December 20, 2008

The Forward: "Madoff on the Couch"

From The Forward, the New York Jewish newspaper:

What Sort of Man? Madoff on the Couch

In Shakespeare’s play “The Merchant of Venice,” Shylock, the usurious lender, attains the status of literature’s classic antisemitic stereotype, in part because of his relentless preying upon non-Jews.

But the victims devastated by Bernard Madoff, the investment guru charged with running an alleged Ponzi scheme that blew through $50 billion of other people’s money, were primarily his own.

In this, say observers looking at the case through a psychological lens, Madoff achieved a wholly different level of notoriety.

“Hitherto, all ethnic groups who ascended into a national class of benefactors made their wealth off other ethnic groups,” said Nelson W. Aldrich, author of the 1996 book “Old Money: The Mythology of Wealth in America.” “They soaked the Irish or sued the French Canadians. They wouldn’t dream of doing what Madoff did.”

This is not to say that Madoff excluded non-Jews from his ruinous scheme. Several large European banks and other non-Jewish institutions and individuals lost millions, even billions, through their investments with Madoff. But in interviews with the Forward, mental health experts agreed that from a psychological point of view, Madoff’s exploitation of his vast Jewish network of friends — many of them close — and acquaintances to bring investors into his alleged Ponzi scheme constituted a level of behavior verboten even as criminal actions go.

“He might have violated a primitive rule against hurting your own tribe,” said Ira Moses, director of Clinical Services at the William Alanson White Institute, a psychoanalytic training center. “He may have broken a taboo amongst criminals.” ...

The novelist Nathan Englander said that he generally has no patience for the idea that Jewish misdeeds will stoke antisemitism. But he said that the Madoff scandal — with its long lists of bilked Jewish charities and individuals covered in major newspapers — embarrassed even him.

“It really raises up for me this primal thing of, ‘This is the kind of thing that looks bad in a general Jewish way,’” Englander told the Forward. “It gave me that ‘circle the wagon’ mentality that I don’t have very often.”

Yet this kind of betrayal from inside a community is not unheard of — there is even a name for it: affinity fraud — but it is unusual.

How Madoff might have justified to himself his exploitation of his own community — in which he was not only a major philanthropist, but also actively engaged in an elite country club scene in Palm Beach, Fla., and New York — would depend on the extent to which he believed his own lies, psychologists said.

Had Madoff deluded himself into believing that his scheme could go on forever, he actually might have seen his victims as beneficiaries, psychoanalyst and Yale professor Dori Laub pointed out.

“It’s possible that what we’re dealing with is a man who’s essentially depressed and as a compensation begins to feel some omnipotence to fight the emptiness,” Laub said. “If you end up really being the messiah, you’ll be glorified.”

At the other end of the spectrum, some psychologists posited that unconscious hostility toward the Jewish community may have provoked him to choose his victims as he did. Noah Shaw, who has studied the psychology of money, said that he had worked with patients who generalized their hostile feelings toward their own family into antagonism directed at their ethnic community.

Stephen Rittenberg, a former director of treatment at the New York Psychoanalytic Institute who collaborated with Shaw on his research, had a similar assessment.

“If he were my patient I would try to address that aspect: Was there some kind of psychological hatred of his own family, his own community?” Rittenberg said.

But Shaw speculated as well that Madoff may have given his victims little thought at all and chose them simply because the Jewish community was the group most accessible to him.

“When people have feelings of inferiority or inadequacy, they need to beat the system, to outsmart the rules,” he said. “It works in an extremely temporary way. It’s the psychological mirror of a Ponzi scheme: If you don’t keep doing it, you collapse.”

Madoff’s motives are further obscured by the fact that there is something suicidal about the very structure of a Ponzi scheme, which has no way of working indefinitely.

“Maybe the ‘deal’ with Madoff is that on some deep level he’s not able to believe that the future exists,” said Rivka Galchen, author of this year’s novel “Atmospheric Disturbances” and a trained psychiatrist herself. “Otherwise he wouldn’t have been able to sleep at night for pretty much the majority of his professional life."

Or maybe, like Willie Sutton and banks, Madoff robbed Jews because that's where the money is.

