(EDIT: By some inexplicable thinko, I managed to misname the principal subject of this article - and in spite of looking at it repeatedly for some time have only just now realized. Outside of the vague resemblance between ‘k’ and ‘d’ and the fact that this article was dashed out fairly quickly, I can offer no real excuse for this; it is simply unfortunate that it fell into the beginning of a long period of personal infirmity and I didn’t notice earlier. MGC. AK)

1. Lies about George Soros by American right-wing pseudopopulists — the better to induct him into their spooky ethnic villain pantheon, a sort of Captain Planet in reverse — generally paint him the exact way Bernard Madoff is: an intensely communitarian, money-grubbing Jew. He is not quite literally a vampire, but he’s been involved in his share of theft and ethnic palm-greasing.

(POINT OF CLARITY: This is the major bit of this essay I felt somewhat uncomfortable about, if only because the subject of powerful Jews is so mixed up with cultural baggage that people are inevitably going to read this as endorsement of something it isn’t. So for the record, within the financier class Madoff is typical as an aspiring big-man but atypical as a Jew. Most of his colleagues - and I would guess even a majority of people funding Zionist charities in the US - are white Christians, largely evangelical protestants. The main thrust of the domestic Zionist project, in which Makoff involved himself as an aspirant capitalist aristocrat, is basically to set specific parameters on the social pressures on American Jews - and, most importantly, to assimilate them as much as possible into a specific subculture with a somewhat unrealistic, idealized relationship with Israel - a relationship that has become increasingly obsolete and replaced with what they regard as an unwelcome cynicism.)

“The Jews just aren’t a big issue in Louisiana. We keep telling David [Duke], stick to attacking the blacks. There’s no point in going after the Jews, you just piss them off and nobody here cares about them anyway.”

former Duke campaign manager, 1990

He is a sort of hypertrophied representative of the worst tendency among the worst, most well-discussed group (the reactionary upper-middle-class) in American Judaism - to live up to its worst stereotypes and fail to live up to the better one. They aren’t a people apart, but they are deeply invested in the idea of it.

Wikipedia no longer mentions it, but the headliner on charities affected by Madoff’s indictment was a glowingly-recommended charity that sent about 1800 Jewish teenagers to Israel per year and fought assimilation. (Also afflicted, in the interest of fairness, are hospitals and secular schools, which have a lot more to do with noblesse oblige than any intra-Jewish thing.)

The pat thing would, of course, be to compare it to organizations representing the same for Muslims. The problem is that people generally take this as some kind of denial of Jewish suffering or explicit endorsement of the Muslim equivalent. Not so: they suffer the same problems.

A bit later, Bennett quotes Moishe as saying, “Carry off your dead, but do not come nigh to us.” So apparently not only does Bennett speak Hebrew, he speaks King James Hebrew.
Fred Clark
Left Behind: Fire-Breathing Martians

The current perspective on Judaism is peculiarly dominated by the Ashkenazim, who make up the bulk of the Jewish population today. It is generally taken for granted that their thoughts and disputes represent a more or less complete encapsulation of the Jewish experience. In fact, the name ‘Ashkenazi’ translates loosely to ‘German’ - and like the modern Hebrew language, a little of the ancient (and presumably unifying) is intermixed heavily with a lot of the modern and divisive.

Even in intra-Ashkenazi terms, the Zionist and anti-assiminationist intellectual foundation is peculiar to a specific number of the Ashkenazim. Central to their thinking is the experience of a number of Jews who lived in central to eastern Europe, were subject to more rather than less severe religious abuse as history advanced, and faced gentile aggression aimed at herding rather than scattering them. A line between the areas in which periodic expropriation of property of all Jews everywhere was the rule and areas in which and blood libels followed by brief and rapidly dissipated orgies of violence against Jews unfortunate enough to live in Christian areas was the rule could well describe the region in which the Holocaust was an active peril.

Unfortunately, most of the Jews — intellectual or demotic — that did undergo that process did not live to tell the tale, because the sudden shifting of gears from inter-community violence to state obliteration almost achieved its desired purpose. Instead, the dominating reaction to them was from their nearest survivors: not German or Polish Jews, but people who inhabited and intermarried with natives or near-natives of countries whose worst recent memories were Captain Dreyfus, Cable Street, and Conklin. The result was an admixture of New Yorker security with Warsawer paranoia, and someone secure in their paranoia is dangerous.

Maintaining a fear of everything in the face of a fearsome life is reasonable and even admirable in comparison to the alternative; what is not reasonable is your Mamets who berate their colleagues for caring about the Arab dead. And just as the madrassas and scholarship bodies most closely associated with the CIA’s massive funding of anti-Soviet guerillas in West Asia sought to take Riyadh and Damascus and Tehran and Detroit city-boys’ strength and security into the fragile and violent world of the eternal jihadis, in a much less necessarily radical way, the programmes Madoff and many like him patronized and upheld were trying to put the fear of God and the coloreds down the block into a people for whom fear was obsolete.

