Ponzi-palooza: Obama Versus Bernie Madoff

obama_madoff_11-11-13-2 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.

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.