In general, minority in-group morality as applied to business ethics rests on the assumption that most potential victims belong to the out-group. Gypsies, for example, tend to believe that driveway repair scams are morally okay because the great majority of the driveways in the world belong to non-Gypsies. But what if Gypsies got incredibly successful and ended up owning a sizable fraction of all the driveways in the world? Then they might wake up one morning to shocking headlines about how one Gypsy had scammed lots of other Gypsies out of billions.

Similarly, Bernie Madoff could set himself up as "the Jewish T-bill" (to quote the NY Times) with many of his customers trusting him with their money because they assumed he was delivering such stable returns by cheating (through front-running) the out-group of NASDAQ traders, not cheating (through a Ponzi scheme) the in-group of investors. After all, why would anybody try to cheat Jews, who, as we all know, are a tiny, beleaguered, discriminated-against minority ... Except that they now own a remarkable fraction of the world's financial assets, making them a prime target for scam artists.

My published articles are archived at iSteve.com -- Steve Sailer

33 comments:

Anonymous said...

“He might have violated a primitive rule against hurting your own tribe,” said Ira Moses, director of Clinical Services at the William Alanson White Institute, a psychoanalytic training center. “He may have broken a taboo amongst criminals.” ...

What about the Indo-European "tribe" that not all, but many Jews constantly militate against?

Unbelievable hubris in this article, to say the absolute least!

Tragic, yet woefully typical double standard: We have been told ad infinitum (more accurately, ad nauseum) that favoring one's group over another is an example of mental "illness"; now they are saying that his(Madoff's) 'illness' was that he went against "his own people".

Utterly ironic, the very people who(by and large) so nobly have taught and continue to 'teach' us this 'lesson' violate it themselves?

Moral of the story: Hypocrisy should be recognized, especially in the psycho-social realm, as the ULTIMATE mental illness, particularly when forcing oneself on the rest of society as some kind of moral and ethical avatars.

Anonymous said...

Steve,

Just read the book (bought several copies) in two sittings. Awesome read. In a rational world you'd be the country's most celebrated journalist. Thanks for what you do, and for the rest of you, get on lulu and buy a copy.

DK said...

Unbelievable hubris in this article, to say the absolute least!

Not sure I understand your outrage at the Forward article. It seems to me they are attempting to understand something that most find surprising.

Hypocrisy should be recognized, especially in the psycho-social realm, as the ULTIMATE mental illness, particularly when forcing oneself on the rest of society as some kind of moral and ethical avatars.

You may not understand the role of the Forward. The Forward does not speak to or dictate to the American world at large, but dictates to the moderate Left affiliated Jewish community. The Forward has never relinquished a communal focus, and does not claim to represent general American interests. Give some points for honesty. The old logo, "Forverts," remains in Yiddish on the side. This is very different than those who pretend they speak for everyone when they do not.

The Forward does not, as a habit, conflate Jewish interests for general American interests. Even race realists, and in fact, even white nationalists, will reference their fairness, even in if in a backhanded way such as, "Even the Neocon [sic] Forward said,"

Look: http://www.davidduke.com/general/496_496.html

Ben Franklin said...

I guess I want to wait to find out if Jews are really the biggest victims of Madoff’s crimes. I can understand how Madoff’s exposure as a fraud affects those close to him, but I’m not as convinced that the most money was lost by those close to him. As Madoff was aggressively selling his fund abroad as an ideal investment vehicle, it could be that those last to invest with him (i.e., get ripped off by him) are the least related to him.

J said...

That Ponzi schemes are suicidal is only a supposition. Madoff operated its fund for thirty years, paying out a stable 10% p.a. to his investors. Recently he have been outgrowing the Jewish charity organizations world and have been receiving investments from important foreign banks. If not for the current world financial crisis, he could have gone on for several additional years and then wrap up and close down his fund in a quiet way, retiring to Palm Beach. The 2008 financial panic bankrupted many bona fide banks such as WaMu and Lehmann, and I dont see their qualitative difference with Madoff fund. All of them work only to the moment the public loses its faith in their solidity, and then they crash.

Vernunft said...

"That Ponzi schemes are suicidal is only a supposition."

Well, it's in the definition. If it weren't doomed to failure, it wouldn't be a Ponzi scheme.

Weird.

Anonymous said...

