I've been listening to them for quite a while now, posting their sad stories on The Daily Beast and complaining to the soft-eyed CNBC reporters with the whiffle-ball questions. At first I thought -- yikes! That would be horrific: losing your retirement, or your parents' deed to the retirement condo. The equivalent for me would be less impressive but no less traumatic. In fact a number of my customers bailed on me last fall for financial reasons and I felt the economic slowdown in a very visceral way. So that's bad. And I thought ... Madoff fed into a certain kind of fantasy. We all feel we should have known about the Dot com bubble. I remember wondering, in a lucid moment, whether Jeff Bezos was a billi0naire ...or broke. And how could he tell the difference? But I didn't give it much thought. AOL buys Time Warner? The question slipped through my mind -- shouldn't that be the other way around?
Or the housing bubble -- in retrospect that's an easy one to call. So what if there was someone just a little smarter than you, someone who actually did see the bad stuff coming, and was shrewd enough to navigate the market so you didn't crash with everyone else when the booms collapsed? That's the Madoff mythology: he was that guy. You were almost that guy -- you saw it all coming (afterward). But you also saw Mine That Bird winning the Derby --afterward. And the only people who know the winner of a race horse beforehand are the ones who fixed it.
So, Okay, I said... they fell for the fantasy.
But the fact is,the guy was giving them ten to fifteen percent returns year in and year out (even when the year was 1989), and no one is smart enough to do that. You can't spin it and you can't evade it.
They had to know it. They didn't want to admit it, they didn't want to deal with it, they didn't want to think about it. But they had to know it. And they were making a lot of money in those years and decades. Joseph Heller writes in his great, underrated second novel, Something Happened, "I know so many things I'm afraid to find out."
They may have been afraid to find out -- but they knew, and they were complicit. To paint themselves as innocent victims is disingenuous at best and mendacious at worst. They were spending other people's money. They were weak and they were greedy. Now they're paying the price.It's not pretty and and it's not fun. But justice rarely is. It can be poetic though.
And this cruel farce is worthy of Jonathan Swift.