"I have no sympathy for Madoff. But the fact is, his alleged Ponzi scheme was only slightly more outrageous than the “legal” scheme that Wall Street was running, fueled by cheap credit, low standards and high greed. What do you call giving a worker who makes only $14,000 a year a nothing-down and nothing-to-pay-for-two-years mortgage to buy a $750,000 home, and then bundling that mortgage with 100 others into bonds — which Moody’s or Standard & Poors rate AAA — and then selling them to banks and pension funds the world over? That is what our financial industry was doing. If that isn’t a pyramid scheme, what is?
Far from being built on best practices, this legal Ponzi scheme was built on the mortgage brokers, bond bundlers, rating agencies, bond sellers and homeowners all working on the I.B.G. principle: “I’ll be gone” when the payments come due or the mortgage has to be renegotiated."
Read The New York Times, The Great Unraveling. (If you want details, read The New York Times series titled The Reckoning.)
You might remember that I said more than a week before the Madoff scandal was made public that financial institutions might have been an elaborate Ponzi scheme.
So why does the government keep trying to prop up the scheme?
UPDATE: Another New York Times columnist, and the newest winner of the Nobel Memorial Prize in Economic Sciences, compares Wall Street and the financial services industry to Madoff and Ponzi schemes, and calls it "America’s Ponzi era." Read The New York Times, The Madoff Economy.
Icing on the cake for Bush's legacy.