Bernie Madoff is an expert on Ponzi Schemes

NO, it’s not an understatement.

So when he says in an interview with the New York Times, expanded upon by Bloomberg, that the US Government is running a Ponzi scheme, I must take notice and listen.

Bernie says the entire US Government is a ponzi scheme, that the SEC looks bad for his getting away with his scheme, that it is a crime that no one from Goldman or elsewhere has gone to jail, that big banks and hedge funds had a willingness to blindness.

Bernie says that regulatory reform is a joke, that Dodd-Frank Reform is not too big to fail, even while it’s banks are.

The very banks who control the trillions of US Government insured deposits and can leverage them hoping to be on the right side of future price actions on real things and man made investments, even layered constructs. Our government insured deposits are sill being exposed, re-infored by recent reform, to too many trader’s personal feelings and frets about the direction of cotton prices and other speculative targets, which, remember, half of which will turn out to be on the wrong side of history.

Such continuity brought to you by the most recent law to “never let this happen again”, the parodied but all to real Dud Franc bank with it’s delineated but not really limited rescue fund, and incomplete and unclear “flexible” instructions to the powers that be, without tying the hands of again surprised regulators such as the FDIC, SEC, Fed and Treasury who feel they have to do what is necessary the next time. They are regulating against the laws of nature. There will be feasts and famines in the plant and animal kingdom forever, they just know how to be sustainable, not political.

Bernie is right, bankruptcies and foreclosures and jail terms should not be a thing of the past. The government can only help create them, it can not, obviously, prevent them.

While some paraphrasing was in order, I profess to know of no better expert on Ponzi schemes. When Madoff speaks Ponzi listens too

But a difference exists between Madoff and the US Government.

What the government does, is by and large legal, after all the government has had a lot of say in the rules. Remember, the one thing laws always do, is to create criminals and the US and most governments us their best efforts to minimize turning themselves into criminals.

Laws indeed are the cause of all criminality. Governments should be careful when it makes them.

What Madoff did was learn how to make off with a lot of money belonging to others. The losers, the real ones, not including I think, the owners of the New York Yankees, did more than make a bad investment; they stepped in the path of a buzz saw with a well executed plan born of accidental opportunity. Most of us run across opportunities to steal. Most of us defer most of the time. Few of us run across the large opportunity Bernie did and with which he ran with fabulous network marketing and execution by staying stealthy under the radar of anyone who could and should have exposed him.

Until recently, he and many of his winners got to keep or use their ill gotten goods for some time, some likely forever. And some might have been innocent winners in this lottery. Collateral damage sucks.

What the government does (any government anywhere by any name) is to use it’s powers to please the people, at least the ones that keep them in power of otherwise reward them. All of the people can not be pleased all of the time.

The government does not get to keep its ponzi money for long because it is essentially a trust, a mutual fund, a pass thru mechanism, a benefactor for others. For whom it “benefacts” is what makes politics fun, sleazy and full of hypocrisy.

Indeed the government does give hypocrisy a bad name.

Bernie is right when he says someone should have gone to jail. But even in America with our large 5th estate of trial lawyers and political class, the collective consciousness at that level knows that what is bad for my enemy might be bad for me.

Even IRAN really did not want their mortal enemy Mubarak to fall.

Bernie was right when he says the SEC looks bad. Some have said the Director of the SEC looked bad when she ran FINRA, but she got the job despite the accusations made by the very man who gave the SEC information early about the Madoff fraud. Ignored information.

Bernie was right when he says big banks and hedge funds had to have known about his scheme. But willful blindness is not a crime,other wise our legislators kiss our behinds with new laws and regulations so we will re-elected them but willfully defer on important items. Big items ignored too long. Think deficit, international competitiveness, schools unable to teach reading, writing and rithmatic. But someday we will all be insured. Who really believes that?

Bernie was wrong equating his printing of money with the printing the government does. His was illegal and also hurt identifiable people.

The government is us and it has our best interests at heart, unless you, Bernie.