he waved red flags, issued caveats that should have been obvious to even an unsophisticated investor. “They were all told by me, ‘Don’t invest any more money than you could afford to lose. This is the stock market. There’s always stuff that can happen. Brokerage firms can fail. I could go crazy and do something stupid. If you want a [safe thing], put your money in government bonds. So everybody understood this. “Everyone was greedy,” he continues. “I just went along. It’s not an excuse.” In his mind, the hedge funds and the banks were little more than marketers, skimming their 1 to 2 percent off the top, a fee for their supposed “due diligence,” though they exercised little oversight. “Look, there was complicity, in my view,” Madoff told me.
Through the nineties, Madoff dreamed of climbing out of the hole he’d dug. “I kept telling myself that some miracle was going to happen or that I was going to be able to work my way out of it. I just didn’t know when that was.” By around 2002, he realized this was a fantasy. “By then, the number was so astronomical I didn’t know what I was hoping for, quite frankly.” So he continued. The scheme demanded endless funds. Money flowed out almost as quickly as it came in, at points. (A certain global reserve currency comes to mind - Jesse)
And then the family that had for so long been a source of pleasure and support was gone. The boys had cut off their mother—a situation for which Madoff blames the lawyers but which was also the boys’ preference.
He sees himself at this stage as a kind of truth-teller. He has disdain not only for the industry but for the regulators. “The SEC,” he says, “looks terrible in this thing.” And he doesn’t see himself as the only guilty party on Wall Street. “It’s unbelievable, Goldman … no one has any criminal convictions. The whole new regulatory reform is a joke. The whole government is a Ponzi scheme.” (Name some names Bernie if you have true remorse, and wish to be remembered as anything except a fraud and cheap con man - Jesse)
