Honor Among Thieves
Stephen Bainbridge, a law professor at UCLA, offers a nice counterpoint to the majority who cheered Bernard Madoff's 150-year prison sentence for running a Ponzi scheme:
Perhaps I'm lacking in the empathy President Obama famously thinks judges need, but I have a hard time working up much sympathy for Madoff's victims . . . These folks wanted to believe that they really had found a great and all-powerful Wall Street Wiz and that there was nobody behind the curtain. So they ignored basic precepts of investing. They got burnt. Whatever.
Coincidentally, a defendant in another fraud case was sentenced today in Washington. Harriette Walters, a former middle manager for the District of Columbia's tax office, received a 17.5 year prison sentence for masterminding a scheme to issue $48 million in property tax rebates to non-existent entities -- the money really went to Waters and her friends.
Now, Walters is denounced as a thief for "stealing" the District's money. Walters' own attorney acknowledged at sentencing, "She took the money of the District of Columbia when it was not hers, and that was a terrible things to do." But the District took the money from its residents in the first place. They were the actual thieves here, not Walters. Sure, it would have been nice if Walters used her skills to help refund the money to its rightful owners, but it's hypocritical to condemn for her spending the money on herself and her friends when that's exactly what the city's "elected" leaders planned to do. Remember, this is the same District that spent over $600 million on a baseball stadium. Nothing Walters did can approach that level of waste or fraud.
Even more comically, the sentencing judge told Walters that, "It's a shame you couldn't have used your talent and your brilliance to help the D.C. government." Help them do what? Steal even more money from local residents?
Comments (17)
Bill R
As Ron Paul puts it:
"Don't Steal. The Government Hates Competition."
http://www.flickr.com/photos/71392301@N00/1404773871/
Published: July 1, 2009 12:55 AM
newson
first, in the haste to condemn the state, i don't think it's at all productive to mitigate madoff's crime. stealing from pin-stripes on wall st is no less abhorrent than stealing from little-old-ladies. stealing is stealing, unless you want to fall down the interpersonal utility mine-shaft.
second, i count taxes as more akin to robbery/extortion than theft (which i understand to involve stealth), which fits the economic description of inflation.
at least the robber must confront his victim in the shakedown...
Published: July 1, 2009 1:10 AM
Econ Guy
"Don't steal. The government hates competition"
This can be applied to numerous other government activities. Some examples:
Don't counterfeit, the government hates competition (inflation)
Don't commit murder. The government hates competition (war)
Don't kidnap. The government hates competition (conscription)
Published: July 1, 2009 3:39 AM
jeffrey
I don't see why Madoff should be in jail. He was a businessman who defrauded people and now he is poor and his life is wrecked. That's plenty of punishment. He is no threat to anyone at all. There is probably plenty he could be doing on the outside to serve others. Instead, he is locked up like an animal (worse!) at taxpayer expense. It is really an outrage. I say: Free Madoff!
Published: July 1, 2009 7:22 AM
dewind
Madoff was fraud that was stripped of every possession he owned in an attempt to payback those he stole from; and as it should be. That is justice.
Justice is not enacting the revenge of those who were wronged. Empathetic and emotional rulings always bother me. We'll be paying for Madoff to live in a prison. We could have thrown him on the street and allowed him or his family to take care of him instead.
Published: July 1, 2009 7:50 AM
DNA
Newson is right. I detest the whole two-minute hate that the court proceedings degenerated into, but surely more punishment is due this man than to simply strip him of his property. A man that he swindled was so distraught that he committed suicide, after all. Libertarians would be well-advised not to make Madoff even remotely sympathetic.
Published: July 1, 2009 9:22 AM
Matt Wing
"...but surely more punishment is due this man than to simply strip him of his property."
I disagree. The punishment should fit the crime; The Godfather (first movie) taught us this. If you don't know what I'm talking about, then watch the movie. Judges need to strip themselves of any sympathy, let alone empathy, and be as objective as possible.
Madoff's 150 year sentence is a mockery of our judicial system. It benefits no one. The only good I see coming out of this is another satire from South Park.
Published: July 1, 2009 9:51 AM
DNA
Matt Wing,
Your post begs the question, is only stripping Madoff of his property proportionate to the crime? Maybe it is, maybe not, but let's not use the 150 year sentence (admittedly absurd) as a rationale to brush this question aside.
Published: July 1, 2009 10:08 AM
Andras
My understanding is that Obama is in negotiation with Madoff to replace Geithner and to run his Ponzi scheme.
Published: July 1, 2009 10:29 AM
eriemiller
Thrown him on the street? Not exactly, dewind; he'd have some pretty juicy job offers from his banker and broker buddies. He already knew how
to steal.
Published: July 1, 2009 10:56 AM
Matt Wing
DNA,
My point is a judicial system should be objective when possible. This means the golden rule of justice should be applied. This is: what you did to others, will be done onto to you. Meaning, if you use fraud to steal money and property from others, your property will be stolen from you.
This does not work flawlessly in all cases, and some subjectivity will have to come in play. However, this case in particular seems to me, black and white.
Published: July 1, 2009 11:32 AM
David Spellman
I agree that handing out an arbitrary 150 year sentence is irrational. I think it would be just to garnish his wages until he pays all his victims back what he owes them, however long that takes.
If he survived more than 150 years and left prison without paying his victims, justice would not be served. On the other hand, letting him go free with the stipulation that he pay back his victims would do some good--particularly if he can earn large amounts of money in banking, finance, or running the government ponzi scheme as someone suggested.
Let criminals pay for their crmes--literally and in cash, not useless vacations in Club Fed.
Published: July 1, 2009 11:40 AM
Matt Wing
DNA,
My point is a judicial system should be objective when possible. This means the golden rule of justice should be applied. This is: what you did to others, will be done onto to you. Meaning, if you use fraud to steal money and property from others, your property will be stolen from you.
This does not work flawlessly in all cases, and some subjectivity will have to come in play. However, this case in particular seems to me, black and white.
Published: July 1, 2009 2:00 PM
BioTube
Jail could work, but only if it consisted of forced labor with the wages redirected to compensate his victims.
Published: July 1, 2009 2:05 PM
dewind
@eriemiller
Yes, let him get great job to which his wages are garnished by 99% to re-pay those he defrauded. What is wrong with that? The other option is that he sits in a relatively comfortable facility costing us a lot of money while making 22 cents an hour.
Published: July 1, 2009 2:28 PM
Franklin
jeffrey, you've gotta Madoff fixation.
Do you also support freeing Harriette Waters? Why should Bernie go free when the SEC is hammering thousands of others who commit similar fraud. At least be consistent; otherwise you seem to imply Madoff is somehow more equal than others.
Published: July 3, 2009 5:21 PM
Rich
If you're starting an anti-imprisonment crusade, I'd suggest getting a better looking poster child.
Published: July 9, 2009 2:48 PM