Off with his head
• Posted Sat, 12/20/2008 at 4:30 am •The whole Madoff scandal is absolutely incredible. How can one man steal $50 billion? What does that even mean? Did he spend it all? Did he stash it in a Swiss bank? Did he just have a big hundred-thousand-dollar-bill bonfire?
Unfortunately this scandal is emblematic of the entire go-go decade, as Paul Krugman so eloquently put it. We’ve been living in a fantasy world where unrealistic returns are viewed as normal and no questions are asked about just where all this magic money is coming from. How exactly does the SEC, not to mention all the other regulatory authorities that Madoff evaded, miss such an incredibly ridiculously enormous fraud?
If Madoff is (almost certainly) convicted of the crimes he committed, what will be his punishment? Should he go to a white-collar jail and live out the rest of his life in relative comfort? How exactly does that work anyway? What exactly is the “harshest” punishment that should be meted out in such situations? We commonly hold the death penalty to be the harshest punishment available; does it fit in this situation? Is it commensurate with the crime, or inappropriate because the crime wasn’t violent?
I’m still on the fence about whether the death penalty itself is humane or not. I have my reservations about whether we as imperfect fallible people have the right to judge whether someone else lives or dies. But I do believe that, assuming that the death penalty is acceptable, there should be no question that someone like Madoff, if proven guilty, should receive it. He has caused almost incomprehensible harm to such a vast number of people that we will be picking up the pieces for years if not decades. Maybe no one has died directly at his hands, but the number of lives that he’s ruined, the number of organizations that are now bankrupt because of his actions, the immeasurable wealth squandered because of his crimes has resulted in far greater harm to this country and to the world than any single act of violent crime could ever cause. If this judicial system has any pretentions to justice, I hope that it lays down a punishment that’s comparable with the judgments it’s laid down for other crimes, and makes Madoff pay as dearly as anyone possibly can for his crimes against his investors and, more pertinently, for his crimes against humanity.
I thought the big money behind his Ponzi scheme came from banks across Europe which may or may not go bankrupt in the future. If they go bankrupt, there will be many reasons, not just Madoff. So, I think you will have a hard time actually pointing out a group of individuals whose lives were “ruined” solely by Madoff. Notice that those who invested in Madoff’s hedge funds knew they were taking a high risk ignoring warnings by other analysts. As Krugman points out, those individuals were likely to lose their money elsewhere, too.
Therefore I totally disagree with your claim that Madoff’s crime was “far greater than any single act of violent crime”. I have much greater contempt for any act of rape and murder. No one lost their lives, their sanity or their health due to Madoff’s actions. They lost part of their money and in the worst case their job. Big deal. Happens all the time. The dude will sit in prison for the rest of his life.
Moritz said this on December 20th, 2008 at 11:30 am
I think your greater contempt for rape or murder is based on disgust at the violence, which I share, but which should not be the sole criteria for the severity of the crime. Madoff’s crime is a big deal and you can’t brush it off as mundane.
First, it’s $50 billion. I know we’re getting jaded with big numbers thrown about with bailouts and bankruptcies happening everyday, but $50 billion is an unimaginable amount of money to steal.
Second, he STOLE the money. People lose money in investments all the time, yes, but the risk should be because the vehicle of investment is volatile, not because your manager is taking your money (not just his commission) and buying yachts with it.
Finally, I would argue that lives are being ruined, and not just bankers’ careers. A variety of charities and pension funds have lost a huge amount of money, many of them forced to close. The lives that they would have helped will now have to turn elsewhere, and in this kind of economy there might be no one to turn to at all. How many mouths will go hungry, how many medical conditions untreated, how many elderly deprived of their pensions because of this theft? Just you can’t point fingers at a corpse or victim doesn’t mean no one is being harmed.
The Random Oracle said this on December 20th, 2008 at 2:49 pm