Economy

One big American Ponzi scheme

(China Daily)
Updated: 2011-03-04 07:45

While Bernard Madoff languishes in jail, bankers continue to profit and the poor lose their homes and hope. Thank you, Bernie, for breaking your silence - even if you are still clinging to that cover-up mode you adopted since you took the entirety of the blame for your crimes.

What is clear is that ripping off the rich is punished far more severely than ripping off the poor. The lengthy sentence you were given spared countless other unscrupulous businessmen from facing the music - whatever music there is.

In an interview - with a reporter from The New York Times who is writing a book to cash in on a man who has already cashed out - we learn, in the vaguest terms, that Madoff believes the banks he did his crooked business with "should have known" his figures did not figure. Keeping with the deceit that has served him well over the years, he names no names.

For years, he went undetected by business journalists, who knew - or should have known - what he was up to. There are even questions about the speed with which he was sentenced, preventing him from being tried - a process which, through diligent cross-examination, would have brought us more information on the details of his dirty deals.

Madoff is still not coming clean about the web of alliances he had established internationally, as well as in New York. As a result, people investigating him are making a small fortune. The Financial Times said: "The army of lawyers and consultants helping to recover funds from Bernard Madoff's $19.6-billion fraud stand to earn more than $1.3 billion in fees, according to new figures that detail the cost of liquidating the huge Ponzi scheme."

The comments of readers to The Times appear to be more insightful than the paper's reports. Here is one from Texas: "I actually, sort of, feel sorry for this man. He was just doing what many investment firms were doing at the same time. He has been imprisoned as a scapegoat, yet many people since then - and to this day - are doing the same thing. Where are the indictments against the thousands of other people who did the same thing - and knowingly led this country into financial disaster?"

The best reporting on the subject is not in the mainstream press but in a music magazine, Rolling Stone, in which Matt Taibbi investigates why the whole of Wall Street is not in jail. "Financial crooks brought down the world's economy - but the feds (federal officials) are doing more to protect them than to prosecute them," Taibbi charges.

By their actions, Democrats and Republicans both appear to prefer the most simplistic understandings - or misunderstandings.

The Financial Crisis Inquiry Commission, like the 9/11 and Warren Commissions before it, avoided key issues. The inquiry commission did not call for a criminal indictment of wrongdoers. While informative, its report was ultimately a dud - telling us mostly what we knew, although there were some disclosures that our tepid press still missed.

Now the Republicans want to water down the regulations on derivatives in the Dodd-Frank financial "reform" legislation, claiming they will lead to a loss of jobs. This is predictable: Every effort to defend big business is always couched in terms of helping the public.

The New York Times reported: "Representative Stephen Lynch, Democrat of Massachusetts, warned: 'You think regulation is costly? How about the $7 trillion we just lost from not regulating the derivatives markets?'" There was no response from his colleagues. So who will do something about it?

The political right prefers to change the subject, while the left does not seem to have the time or energy to make economic justice its principal concern - even as polls show the economy is the number one problem for most people in the US.

Progressives should hang their heads in shame at the minimal amount of activism taking place against the banks and the escalating numbers of foreclosures. Homes and hope are being stolen from people for whom the term "depression" now has a personal, as well as economic, meaning.

The other day, economist Jeff Sachs - who has a lot of atoning to do for his own misguided, destructive economic advice to Russia after the fall of the Soviet Union - warned that little is being done about economic inequity and the growing ranks of the poor in the US. He asked if people who run things in the US want "another Egypt". He is a policy wonk, not an activist - and is likely to fear the idea.

Many activists say they want to emulate the Egyptians, but who will organize anything as effective - even in a land that used to be known for people's movements - to raise hell? In Egypt, young people used the Internet to organize and mobilize for change. In the US, the Internet seems to function more as an escape valve, consuming hours of our time and giving us another way to talk to each other. Social media here seems to be more for socializing.

The US government supports Internet freedom abroad - but restricts it and spies on it at home. US President Barack Obama has already supported a law allowing him to shut it down here in a national emergency.

The passivity of the public is one result of the inundation by middle-of-the-road media and effective information deprivation.

As philosopher and political activist Noam Chomsky puts it: "The population in the United States is angry, frustrated and full of fear and irrational hatreds. And the folks not far from you on Wall Street are just doing fine. They're the ones who created the current crisis. They're the ones who were called upon to deal with it. They're coming out stronger and richer than ever. But everything's fine - as long as the population is passive." That is our problem, Bernie. Even if the people want to know, it is not that easy to find out. Let us thank the media and the US government for that.

The author is news dissector and blogger in chief at MediaChannel.Org, and has written a book, The Crime Of Our Time (Plunderthecrimeofourtime.com ) on financial crime.

The article first appeared on AlJazeera.Net.

(China Daily 03/04/2011 page9)