The news keeps on coming in the Madoff Meltdown, and it's not getting any better. But the comments to last week's post about this mess have been great and they demand a response about the relationship between concepts like justice, compassion, t'shuvah (repentance) and kapparah (atonement). They are not mutually exclusive, even as applied to a single person and that person's wrong-doings.
My thinking about this is still evolving and, given the scope of this, I hope that yours is too. So here goes. I start by distinguishing between compassion and forgiveness - something that many commenters seem loathe to do. I wonder why? One can have the former without granting the latter.
A good example from Rabbinic literature might be how the Sages interpret what it means to love one's neighbor as one's self -- a reasonable way to think of compassion. Among the views offered is the notion that it means we should execute a convicted felon in a dignified manner. Hardly what most of us would call forgiving, but we might call it compassionate nonetheless. At least the Sages did.
The compassion about which I write is not squeamish about the law.
It simply realizes that we will need to go deeper than procedural justice (a rebalancing of the scales), if we want to really understand what happened here and make it less like to occur in the future.
From a philosophical standpoint, t'shuvah (repentence) is an ongoing process. It involves both the pursuit of kaparah (atonement) and the gaining of mekhilah (forgivness). And while accomplishing it vis a vis God is a purely internal issue, vis a vis our fellow human beings it is not. Those whom we have wronged need to be satisfied, which can be a lot more difficult than satisfying God.
Bernard Madoff may well never be able to accomplish full kaparah (atonement) from the standpoint of his investors because he probably cannot fully repay them. They however, could grant him mekhilah (forgiveness) independent of that fact. It's entirely up to them if they choose to do so, but there is no undermining of justice if they do. One is a matter of satisfying the demands of the law and the other is a decision that those who have been hurt are always free to make.
We do not have the right to demand compassion from others when dealing with wrongs that were done to them. It is theirs to either share or withhold. But neither should we hide a lack of compassion behind the claim that it would be wrong to show some because doing so dilutes justice. We simply have to make a choice.
If we just want to be right, then we can keep shouting - at Bernie Madoff and at each other. But if we want to have impact, then more than shouting is needed. That's where compassion comes in. It never subverts our commitment to justice. It does however demand that justice is done with gentleness, modesty and love.
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Author, radio and TV talk show host, and President of CLAL-The National Jewish Center for Learning and Leadership, Brad Hirschfield is the author of 
Essentially, anyone that thinks larger than ordinary/customary financial returns are possible, without someone giving up something in the process is naive. Even Mother Teresa was rewarded for her good deeds… if not a palace then by her conscience. As a matter of fact the world was her palace.
In times of need I’m willing to pay back and even with something extra as a thank you. It may be the words only. In regard the Bernard Madoff affair most of the investors at the 90% bottom of the pyramid scheme didn’t even understand they were part of the plot. They only rode along the coat tails of what they thought was their successful investments.
In the short run the top instigators will have to not only live with their conscience but also with meted punishment. I suspect if shoplifting is a crime and when exceeding a certain dollar figure becomes grand theft and is punishable by years of prison time then Madoff & company should be put away for life after being legally dispossessed of all their earthly goods.
Both Alex and Ruvain seem to also blame the big wigs who lost billions. I think Alex is especially correct to limit the joint blame to the top 10% who had the knowledge to know better.
All the big players had to know about how the mortgage market had been turned into a Ponzi scheme like Equity Funding in 1971. Of course, it was not only us Jews who should have known better. There is Bernacke and Paulson. Having cohorts in crime, however, is not a valid defense.
Can there be crime through stupidity? I would allow the defense -- for the bottom 90%. One cannot be the had of the Federal Reserve and Secretary of the Treasury can assert the defense of Stupidity.
Can Spielberg or others responsible for Jewish charities claim Stupidity? I think not. Although they will deny knowing, by the 1990's everyone knew about Equity Funding, Lincoln Savings, Enron, etc. and everyone knew that any business which reported unbroken gains was a scam. The very financial statements, on which these guardians of Jewish charities say they relied, were shouting, "Scam, Crook, Ponzi scheme" for years.
