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So I just finished watching a whole news show about Bernie Madoff, the guy who allegedly  ripped off  investors to the tune of $50billion. He ran a Ponzi scheme for years, paying old investors with new investors’ money. In the news story they showed an artist who had invested with Madoff and apparently lost all her savings.

I asked myself, “Self, what is the difference between her and someone else who had invested in Bear Sterns, Washington Mutual, Fannie Mae, or Countrywide?” They all lost their money. Why are Bernie Madoff’’s investors so special? Just like these other companies, they had made money for years. Just like investors in other investments, they lost money. There really is no difference. So Bernie Madoff’s investors were lied to. Weren’t the investors in those other companies lied to as well, or at least mislead as to the financial strengths of the investments? Would anyone have bought stock in any of those companies if they knew that they were so close to failure. Madoff paid his investors for years. Many people made money with him. He could have never garnered the reputation he did, had he not.

The poor economy caused the failure of Madoff and legitimate companies alike. Too many investors drew on their money all at once causing massive liquidity problems. Some companies folded, others get bailout money from the taxpayer and Madoff gets arrested. I am not defending his actions, but I do fear that he will become the scapegoat of this whole debacle like Gordon Gecko was for the greed of the eighties.

Take a closer look and I think you may find the line between Bernie Madoff and any other corporate failure slightly more blurred. He blatantly lied and they may have done it in a more subtle manner.

Let’s not let the sugar coating fool us anymore. Politicians have been using it for years. Corporations have too. Let’s all be smarter this time and punish Bernie Madoff, if he has done something wrong, but also punish every politician who has urged lenders to lend to less than lendable borrowers. Punish corporate leaders who urged unscrupulous lending activities, unscrupulous investments, and unscrupulous disclosures to investors. Let’s also let greedy and speculative homeowners be punsihed too by losing their homes. There are few innocent parties.

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