DK,

No, I agree that the Forward is a fair paper. I also agree that it speaks from a moderate Left/Jewish perspective, and does not typically conflate the issues they advocate with the broader American society as a whole.

My astonishment was directed against the general tone and tenor of the 'psychoanalysts' quoted in the article, who interestingly spoke of 'rule violations' against your own tribe;

when so much of psychoanalysis historically has been directed at discrediting and deconstructing European racial and 'tribal' identity.

BTW, I like your website.

J said...

The Madoff scam is so shocking because most of his investors were Jewish and there is supposed to exist a solid Jewish solidarity. Unfortunately, that is not the case. On the contrary. Israel, for example, has produced many spies for the country´s enemies. The ¨vaciamiento¨ (emptying) of Argentina´s Banco Mayo - a Jewish cooperative bank - was done by its own directives. There are many examples, the most horrible are the Judenraths under the Nazis, that are accused of cooperating with the Nazis. The Nazis tried and failed to set up similar organizations with the Polish, but Polish leaders preferred to die and never to give a hand to enslave their own. Jewish solidarity is an illusion shared by the Jews and antisemites. I would wish it to exist in reality.

Zimri said...

J, that's been the case since General Josephus switched sides in the Revolt. And don't get me started on the infighting within the walls of Jerusalem. Oy.

This is why, if I were a pure blood Aryan which I'm not, I wouldn't lose sleep over The Elders of Zion. For me, what's more effective at inducing insomnia is the fear that my relatives in Israel will be left hanging by the idiots in charge over there.

Paul Colemarke said...

Sorry. Not buying any of the conventional wisdom congealing around the Madoff ripoff. Nothing is as it appears in this situation.

This family is total scum and they are part of a scumbag network. The staged bullshit of the two sons taking the confession told us that. And then the evil smirking Madoff leaving the courthouse told us more.

There's a mountain of money missing and I bet most of it went to Israel. And I also bet that the U.S. taxpayers! are going to be making good on many of the losses.

The whole cover story stinks and there are about seven layers of criminal hell here.

Anonymous said...

You have Gypsies in America pulling the driveway tarmac scam? I thought that only the British were that foolish to believe a tinker's promise to do the job properly.

Astounding!

Anonymous said...

Many of the biggest victims were charities and banks, who wouldn't touch a fund if they suspected fraud. Charities are philanthropic organizations and generally will have higher ethical standards regarding their funding. Banks may not have high ethics, but they do have self interest and understand the law of fraudulent conveyance, and thus know that their large pockets make them the first target for recovery of the stolen money.

Lloyd G. said...

I like the underlying assumption here: It would have been less disturbing if Madoff had ripped off only goy widows and orphans to the tune of $50 billion.

Anonymous said...

"J, that's been the case since General Josephus switched sides in the Revolt"

He didn't really switch sides during the revolt; he moved to Rome after the revolt and wrote the history of it. One can argue that he may not have fought as hard as he might have had he not had an affinity and comfort level with Roman culture.

- Fred

dearieme said...

"his vast Jewish network of friends — many of them close": it seems to me to be an American oddity to refer to having many "close" friends. It's like that other American oddity of referring to a "personal" friend.

neil craig said...

Firstly I'm not sure that you are right about criminals targeting other tribes. Certainly the triads have little visible effect on anglos but clearly exercise a reign of fear over Chinese. The same used to be the case with the Mafia, though, like all good feudal rulers, they sometimes protected their community from exploitationn by outsiders.

Secondly the fact that Madoff was an equal opportunity crook would seem to me to discourage anti-semitism & even suggest that Jews are just like everybody else when it comes to being suckers.

Anonymous said...

Oh man, the Jews are forever the victim. If they are not being mistreated by Gentiles, they are being ripped off by other Jews.

mnuez said...

To make it a trinity, I'm with J and Zimri, much as the chevra here doesn't like it, the fact is that Jews are inordinately successful both because they have higher ambitions than your average non-Jew as well as because they have vastly greater talents than the average non-Jew. Do some Jews end up benefiting from having an uncle in "the business" when straighter noses might be slightly better qualified, sure. But in general, Jews totally suck when it comes to helping what you'd call "their own", successful Jews HATE the fact that they're surrounded by successful Jews and vastly prefer to hire non-Jews than Jews if they can help it.

