Ed Driscoll

Ponzi-palooza: Obama Versus Bernie Madoff

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No, this is how you really do a Ponzi scheme, Bernie…

Question asked and answered:

But let’s compare the similarities. First up, the rabid, “you’re a fool if you don’t give this man all your money” tone of the early true believers:

Obama’s finest speeches do not excite. They do not inform. They don’t even really inspire. They elevate. They enmesh you in a grander moment, as if history has stopped flowing passively by, and, just for an instant, contracted around you, made you aware of its presence, and your role in it. He is not the Word made flesh, but the triumph of word over flesh, over color, over despair. The other great leaders I’ve heard guide us towards a better politics, but Obama is, at his best, able to call us back to our highest selves, to the place where America exists as a glittering ideal, and where we, its honored inhabitants, seem capable of achieving it, and thus of sharing in its meaning and transcendence.

— JournoList founder and Washington Post journalist Ezra Klein, at the start of 2008.

Jerry Reisman, who met him at the Glen Oaks Country Club in Westbury, New York, said: “He moved in some of the best social circles in New York. He worked the best country clubs. He was utterly charming. He was a master at meeting people and creating this aura. People looked at him as a superhero.“People didn’t want to know what he was doing. If it’s too good to be true, it isn’t true. But people didn’t care. They were greedy.”

Smug, too. Jeffrey Gural, chairman of real estate firm Newmark Knight Frank told the New York Times that he was teased by his friends after Madoff refused to let his family invest in the fund because he would not put up a minimum of $20 million. He said: “They thought Bernie Madoff was a genius, and that anyone who didn’t give him their money was a fool.”

The revelation that they were the fools has left Madoff investors devastated.

“Bernard Madoff: how did he get away with it for so long?”, the London Telegraph, December 20th, 2008.

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Those who were swindled no doubt feel nostalgia for the good times they initially enjoyed. Not to mention, that initial rush of smug superiority that came from being “in the know,” unlike the ignorant naifs outside of their social circle:

Meade pointed me to that just now, and it made me laugh (and cringe). I knew I’d already talked about an Obama nostalgia movement — here, 3 days ago — but I see I was talking about it as far back as October 2011.

I know you may scoff and say that every single reference to the abstractions and fuzzy feelings of 3 years ago will only draw derision and intensify the pain. But there’s so much pain… At some point, won’t people want to take the drug that worked so well that other time. What intense pleasure! What brilliant hallucinations! It calls to you.

Ouch. At the time, the old video I highlighted was Michelle Obama’s 2008 line “Barack will never allow you to go back to your lives as usual, uninvolved, uninformed.”

“I pledge to be a servant to our President.” Ann Althouse, yesterday.

Secrecy is often needed to keep a risky investment scheme afloat, and away from the prying eyes of regulators:

One of the reasons Madoff was able to perpetrate his fraud for so long was his preference for marketing his investment business by word of mouth. Until the scam’s later years, people heard about it from friends. It was a private club, one that, famously, became only more desirable because of Madoff’s seeming reluctance to admit new investors. One of the tacit conditions, as we know now, was an understanding that information about Madoff investments — including their existence — was to be held closely. Most investors complied. Who would want to anger Madoff and risk losing their privileges?

“How Bernie did it,” CNN-Money, April 30th, 2009.

A running theme in the Goldstein-Eilperin piece is political paranoia, the degree to which the White House kept key details of Obamacare’s implementation secret—from its own allies—because they feared that even modest efforts at transparency would lead to criticism from Republicans. It was “a sensitivity so intense that the president’s aides ordered that some work be slowed down or remain secret for fear of feeding the opposition.”

“According to two former officials,” they write, “CMS staff members struggled at ‘multiple meetings’ during the spring of 2011 to persuade White House officials for permission to publish diagrams known as ‘concepts of operation,’ which they believed were necessary to show states what a federal exchange would look like. The two officials said the White House was reluctant because the diagrams were complex, and they feared that the Republicans might reprise a tactic from the 1990s of then Sen. Bob Dole (R., Kan.), who mockingly brandished intricate charts created by a task force led by first lady Hillary Clinton.”

“On Sept. 5 Test of Obamacare’s Website, Govt. Staffers ‘Secretly Rooted For It To Fail,'” Avik Roy of Forbes, November 3rd, 2013.

Of course, in retrospect, there were some who saw the handwriting on the wall, long before others:

President Obama and Bernie Madoff have an immeasurable amount in common. Both believe in soaking the rich to accomplish their goals and achieve their power. Both are known to be extremely generous with other people’s money, the very same money they’ve snookered people out of, and both are famous for making promises that they can’t, in the long term, keep. Both tactically use money that doesn’t really exist, and like any true Ponzi-scheme, the last people holding the bag are rewarded with seeing the proverbial feces hits the fan.

