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Monday, June 29, 2009

Sympathy for the Devil

Bernard Madoff's 150-year prison sentence puts a period at the end of Madoff's life, if not the case itself, or the fates of his victims. The government was out to make an example of Madoff, and in the wake of Wall Street's collapse, he made a good fit for the role of goat: there are plenty of politicians and CEOs whose decisions did deeper and more wide-spread damage, but Madoff was the one who was personally responsible for people losing--or rather, discovering at the worst possible moment that they'd lost--their life savings, and he was the one who could be seen on the TV news trying to navigate streets full of angry people hissing and spitting at him and shoving him. "Don't shove me," he says on one piece of tape, after someone has lunged at him, and you can see right there that he had no actual sense of just how much trouble he was in, or at least that he had no idea of how to spin it. A more cunning con man would have clutched his chest and crumpled to the sidewalk, just to see if a show of pitiable frailty would get him anything.

I'm not going to argue that Madoff deserved more leniency than he got (though I might be up for an argument about whether some of the Jeffrey Skillings and Bernard Ebbers of this world might actually have gotten off a little light. But ever since the Madoff story broke, I have been a little surprised at the level of venom that's been directed at the old guy's head. The judge who sentenced Madoff described his crimes as "extraordinarily evil", and he was just dotting the i; since the story broke last December, former investors, federal prosecutors, and assorted journalists had been describing Madoff in terms out of Paradise Lost. It wasn't long before the forces that shape conventional wisdom routinely described him as a sociopath or a psychopathic personality, usually with the implication that he had set out to deliberately ruin hundreds of lives. And early reports from the trial are making it sound as if he were insincere and, that dreaded word, "emotionless" in court, which is supposed to prove that he has a heart of stone, that it could also be taken as a description of a man in deep shock who's so ashamed to be where he is, in full view of people he'd wronged, that he's concentrating on trying to astrally project himself to some distant happy place.

Madoff could have been more co-operative with the prosecutors, who think he still has money stashed away someplace and is lying about how long his Ponzi scheme was going on. (Madoff says that he started living off his clients' funds, instead of investing them, in 1991; others suspect that he went off the reservation sometime in the 1980s, if not before then.) But it struck me as weird the first time I heard this little putz classified as a diabolical entity, and it still does. Something about it doesn't even fit his specific pattern of corruption. I'm not sure that Ponzi schemes attract evil schemers who view their victims as saps who deserve the worst that can happen to them. I think they're more likely to attract people like, well, me--that is, somebody who's been known to juggle the bills during a rough patch and take a deep breath and hope that the electric company just doesn't get around to depositing that check until the direct deposit comes into the account. I think that's probably true in the case of someone like Madoff, who, for at least a few years at the start there, was conducting a legitimate business and playing by the rules.

Part of what's striking about Madoff, and about the gap between what he is and the inflated version of him that the media has created so that he can stand in for all the financial sins of the past, what, thirty-something years, is that he's such a small-timer. Madoff kept his fraud going by not promising too much; he told investors that he wasn't going to make them insanely rich over night, but he assured them that, if they stuck with him, the modest gains on their returns would be a steady, uninterrupted flow. Something small but stable, one little thing in this world that one could depend upon. He also played hard to get, taking only those potential clients who were directed his way and scolding anyone who talked about his miraculous results out of school. Those who see Madoff as a determined snake will of course point out that this is a proven seduction technique. But I have a hunch that he really did sweat a little whenever a new sucker was brought on board. He must have lived in dread that the next person who became privy to his services might be the one to get suspicious and blow the doors open.

Why didn't anybody get suspicious? There's a telling moment in the Frontline documentary "The Madoff Affair" when Michael Bienes, an accountant who worked for Madoff for years, starting when they both in their early thirties, until 1992, and who continued to invest with him, is asked if he didn't ever notice that the steady returns Madoff achieved were statistically impossible. Yes, he says, it did seem funny to him after a while, and he and his wife were both troubled by it, but then his wife came up with an explanation that made sense to both of them, and after that they both accepted Madoff's results without question. And what was that golden answer? "God wanted us to have this" money. That's pretty much the American financial culture from Reagan to 2008 in a nutshell.

In the immortal words of Eric Burden: oh, lord, please don't let me be misunderstood. I'm not trying to suggest that the damage Madoff inflicted hasn't earned him a lifelong residence at the crowbar motel, and I am definitely not trying to say that his clients, who should have been more curious and skeptical, deserved to be ruined for having made the mistake of trusting him. But it's just a little surreal to see this hapless bastard denounced, again and again, in terms befitting a sadistic agent of chaos who set out to deliberately wreak havoc on society at large and his friends' lives. My gut feeling is that Madoff cared about his investors and that he probably first went wrong trying to dig himself out of a jam. He may have come up short and thought that, just this once, he could shift things around to cover the hole before he recovered, and nobody would be the wiser. And, if my guess is right, when he discovered that he was getting in deeper and deeper and nobody was really noticing, he must have gone a little nuts, but in a way that matched up all too well with the attitudes being taken by a lot of people were being celebrated in financial circles for their bold new thinking.

