Bernie Madoff is going to jail. And what about his family, enriched by his years of fraudulent activity but claiming to be utterly ignorant of his activity?
In any normal Law and Order episode the DA would put Madoff's brother, wife, and two sons in separate rooms and explain to each of them that one person was going to get a great deal and three were going to jail for a long, long time. This is the textbook Prisoner's Dilemma, and normally at least one person accepts a deal.
However, the solution to the Prisoner's Dilemma (from the prisoner's perspective) is to find some mechanism to ensure compliance with prior promises not to betray each other. In the Madoff case, We the People are providing that mechanism.
Consider - what happens after the prosecutor offers a Madoff clansman a deal? When the laughter subsides, the target of the prosecutor's largesse patiently explains that the public will never allow one of the Madoffs to walk, so the offer of a deal is not plausible. Besides, a Madoff who ratted out his/her family would have neither money nor a social circle to which they might return.
They may as well hang together because in the court of public opinion they will be hung anyway.
FWIW:
It's outrageous if they keep it.
Hey, nationalize it. There's a solution.
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Posted by: kim | March 12, 2009 at 01:07 PM
Surely it's good for the economy to make his investors whole with taxpayer money. Stimulate those investers. Yeah, that's the tikket.
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Posted by: kim | March 12, 2009 at 01:08 PM
And free Bernie to let him work his magic. We need these special bubblers, now more than ever.
Oh, wait, all those Tontos working for the Lone Ranger are still out there. I feel better now.
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Posted by: kim | March 12, 2009 at 01:10 PM
I don't care, his wife, his kids , his cousins, and even the family dog all need to serve very hard time in some dark filthy prison where the sun doesn't shine.
That's what would happen to them if the knocked of a 711.
They have ruined thousands of lives. they need to suffer. Public humiliation isn't enough.
Posted by: verner | March 12, 2009 at 02:18 PM
make that "they knocked off"
Posted by: verner | March 12, 2009 at 02:22 PM
I'm having a hard time distinguishing between what Madoff did to a bunch of people and what government is attempting to do to all the people - at least the unelected ones.
Posted by: Jane | March 12, 2009 at 02:28 PM
Prosecutors have absolutely no need to present the Madoff family with the prisoner's dilemma. Non-family members who were long time employees of the felonious clan's enterprise would appear to be in a position to confront the dilemma and make very rational choices. No family help needed.
That is, if clan employees are allowed to do so by Chuckie Schumer's buddies in the SDNY office responsible for pursuing the matter. I'm not sure that Schumer's SDNY has the ethical foundation to shrug off Chuckie's pressure. With Mary Schapiro carefully shoveling kitty litter over the problem at the SEC, this may wind up in the 'unsolved mystery' file next to the IRS case on Charlie Rangel.
Posted by: Rick Ballard | March 12, 2009 at 02:30 PM
this stinks of coverup. A simple guilty plea will never allow the entire scam to be studied and analyzed through the discovery process. Who else was involved? Where did $50 Billion disappear to? Whose pockets were lined?
Posted by: matt | March 12, 2009 at 02:38 PM
Does anyone know if,or how much Madoff gave to the Obama Campaign---just asking.
Posted by: interested party | March 12, 2009 at 02:45 PM
I can't believe there's not going to be a blizzard of civil action to recover whatever there is to recover.
Posted by: Aubrey | March 12, 2009 at 02:55 PM
Hold on to your hats, because Robert Gibbs just said Obama is going to be talking about the stock market this afternoon.
Posted by: MayBee | March 12, 2009 at 02:55 PM
interested party, I would imagine that payoffs were handled through a yet unknown third party. I'm sure the Holder Justice department will be right on it!!
Posted by: verner | March 12, 2009 at 02:56 PM
Maybee:
Hold on to your hats, because Robert Gibbs just said Obama is going to be talking about the stock market this afternoon.
Oh great. And it was looking like a pretty damn good day, too.
You know, this is the headline intended to explain why the market is up today: http://us.rd.yahoo.com/finance/news/topnews;_ylt=ArlvkeefyaKOYCmKycSD.r.7YWsA/*http://biz.yahoo.com/ap/090312/wall_street.html>"Market Extends Rally After GE Rating Cut Not as Deep as Expected; Dow Up 200- AP"
But surely this helps in its own way: http://rds.yahoo.com/_ylt=A0geu7OhXrlJtuIAG8JXNyoA;_ylu=X3oDMTBza212ZjZiBHNlYwNzYwRjb2xvA2FjMgR2dGlkA0gxODdfOTU-/SIG=12mv87cm8/EXP=1236971553/**http%3a//news.yahoo.com/s/nm/20090312/pl_nm/us_usa_stimulus_pelosi_1>"Pelosi dampens idea of second stimulus"
But can either or both be enough to overcome O?
