Sound Economy with Jon Talton
Veteran financial journalist Jon Talton blogs daily on the most important economic news, trends and issues involving Seattle and the Northwest. Read his regular column every other Sunday in the Seattle Times.
Blog Home |
E-mail Jon |
Subscribe | Twitter feed |
Read Jon's bi-weekly columns
Comments (0)
E-mail article
Print view
Share
Madoff is only the tip of the dirty iceberg
Posted by Jon Talton
Top of the News: I was never a personal finance columnist because there are really only two personal finance stories to tell: 1) Don't be greedy and 2) Don't be stupid. Investors with Bernie Madoff were both, and his long prison term won't get their money back.
Really, would you give your life savings to a guy whose last name is pronounced "made off"?
The more interesting stories fall into two categories. First: Who made out? The money went somewhere, and even the most sybaritic con man could not burn through at least $13 billion on his own, even if he super-sized every order at Per Se. Only $1.2 billion has been recovered.
As a Ponzi scheme, it paid out "earnings" to somebody. Or was it like the AIG scheme, with self-dealing among big financial outfits. This is a story I haven't seen.
The second Madoff issue concerns his ability to run the Ponzi scheme for years, despite several red flags. Yet the Bush, and perhaps Clinton, Securities and Exchange Commissions were asleep. And deliberately so -- these were the years of attending the Church of the Free Market. "It will police itself," we were told.
The inattention was particularly inexcusable after the massive frauds in the early 2000s. Remember Enron? Sarbanes-Oxley was supposed to be the Vic Mackey of securities police. It turned out to be "The Commish" -- on the take, hopelessly compromised by both a political ideology hostile to regulation, a bubble-making Fed and the deep compromises our elites have made with financial criminality.
Meanwhile, the engineers of the far more costly financial crash that revealed Bernie Madoff are free, rich and in many cases still running their companies. It's like a caper movie where all the George Clooney types get away, leaving Madoff (played by Danny DeVito or Joe Pesci) to take the fall.
Meanwhile, as a direct result of these policies and huge losses, more Americans will have to forgo retirement -- and what jobs they can get will pay nothing like they had earned in another America, offer fewer benefits and no pensions. No wonder Americans would rather immerse themselves in the trivialities of the passing of an eccentric song-and-dance man than confront the huge and tragic challenges facing us.
Today's Econ Haiku:
Summer hiking time.
What about that big mountain
Of toxic assets?
Check out the winner of last week's Econ Haiku contest!
Copyright © 2009 The Seattle Times Company
Nov 13, 09 - 9:35 AM
The high economic cost of dropouts and inadequate education
Nov 12, 09 - 10:05 AM
A jobs summit? President Hoover, call your office. Plus, a debate over whether capitalism has failed
Nov 11, 09 - 10:15 AM
Why is this recession different, and other big reset questions
Nov 10, 09 - 11:28 AM
Welcome to the great reset, Mayor-elect McGinn
Nov 9, 09 - 10:00 AM
Kraft wants to gobble up Cadbury: Sweet for Wall Street, not Main Street


- Homeless man, 46, arrested in Greenwood arsons
- KVI talk radio host off the air as of Thursday
- Steve Kelley | ESPN's Bill Simmons gets us: He hates Clay Bennett, too
- Police investigate videotaped arrest
- Seattle U. Men's Hoops | Big recruit goes from Huskies to Redhawks
- Mariners sign Jack Wilson to 2-year contract
- Razor found in muffin an accident, 'mortified' baker says
- Suspect's family shaken by slaying of police officer
- Mountlake Terrace woman reports razor in muffin
- Man says he will protest city's gun ban by carrying gun into community center
- Police investigate videotaped arrest
632 - Seattle man to pack a pistol into community center to protest mayor's ban
254 - GOP clueless as families struggle with health care
179 - Light rail to airport to begin Dec. 19
178 - KVI talk radio host off the air as of Thursday
142 - Mariners sign Jack Wilson to 2-year contract
135 - Wright State game thread
97 - Person of interest in custody in connection with Greenwood arsons
96 - Rang says Locker not ready for NFL
85 - Licata looks at boosting traffic-ticket revenue
74
- Light rail to airport to begin Dec. 19
- Homeless man, 46, arrested in Greenwood arsons
- Ivar's undersea billboards a hoax devised as marketing ploy
- Steve Kelley | ESPN's Bill Simmons gets us: He hates Clay Bennett, too
- Light rail to airport to begin Dec. 19
- KVI talk radio host off the air as of Thursday
- Washington in race for federal education funds
- An 802.11n upgrade could make a big difference
- Police investigate videotaped arrest
- Goodwill's Glitter Sale is Nov. 14-15


