We are all effected when 50 billion dollars vanishes from the economy in an instant as it did with the unraveling of Bernard Madoff’s gigantic Ponzi scheme which masqueraded as a legitimate investment. Trickledown economics may not work to our benefit, but it sure works in reverse.
We all feel the ramifications of this kind of thing. From the Billionaires who suddenly discover that they are “only” millionaires to the doormen who work their buildings. But the strongest shock waves right now, beyond the investors at least, are being felt by the philanthropies that relied on their generosity and are discovering that probably billions of pledged dollars are simply not there.
From Yeshiva University and Steven Spielberg’s Wunderkinder Foundation, whose loses top one hundred million dollars, to Elie Wiesel’s foundation or the endowment of my own kid’s school, the Madoff meltdown challenges blue chip names in Jewish charities. Among the questions that people are asking themselves is, “how did this happen?” “How did we get into this mess?” “Why did Madoff do this to us?”
The easy answer to all of these questions is a simple one word answer – greed. And like most easy answers to complex issues, the answer is certainly insufficient and probably plain wrong. I appreciate how we are tempted to feast on righteous indignation as a replacement for the financial support which may no longer be forthcoming. But that kind of righteous indignation is nothing more than spiritual junk food. It provides little sustenance for the long-haul even if it tastes great going down.
So what do we need?
Along with a real regimen of justice for Mr. Madoff and anyone else complicit in his scheme, I suggest that we need to discover genuine compassion for all those involved – even Bernard Madoff. Why? Because, from Madoff to the charitable organizations that relied on the wealth he supposedly created, and their leadership who entrusted their money to him, I don’t think anyone was motivated by greed.
In fact, I think that Madoff was motivated, at least initially by shame. And the only way to break a cycle of shame it to meet the ashamed with enough compassion that they can actually bear the responsibility that is theirs to accept. And for Bernie Madoff, that means imagining for ourselves why he really did this as the first step in figuring out what it means and how best to respond.
I doubt that Madoff started out decades ago with a complex plan to defraud major banks and a long list of wealthy Jews. More likely, Bernard Madoff began his career by successfully investing their money and regularly returning solid profits with nary a single bump in the investment road. But over time, those returns were not sustainable, and rather than live with the reality that he was not an omniscient investment god, and helping his old clients accept some down quarters, he started taking money from new investors to pay off the old ones — the classic Ponzi scheme. As the story unfolds, I am certain that this is the picture that will emerge.
Likewise, all of the philanthropists who “invested” with Madoff had one desire: to increase their wealth and their ability to use it in meeting human needs from education to cancer care. Could they have done better due diligence? Should they have researched more fully? Of course. But when we are busy doing good things, it’s easy to overlook the details and imagine that it will all workout. After all we tell ourselves, “it’s all for a good cause.”
It’s really just a modern version of the ancient rabbinic claim that individuals on a journey to do a good deed or perform a sacred task cannot be harmed. Cleary the evidence proves otherwise, but we keep repeating it because we hope that it would be true – it’s such a compelling idea.
So without being naïve about the real challenges created by the Madoff meltdown, I hope that even those of us directly affected by it, people whose good work will be curtailed, can meet this moment with the compassion that might carry us through it. In the compassion we seek, which is more than a weekly offered sentiment of “it’s okay”, we will also find the ability to strengthen the relationships and build the honesty which create the transparency which makes such schemes impossible to sustain for so many years.
Sermons about greed are not likely to prevent a repeat performance of this mess, but that kind of compassion, honesty and transparency are. And which is better, a few moments of sacred rage now, or preventing this from happening again for a very long time?
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 
posted December 16, 2008 at 8:16 pm
What’s wrong with a little righteous indignation here? It seems well-placed and well deserved. What reaction do you feel is more appropriate? Anger? Disgust? Rending of clothes due to such huge losses?
The man is a filthy thief and a shanda fur der goyim as well as for us.
You can bet your sweet bippy there will be non-Jews pointing the finger at him and at us and spouting religious epithets and slurs while they do.
posted December 17, 2008 at 9:14 am
You’re right eastcoastlady. A lot of people invested with Madoff and trusted him because he was Jewish and donated money to Jewish charities. Madoff would have drawn much more scrutiny if his name was Peter Lynch, Chris Gardner or Ed O’Shaunessy. The lessons here are never to trust anyone completely, read the reports produced by you investment companies (Madoff had incomplete reports that were wildly fabricated) and spread your investments over several banks, brokers, mutual funds, etc.
posted December 17, 2008 at 9:25 am
Thanks, Anton. The more I read about this, the worse it gets.
