Published: October 20, 2009 10:42 pm      

Ron Hart: A Madoff stimulus

America’s favorite Ponzi scheme artist, Bernie Madoff, is having trouble in prison.

I am sad to report that the 70-something swindler is a bit depressed since reporting to the Big House. Just think: only one short year ago he was a perfectly content and well-adjusted guy who just happened to steal $50 billion from his own “Swindler’s List” of charities and retirees.

When Madoff checked into to the federal prison, he was forced to empty his pockets. There was an awkward moment when an SEC auditor fell out.

Maybe because he is so depressed and because there are precious few Jewish gangs in prison, Madoff has to make a name for himself in the Big House in short order. Instead of the Crips and the Bloods, Jewish gangs are called the Doctors and Lawyers, and I hear there is also a feared Jewish West Coast gang called the Retailers. Bernie is in none of these gangs, which forces him to fend for himself. In an attempt to establish his prison cred, he recently got into a fight with another inmate. Like most country club prison fights, I hear this one started with an argument over the 20-day moving average of AIG’s stock price on a chart.

Martha Stewart had to do the same thing when she went to prison: she had to send a message. If memory serves, Martha went to prison for organizing dog fighting or something. The Feds did get her behind bars, and we felt safer as a nation then. No word yet on Osama bin Laden.

Early in her prison term, fisticuffs with another inmate stemmed from a disagreement over seasoning a Cornish hen. Just to send a message, she seasoned it with lemon pepper and not the usual paprika. Nice prisons have certain rules, and Martha clearly pushed the limits with that breach of culinary propriety. A fight was inevitable.

After the Enron disaster, the SEC’s budget was tripled. The agency received letters from whistle blowers detailing Madoff’s illegal activities and still did not catch him. Evidently Madoff is such an accomplished liar that, even when he confessed to the crime, no one believed him. He did not make a trade for 12 years for his “clients.”

Bernie Madoff was convicted for taking money that was not his, spending it lavishly, and lying unremorsefully about it. He faced a choice between 150 years in prison or eight years in the U.S. Congress. He could have a year added to his sentence for his recent prison fight — that will show him. By then, the Republicans could be back in power.

In prison, justice is swift. Madoff’s fight began when he promised an inmate that one cigarette today would return three to him next week. Even prison inmates know when a promise is too good to be true.

Bernie Madoff’s lovely wife, the fair and demure Ruth, got a little sideways with the Feds, too. She had $14 million of her own money and wanted to keep it. The lifelong Democrat said that they were not swindled funds, but rather money she saved by heeding Obama’s suggestion to properly inflate her tires. The authorities did not see it that way, so she had to give some of the money back. I am told she is so badly off now that she has recently been seen drinking domestic wine.

Greed is an age-old story. The Securities and Exchange Commission, responsible for watching out for such fraud, fell completely on its face. The private sector pointed it out, and those tasked with vetting Madoff never would have invested with him.

Our government could not find a polar bear that had been stabbed and was running bleeding through the snow. It steps on ants as elephants jump over the fence. I just cannot wait for government-run health care.



Ron Hart is a Southern libertarian and a professional investor. He writes his column weekly.