Posted by: hit and run | March 12, 2009 at 03:16 PM
Maybe Bambi needs to talk about the Treasury Department before he goes all spider-teleprompting about the NYSE...
Politco reports -
"Withdrawal from consideration
ABC REPORTS: Dem sources say that H. Rodgin Cohen, candidate for Deputy Treasury Secretary, has withdrawn.
Posted by: Enlightened | March 12, 2009 at 03:26 PM
Not to worry, Enlightened, Andrea Mitchell says that http://www.huffingtonpost.com/2009/03/11/andrea-mitchell-pleads-gu_n_174047.html>she's to blame for Obama's nominee woes.
When Barney Frank said this...
Mitchell said this:
Where's JMH?!?!?!?!
Not Hot!: Accountability Journalism
Posted by: hit and run | March 12, 2009 at 03:35 PM
Matt, we will eventually find that the top figure ($50B now said to be $65B) is the value of the accounts including the "accrued earnings" (which were fake, since we are told there were no trades in at least the last ten years). Some of the lawyers involved estimate that the actual cash contributed was closer to $20B and some say as low as $10B, and the difference between that number and the top number is what the investors thought they had earned and left in the accounts. About $1B is left. Since many of the account holders withdrew cash over the years, much (most???) of the cash contributed will have gone to repay those withdrawls. Some will have gone for office rent and expenses. The gap left is what fed the lavish lifestyles of Maddoff and also probably some of the middlemen (to the extent they front end loaded some of the placement costs and then took oversight fees...even if those were legit at the time, they were huge). If you create a simple spreadsheet of fifteen columns and make up numbers for the deductions above, it is real easy for alleged 15% returns compounded to soak up most of the numbers involved.
All really really evil, of course. But it explains why there will never be found a secret safe with $50B in it.
PS, another lesson of that little exercise, relevant to the political debate, is how much real money is in a billion or two here and there. Now try that with a TRILLION!
Posted by: Old Lurker | March 12, 2009 at 03:37 PM
"I don't care, his wife, his kids , his cousins, and even the family dog all need to serve very hard time in some dark filthy prison where the sun doesn't shine."
The dog is innocent!
Posted by: PeterUK | March 12, 2009 at 03:38 PM
Politico releases some excerpts from this afternoon's planned speech:
I believe it is the Obamas' failure to find a puppy that has led us to this point.
Posted by: MayBee | March 12, 2009 at 03:38 PM
Not Hot: Andrea Mitchell
Posted by: bad | March 12, 2009 at 03:39 PM
I suspect Bernie may have acted alone.He reported constant year to year returns. If he had help he could have some variation in returns. Returns would still be unreal, but not as transparently bogus.
Posted by: PaulV | March 12, 2009 at 03:48 PM
Captain Bullshit:
Though to be fair, using the language from the campaign, Obama's language, he really wasn't far off from what he should say now:
"America cannot afford four more years of the same failed policies of the past eight
yearsweeks!"Posted by: hit and run | March 12, 2009 at 03:49 PM
Madoff is described as very cool and unflappable in court.
That description is so familiar.....
Posted by: bad | March 12, 2009 at 03:50 PM
Seriously find that puppy, the other one has already made quite a mess; 'green economy, with wind and solar,' lower health care, means less technology and less attention to the vulnerable, so there's that. Why would business dare invest, if they're going to get penalized one hundred
ways from Sunday for their trouble
Posted by: narciso | March 12, 2009 at 03:50 PM
Was it here that someone pointed out that Bambi's teleprompters are positioned one to the left, and the other to the right? So that his head is always moving to one side or the other, and he never makes direct eye contact with anyone?
I tell ya, ever since I read that - whenever I have the misfortune of stumbling onto one of his sermons - that is all I see now - Head to the right, head to the Left. It's hysterical - I swear one of these days Rahmbini is going to screw up and forget to have the puppet strings coated so they stay almost invisible.
I bet Trey Parker and Matt Stone could have field day with that.
Posted by: Enlightened | March 12, 2009 at 03:58 PM
Obama:
"While middle-class families have been playing by the rules, living up to their responsibilities as neighbors and citizens, those at the commanding heights of our economy have not."
Just how badly was he treated by the rich kids at that chi-chi school in Hawaii?
Responsibility is the new buzz word. It must have focus tested really well.
Posted by: bad | March 12, 2009 at 04:01 PM
He's still badly missing the point; it is his crazed policies, particularly in energy and healthcare, and his continued demonization of the investor class, that has spooked capital.
