Tag: Madoff

Why Bother Being Ethical? A Follow Up

Dr. Bruce Powell, founder of New Jewish Community High School in West Hills, spoke at Or Ami last week about How to Explain to our Teens Why Bother Being Ethical in an Unethical World. It was Fabulous. He was Inspiring. Straightforward. Contemplating still Dr. Powell’s teachings, I came across a sermon by Rabbi Stephen Pierce of Temple Emanu-El in San Francisco. Poignant, insightful, meaningful. Do read it:

Coziness, Drowsiness, The Lulling Effect, False Profits and Truth Decay—Restoring Trust After the Bubble Decade Of Economic Triumphalism, Materialism, Arrogance, Exploitatioin, Malignant Narcissism, and Betrayal

A sermon delivered on Kol Nidre 5770 Rabbi Stephen S. Pearce, PhD

Our era is on trial! The financial mess created by uncontrolled greed created an ethical vacuum and destroyed faith in the advice of so- called “experts” and government regulators who reassured us that our assets would grow at an uninterrupted rate, home equity would continue its meteoric rise, and retirement funds would be protected from volitivity— even as the world economy descended into the abyss. harvard Law School economist kip Viscusi called this sad state of affairs “the lulling effect”— the government’s imprimatur that makes people feel safer than they really are. Where did we go wrong? Jean Twenge and W. Keith Campbell, authors of The Narcissism Epidemic: Living in the Age of Entitlement, provide a stinging indictment of what led to the current turmoil:

Understanding the narcissism epidemic is important because its long-term consequences are destructive to society. American culture’s focus on self-admiration has caused a flight from reality to the land of grandiose fantasy. We have phony rich people (with interest-only mortgages and piles of debt), phony beauty (with plastic surgery and cosmetic procedures), phony athletes (with performance-enhancing drugs), phony celebrities (via reality TV and YouTube), phony genius students (with grade inflation), a phony national economy (with $11 trillion of government debt), phony feelings of being special among children (with parenting and education focused on self-esteem), and phony friends (with the social networking explosion). All this fantasy might feel good, but, unfortunately, reality always wins. The mortgage meltdown and the resulting financial crisis are just one demonstration of how inflated desires eventually crash to earth. Read on, page 3.

Madoff Affair: Tribal Thinking and Its Dangers

Larry Gellman, a former member of my friend’s congregation, reflected thoughtfully in his blog, Thoughts from the Desert, on the Madoff affair. Gellman writes:

Time Magazine‘s article entitled, “How I Got Screwed By Bernie Madoff,” was written by investor Robert Chew. He explains that all of his money and that of his wife’s entire family (more than $30 million) was invested with Madoff.

But look at what he says:

“The call came at 6 p.m. on December 11. I had been waiting for it for five years…
I think everyone knew the call would come one day. We all hoped, but we knew deep down that it was too good to be true, right?”

Which brings us back to the original question: Why did so many smart people give Madoff all their money and sit back and do nothing when it became clear–or at least seemed likely–that he was reporting unrealistic results?

Part of it was human nature but I believe a bigger part was related to the rules of the game governing Members of the Tribe–the Chosen People at the Jewish clubs and charities where a select group of their friends and associates were also invested with Madoff. There are certain unwritten rules that go along with membership in that group. The first is that you never criticize Israel in public and the second was apparently that you don’t question Bernie Madoff. To question Madoff would have been an affront to the other members and particularly those respected tribal leaders who got them in the door in the first place. Never mind the facts and never mind the gnawing feeling described by Robert Chew that this wasn’t going to end well.

The Madoff catastrophe has left the Jewish community reeling financially and emotionally. It has also been jarring for many of us to realize that a fellow MOT could do this to his own.

But the major positive lesson that might be learned is that it’s time to move beyond tribal thinking for our own good. We can’t and shouldn’t abandon the idea of community and a shared responsibility for each other’s welfare. But we live in an open, pluralistic world where the true value of Judaism is now reflected by our wisdom, ethics, and values–not by our need to stick together and blindly trust only our own. Most American Jews realized this a long time ago. Hopefully more of our Jewish organizations and their leaders will finally get the message.

Bernie Madoff: The Fires Continue to Burn

And the Bernie Madoff Fires Keep Burning

Some Resources:

A friend’s colleague’s friend’s family is unfortunately amongst the many investors who were affected by Bernie Madoff’s scams. She is active in the NY Jewish community and has created a group for families affected and who need help. If you know of any one who has been affected, please refer them here.

For the Local Los Angeles situation: Check out Swindler’s List (Jewish Journal Blog)

Regarding National Jewish Victims? Check out The Fundermentalist (JTA blog)