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Madoff Scheme Not Much Worse Than Legal Ones

End of communism let Wall Street become unhinged: Friedman

By Jason Farago,  Newser Staff

Posted Dec 17, 2008 10:30 AM CST
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(Newser) – Wall Street used to be the epicenter of capitalism that the whole world wanted to emulate, but, on a trip to Hong Kong, Thomas Friedman discovers that the American financial establishment has lost its credibility. "We don’t just need a financial bailout," he writes in the New York Times, "we need an ethical bailout."

Bernard Madoff is "only slightly more outrageous" than the "legal Ponzi scheme" where banks bundled up bad mortgage debt and sold it, Friedman observes. And these days China seems more stable that the US, which has no strategy for ending the crisis. Madoff, he says, "is the cherry on top of a national breakdown in financial propriety, regulations, and common sense."

In Hong Kong, which once saw Wall Street at a model to be emulated, Chinese capitalists now consider America corrupt, writes Thomas L. Friedman.
In Hong Kong, which once saw Wall Street at a model to be emulated, Chinese capitalists now consider America corrupt, writes Thomas L. Friedman.   (©das farbamt)
In Hong Kong, which once saw Wall Street at a model to be emulated, Chinese capitalists now consider America corrupt, writes Thomas L. Friedman.
In Hong Kong, which once saw Wall Street at a model to be emulated, Chinese capitalists now consider America corrupt, writes Thomas L. Friedman.   (©jimw)
Wall Street was running little more than a legal Ponzi scheme these past years, writes Thomas L. Friedman.
Wall Street was running little more than a "legal Ponzi scheme" these past years, writes Thomas L. Friedman.   (©Pete Fordham)
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This legal Ponzi scheme was built on the mortgage brokers, bond bundlers, rating agencies, bond sellers and homeowners all working on the IBG principle: “I’ll be gone” when the payments come due.
- Thomas L. Friedman

Everyone needs a competitor. It keeps you disciplined. But once American capitalism no longer had to worry about communism, it seems to have gone crazy. - Thomas L. Friedman

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COMMENTS
Showing 2 of 2 comments
gilgordan
Dec 16, 2008 11:03 PM CST
Praise to the author on focusing on a root cause of the current financial condition of the mind and soul of so many who view capitalism as "smart business". There was a time in this fair land, where honor, honesty, and the word you spoke in business were to be trusted. No longer and how did it happen? Greed replaced Morality, Status and Control driven by social and political action of the last 30 years. Educational values of upmanship, and dishonesty to gain economically and socially have driven the business sector to this point, and just add in de regulation, and the majority of the governed are the people hurt the most. the old mantra, " the greatest good for the greatest numbers" was replaced by " the greatest greed to the fewest numbers"
Guest
Dec 16, 2008 10:37 PM CST
What about the legal Ponzi scheme of Social Security? Thank you, FDR!

Who bears the blame for the financial crisis?
USA Today

Regulation and the decline of capitalist ethics
Asia Times

 
China • ethics • Wall Street • communism • Asia • subprime mortgages • Hong Kong • capitalism • Chinese economy • Thomas Friedman • Ponzi scheme • financial crisis • Bernard Madoff

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