It’s hard for me to imagine one man’s operation losing fifty billion dollars. The sums are beyond my comprehension. It reminds me of an illustration I used in a message several years ago. I said that if I kept working at my current salary, it’d take me 1500 years to catch up with Alex Rodriguez (a baseball player who had just signed a $250million contract). Unimaginable wealth!
But I didn’t stop there. I explained further that it would also take 1500 years at his current wage for Alex Rodriguez to catch up to Bill Gates.
And here – in Bernie Madoff – we have a fellow that lost fifty billion in just a few years.
Jerry Pournelle wonders why, if the root problem is bad mortgages, our bailout couldn’t just focus on them. I’m no economist (as if that has done anyone any good lately), but it appears that while the original computation of bad mortgage value might be around $100 billion (I’m going by Pournelle’s figures, and his math was inaccurate enough to multiply 8 & 12 and get 92), all the complex “investment” vehicles surrounding it magnified that amount (as all the Bernie Madoffs along the way took their cut), making it and its impact o the whole economy much larger.
Here’s a story about one couple who lost their life savings to Madoff. One paragraph stood out for me:
My husband, Dominic, is 48 and I am 55. We are young and expected to continue to explore and learn for many more years. Now, I don’t see how that is possible. We have no income, other than a small pension from Dominic’s job. It doesn’t cover our monthly expenses. Expenses that we incurred when we had wealth with Bernie Madoff.
What old people! Should I feel like a failure, not because Bernie took my money, but because here I am only a couple years younger than Dominic and have no prospects for retirement anytime soon? But I think I do have an advantage over that couple. I work. I am gainfully employed. Sure, I’ll never be considered of any interest by Forbes or any other list makers. I may not even be able to retire before I wear out. But I can work.
Dominic and his wife illustrate the problem of the larger (and completely legal) Ponzi scheme in which we are all mired. Social Security was designed to depend on a couple of factors:
- More workers than recipients.
- A fairly close correlation between the age of retirement and the age of death for most people.
Neither of those is true any more. The population of retired folks is growing faster than the population of workers. At the same time, many workers value early retirement. While they may not begin receiving Social Security, by not earning money any more, they no longer contribute to the system, further reducing the ration of workers to recipients.
Is work a bad thing? A curse from God? Something to be avoided if at all possible? I like (most of) what I do. While I understand the temptation of being able to do whatever I want, whenever I want, I find greater value in what I am doing, in the work I do.
Since Dominic and his wife have found a friendly, open community there in Arizona, I pray that they will also be able to find jobs that they will not only enjoy, but will be a blessing to their community.