This is just more demagogic campaigning, and won't bring any money back into the market that has already left it.
I don't know about today, but I'll bet the market drops tomorrow. No, I won't bet, I'll just blather.
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Posted by: kim | March 12, 2009 at 04:12 PM
I'm listening to his speech.
It is his goal to paint the stock market as it was as a bubble, and to establish the current market as a new foundation upon which "real" wealth is going to be built.
Posted by: MayBee | March 12, 2009 at 04:17 PM
WSJ:
Ethics, transparency, accountability, responsibility... ain't it the life....
LUN
Posted by: bad | March 12, 2009 at 04:17 PM
While middle-class families have been playing by the rules, living up to their responsibilities as neighbors and citizens, those at the commanding heights of our economy have not.
Maybe that's why Wright's parishioners were told to disavow the pursuit of middleclassness, so they didn't get taken for suckers.
Posted by: bgates | March 12, 2009 at 04:21 PM
It is also important to him that companies are free to invest in good (green) jobs.
He definitely wants to point businesses in one direction.
He sounds really scoldy. I bet these business leaders can't believe this guy who has never run (or worked in) a business is their new school principal.
Posted by: MayBee | March 12, 2009 at 04:21 PM
Oh Gawd I am really starting to love Jake Tapper...it might be me, but I think he likes to push Gibb's buttons....
He totally did an end-around on him today -
JT pointed out Bambi saying the other day that the Reps are a party of "no ideas"...and then JT said "well didn't Bambi say in Janaury that the Reps presented lots of ideas for the stimulus and he(Bambi) said they aren't all crazy ideas" and then after Gibbs tried to explain through the art of stuttering and stammering that indeed, some GOP ideas were included, JT finishes off with: "But I thought Bambi said they were the party of no ideas?"
Go read it....this is good stuff. LUN
Posted by: Enlightened | March 12, 2009 at 04:22 PM
The WH was really smart to schedule this speech after the markets closed.
Posted by: MayBee | March 12, 2009 at 04:23 PM
More WSJ:
Excuse me while I go rope and chain myself at the prospect.
Posted by: bad | March 12, 2009 at 04:26 PM
"I am a firm believer in the ability of the free market to create prosperity...equally...across the board"
Posted by: MayBee | March 12, 2009 at 04:31 PM
thanks Lurker. Interesting analysis.
I still want to know how he got away with it for so long. Eventually Ponzi schemes fall apart, but for 40 years? Who were their auditors and outside accountants? I'll bet they're now working for the administration.
Posted by: matt | March 12, 2009 at 04:33 PM
"We were engaging in an unsustainable model for a very long time. The bill is now due."
See...the old wealth was a bubble.
Once we "invest" in education and healthcare and green jobs, then the real wealth building will begin.
Posted by: MayBee | March 12, 2009 at 04:35 PM
"Bambi's teleprompters are positioned one to the left, and the other to the right? So that his head is always moving to one side or the other, and he never makes direct eye contact with anyone?"
Obama has a squint.
Posted by: PeterUK | March 12, 2009 at 04:44 PM
Maybee, he's just whack. His schemes will retard business growth, and business understands it. With a G20 planning meeting this weekend, which won't go well, I'm predicting falling markets early next week.
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Posted by: kim | March 12, 2009 at 04:46 PM
His schemes are a prescription for real poverty. Some one draw him aside and tell him. Watch it be Congressmen.
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Posted by: kim | March 12, 2009 at 04:48 PM
Again from Tapper:
"The administration is not here to win a popularity contest among economists that are interviewed by a newspaper," Gibbs responded. "The president has great confidence in his (ONE)economic team (member)"
Posted by: Enlightened | March 12, 2009 at 04:56 PM
We have a moral obligation in a country this wealthy that we don't have single moms that can't afford to send their children to the doctor.
The path we're on is unsustainable. If we have a growth in the rate of health care costs every year, we'll be broke.
We need to figure out how to make it run more efficiently.
The cost issue is the big driver* in this whole debate.
Prevention, reimbursement structure, medical liability**, IT.
The resistance isn't based on evidence, it's based on their interest.
We want Congress to see some of the contradictions in their own positions and sort through some of those tensions.***
*true
**good
***yeah, that's what Congress is going to do
He's also trying to repaint what he's doing right now as long term planning, and can't believe some people are criticizing him for it.
Posted by: MayBee | March 12, 2009 at 04:57 PM
Gibbs is revelatory. It's not that he's not popular with economists, it's that they think he is wrong. Big difference, and one that seems to go right over the heads of Gibbs and Obama. It is his fatal flaw.
