Monday, December 22, 2008

It's Literally Pronounced "Made Off"

I don't have much of in terms of formal economics education, so I often struggle to machete my way through the thicket of the issues we're facing during this ongoing financial crisis.

I often bookmark blogs or articles to read but too often, I chicken out or get distracted by items that conform to the things that I generally write about.

But on Friday afternoon, I forced myself to read this long New York Times chronology of Bernard Madoff's $50 billion (with a B) international Ponzi scheme.

And I'm really glad I did.

It was absolutely riveting and I can't get it out of my mind. I'd say that if you've been struggling to understand the Madoff scheme, this is a good place to start because the narrative is so compelling and interesting to read. The media really has no idea how to explain this to the lay reader so I don't think they've quite imparted to people the scope of the fraud. It's historic.

I spent all weekend regurgitating the story to friends, which also helped me wrap my mind around some of the concepts and inspired me to conjure up a much clearer visualization of the larger financial system.

I don't normally glow about an article like this, it is definitely worth 45 minutes of your time. This guy was a total Bond villain and you get to imagine the plot of that movie in your mind. He even has the last name of a Bond villain.


If you decide to take the plunge and invest some time into the Madoff article, come back here and tell me what kind of weird physical abnormality your Madoff/Bond villain caricature has for which he needs to dominate the world in order to compensate.

My Bernard Madoff sustained an inoperable facial injury as a child that has caused him to experience a perpetual nose bleed. Doctors resolved this by diverting the blood into a series of cysts in the back of his throat that need to be drained by a busty fembot assassin in between hands of Texas Hold'em on a Mediterranean yacht.


ethan said...

Hey E--

This piece by Krugman is a nice place to start:

Also very much worth a read is this post on Madoff over at Naked Capitalism

Clifton said...

The mainstream news media's coverage and approach to this story is shameful and shows who really controls what makes the news.

Leigh C. said...

In the annals of "shonda fur di goyim", this guy has gotta be one of the worst. God help us all.

Duff said...

The WSJ has had several extensive puff pieces about the "hapless victims" of the "charming and natily dressed" Madoff.

Of course, we're still stupid and corrupt.

E said...

A big time shonda dur di goyim, Leigh.

He may even be redefining the word.

A regular Uncle Bernard, this guy.

alli said...

Hey, I have a formal economics education!

I believe Krugman wrote the other day that l'affaire Madoff is not all that different from international finance in general. That's been my suspicion since college. How do you keep an entire economy afloat when you push paper around and multiply numbers without actually creating or adding value?

Neoclassical economists totally ignored that question. Marxian, institutionalists, post-Keynesians - they did not. But they were laughed out of every academic journal.

For the best primer on some of the academic squabbles in the economics profession, i recommend Chris Hayes' article from summer 07, featuring my mentor/professor from college. Hip Heterodoxy