According to articles, some full of pseudo-psychology, that are appearing in various newspapers and in blogs--New York Times, The Daily Beast, even Paul Krugman--Bernard Madoff didn't want to rip anyone off, he just wanted to be accepted and win people's approval by making them lots of money. Or as Krugman asks: How is Madoff's scheme any different from the rest of the delusion that infiltrated our economy?
Madoff is now confined to his apartment in Manhattan and has been ordered to have his wife pay for 24/7 private security guards. With his scam reaching beyond Manhattan, the Hamptons, West Palm Beach, Hollywood, all the way to Europe, the Persian Gulf, Southeast Asia, and finally China, there are a lot of people out there who have lost millions, perhaps billions, and I would think that Madoff's life is indeed in danger. His curfew prevents him from being out after 7:00 pm, but let's face it: what restaurant could he safely eat dinner in now?
However, the psychology of the victims interests me, too.
According to folks who were approached by Madoff, back when, there was a lot of status involved in being able to say that you had enough money to invest with Madoff. He didn't accept clients without a certain minimum, once a million, and apparently, at the peak of his fame, that minimum was $20 million. Less affluent groups of friends and colleagues would pool their assets so that together they could reach the threshold. Now they are all broke together.
But for a decade or so, they got to drop hints at cocktail parties or on the greens, that they were successful enough to be a Madoff client. And they were getting a 10% return on their "investments."
The Daily Beast's post focuses on how Madoff himself wanted acceptance, and it looks like his clients did, too.
People paid a lot of money for bragging rights. But now we will, too.
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