This is America

I don't know if I could possibly come up with a more ridiculously appropriate description of the last 10 to 20 years of American life than this article. It pretty much sums up everything good, bad, and weird about the country that we've both inherited and created.

If you've ever dreamed of turning the tables and taking Bernie Madoff to the cleaners, here's your chance. John Vaccaro, a New York entrepreneur, is selling iPad covers made from the disgraced financier's tailored clothes.

Madoff was sentenced to 150 years in prison in June, 2009 for swindling billions of dollars from clients in what has been called the largest Ponzi scheme in U.S. history.

Last November, his clothes and personal possessions were sold at auction sponsored by the U.S. Marshals Service with proceeds going to help those who lost money from his scheme.

One of the bidders at the auction was Vaccaro, 41, who had just launched a new company, frederickjames.com selling eco-friendly customized iPad covers made from cashmere and other fine fabrics. Vaccaro first conceived the idea for his unique covers after purchasing an iPad and searching for a cover that would prove to be both scratch-resistant and fashionable...

Vaccaro immediately sold five iPad covers made from Madoff's former cashmere sweaters to a Wall Street attorney who gave them out as Christmas gifts.

"For some people in the finance world, these covers, made from Madoff castoffs, represent bragging rights," said Vaccaro. "For others, it's a chance to own a piece of history."

Now Vaccaro is focusing on selling one-of-a-kind iPad covers made from Madoff's Banana Republic chinos and Murphy & Nye sailcloth pants for between $250 and $500, while providing buyers with a certificate of authenticity, and a receipt from the auction.

He estimates that he has enough fabric to sell a limited collection of 31 Madoff-themed covers. Once he breaks even with his auction purchase, he hopes to donate a portion of the proceeds to Madoff victims.

Whether you choose to view this article as interesting, disgusting, amusing, or irrelevant is of course entirely a matter of your own personal point of view, and to me that's what makes it so fascinating.

This article has everything going on--the Madoff issue, some kind of non-descript pandering to Madoff victims' "charity", the cult of celebrity, Apple fanboyism, corporate voyeurism in all its forms--and basically is an absolutely perfect addition to the American time capsule.

Ultimately, what's clear is that America's obsession with celebrity remains incredibly powerful, regardless of the source of the celebrity. For better or worse, Madoff is most assuredly a celebrity, and he captivates the imagination of the people in a way that few people can. 

[CNN Money]

Quote of the Week

I somehow managed to let yesterday slip by without posting the Quote of the Week. It's probably because I thought it was Wednesday all day (today's Thursday, right?), so it never dawned on me that it was time for Quote of the Week. So be it.

Without further excuses, here it is. It's from Bernie Madoff's latest jailhouse interview, as published in the New York Times.

This week's QUOTE OF THE WEEK

"[The banks] had to know. But the attitude was sort of, 'If you’re doing something wrong, we don’t want to know.'"
                    - Bernie Madoff, from prison, on his fraudulent Ponzi scheme

It's difficult to know exactly what to make of this line from Madoff. Is it simply a broken and desperate man trying vainly to blame others for his own shortcomings and crimes? Or is there more to his claims of complicity on the part of the large banks and hedge funds whom he claimed as clients?

On the surface, I think there has to be some truth to his statement. As the Times notes, there were significant discrepancies between Madoff's regulatory filings and other information that he provided to prospective investors, discrepancies that should have been revealed during the normal due diligence process. So either the banks were negligent in their research, or they were indeed complicit in the crimes--either way they must shoulder some blame, whether for a crime of omission or a crime of commission.

In that regard, I view the banks (and every Madoff investor) much the same way that I view over-leveraged home-buyers during the housing bubble. Both sides knew--or should have known--that the home in question was overvalued and that the buyer was overextended, but neither cared, and both thought that they could get out for a profit before the "fraud" was revealed. But it's always easier for us to blame the perpetrator--one bad man--rather than to admit that there is shared blame.

Admitting shared blame would require us to ask some hard questions about human nature and capitalism, and whether fraud is inevitable in all systems. It's much easier and more comfortable to blame these situations on isolated bad actors, and to banish them forever while we pretend to be innocent bystanders. I'm not certain we're doing ourselves any favors with that approach.

[New York Times]

Roger Clemens? Meet Bernie Madoff. An explanation...

With retired (for real this time, right Brett Favre?) pitcher Roger Clemens in Washington, DC this week to answer to perjury charges related to his alleged steroid use, the ongoing debate regarding steroid use in sports has once again come into the public spotlight.

The arguments on both sides have been well-documented (very well done here), but I was particularly drawn to one recent piece on NPR, in large part because it does a great job of summarizing my own feelings about performance-enhancing drugs (PEDs) in sports.

"Katherine from Larkspur, Calif." called into NPR's Talk of the Nation nearly three years ago. It was a few days after [Olympic track star Marion] Jones made her public admission [regarding PED use], and the topic for discussion was why athletes dope, and why they think they can get away with it.

The caller said that was missing the point.

"There is an untold story," she said, "about all the thousands ... who make a conscious decision, that are really great athletes doing the right thing, working really hard — and they just drop out because they're just not willing to do the things to your body and to go down that road."

In other words, athletes who don't just say no to drugs, but no to sport — athletes, it turns out, like that caller: Katherine Hamilton.

Ultimately, this is the insidious problem with steroids. It's not about the health risks, or that it encourages high school athletes to use similar PEDs--at least not directly. The problem is that where there are great rewards--and the rewards, both financial and otherwise, for athletic prowess have never been greater--there will always be those who attempt to cheat the system. If we allow those cheaters to prosper, then the viability of the entire enterprise is compromised. The more great athletes who quit out of despair, the closer sports in general come to being simply irrelevant. Nobody cares about sports that they consider (or fear) to be rigged, except as a side show--like professional wrestling or heavyweight boxing.

We simply cannot allow the greatest rewards to be accessible only to those who are willing to make the most questionable decisions. Therein lies the similarity between Roger Clemens and Bernie Madoff (or any number of other white-collar criminals). Both existed in arenas where great rewards were to be had, and both (allegedly, for now) cheated to rise to the top.

 
Being the great believer in meritocracy that I am, nothing offends me more than to see a supremely talented athlete--like the woman profiled in NPR--abandon her dreams because she sees no choice in a rigged game. A society that rewards (or at least, does not punish) the taking of shortcuts to their accomplishments will eventually find itself with no incentive to work hard or do things "the right way".

Clearly, our society is one that is rife with inconsistencies. We vilify those who use PEDs in sports, but we cannot watch a single sporting event on television without being bombarded with advertisements for antidepressants, male enhancement drugs, or cholesterol-lowering medicines. In many ways we have become a "quick-fix" society, but we shun these behaviors at the highest levels, or when they begin to offend our collective morals.

Eventually, we will need to address these inconsistencies, and find a way to return to being a society defined by true hard workers. Until then, focusing on figures like Clemens and Madoff--men who chase the highest rewards that our society can provide--will have to suffice. Hopefully, this is one area where "trickle-down" economics will indeed pay dividends.

[National Public Radio]