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Bailout Protected Bernie Madoffs

Had the economic good times remained, Bernie Madoff's $50 billion Ponzi scheme would have never been revealed.  Fraud is easy to hide when people aren't worried about their money.  A person earning regular 10% annual returns falls asleep.When the stock market fell, people began withdrawing their money from Madoff's fund.  After Madoff was unable to keep up with redemptions, he confessed his crimes.  Imagine, though, if Madoff had been bailed out before his fraud had been discovered. He would have had a compelling case for a bailout.  He could have said, I manage $50 billion.  Many of my clients are cities.  If I fail, people will lose their pensions.  Charitable foundations will go bankrupt.  People will suffer.  I am too big to fail.  Imagine if the government had bailed him out...continue to full post

Full post as published by Crime & Federalism on December 20, 2008 (boomark / email).