And that, of course, was at the heart of the problem. In it's final days, Bernie Madoff's Ponzi scheme had gone worldwide, but it was built on a solid foundation of "investments" by his fellow Jews. All of them were successful, and most of them were pretty sharp. So why did they trust a goniff like Bernie?
Yes, he had a good reputation. He was a bright young man back in the sixties, when he founded BMIS, and in the seventies, when he was a leader in the creation of NASDAQ. Mostly, though, he was a lantzman, a guy you trust because he's, well, like you -- provided you're a wealthy Jew.
Anthropologists Karen Cook, Russell Hardin, and Mary Levi put it like this:
In general, we are likely to deal more with those whom we trust. Hence, we tend to narrow our associations to certain networks, such as a neighborhood group or an ethnic group. If others in the same context do the same, we have effectively defined a group from which others are de facto largely excluded from many of our relationships. They may soon enough become excluded deliberately and not merely de facto, so that we begin to define them as actively foreign. In a sense, then, distrust defines the boundaries of our group. (Cooperation Without Distrust; Russell Sage, 2005; p. 67)Bernie targeted Jews for one important reason -- it was easier than targeting goyim. Reading between the lines of the news coverage, it looks like he might have actively rejected non-Jews back when the scheme was new, perhaps concerned that they might be more inclined to entertain the occasional doubt. Ponzi schemes being Ponzi schemes, however, the supply of rich Jews eventually was exhausted. Hello, Banco Santander. Hello, Royal Bank of Scotland.
(It didn't hurt at all that Jews have been marrying out with increasing frequency in recent decades. Kinship networks facilitated the move into Europe, and from there to the Middle East and Asia.)
Some of my non-readers (does anybody read this blog?) may think I'm singling out Jews. I'm not. Exactly the same thing probably is happening among Lebanese Christians, Pashtuns, Tutsi, Mormons, and an host of other tribalized entities in this diverse, competitive world. We'll probably see more of the same kind of Ponzi scheme falling apart, although probably not nearly so extensive as Bernie's. He's not your average goniff, by a long shot.
Just the same, I think a lot of people wish he'd listened to his mother, and become a doctor.