Bernard Madoff: Thuggish with Wall Street Swagger

The recent reports on Bernard Madoff, founder of Bernard L. Madoff Investment Securities, forced me to examine how we perceive things and make decisions based on how things are "packaged."

As I watch the victims of Bernard Madoff's $50 Billion hustle come to surface- with some even committing suicide, I can't help but wonder if Mr. Madoff were walking down a dark Wall Street Alley dressed in a hoodie, was carrying a gun and sagging pants - would said victims have grabbed their purses a little tighter? I can't help but think that if Madoff did business sans plush Wall Street office and credentials but out the trunk of his car, if his "investors" would have run down the street in the opposite direction. Under different circumstances, the Madoff crime spree would have been considered a stick-up by gun point, with witnesses and victims calling the authorities to have him arrested - after the very first time. So, why is Bernard Madoff (even after confessing) only under house arrest and allowed to essentially go on living his life?

As the former Nasdaq chairman, and perpetrator of the largest ponzi scheme, the man obviously has the system on "lock". Now that he has been charged with massive fraud, many report that he has been considered suspicious for a long time. According to Time Magazine, Madoff employees were to follow strict rules for what they kept on their desk. Family photos were also an issue - they were allowed but only if they were displayed in a simple black frame.

So how does a man like Madoff carry on such a massive Ponzi scheme? There are only two words that come to mind other than "gangsta" - as defined by the urban dictionary:

Thuggish - of or relating to the word 'thug'.

Sentence Use: Your shootin' that guy last week was pretty thuggish, dawg.

Swagger - How one presents him or her self to the world. Swagger is shown from how the person handles a situation. It can also be shown in the person's walk.

Sentence Use ----

Ryan: "Denzel Washington has swagger in all his movie rolls"

Phil: "You can't forget about Al Pacino! He had swagger all over in Scarface!!!"

So what exactly is a Ponzi Scheme?

Per Wikipedia:

A Ponzi scheme is a fraudulentinvestment operation that pays returns to investors out of the money paid by subsequent investors rather than from profit. The term, "Ponzi scheme," is used primarily in the United States, while other English-speaking countries do not distinguish colloquially between this scheme and other pyramid schemes.^[1]

The Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors. The perpetuation of the high returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors in order to keep the scheme going.

The system is destined to collapse because the earnings, if any, are less than the payments. Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or because the promoter is selling unregistered securities. As more investors become involved, the likelihood of the scheme coming to the attention of authorities increases.

The scheme is named after Charles Ponzi,^[2] who became notorious for using the technique after emigrating from Italy to the United States in 1903. Ponzi did not invent the scheme, but his operation took in so much money that it was the first to become known throughout the United States. His original scheme was in theory based on arbitraginginternational reply coupons for postage stamps, but soon diverted investors' money to support payments to earlier investors and Ponzi's personal wealth.

Knowingly entering a Ponzi scheme, even at the last round of the scheme, can be rational in the economic sense if a government will likely bail out those participating in the Ponzi scheme.^[3]

So, did someone mention "government bailout" and "Ponzi Scheme" in the same wikipedia definition? Perhaps the above definition explains why we are witnessing them both within weeks of each other. Ironically, while some seek smaller government when it comes to bailing out Main Street, the same people say that we need big government intervention to bail out airlines, car industries and more. So, is it just me or are you confused about this line of logic? I can't help but grow frustrated as Main Street struggles with foreclosures, job losses and unprecedented economic challenges - while legislators haggle over an $800 billion stimulus package (courtesy of the American Tax payer) to support the American Taxpayer.

As the President-elect Obama juggles an economy ravaged on a number of levels, he stood in front of the nation and world today stating; "No longer can we allow Wall Street wrongdoers to slip through regulatory cracks. No longer can we allow special interests to put their thumbs on the economic scales. No longer can we allow the unscrupulous lending and borrowing that leads only to destructive cycles of bubble and bust."

I don't know about you but as cases like Bernard Madoff unravel - I can only hope that we all realize that a thug is a thug whether dressed in a hoodie or custom tailor- made suit.