The original beneficiaries of Bernie Madoff’s and Barack Obama’s tactics, like in all pyramids, come out quite well. They get exactly what was promised to them, thereby causing such excitement at the miraculous results that it creates extraordinary demand for them, peaking at near messiah-like worship. The stimulus-bailout torch burns brightly for those in the front of the line, but becomes dimmer and dimmer, as it’s passed back to the suckers in the back of the line.

Mr. Madoff, like Mr. Obama, only took money from rich people, fat cats, millionaires, evil private jet owners, those that can afford to get bilked. Both have account minimums, a status symbol used to create the illusion that only the select elite will be allowed to participate. In Obama’s case, it seems to be around $250,000 (for a couple, but only $125,000 for an individual filer) Madoff’s, reportedly, was a cool million.

Obama and Madoff both like to hob-knob with the rich, famous, and influential of society, maintaining social networks that would put Donald Trump to shame. Their legendary early results spread like a virus among the privileged few.

Madoff devastated charities that had trusted him for his legendary investment prowess. President Obama will devastate charities with his proposal to vanish charitable tax deductions for the well-healed.

The major difference? One is behind bars, and one is still actively employed, planning new types of schemes to solve such “perceived” problems as global warming and economic inequality. The road to hell is paved with good intentions.

— “Bernie Madoff, an Obama Democrat,” The Capitalist Newsvine, March 14th, 2009, which went on to note, “Both are phonies with a lot of gullible, greedy followers. Madoff pretending to be a brilliant professional investment guru, and Obama, pretending to be the President of the United States.”

And one of the two still has plenty of gullible, greedy followers, who can’t believe anyone outside their circle wouldn’t trust his methods. Sometimes with comical results, such as when Kool-Aid drinking Obama supporter Matt Lauer of NBC gets run over by Sarah Palin today:

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When Marshall McLuhan first appeared on the scene in the mid-1960s as a sort of Howard Beale-esque mad-prophet character, Tom Wolfe asked in the New York Herald-Tribune, “What if He’s Right?” Deep down in the pit of what’s left of their souls, Matt and everyone broadcasting from the GE building at 30 Rockefeller Plaza are asking a similar question: What if Palin — and the Tea Party — and the rest of GOP and libertarian naysayers on Obamacare…are…..could..it…possibly…be…right?

Bloomberg.com reports today, “Even with the flawed roll out of health-care reform and uproar over spying, Barack Obama is enjoying one of the best stock markets for a re-elected president. Signs are building that it might not last.”

Which brings us to our exit juxtaposition:

A Ponzi scheme is the opposite of a perfect crime; detection is inevitable because eventually the numbers become unsustainable. Henriques paints a vivid picture of Madoff as this truth closes in on him in the last year of his operation. With client withdrawals accelerating and new investments drying up, as he scrambles to raise the impossibly huge amounts of money he needs to plug the hole, he finally realizes that the jig is up, and that it is only a matter of time before he will be destroyed.

“How Bernard Madoff Did It,” the New York Times, May 13, 2011.

The real fun might begin next month, when Healthcare.gov is supposed to be up and running, and ready to deal with the expected rush of millions seeking new insurance policies before the New Year. Let’s assume that the site is functioning well enough, even if only barely, and that the state exchanges are up and running, too. Millions are going to find themselves facing the twin devils of higher premiums and higher deductibles. That means they’ll take home less pay, and have to sock away more money into savings. The resulting reduction in consumer spending — 70% of the U.S. economy — could be a body blow to our already weak growth.

Or suppose the rush never materializes, since only 22% of the uninsured actually plan on buying ObamaCare policies. That’s the “death spiral” insurers fear, when rising prices force out the young and healthy, leaving them with nobody but the old and sick. At the start of the new year, our economy might just be looking at a collapsing insurance industry, declining consumer spending, rising underemployment, and a shrinking labor force — all at once.

“2014: The Collapsing Obamaconomy,” Steve Green, at PJ Media, today.

Update: This post at Ace today dovetails perfectly with the Madoff/Obama comparisons and the goal of leftists to retain a sense of feeling self-satisfied and anointed, even as they realize they allowed themselves to be willingly played for fools by a conman: “Progressive Apologist: We Forced Obama to Lie to Us Because We’re Immature or Something.”

More: Rush Limbaugh explores his brother’s tweet as well: “Obama’s Fraud was Bigger Than Madoff’s.”

(Artwork created using a modified Shutterstock.com image.)