Thursday, January 15, 2009

Late To The Party, A Word on Madoff

If you don't know about Bernie Madoff and the 50 billion dollar Ponzi scheme he faces charges for, then you probably need to pick up a newspaper. I've been meaning to comment for a few weeks now, but just never got around to it. Philosophically, Madoff is important precisely because his scheme proved wildly profitable and wildly popular for so many years, dating all the way back to the early 90's. Some on the left were quick to point to Madoff as another symbol of greed run amok and yet another reason why we need more stringent financial regulations. But Madoff represents more than politics, as his relatively simple acts of fraud hoodwinked both regulators at all levels of government and thousands upon thousands of investors worldwide. Madoff shows us that some wrongs in this world are just inevitable and that not all disasters can be avoided no matter how hard we try.

The notion that government could have somehow prevented this is preposterous. Thousands upon thousands were swindled out of their own millions of dollars and if those with the most to lose never as much as raised an eye brow, how is it that the government was supposed to discover this sort of fraud? Nor is this the sort of incident that can be blamed on the Bush administration. Madoff's scheme prospered during the Clinton years as well. In fact, the scheme was only discovered in the wake of the financial crisis, as many investors began to demand their money back.

As a libertarian, I do take a bit of solace in this notion that "shit happens." I would hope that everyone, regardless of political affiliation, would take notice of the fact that not only can't government solve every problem, but that some problems don't have ready made solutions period.


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