|The Madoff Paradox: Sage, Savior, Thief?|
|At the heart of the scandal concocted by Bernard Madoff is a paradox: the so-called investment genius built up and nurtured his colossal empire through gaining the friendship and confidence of numerous wealthy Jews. At the same time, he styled himself a hero and savior of prominent Jewish institutions, many of which were identified with famed Jewish personalities and organizations. Yet in erecting this phantom edifice--which can not even be termed a house of cards—Madoff situated himself at the center of a potential maelstrom which sent the people and charities, to whom he was beloved, crashing to near oblivion. He supposedly worked to make Jews strong and proud. Madoff became, instead, a lightning rod for another round of accusations associating Jews with financial crime and other nefarious deeds.
By no means did Madoff begin his ascent with a diabolical masterplan. He was not that bright or far-sighted. Comparatively speaking, he did not have the ability of an Ivan Boesky and Michael Milken. In terms of his understanding of markets and world politics, compared to, say, Warren Buffett and George Soros, Madoff was an intellectual pygmy. He was no striving child of the ghetto, although the myth he propagated sometimes assumes this guise. In his first years, possibly his first decades as a financial adviser, he might not have believed he was doing anything wrong. Had he any doubts in that direction, they were mollified by wishful thinking: that future gains would make up for the fact that he was robbing Peter to pay Paul. As compared with the complexity of the Worldcom and Enron schemes, Madoff's operation was shockingly simple: the funds of new investors were used to pay off earlier clients, and to create the impression that the firm was steadily earning substantial income—despite the changing fortunes of the times generally, and in particular, the tumultuous stock market of 2007-8.
This recounting of the background and unfolding of the Madoff debacle is historical and comparative. It is told from the perspective of earlier scandals concerning Jews and white-collar crime in the United States, the UK, and Europe, on the one hand, and the biography of Bernard and Ruth Madoff, on the other. Those who entrusted their fortunes to Bernard Madoff sought safety and prestige. He delivered ruin and disgrace.