I was sent a link this morning and the details it gives show that the word “travesty” certainly applies here.
Washington Post Article
posted December 17, 2008 at 9:26 am
clearly, the post above did not work. Try this.
posted December 17, 2008 at 10:43 am
The dictum that “those on their way to do a good deed are not harmed” has a very important caveat. Where “damage is likely” (“Shechiach Hezekah”) this dictum does NOT automatically apply. In the financial world, there is certainly “financial danger” so one can not claim that the philanthropies acted on that basis.
A far better “jutification” is that Madoff had [suppoedly] been “cleared” by rgulatory agencies whose job is to detect such fraudulent behavior.
The pro-business atmosphere that predates th current Bush adminstration (but was certianly fanned by Bush & Co. who felt that the markt can do no wrong) dulled and vitiated those who are supposed to protect the public. For that, there can be absolutely no excuse. There *may* be an excuse fo Madoff’s actions. And, in that respect, this collapse is simply yt another instance of the SAME behavior that characterized the institutions that made unsupportable mortgage arrangements and then “packged” them in toxic deals. There is likely to be an excuse for at least some of those who invested with him. But I think that we should REALLY heap anger on those expected to PROTECT us and — instead — allow this sort of behavior to take root and flourish.
posted December 17, 2008 at 11:02 am
Dear Rabbi, With all due respect this is nothing more than naked greed. Mr Madoff realized he did not ha ve the skills to make an honest living so he set out to make a dishonest living. Fortunately for me I lost no money in this but that really does not make me feel any better. I do feel at least some of the pain that those directly affected are feeling. I would not be surprised to see some people take their own lives because they are destitute and have no way of surviving without the assets they truned over to this common garden variety thief. I think the laws of the US should be amended to provide for the death penaly for those who cause the death of another due to a fraud. Only then will Mr Madoff get what he deserves.
posted December 17, 2008 at 11:26 am
BM-gotta love the initials-how appropriate! sure did start out long ago to defraud-Jews because many Jews trust a Jew- as many a Christian has sadly been bilked in some way by somebody who they thought was a true Christian-MY OWN WOULD NEVER HURT ME!!!! syndrome which con men and women use full advantage of! In reality he could not have cared less who he defrauded as long as the money was good! The better to defraud someone who might be reluctant to call down the govt and show that another one of “them” did something dishonest-knowing how ingrained it is in the Jewish psyche that what one Jew is accused of we all are.
It was sneaky, clever, and shows the man is a real goniff and may he get everything he so richly deserves. He should only go to jail and be somebodys “best friend” who will protect him. That should do it!
hugs
Laura
posted December 17, 2008 at 11:29 am
Your name
Stop already, what is your life about but blame. Bush was not in office when this all began, He was not in office nore in any position of power as this man’s scam expanded.
It might be better to ask yourself what causes you to judge and what is your payoff for making this about Bush?
posted December 17, 2008 at 1:16 pm
This is a horrific Chillul HaShem. I can think of few averos worse that stealing from charities. The ramifications are disastrous. In Judaism, forgiveness must be earned. Compassion without justice contradicts Jewish ideology.
posted December 17, 2008 at 1:44 pm
The fact that the regulatory agencies acted somewhat as enablers becuase they could not or did not act on information does not make Madoff any less of a filthy thief.
Not buying that Madoff is any less to blame because of this.
posted December 17, 2008 at 1:48 pm
For 20 years he lived like king; giving away money that he stole from others.
He received awards, and homage that he earned by stealing money from gullible, trusting,and perhaps naive Jews who foolishly believed that a Jew would not lie or cheat another Jew. Well, so much for that fantasy.
Its hard to believe that the good that he may have done was for altruistic purposes, as opposed to chumming the waters for more Jews to defraud through alleged good works that were well publicized.
His bail is $10 million, which he can easily make. A condition of bail is house arrest. Big deal. He has 5 or 6 houses in several states, and can travel between them at will. He is 70 years now. How much time could he possibly serve?? How to punish a man who lived so well for so long on the backs of others. The case could drag on for a few years, while he helps unravel the puzzle in exchange for leniency. Then if he goes to jail for a few years before he dies in prison, is the score even?? I’d say on balance, he wins. THe laws of karma, however are a different thing. We shall see, however perhaps, not in this lifetime.
posted December 17, 2008 at 2:18 pm
Bernard Madoff is nothing special. As George CS Benson pointed out in his book, Amoral America (1975, 1982), America is far more corrupt than Europe. For decades we have tolerated a level of corruption which is unacceptable in the rest of the industrialize world. Benson, who was shocked by Equity Funding and Watergate, was a Goldwater Republican who believed that a substandard educational system had much to due with America’s corruption and incompetence.