Assimilation is not a good thing, but it is basically inevitable; society functions best when efforts against that assimilation result in a sort of pride and purpose which stop well short of encouraging one to cheer when anyone in particular gets bombarded on the news.

2. The fall of Madoff is delimited in painful care by the newspapers, and his literal Ponzi scheme is kept carefully separate from his less literal pyramid-building as a market-maker. After all, when you run a society that functions on bullshit, it’s important to keep the kind of bullshit that explodes away from the kind of bullshit that finds itself self-sustaining.

If you ask me to name the proudest distinction of Americans, I would choose- because it contains all the others- the fact that they were the people who created the phrase to make money. No other language or nation had ever used these words before; men had always thought of wealth as a static quantity- to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created.
Ayn Rand
‘Atlas Shrugged’

Madoff, as a maker of markets, judges how the strength of various corporations’ stock offerings are against each other with the use of a series of decently-established fiscal models. A man who had invested an enormous amount of time and energy into a literal Ponzi scheme spent a period in the Bush Administration actively managing the direction and purpose of the NASDAQ. And why not? Dow Jones has been owned by a card-carrying corporate dominionist — Rupert Murdoch, of all people — for some time. It cannot, in spite of itself, report the economic situation as rosy, but it was particularly striking to watch its carefully-maintained index stumbling and lurching into free-fall months, maybe a year, after the American economy had clearly gone off the rails. One always gets the sense that timing is crucial to these things, which makes it surprising how badly that timing gets minced by the people who are openly in charge of major elements of society. The President of Georgia launching his October surprise in August is understandable - after all, he only imported American contractor methodology and culture, not their calendars. He lacked Sam the Skinhead’s acute sense of when it would be best to find one of his generous masters to throw crumbs to. (And, of course, Sam lacked the big-time suit skills to spin his complete failure the way Sakvy-boy did: sure, every guy on the street thinks of Sammy Davis Junior whenever Obama comes up. Whatever you say, Mr. Rockwell.) And the stockbrokers and investors and all the people holding up the middle of the pyramid chose the exact wrong time to get all self-interested. This is why conspiracy theories always fall flat: anyone who feels justified in getting together with others and defrauding the public has no reason to trust those others and at least is untrustworthy enough to fuck it up himself; the history of human society is just one long string of fuck-ups, and smaller groups are nothing like immune.
Madoff presided over part of the glorious eternal housing bubble period. He lacked, as many did, the insight to understand that anything but gas could bring down the exurbs — although he has the major excuse of having been at the head of a Ponzi scheme. He was a gladhandler shoved up the ladder so far that the big shots became little people to him, a capo di tutti cappi — like every other market-maker or capitalist ringleader. His efforts to enrich those people by defrauding them were at least fairly straightforward. As easy as it is to explain Murdoch — after all, his selling us poison for our own good lines his pockets with little personal risk — there’s nothing comfortingly irrational about what he does. We can make Madoff an exception. We shouldn’t.

3. Bernard Madoff ran what seems to be literally history’s biggest Ponzi scheme. The subprime crisis, various land and infrastructure bubbles, the South Sea and tulip crazes — they all have something separating them from the pure and fine case of a man heavily involved in market-participatory legitimation muscling his way into the party with a corporation run and audited by personal associates which cooks its books to look unreasonably good to all but the most cautious investors.

—Dot-coms have redefined the fundamental principles of economics!
Hurrah! P-E ratios will never be relevant again!—
—Housing prices just keep going up and up!
Hurrah! We’ll never experience an economic downturn again!—
—Hey! I found a peanut in my pocket!
Hurrah! We’ll never go hungry again!—
Tom Tomorrow
‘The End Of History Again’

Ponzi schemes are treated as highly irrational in terms of normal market behavior. In spite of a few brave attempts by corporate knob-polishers to suggest that there was something fundamentally unmarketly about the classic pre-regulatory bubbles and boom-bust cycles, they have been reasserting themselves with a vengeance in the post-Clinton years of bipartisan deregulatory consensus. For all the economists’ talk about what rationality entails and what produces apparent irrationality, they have been allowed to ignore for far too long the most serious and dangerous abstraction in their pantheon: the removal of human hands, with their messy fingerprints and deformities, from the glorious invisible one that governs us all.

The Ponzi scheme is named after Charles Ponzi, who was at least a long-con man in an era of short cons — and like most Ponzi schemes, including Madoff’s, the typical process by which they are formed is a basically good idea being hypercapitalized and turned into an engine for producing and distributing graft. Ponzi observed that receipt coupons, which paid for the price of stamps for return mail, were subject to the rules of arbitrage - and as such, being in communication with his mother in Italy, he learned that the high rate of inflation and the relatively poor response by the government to changing values in the pricing of stamps meant that he could rake in profits of 400% or more. He banged out the rosiest picture he could — for that was SOP in those days — and started gathering investors for what seemed to be a basically viable scheme.

The problem is that the rosy picture is never as good as the actual profits — but some people are salesman enough to explain that away, and when you live in a society that encourages that salesmanship, you’re going to produce companies that should not have the profit margins to operate still finding investment money pouring in, and becoming basically devoted full-time to the procurement of more investment. This has happened to countries under the IMF’s iron heel; it has happened to various companies and industries in periods of extreme liberality with cold, hard economic fact; and it is currently happening to the housing market — and is just now bottoming its largest boats, thanks to the sterling efforts of people like Madoff.

