Everyone has vilified Bernard Madoff for his Ponzi scheme — as well they should. Well, up to a point.
It is true that he promised his friends that they could make huge returns on their “investments.” Yet, his wealthy friends did not get that way by being stupid.
They all had to know that this would be revealed eventually as illegal, immoral, and maybe even fattening. Nonetheless, Madoff made them millions — if not billions — off of the backs of the smaller investors’ money.
When the economy went south, the “biggies” wanted their money out, and the whole world of Ponzi collapsed.
Madoff made some important points during an interview in jail. First, he said that the banks and investment companies had to have known what was going on. Indeed, there are lawsuits because some employees of the financial institutions argued that something was rotten. They were ignored because of — get ready now — greed!
In fact, Madoff says that everyone who invested with him was simply downright greedy. And I have to agree with him.
Some years back, a then-business associate of mine who was very wealthy told me that if I gave him $100,000 he would double it for me in a few months. At first, colorful lights blinked in front of my eyes. It took me seconds to realize that whatever technique he had could not be legal. I said no.
Madoff reports that he warned investors that this situation is volatile, risky, and not necessarily going to get them the pot of gold. He said that people were willing to risk their entire life savings in an avaricious desire to get more, more, more.
He is absolutely correct. Many people are easily swayed and seduced by the lure of something for nothing. They suspend common sense and put their trust in a situation that is, even on the surface, faulty.
Investors who lost everything beg to differ. They say Madoff’s reputable associations with Wall Street made him a wolf in sheep’s clothing. Yes, that is true too. But we still have to come back to the something-for-nothing reality.
People who put their entire life savings into “betting” are foolish at best. But greed explains the desire to do so.
In the movie Wall Street, Gordon Gekko proclaims that greed is good because it is the prime motivator for a society’s growth. I believe he is wrong. The profit motive doesn’t have to be about greed if it is fair.
I recall the story of a factory owner whose business burned down, but he continued to pay his employees’ salaries until the company was operating again. I’m sure his profit level was huge afterwards because his loyal employees worked even harder.
The profit motive and ambition when dealt fairly make life worth living for anyone they touch.
Dr. Laura’s radio program is on from 2 p.m. to 5 p.m. Eastern time, weekdays, on Sirius Channel 102 and XM Channel 155.
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