Something is Rotten in the State of Denmark

Frank Rich, writing about the moral bankruptcy of our times, summed up my feelings well in his op-ed in the NYTimes on Sunday:

As our outgoing president passes the buck for his failures — all that bad intelligence — so do leaders in the private and public sectors who enabled the economic debacle. Gramm has put the blame for the subprime fiasco on “predatory borrowers.” Rubin has blamed a “perfect storm” of economic factors, as has Sam Zell, the magnate who bought and maimed the Tribune newspapers in a highly leveraged financial stunt that led to a bankruptcy filing last week.

After a while they all start to sound like O. J. Simpson, who when at last held accountable for some of his behavior told a Las Vegas judge this month, “In no way did I mean to hurt anybody.” Or perhaps they are channeling Donald Rumsfeld, whose famous excuse for his failure to secure post-invasion Iraq, “Stuff happens,” could be the epitaph of our age.

Our next president, like his predecessor, is promising “a new era of responsibility and accountability.” We must hope he means it. Meanwhile, we have the governor he leaves behind in Illinois to serve as our national whipping boy, the one betrayer of the public trust who could actually end up paying for his behavior. The surveillance tapes of Blagojevich are so fabulous it seems a tragedy we don’t have similar audio records of the bigger fish who have wrecked the country. But in these hard times we’ll take what we can get.

Rich didn’t have enough space in his column to mention the other three stories of mind-boggling fraud, corruption, and lies that appeared in the paper that day.

First, there was a “follow the money” expose' on Chuck Schumer’s close ties to Wall Street. Mr. Schumer was the leading advocate in Congress for deregulation of the financial industry; and in return, he received the most campaign donations from Wall Street of any Congressman in the government, except John Kerry. And we were supposed to believe that Wall Street is mostly in bed with the Republicans. Um, sorry folks. The biggest difference between the Rubin/Summers Democrats and the Paulson Republicans may turn out to be which Wall St. firm each camp calls when the government needs to find out how much money still needs to be printed in order to recapitalize the U.S. banking system. Paulson has been calling his friends at Goldman Sachs, where he was the former CEO. Summers, however, will call the folks over at Citigroup, home to his mentor and confidant, Robert Rubin.

Another front-page article appearing that day reported the story of Marc S. Dreier, “one of New York’s most accomplished lawyers,” who swindled people out of at least $35 million by selling fake promissory notes issued by his company. Mr. Dreier needed the cash to fund his lavish lifestyle that featured a $30 million art collection, homes in the Hamptons, Manhattan, and Santa Monica, a Mercedes 500 and an Aston Martin, and a yacht with a Jacuzzi and a crew of 10.

Dreier will shortly find himself in prison; but he should consider himself a lucky man. Why’s that? Well, no one will remember his name or even really care that he made off with a mere $35 million. You see, the story of his rather sizable swindle broke the same weekend as the mind-blowing $50 billion fraud perpetrated by Bernard Madoff, who for many years ran the largest Ponzi scheme in the history of mankind. Madoff’s story is simply unbelievable. It would be laughable if the victims of his crime didn’t include many of the same sweet Jewish grandmothers who, I like to imagine, helped put Obama over the top in Florida when their grandkids, inspired by Sarah Silverman’s video, flew down from New York to convince them to go with Barak. Countless people have lost their life’s savings, not to mention any remaining trust they may have had in Wall St.

But Madoff is not the only villain in his story. A number of fund-of-fund managers entrusted their entire portfolio (of other people’s money) to Madoff. This, despite the fact that they were being paid millions by their clients to diversify the investments and to conduct the proper due diligence on the folks to whom they were farming out the dough. No one needs to give these managers 1% of their investments just so they turn around and hand it all over to some two-faced criminal. I’m sure the original investors could manage to accomplish that feet all on their own without any profession help from a clueless middle-man. It’s absolutely pathetic.

Add these stories to the Blagoyevich scandal, and the whole stinking pile of lies makes for a rather depressing picture. Maybe I’m looking at history with rose-colored glasses, but it seems to me that, these days, a larger than usual number of politicians and lawyers and bankers are turning out to be crooks. Or maybe they are just coming out of the woodwork now because the economy is imploding. Whatever the reason, it sure seems as though we are living in an age of widespread mendacity.