Madoff to spend the rest of his life behind bars

Bernie Madoff's sentence of 150 years (read: life) in prison may satisfy his victims' psychological need for revenge but it certainly won't get them their savings back.

According to prosecutors, Mr. Madoff swindled his investors out of some $170 billion over the course of the Ponzi scheme. In December, Madoff's books indicated a total of $65 billion was currently "invested."

Mr. Irving Picard, the trustee charged with winding down Mr. Madoff's affairs has thus far only been able to collect $1.2 billion to return to his victims.

Now, don't get me wrong, some sanction is required in this case. I just don't know if burying Mr. Madoff beneath the jail is it. With today's sentencing, the same folks whose "investments" paid for Mr. Madoff's lavish lifestyle will once again be paying to house him in prison.

White collar crime and punishment

R. Allen Stanford is just the latest in a long line of accused con men to face the prospect of prison time for his alleged misdeeds. He certainly won't be the last.

My question is whether it makes any sense to put a white collar criminal behind bars in the first place.

Mr. Stanford's alleged crimes include lying to investors and diverting investor funds to his own private bank accounts. Mr. Stanford's firm promised huge returns for those willing to invest in certificates of deposit in his Antigua bank. Of course, as I have pointed out before, it is a law of economics that the riskier the "investment," the higher the return.

Apparently no one questioned why a bank was paying exorbitant interest rates on certificates of deposit. Investors were blinded by greed and neglected to perform their due diligence before handing over large sums of cash to Mr. Stanford's company.

Now, if the allegations are true, I'm not saying that Mr. Stanford didn't do anything wrong. What I am saying is that locking him behind bars for the rest of his life doesn't do anything for the people he allegedly bilked.

I guess there's the lottery for the working poor; casinos for the middle class; and R. Allen Stanford, Bernie Madoff and company for the wealthy.

Greed is good?

Bernie Madoff's alleged swindle of over $50 billion was made possible, in large part, by the greed and avarice of wealthy individuals who bought the premise that they could earn huge returns on their investments without any risk.

This was not a man trying to swindle poor old widows out of their monthly social security checks. He wasn't trying to scam someone into believing they could make millions off the internet doing nothing. His victims weren't those so gullible as to believe that a bank in Nigeria would be depositing millions into their bank accounts.

The point is, ladies and gentleman, that greed -- for lack of a better word -- is good. Greed is right. Greed works.

Mr. Madoff scammed the sophisticated and the wealthy.  He scammed them because they were blinded by the dollar signs he dangled in front of them.  He scammed them because the Securities and Exchange Commission was (once again) asleep at the wheel.  He scammed them because during the Bush years no one wanted to rock the boat and actually regulate the financial markets.

Certainly there are some very wealthy people who lost a lot of money, but losing money is a kinder fate than that which awaits the avarice in Hell -- sitting in a cauldron of boiling oil.

Here's more on the Madoff saga:

• Yahoo! News' coverage of Madoff's arrest.
  
• Loren Steffy's (Houston Chronicle) column on the complicity of the SEC.
  
• New York Post's report on Madoff's bond conditions.
  
• Mark J. Astarita's blog coverage.