For decades, business has pushed the motto: “It is better to cheat than to compete.” That was the thrust behind the de-regulation of business. Gov. Arnie bankrupted the State of California by helping decimate its Unfair Competition Law. If UCL had not been virtually destroyed, then consumers could have stopped Countrywide and Indymac Bank years ago and the entire meltdown of the mortgage industry would not have occurred. With an effective UCL, corrupt businesses ran a muck in California and crooked businesses drive out the honest which depresses the entire economy which lowers the tax base and the lower tax revenue bankrupts the state.
We now learn that Gov. Arnie was illegally spending the money that was supposed to be put aside to pay Worker Compensation Claims. As a result, that fund is also bankrupt. Whatever is done to Madoff should be done to Governator also.
What about the corrupt judges who did learn about Countrywide’s systematic pattern of fraudulent loans during litigation involving Countrywide and chose to cover up for Countrywide? ONe could research the situation with Dr. Zernick and Judge Connor in L.A. Superior Court in 2006. Had Countrywide been stopped then, there would have been a crisis, but not of worldwide proportions.
People do not realize that we live in a social, political, economic, and judicial morass of Corruption and Incompetence — and it is not going to end soon of ever.
Bernard Madoff is only a high peak in a vast mountain range of corruption and incompetence.
posted December 17, 2008 at 2:46 pm
Ooops, sorry errata: It was supposed to be:
“Without* an effective UCL, corrupt businesses ran a muck in California . . . .”
posted December 17, 2008 at 3:31 pm
I forgive
All human weaknesses
And own up to myself
Falling pray to any
Interest-bearing scheme.
After all what are banks?
They are the greatest Peter pay Paul schemes before they even had a name.
YahWeH will always have a new carrot… rotflmao
posted December 17, 2008 at 4:30 pm
Good and bad people are found everywhere. The fact that Mr.Madoff ended up being one of the most prolific greedy bastards who ever lived and primarially hurt Jews who trusted his reputation just makes it sad. When one becomes a money pusher and a manager of huge repositories of money, I can understand how “just a little” cheating might seem interesting. I can also understand why it can grow, like a cancer, and become deadly and unstoppable. However, it does not excuse. You might as well say that someone who murdered and found the taste of blood interesting can be excused for turning into a serial killer. Mr. Madoff should not be excused. He deserves punnishment by law, even if that means spending the rest of his life in jail.
There is mercy. ALSO, THERE IS JUSTICE. Unfortunately, those worth charities who have lost the clothes off their backs cannot be paid back or recoup their losses. If they can gain nop justice, why should
My. Madoff be shown mercy?
Lucy Silver
posted December 17, 2008 at 10:11 pm
If the rich could hire other people to die for them, the Poor could make a wonderful living. ~~~ Yiddish Proverb… After all the costs were subtracted, there was profit left over, and the family I was born into lived well on that small percentage of the monies invested in producing little girls’ dresses. Madoff made nothing. That is almost as big a shame as charities putting the money they are entrusted with at risk to make lotsa money, or universities trying to fatten their endowments (gifts) through gambles. I worked in the stock market once, for portfolio managers, and they charged a high fee but had to promise 15 percent growth in their clients’ portfolios per year in 1973. There was no greed here. People were just trying to avoid attrition of their money. Quite a number of Madoff’s investors were looking for the highest possible return, not safety of principal. That principal could have provided scholarships and labs at Yeshiva U. or food and clothing for the poor children of Israel. The whole business of betting and gambling is barren. Madoff is a parasite and so are those money managers who bought into his vision, but he may have been more enterprising.
posted December 19, 2008 at 8:35 pm
I see this core issue throughout Israel. No, its not anti semitic, but it is a cancer, where people are conditioned to believe they are flaw free, gifted, choosen…. and then encounter the reality that they are just as subject to decision making frailties as the rest of the tribes. I have lost count of the number of israeli business owners who when confronted with failure, lie and attempt to cover up their mistakes. It, again, is not an israeli thing, their brothers further down on the penninsula do the same. Perhaps it something in the Shamals that blow through the region? who knows…. one thing is for sure though, *they* do not know better than anyone else. Beware entrusting to *anyone* claiming same.
Salami alikum shalom peace be unto the future.