But his other effort was deliberately fraudulent, although successful Ponzi schemes rarely start out that way. After all, America is all about finding a way to profit on other people’s mistakes and make money for nothing — how can you put a bold line between selling people stocks to a turd by telling ‘em it’s a rose and selling people stocks to nothing at all by calling it a rose? How can you put a bold line, for that matter, between that and selling them daisy stocks the same way? And Madoff had a Ponzi schemer’s dream background — well-connected in finance, extremely respectable, basically cognizant of what looked suspicious. His margins were never, by Wall Street standards, showy. (13% a year is ridiculous in any other context — Slacktivist’s Fred Clark cites this skewed belief of what constitutes necessary profit as a major reason newspapers, which function as a license to print money but can only handle doing so very slowly, have become a golden goose to be butchered by their parent companies and sold off to ideologues for scrap.) The fact that he had few down months was, in the short term, attractive — but, later, served as one of the key warning signs. But many firms basically cook their books to look closer to solvent than they are; many companies in dying sectors vainly try to look successful and dynamic and gain a remarkable amount of investment and respect in spite of being pathetic. The fact that he almost never had down months was not a warning sign because it is unusual for firms to weedle their way out of having bad months, but because it is unusual for them to succeed all the time.

Like Ponzi, Madoff quickly realized that sticking to his business model would outstrip even the most generous company’s abilities. So he hired a friend to audit his books and started trading exclusively in bullshit. (Ponzi himself, in the end, was brought down by his ever-expanding profit margins resulting in an impossible level of profit from his claimed business — he would have to have on him some six times the number of reply coupons as had been made in the last year to cover the investments made in the week of discovery alone.) However, what ultimately brought Madoff down was not what brought Ponzi down. The Italian was caught red-handed selling bullshit futures by a well-respected financial body. Madoff was a well-respected financial body, and what ultimately brought him down was his own family — his relatives, who dominated the upper echelons of the company, to whom it seems he kept as fully in the dark as his investors, but who seemed to wish to be just as willfully ignorant of what he actually did with their money.

Ultimately, profit is always a motivator for these things. But when Ponzi overextended himself and wound up depending on a stream of income that would imply he had postal receipt coupons running in half of the Solar System, he had already made so much that he wound up living in one of Massachusetts’s best houses. He had a wonderful marriage and scads of money, and he undid himself over the equivalent of a second billion. Madoff did it all for the lurve: the respect of his friends and family, the ability to be a big man and take care of his paysans without having to face the very real charges of inappropriate dealings that would charge any more honest business run primarily by people sharing grandparents.

4. They will tell you Madoff was a fluke; they already are, and there are bound to be dozens of editorials in the next few days defending the doughty little marketeers of Manhattan from his perfidy, just as there were for the various thieves who have emptied the country’s coffers in a scant month or two.

What you lookin’ at? You all a bunch of fuckin’ assholes. You know why? You don’t have the guts to be what you wanna be. You need people like me. You need people like me so you can point your fuckin’ fingers and say, “That’s the bad guy.” So… what that make you? Good? You’re not good. You just know how to hide, how to lie. Me, I don’t have that problem. Me, I always tell the truth. Even when I lie. So say good night to the bad guy! Come on. The last time you gonna see a bad guy like this again, let me tell you. Come on. Make way for the bad guy. There’s a bad guy comin’ through! Better get outta his way!
Tony Montana
Scarface

The problem is, Madoff isn’t the exception but the rule. The people running most modern corporations know jack shit about what those corporations do. It’s not even that they couldn’t assemble their products - that’s just specialization. But they’re finance-sector lifers who are rewarded regardless of success or failure, whose purpose is to sell stock, placate anyone with stock and the balls to shout about it, and keep shuffling money around until they get hired by someone richer. Madoff was only atypical for what must have been a few early days when he realized that, no matter what he threw into the mix, nothing but shit was going to come out - and when he went fully predatory. Before that, he made his money the way every American capitalist does. After that, he maintained his money the way every American capitalist does. The only other oddity? When the cracks first started to form, like any good Ponzi man, he dug into his own pocket — something that might just be the only feature of Ponzi schemes completely divorced from maintenance capitalism as usual, the willingness to use your own resources to wallpaper over the firm’s self-evident failure, sometimes even to the point of ruining yourself before anyone calls the authorities — and his family freaked out, asked him how they were going to pay their bonuses (bonuses!) if the firm couldn’t pay off its shareholders. He got caught red-handed, and he did the oddest thing anyone in American business for some time has done: he gave up the game, admitted what he had done, and cooperated with the authorities.

That, not anything else about Madoff’s strange, disgusting saga of corruption, is the truly unusual thing. If he had been a purely typical American finance-capitalist, he would have a stable of admirers and apologists treading thicker and thicker water for him until some fat embolism took him down and no one was left to profit from the lies.