*This was written as a column for the yearend issue of The Philippine GRAPHIC
Old as time
Sex and scams; it’s a toss-up which one is the oldest profession.
They were probably hatched by twins with fingers on humankind’s pulse: the illusion of happiness, on the one hand; the illusion of success, on the other. Both promising instant gratification and, both, at times, exacting a grievous toll.
Ponzi scams – where investors buy nothing but promises of hefty returns – have been around since people switched from barter to tender. The illusion is maintained by paying off initial investors from what latter investors put in. The tower of joy crumbles when new investments can no longer meet obligations – and that always happens as sure as the sun shines in the East. Yet the scam thrives in its various forms, sometimes bankrupting populations of entire countries (Albania, for one).
Conventional wisdom is that Ponzi scams lure the poor and desperate, the lonely and the idle and unproductive. Truth is that, Ponzi victims include society’s richest folk. It’s the attraction of easy profit. There is no accounting for greed.
It is the Ponzi credo of “more, more, more” that permeates the bigger scandal that is the US and global financial meltdown. Lack of accountability is the root problem behind the traditional and criminal schemes that imploded worldwide these past months. And it is sometimes difficult to parse between the traditional and the criminal.
Financial bigwigs often cover up their fumbles by falling back on the small print that admonishes investors to keep track of their funds. When the going is good, few people bother to ask where and how.
The $50-billion Ponzi scam presided over by Bernard Madoff – no less than a former chairman of the Nasdaq – was a three-decade, high-flying operation that had a barely-there accounting and compliance arm.
Madoff’s “victims” range from middle class couples to retirees to family trusts to the International Olympic Committee Federation to Japan’s Numura and many major banks and financial funds. Most of them had finance savvy. They were just too enamoured with ROIs to even care about where the hell these were coming from.
Now, one hedge fund manager has committed suicide in the wake of the Madoff scandal and, worse, anti-Semites have found a bone to nibble on.
Which is a tragedy. Sure, Madoff is Jewish but crooks come from all religious and ethnic backgrounds. Many of his clients were Jewish but a big, big number were non-Semites. Their greed had nothing to do with creed. That they blithely accepted huge profits without question is not much different from how the world, media included, jumped up and down as hedge fund managers and all other wunderkinds and wise lions of the marketplace kept chalking up those spectacular profits before the crash.
The rumbles of bigotry -- also long a bane to humankind -- are something to watch out for these days. As much as Barrack Obama’s election to the US Presidency gives us hope for a gentler world, we also have to face reality. When bad times come, the other, the stranger, always becomes a figure of suspicion and mistrust.
Obama himself is a barometer. While the campaign went on, critics accused him of being a Muslim and a liberal or communist and, by implication, a terrorist. Then he appoints as chief of staff the very Jewish Rahm Emanuel, and gets the same amount of grief. And, more recently, his invitation for Rick Warren to give the inaugural prayer has sent screams – from all sides now – rising in decibel.
The quicksand is spreading for hope’s herald. Obama has no time to lose in the task of calming the very troubled waters of his nation and the world. Hatred is almost always an offspring of fear. There are more than enough madmen awaiting this obscene birth. (Send rants and raves to email@example.com)