Madoff was a practitioner of a classic financial shell game, but in his operating as if the money wasn't real and that everything would just work out if he had confidence in the markets, he was a creature of his time and a spiritual brother to everyone from the junk bond kings and insider trading scumbags of the '80s to Dick Cheney proclaiming that "Reagan proved that deficits don't matter" to Alan Greenspan spending his credibility on support for Bush's tax cuts, right up to Lehman Brothers' CEO Dick Fuld's serene confidence that some deus ex machina would appear in the nick of time to tug his drowning company to shore. Just as there's a part of him that I'm sure is truly repentant, I bet there's also a part that feels that things would have somehow turned out all right if only a bunch of other idiots hadn't wrecked the economy and caused his contented clients to start asking for some of their money. (I wonder how many of his clients died at some point between they began doing business with him and last December's revelations, and who went to their reward still grateful to him, still thinking he was a genius. Does he take some comfort from that?) Compared to a lot of people, he was more a symptom of what went wrong with American financial thinking in the last few decades than a cause of it, but he's the one who got caught doing something demonstrably illegal. As a wise man once said, it's what's not illegal that's often the real scandal.

While I'm on the subject of demonizing and forgiving public figures, Mark Sanford's weepy, dithering press conference last week inspired a number of thoughtful pieces calling for greater sympathy and understanding to be extended to the flailing sod; some of them made the point that, by painting a vivid picture of how much the object of his extramarital affections means to him, Sanford broke with a contemptible tradition among adulterous politicians, who have plastered their cast-off lovers with such endearing labels as "that woman" and cruelly thrown them to the curb. I respect the thinking behind such sentiments without being entirely convinced that Sanford's behavior wasn't both feckless and cruel to his wife. It reminded me a little of Steve Martin saying that, during the Clinton impeachment mess, he'd heard some angry bloviator on TV saying that Bill Clinton needed to apologize to Monica Lewinsky, and Martin's reaction was to think, "How do you know that he hasn't?" Contrary to the new media wisdom that nothing happens unless it's been broadcast, some communication between human beings needs to be done off-camera for it to mean anything at all, and there has to be a middle ground between churlishly treating a lover as if she had never meant anything to you other than a career obstacle and publicly improvising love odes to the path not taken in a way that can't help but cause pain to your spouse.

I didn't rush to say any of this last week because I had some faint, ill-informed sense that Sanford, however childish and deranged he might be, was still a reasonably decent human being who didn't need people further piling on as his life turned to ashes. That was before Sanford, who a decade ago both voted for Clinton's impeachment and approved of Bob Livingston's resignation on grounds of moral turpitude, dismissed calls for his resignation while comparing himself to King David and talking the scandal up as a learning experience from which he hopes to emerge as a better governor. The detached, self-celebratory quality of the speech matched up all too well with last week's press conference, where what looked to some like a man stumbling through a heartfelt, soul-searching moment looked to the rest of us like a goofball trying to get us to share in how thrilling it was to cast himself in an episode of Fantasy Island. (And if I may be allowed a private moment of my own here, the starry-eyed weasel did no favors for that select group for which I am the poster boy, that of fantastically unattractive men who very much enjoy the company of women and whose fervent desire to have more women friends are constantly running up against society's widespread belief that platonic friendship between women and even the homeliest men is an impossibility because of her unholy and uncontainable desires. If this Gomer Pyle can't keep his hands off a woman to whom he's offered religious counsel in an effort to try to help save her marriage, how much benefit of the doubt can the rest of us Neanderthals expect? I can also see this story being of little use to tempestuously hot Latin women who've been trying to convince the neighbors that it's safe to let them babysit.) He stands revealed as both a world-class hypocrite and a fantasist whose feet rarely touch earth. He was also, until a week ago, the latest model for what many Republicans said they'd most like for the new face of their party.


Michael said...

I have to admit-I was a "curse Madoff" guy, too. But as usual, you made me think about it in a new way.

Vanya said...

Surely much of the bile towards Madoff derives from the fact that he robbed his "own people." He has robbed Jewish charities, Jewish hospitals and even Eli Wiesel. That, coupled with the fact that his crimes and behavior are reminiscent of some stereotype of boorish Uncle Moishe from the old country, makes him an incredible embarrassment to successful Jewish leaders in the media and financial world. Are his crimes 1/100th as heinous as Dick Cheney's or even Hank Paulson's? Certainly not.