Of course recognizing the above would require adopting a less than ideal perception of you and yours and would also seem to violate Occam's razor when one views all of the successful Jews out there, etc. etc. but what can I do? It's unfortunately the truth. As a Jew by birth, I wish it would NOT be true, but alas it is, and as Zimri pointed out, anyone with a deep knowledge of the situation in Israel would recognize that. Israel is one m-f powerful country, militarily, economically, intelligence-wise and every which way, yet its recent leaders (with the notable exception of Menachem Begin) have cared vastly more about the opinions and applause of non-Jewish non-Israelis than they have about what would be good for their local populace. (Scoring Arafat a nobel peace prize would be one example, creating the terror regime of gaza by making thousands of Israeli families homeless would be another, etc.)


As for Josephus, it would appear that the truth is about halfway between J's and Fred's take. Josephus was not in any way anti-Jewish and spent quite a few literary hours defending Jews from all comers (including long-dead ones like Manetho). But he DID leave his group high and dry by agreeing to a mass suicide which he then chose to not partake in, after which he travelled around with the Romans and couldn't but help to have been of service to them. To truly understand Josephus and his loyalties one would need to view him and his actions within the context of the period but suffice it to say that with defenders such as him (and R' Yochanan Ben Zakai, for that matter), we hardly need enemies.

mnuez

David said...

[There's a] rule against hurting your own tribe," said Ira Moses

- in a pious voice all but quavering with indignation, I am sure.

But when addressing White European people, a large number of influential Jews during the past century (and longer) have promoted the idea that the acme of virtue is precisely to hurt the interests of one's own tribe. One mustn't be "racist."

Who pushed desegregation in the South? Who were the Freedom Riders? Who started the NAACP? Who were the machers behind civil rights and immigration reform, the voices most eloquent in opposing "racism"? (Which only Whites can engage in, according to my Jewish middle school teacher.) Who is it that advocates White genocide from the highest halls of academe?

On the one hand, harming one's own tribe is what Whites must be willing to do in order to qualify as not mentally ill and to prove their moral respectability. On the other hand, respecting and protecting Jewish tribal interests as a moral absolute is identical to defending human rights.

This is hypocrisy, and everyone can see it, but it's useless to accuse Jews of hypocrisy. Plain criticism of Jews as a group is the one thing they are most consistently marshaled against. Though every White is a latent Nazi and a racist until proven otherwise, when criticized as a group Jews respond with dodges that they would jeer down if others uttered them:

1. It ain't us. We are no more than atomized individuals with a multiplicity of contradictory views;

2. You should be ashamed of yourself. My stomach is turning in the face of your hatefulness;

3. You are an ingrate. We have done many good things (but cf. 1., above);

4. I'm reporting you to the authorities.

LLoyd G. said

I like the underlying assumption here: It would have been less disturbing if Madoff had ripped off only goy widows and orphans

That is my point: any student of ingroup/outgroup dynamics could do worse than studying the Jewish people.

From the story:

[P]sychoanalyst and Yale professor Dori Laub pointed out[,] "It's possible that what we're dealing with is a man [who] as a compensation begins to feel some omnipotence[.] If you end up really being the messiah, you’ll be glorified." [Emphasis added]

Wanting to be Jesus is Madoff's sickness, perhaps.

DissidentMan said...

Here's my two cents....Madoff is continually being depicted as a con-artist and/or a gangster. In terms of damage done, that's what he may have amounted to, but I doubt that he personally identified with gangsters or scammers, and I doubt that he really wanted to be in the shoes he was in. I've just been reading how most Ponzi schemes start out with honest intentions, take a turn for the worse, and then dishonesty ensues due to an effort to sustain appearances. Looking at it this way there is no reason to think that Madoff was a terribly disloyal Jew, in his heart at least.

One question that we should all be asking is: Why is he being continually depicted (in the MSM) as being disloyal when he wasn't? I think that this misattribution of motive it a way for Jews to distance themselves from Madoff. They cannot abide the idea that someone so damaging to their image was a loyal Jew all along, so they engage in a process of diabolisation.

