It was announced yesterday that Bernard Madoff, the disgraced financier and former chairman of NASDAQ, will plead guilt to 11 felony charges, including securities fraud, money laundering, and false filing. The penalties for the combined charges add up to 150 years in jail. Considering the fact that Madoff is 70-years-old, his admission of guilt is essentially an acceptance of the fact that he will spend the rest of his life in prison.
Good. This guy is a criminal of the sickest sort, and of the type that Thomas Jefferson particularly loathed. In his time, they were referred to sneeringly as "speculators", although that term is no longer considered a pejorative. Perhaps it should be, because Madoff and others like him- R. Allen Stanford, the Enron crew, and, for that matter, pretty much every executive from every major bank in America- have nearly wrecked the country. Their obscene quest for wealth derived from the labor of other people, when they themselves do nothing productive, would have dismayed but not surprised Jefferson.
In 1789, when Jefferson returned to America from his diplomatic tenure in Europe, he was shocked by the financial shenanigans being perpetuated by the associates of Alexander Hamilton. In particular, he was horrified by the manner in which teh Hamiltonians took advantage of ordinary citizens who have bought government bonds during the Revolution. These patriotic citizens have often poured their own life savings into these bonds in order to help finance the government and contribute to the victory over the British. In the years following the end of the way, hwoever, the bonds had depreciated to a fraction of their former value.
Hamilton, as the first Secretary of the Treasury, labored to establish the credit of the United States, but he made sure that his friends made money in the process. Citizens were frantically selling their bonds for whatever they could get for them, but Hamilton was planning on buying back the bonds at par. Had the citizens known this, they could have held onto their bonds and get their full value back. But the only people Hamilton told were his own cronies, who promptly bought up as many of the bonds as they possibly could. When the bonds eventually wer bought back, Hamilton's friends made a killing at the expense of the ordinary citizens, many of whom were ruined. Hamilton couldn't have cared less about the people, so long as his friends made money.
The current economic crisis was caused by very similar men with very similar motives. People who have never done any productive work in their lives, in that they have never built anything or grown anything or provide any useful service to anyone, sought to agrandize themselves on an unimaginable scale by using their financial tricks to siphon money out of the system. They made promises that were impossible to fulfill, and they apparently never expected the good days to end. Well, we are now reaping the whirlwind for their greed and short-sightedness.
Most of the discussions about how to fix the economy revolve around the premise that we should get back to where we were before it all began. Jefferson would have very different advice for us. He would tell us that we need to scale back our materialistic ambitions and recover the lost virtues of self-sufficiency and self-reliance.
Oh, and he would also tell us to put Madoff and the others like him in jail for the rest of their lives.