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Posted by: kim | March 12, 2009 at 05:02 PM
"The president has great confidence in his (ONE)economic team (member)"
Tapper does a great rope-a-dope on Gibbs today, I agree. He, like his boss, is a joke.
Posted by: Jane | March 12, 2009 at 05:02 PM
Hmmm. Cliff Kincaid is challenging Bambi to re-open a Weather Underground case?
"Kincaid also urged President Barack Obama to urge the Justice Department and the FBI to "gather all the evidence available in this case."
"He himself said that he deplored the despicable acts of the Weather Underground," Kincaid said. "Well, this is a chance to prove it.”
Interesting.
Bambi, pondering whilst smoking in the boys room-"Should I re-open this case? Or might that link me unfavroably to Ayers? Or should I just have Bush tried for war crimes?" Hmmmmmmm......which one will get me more teleprompter time?Hmmmmm.....
Posted by: Enlightened | March 12, 2009 at 05:03 PM
Substituting long term planning for short term action. What a putz. And he seems utterly unconscious of the fact that lots of people don't like his long term planning.
He's in a bubble and we are going to suffer for his ignorance and intransigence.
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Posted by: kim | March 12, 2009 at 05:05 PM
Re-opening scrutiny on the Weather Underground is going to find a co-incidence of interests between the WU and Obama in the early '80's over apartheit. Yes, let's turn over a few rocks. Maybe someone already has.
==============================================
Posted by: kim | March 12, 2009 at 05:08 PM
We have a moral obligation in a country this wealthy that we don't have single moms that can't afford to send their children to the doctor.
Translation: My own single mother was on foodstamps and couldn't afford to remove this big-ass mole on my face. The rich kids all made fun of me. Now I can't remove it 'cause it would look vain and a poor use of resources. Damn media...
Posted by: bad | March 12, 2009 at 05:14 PM
"I am a firm believer in the ability of the free market to create prosperity...equally...across the board"
That's just bull. I used to be capable of creating prosperity for my family and now I'm not. Neither the freemarket nor the govt. is capable of creating wealth through me at the rate equal to which Mr. bad can. Facts....
Posted by: bad | March 12, 2009 at 05:21 PM
"My own single mother was on foodstamps and couldn't afford to remove this big-ass mole on my face. The rich kids all made fun of me."
Plus the disadvantage of a private school,a grandmother who was a Bank VP and a mother studying for a Phd.
Posted by: PeterUK | March 12, 2009 at 05:42 PM
PUK, don't confuse us with facts, we're talking about feelings here.
Posted by: bad | March 12, 2009 at 05:50 PM
I already bet that the kids were in on it. And Kim pussies and the like disputed it. Fucking liberal maggots. Don't know shit about Adam Smith. Bunch of Keynsian faggots.
Posted by: TCO | March 12, 2009 at 06:17 PM
Musta caught your blow up doll with another sailor.
Posted by: boris | March 12, 2009 at 06:58 PM
Either that or caught his lip in his zip.
Posted by: PeterUK | March 12, 2009 at 07:28 PM
The path we're on is unsustainable. If we have a growth in the rate of health care costs every year, we'll be broke.
Absolutely right, though I've never seen "government" spelled "health care" before.
Posted by: bgates | March 12, 2009 at 07:42 PM
Once again with the unsupported statements, TCO. Show me where I disputed that the kids were in on it. You are developing a huge credibility problem.
I think you are just confused, and that is a shame. I know you can think, but you cannot forever get away with saying things that aren't so.
==========================================
Posted by: kim | March 12, 2009 at 08:51 PM
The unsustainable model Obama refers to was the rampant greed and amorality at the top, and which includes Pelosi, Boxer, Kerry, Madoff, Corzine, and all the other scumbuckets using insider trading and captive boards of directors to rape their investors and customers. You can throw Romney into that mix as well, by the way. His conduct at Bain was the same.
If I was to pick the day it all got out of hand, I think that Eisner's utterly hypocritical $200 Million bonus in 1991 is a good one. At that point, they all started to try and get away with more and more outrageous conduct.
Posted by: matt | March 12, 2009 at 09:18 PM
We have a moral obligation in a country this wealthy that we don't have single moms that can't afford to send their children to the doctor.
Translation: Let's subsidize single motherhood so we get more of it.
Posted by: PD | March 13, 2009 at 12:00 AM
We have a moral obligation in a country this wealthy that we don't have single moms that can't afford to send their children to the doctor.
Odd, I thought the horrifying interpretation was that these people wanted to do away with single moms.
Posted by: sbw | March 13, 2009 at 08:15 AM
"TCO. You are developing a huge credibility problem."
TCO began with a huge credibility problem,it was downhill from there on.
Posted by: PeterUK | March 13, 2009 at 10:54 AM