Bernie Madoff's Real Legacy

Madoff's Legacy: A New Generation of Bicycle Thieves?

In the post-World War II Italian movie classic, "The Bicycle Thief," the protagonist makes a moral full circle.

At the beginning, the faceless but dignified day laborer is the victim of a seemingly innocuous crime: his bicycle is stolen.

To the worker, however, his bicycle is everything: not just his lone material possession -- we earlier see his wife hocking their linen for bread money -- but his sole means of making a livelihood (working for the government plastering billboards around Rome).

As he searches the city in vain, his despair and rage palpably grows.

Finally, overcome by temptation and desperation, he succumbs to his own inner demons, and steals another's bike, marking the evolution from victim to perpetrator.

Of course, he's promptly apprehended; in one of the most poignant scenes in cinematic history, the camera cuts to the bicycle thief's sense of shame and remorse as the vengeful, (equally) hungry crowd surrounds him (they ultimately take pity and let him go).

Madoff's Legacy

For society at-large, the real legacy of the now-derailed $50 billion fraud perpetrated by New York financier Bernie Madoff is that it unleashes thousands of prospective Bicycle Thieves.

Having been wronged so egregiously, one's own inclination not to wrong others is weakened. Even though their misery may be due to one or at most a handful of cheats, all of society seems complicit: didn't everyone allow it? After the fact, what is anyone really doing about it?

Compounding matters is the real economic hardship facing many of the investors Madoff victimized.

It's no exaggeration to say that, virtually overnight, many have gone from generous givers of charity to candidates for receiving it. Like the bicycle thief, people in desperate circumstances are capable of doing desperate things.

Society's Duty

It is incumbent upon society -- the rest of us -- to check those impulses. In turn, that requires doing two things:

One. Mitigate the economic harm to the victims.

The bicycle thief lost . . a bicycle. By contrast, many of Madoff's disproportionately wealthy clientele apparently now face the loss of their homes, their possessions, and indeed, at least for some, their sole source of income.

No one is "entitled" to belong to a country club. But neither should anyone, at least in a country as wealthy as America, be consigned to go hungry, or homeless, or without basic medical care. Ironically, perhaps society finally has an incentive to create a genuine safety net now that the formerly well-to-do need it as much as the poor.

Two. See that justice is done -- both for the sake of Madoff's victims, and to prevent future ones.

Incredibly, Madoff appears to be using money taken from investors to pay a battalion of defense lawyers. He seems to be getting his (or more accurately, his investors') money's worth: Madoff's sole punishment so far, aside from public condemnation, is being confined to his Park Avenue residence.

It is simply unconscionable for Madoff to retain any spoils from an "endeavor" that cost his investors everything. Madoff's homes, boats, cars, etc. are doubtless worth far less than the $50 billion that he allegedly stole -- but it's a start. Toward that end, you'd think that there should be a New York judge with jurisdiction willing and able to put an immediate freeze on Madoff's assets, and issue an injunction preventing him from spending his victims' money on his legal defense. (Too bad the public defender's budget has been gutted).

Once Madoff is separated from his assets, comes the question of legal punishment.

In my opinion, spending taxpayers' money on prosecuting and incarcerating Madoff is simply throwing good money after bad. Once his homes have been confiscated, my suggestion is to let him live at-large, amongst the community he defrauded -- perhaps even a mendicant at one of the many charities he defrauded. He'll be much more vulnerable like that than protected from his victims in a minimum-security "Club Fed."

Finally, undertake true systemic reform.

Ultimately, the best way to honor Madoff's legion of victims is to make sure that there aren't any more. That means (re)creating a system where the financial cops haven't been co-opted by the people they regulate (Wall Street); people who save and invest have more rights than the people who manage their money; and it is rational, not foolish, to trust others.

If The Bicycle Thief has a silver lining, however slim, it is that social standards of honesty and decency still matter. It is time for our laws to reinforce, not undermine, those mores.