the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Jan 12, 2009
Bernard Madoff was arrested on December 11 for the largest swindle in Wall Street history. He lost 50 billion dollars of his clients’ money through a giant pyramid scheme – or Ponzi scheme – using new investors’ money to pay out dividends to old investors. The scheme fell apart when some of his clients asked to withdraw seven billion dollars of their own money, which Madoff didn’t have.
Madoff was one of the most respected figures on Wall Street. He had been the chairman of NASDAQ, the second biggest stock exchange, and ran one of the biggest private investment companies. He was also a philanthropist on the side.
Madoff obviously didn’t manage money for ordinary mortals, but for those with tens or hundreds of millions of dollars to invest. Among his clients there were very rich people, big banks and also industrial companies. Ascot Partners, run by the chairman of GMAC, Jacob Ezra Merkin, could lose nearly 1.8 billion dollars. This is the same GMAC that is tying to fleece GM workers as well as the taxpayers. Tremont Group Holdings stands to lose 3.3 billion dollars. Fairfield Greenwich Group invested 7.5 billion dollars and Kingate Management 3.5 billion dollars. The super-rich Carl Shapiro may personally lose 545 million dollars. Major financial institutions in Spain, Switzerland, Japan and France each invested hundreds of millions of dollars they stand to lose.
But this pillar of Wall Street did nothing different from his peers at the big banks and hedge funds. They all promised high gains, knowing that it was impossible to distribute as much as they promised without it leading to the collapse of the collective swindle. Madoff is certainly a swindler, but the functioning of their system is a generalized swindle.
We could laugh at the idea that these high finance swindlers steal from one another. But this isn’t a giant Monopoly game, where the losses and gains are fictitious and concern only those who play. The entire economy has already paid for their swindles. Big companies are threatened with bankruptcy. Workers are laid off or suffer from greater or lesser periods of reduced hours. Factories close. Subcontractors collapse.
Since the financial crisis broke out, there has been a lot of talk about “cleaning up the financial system,” “regulation” or “transparency.” But, while the political leaders sound off in front of the TV cameras, banks and businesses continue to speculate.
This is the way their world functions. Swindlers and completely irresponsible people decide what happens with the economy, and with the lives of the women and men of the planet – while political leaders distract the population.
They shouldn’t be astonished when one day the whole thing flies apart in their faces!