BTW i read how the original Ponzi scheme developed exactly along the lines I described. Charles Ponzi was hoping to gamble his way back to good fortune at the time the walls finally closed in on him. Those posters who think that flushing away billions in bad bets is some kind of mathematical impossibility, please think again. This has now happened at least twice before. Google for Nick Leeson and Jerome Kervial.

孔夫子, the Œcumenical Volgi (The Notorious ŒV) said...

I don't think Gypsy culture is set up so that you rip off other Gypsies. Like most clan-based societies, your reciprocal obligations are too serious. (Gypsies of other clans? Maybe.)

But the fact that the gadje are sheep to be sheared is an bedrock fact of Gypsy life: Rom rom, gadjo gadjo. ("A gypsy is a gypsy, a gadjo is a gadjo." [And ne'er the twain shall meet...])

kijkfaas mcgee said...

Jews have a disproportionate amount of America's assets, most of it well-earned -- but they don't have THAT much. America is a huge economy and even if Jews control one tenth of it, which is what I would guess off the cuff, there's still a hell of a lot more out there. Forward is a Jewish magazine, so I don't think we should be surprised by their Jewish focus on this scandal. It wasn't such a bad article.

Svigor said...

The novelist Nathan Englander said that he generally has no patience for the idea that Jewish misdeeds will stoke antisemitism.

An important ingredient in the philo-Semitic potion constantly brewed for the population; most Europeans, or at least most northern Europeans, find this kind of chutzpah so alien that they'd rather believe the fabrication (this chutzpah is righteous indignation) than the reality (this chutzpah is typical of the criminal sociopath).

It's an interesting house of cards, but lately I've been wondering how long the door can be kept shut; one little breeze will blow it down.

Svigor said...

Jewish solidarity is an illusion shared by the Jews and antisemites.

(Illusions are frequently real)

You're right that Jews have plenty of infighting going on. It's impossible to have an aggressive, ambitious group and not have constant internecine competition sans external threat (which is why Jews are so big on ginning up external threats). Doesn't make Jewish solidarity an illusion, any more than sibling rivalries obviate nepotism.

The richest Jews have been throwing smaller Jews to the wolves at least since medieval times.

Svigor said...

MNuez, what a card. Sometimes I read a few lines of his posts, and today he doesn't disappoint.

No no, none of Jewish success is due to ethnic nepotism.

*Snicker*

Some of us are paying attention, guy. :) When one pays attention, it's kinda impossible to miss how wrong you are.

Tired of Being Censored said...

“He might have violated a primitive rule against hurting your own tribe,” said Ira Moses...

Granted, the quote's from the mouth of a crackpot psychoanalyst, but when the essence of its meaning is applied to the pathetically hollow sounding "Indo-Europeans", it shows how ignoble we really are. I can't think of another people who've harmed each other so much in order to advance his biological competitors' ecological interests, no matter who those competitors might be.

The boring racist mnuez is correct in his constant drumbeating about the chosen being "better" than the, ahem, Indo-European, albeit it only in one category as far as I can see, and that's solidarity (the solidarity he claims is only a figment in the tiny imaginations of hateful men).
Granted, the solidarity ebbs and flows with the level of perceived resistance (i.e. antisemitism), but it's there, and it's worthy of emulation, not scorn. However, as far as little things like civilization building, well, that's a different story, nu?

Anonymous said...

"To make it a trinity, I'm with J and Zimri, much as the chevra here doesn't like it, the fact is that Jews are inordinately successful both because they have higher ambitions than your average non-Jew as well as because they have vastly greater talents than the average non-Jew. Do some Jews end up benefiting from having an uncle in "the business" when straighter noses might be slightly better qualified, sure. But in general, Jews totally suck when it comes to helping what you'd call "their own", successful Jews HATE the fact that they're surrounded by successful Jews and vastly prefer to hire non-Jews than Jews if they can help it."

Are you competing with testing99 to see who can post the most outrageously dishonest apologies for jewish racism against gentiles? Why does a jewish supremacist like you insist on living amongst us inferior goyim?

Anonymous said...

"Sorry. Not buying any of the conventional wisdom congealing around the Madoff ripoff. Nothing is as it appears in this situation.

"...The staged bullshit of the two sons taking the confession told us that.

