Madoff And The Meltdown
It’s been a year — a long and difficult one for many — since Bernard Madoff became an international symbol of greed and immorality. And it has been a year of fitful recovery from a financial meltdown that brought the nation to the brink of catastrophe.
Have we learned from our mistakes? Are we — as individuals, a community and a nation — taking the steps necessary to prevent a recurrence of these disastrous events? The answers are mixed, but on the whole positive.
Many of the Jewish organizations that were cruelly taken in by Madoff have implemented tighter financial controls and more transparency over investments. In many cases, generous donors have stepped forward to make up big losses.
There will always be a tension between the need for organizations to maximize return on investments to pay for the programs our community has come to expect and the need for prudence with donated dollars. But there are indications the twin disasters of Madoff and the financial meltdown have prompted a new, much-needed sense of caution when it comes to managing money.
As individuals, many of us have relearned the essential truth contained in the maxim of our parents: If an investment seems too good to be true, it probably is.
Less clear is whether we have sufficiently absorbed this lesson from Madoff’s modus operandi: being Jewish, belonging to a synagogue and/or having a long list of prominent Jewish friends is no guarantee of a person’s morality and financial prudence. Just this week, there were news reports of another Ponzi fraud that exploited communal ties to target fellow Jews, this one in Canada.
A financial crisis that has caused so much human misery was the result of many factors, ranging from shortsighted national policies to a live-beyond-our-means ethic in our personal lives. Included among them: regulatory processes that failed to keep up with the proliferation of new investment vehicles and a political environment of unthinking deregulation. Too often, the debate over how to fix those problems takes place in the realm of ideology and partisanship.
That could set the stage for new and even worse crises. Jewish organizations are showing signs of recovery, however slow. Our national leaders must act with a sense of urgency and a determination to learn from past mistakes. That’s not what Washington does best, but the stakes are simply too high for partisan business as usual.