Freedom Feens Blog


Bernie Madoff, the official story.


But this long run is a misleading guide to current affairs. In the long run we are all dead. John Maynard Keynes. A Tract on Monetary Reform (1923), Ch. 3

Last week ABC aired an interesting program. Kind of a movie, kind of a miniseries. With commercials it was four hours long but I think that it was good enough to get past my current intifada on excessively long movies.

The 2008 financial crisis shook this country to its core. The decidedly unsustainable and insane financial system that has driven this country and most of the developed world for almost a century since a secret meetings of a bunch of insanely powerful and rich guys at Jekyll Island plotted to get even more wealth and power was partially revealed as what it was. A scam, a really, really big scam that billions of people depend on. But a scam nonetheless.

In the ensuing deconstruction hundreds of banks folded. Including some very big ones like Wachovia, and even old, stalwart companies like Bear Sterns and Lehman Brothers went down in flames. The financial turbulence became so bad that the federal government stepped in and did the largest bail out in the history of the world. Rumors swirl that if they hadn’t given the remaining largest banks and other companies in the financial world this insane payout that it would result in rioting in the streets and perhaps a complete collapse of western civilization.

So the scam that is our current financial system continues into the foreseeable future. Until a future date, breathlessly waited for by legions of survivalists, doomsayers, 99%ers and whatnot. Where the federal government will not be able to stave off total collapse and those who are prepared will wait out ensuing Armageddon with their stores of food, ammunition, guns and books while the unwashed masses resort to cannibalism in order to stay alive.

Before we get down to the serious business of eating each other’s eyes we still have many stories to tell and a particularly interesting one is that of Bernard Madoff, his family and his elaborate financial scam. The aforementioned unwashed masses may have mostly forgotten about Lehman Brothers and Bear Sterns but Madoff remained in the public consciousness for quite some time because of the ensuing trial and his incarceration. ABC has taken their coverage of his downfall and fleshed it out into a very detailed biographical picture with Richard Dreyfus as the man himself with a very skilled supporting cast backing him up.

When it came on I freely admit that I didn’t want to like this movie. ABC is owned by the Disney Conglomerate and I detest what Disney and other big film houses do to historical stories. Changing events to the point where they become unrecognizable to the actual event. Yet, because said story is presented as a film or TV show that people will actually go and see as opposed to reading books or doing their own research. The Disney version of the story becomes the official narrative. Even if it is little more than propaganda. I was fully expecting the official story presented officially and this is probably what you get.

That said, I can understand that relatively few people have the resources, interest, or the time to go off and find out what happened in every historical event. As for the film, it presents itself as a fairly detailed and honest take of the events in question. Madoff is presented as an interesting and deeply flawed character. A con man who bit off more than he could chew. To me where things get very interesting is in the events leading up to his confession and ensuing fall. As insane and utterly untenable as his Ponzi Scheme was it may have continued until his death had it not been for the 2008 financial crisis. In the film, Madoff and his minions that were in on the scam talk about how they wanted to come clean to their clients that what was happening was a scheme. Not some kind of financial wizardry. That their money was “safe”, that there was no need to panic and cash out.

I found the subplot of Harry Markopolos going after Madoff particularly entertaining and sad. After having done research with public sourced information, he came to the conclusion that Madoff was running a scheme and tried to take him down. Only to fail over and over again like Wiley Coyote trying to get the Roadrunner. I think this comparison is particularly apt because Markopolos used extremely complicated financial jargon and mathematical information to go after Bernie and was foiled. Over and over again by the fact that so few people understood what he was saying. I never would have imagined that an old cartoon about a coyote who uses elaborate traps to take down a fast, wacky bird could blend so well with a story about financial fraud on a grand scale.

The story is engrossing, the acting is superb and the pacing is amazingly well done for a story about such a dry subject. That we already know the ending to. This films specific take on the ending of this story is mindbogglingly good. I rate it a 5/5 and highly recommend having a look at it wherever it might be available if you have some hours to spare in your busy day. But I would like to share two thoughts about mr Madoff. One, he is going to be in prison until the day he dies barring some bizarre act of legal wizardry or the aforementioned complete collapse of western civilization. All evidence I have seen is that he is relatively happy in prison. He is much respected by other prisoners and is not under nearly as much stress as he was when he was fleecing millionaires. But I can’t help but feel that he is happy to be in the clink mainly because he fleeced a large number of very rich and powerful people who likely want vengeance and if he were to ever get out of prison. Something tells me he might not last long on the outside. Ironically, in prison he is surrounded by people that he hasn’t pissed off and/or fleeced.

My second point is that it doesn’t require all that much research to conclude that our federal reserve driven Keynesian financial system is not sustainable over the long term. The quote by Keynes that I started this article with, infamous among Austrian Economists suggests that even he was aware of this. Those who created this system are long dead, but we are still here and someday there is going to be a reckoning for their crimes. As to what that reckoning will look like I do not know, but I hope it doesn’t involve too much cannibalism. But we all need to be aware that the damage Madoff and his surprisingly small number of minions did, is just a symptom of a much bigger problem.

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