"There's a mountain of money missing and I bet most of it went to Israel.

"...And I also bet that the U.S. taxpayers! are going to be making good on many of the losses.

"The whole cover story stinks and there are about seven layers of criminal hell here."

How incredibly prophetic Paul! Journalist Israel Shamir has blogged extensively on this one and unfortumately, this whole thing is seeming more and more like a gigantic "con within a con"; a 'Ponzi scheme within a Ponzi scheme.'

The "official" version of events is nothing more than a poorly-scripted cover story: Madoff and his acolytes (after all, NOBODY ever works alone) pulls off one of the GREATEST wealth transfers in history, while making it seem like his "people" were the main "victims" of his perfidy (gee, sounds awefully like the official histriography that a certain "people" were the victims of Communism, when in reality so many were its actual architects and beneficiaries).

To add insult to injury, we get High-Priest Abe and his acolytes arrogantly claiming how morally perfidious We are for merely noticing the obvious.

Wow, what a way to deflect the Truth and simultaneously project true racist animus against the real victims of this evil: the average American People.


Ephesians 5:6 "Let no man deceive you with empty words, for because of these things the wrath of God comes upon the sons of disobedience."
...................................

DK said...

mnuez wrote,

Israel is one m-f powerful country, militarily, economically, intelligence-wise and every which way, yet its recent leaders (with the notable exception of Menachem Begin) have cared vastly more about the opinions and applause of non-Jewish non-Israelis than they have about what would be good for their local populace.

Exactly how did Yitzchak Shamir demonstrate what you are talking about? For the others, you make a lot of assumptions, some quite strange, and require the following beliefs:

1) That your hardline solutions would have been more successful.

2) That the Israel prime ministers also believed your hardline solution would have been more successful.

We can agree to disagree on the former. However, I think the idea that the prime ministers you accuse of treachery to the people they were leading is most unconvincing.

Anonymous said...

"The whole cover story stinks and there are about seven layers of criminal hell here."

I suspect he is continuing his "Ponzi" scheme in front of our eyes and all through the US legal system, for what its worth. In the end he and his family will come out laughing.

Anonymous said...

"An important ingredient in the philo-Semitic potion constantly brewed for the population; most Europeans, or at least most northern Europeans, find this kind of chutzpah so alien that they'd rather believe the fabrication (this chutzpah is righteous indignation) than the reality (this chutzpah is typical of the criminal sociopath)."

There is actually quite a bit of low level mistrust and dislike (not hatred) of Jews and Israel throughout Western Europe. If you knew what you were talking about, you would know that. But you don't.

Interestingly, the strongest European nationalist parties like the Italian Northern League and Vlaams Bloc do not use any low level dislike of Jews at all to their electoral advantage.

And yet they seem to actually win elections instead of ranting about Jews like your Stormfront buddies do, Svigor. (How many elections has Stormfront and company won in the US compared to the National Front or the Danish People's Party, btw?)

Maybe antisemitism isn't a winning electoral strategy?

bbartlog said...

If not for the current world financial crisis, he could have gone on for several additional years and then wrap up and close down his fund in a quiet way

Do you understand what a Ponzi scheme is? There is *no way* Madoff could have 'wrapped up and closed down in a quiet way'. There were already tens of billions missing when the financial markets crashed; the crash just made it impossible for Madoff to come up with enough ready cash to maintain the illusion.

I do second the point that Madoff may have started out, years ago, as an honest trader. We could imagine someone who

- wants to be admired and respected (for his acumen an investment manager, in this case)
- has an exaggerated idea of his own capabilities
- isn't particularly honest

Suppose someone like this managed to achieve above-market returns for two or three years, gained some approval and acclaim, and then found that he was about to report some significant losses. If he were in a position to do so, he could easily fall prey to the gambling addict's mentality. He would report winning returns (just as before), faking the reports 'just for a quarter or two', and rely on his own genius as an investor for the real returns to catch up. Of course, eventually there comes a sitting face to face with reality, and in a year or two Madoff would have had to realize there was no way to catch up... but by then the scheme would already have been well underway.

Anonymous said...

Claim Madoff acted alone meets skepticism | U.S. | Reuters

http://www.reuters.com/article/newsOne/idUSTRE4BM4DP20081223