There were Jewish millionaires and billionaires around the world who knew or should have known that Madoff was running a Ponzi scam; yet they remained silent. Collectively, they can rehabilitate themselves and remove this disgrace from the Jewish Community by gathering $50 Billion to pay back everyone who lost money to Madoff. It's time for Spielberg, Zuckerman, etc. to assert some moral leadership and spearhead "making everyone whole."
Rob's inability (or unwillingness) to recognize that a crook is a crook quite apart from his religious views, or to take into account the fact that many of Madoff's victims are themselves Jewish, reflects clearly upon the prejudice which is the source of such disparaging remarks.
Please allow his views to stand as the testament they are to the limited scope of understanding and insight they exibit.
There is a vast difference between a confidence man or a robber who knows he is victiming his target with the intent that the victim will never see that money again, as compared to a man who is confident in a Ponzi scheme that can make money for his "victims" as well as for himself, although operating illegally. With all of Mr. Madoff's experience and visibility as an expert in the stock market, I gotta believe he KNEW this scheme WOULD WORK. From I read he would only take referred clients, and he KNEW he could make a profit for them, as well as for himself. And he did for years. I see this NOT as a crime of intent to steal, but rather as a crime by definition. His purpose was to give MUTUAL FINANCIAL REWARD to his victims and himself.
If it had not been for the economy tanking, something Madoff could never have predicted when he started the scheme years before (who could have predicted 9/11, followed by the Bush-Cheney deceit that led us into the invasion of Iraq, the military ineptness of Sec/Def Rumsfeld that followed for 5 years, resulting in incredibly huge financial costs on America and financial impact upon the world economy?) his Ponzi scheme would still be going on today with everyone happy with the income.
Today, instead of being happy with the INCOME the victims (and unknowing partners) are justifiablly very distressed with the OUTCOME.
As a lawyer (now retired) I do not see this as an
evil-intent crime. It is a crime by definition in the statutes. I see it as greed, but greed balanced by the desire to enrich those who invested, as they enrich him.
Stewart Perry
Dear Stewart Penny:
You do not understand the mechanics of a Ponzi scheme. They never work! No person with even a elementary understanding of finance or math would think a Poniz scheme would ever work. That is why they are illegal.
Ponzi schemes, like Madoff’s and Equity Funding’s, take the money of later investors to make the interest payments to the prior investors for the criminally fraudulent purpose of deceiving outsiders into thinking that the leader of the Ponzi scheme is making wise and profitable investments. By showing bogus investment returns, the Ponzier then garners more investors, and the Ponzier then uses this new money to make payments to the prior investors. Of course, the scheme is a fraudulent sham since the payments to the investors do not come from investments but from the funds of the newer scamees. Each time more investors are added to the Ponzi scheme, the need to raise more cash increases as there are more “older investors” who need to be paid high returns in order to keep the criminal illusion of success alive.
As the records reveal, Madoff was engaged in criminal fraud by telling investors that their money had been invested in certain securities when no such investments had been made. From the news reports, Madoff invented false "investment vehicles" showing a high rate of return. No one could ever believe that a non-existent investment would ever make money for any investor. Madoff knew for an absolute fact that he was involved in criminal fraud where his "investors" would end up losing billions of dollars. That is why he had a bogus CPA firm.
Next year you will also find out that during the reign of Gov. Arnie, Countrywide and other California mortgage companies were also running Ponzi schemes. They were selling non-existent mortgages to Wall Street, but due to their overwhelming greed, they were pocketing so much of the loot that 20% to 30% of Countrywide's alleged mortgagees were missing their first payment.
After encouraging California businesses to engage in fraudulent business practices, Gov Arnie now wonders why California is bankrupt. Gov Arnie, in contrast to Madoff, appears to have actually believed that California could cheat its way to success. But that's a story for 2009.
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