We are all effected when 50 billion dollars vanishes from the economy in an instant as it did with the unraveling of Bernard Madoff’s gigantic Ponzi scheme which masqueraded as a legitimate investment. Trickledown economics may not work to our benefit, but it sure works in reverse.
We all feel the ramifications of this kind of thing. From the Billionaires who suddenly discover that they are “only” millionaires to the doormen who work their buildings. But the strongest shock waves right now, beyond the investors at least, are being felt by the philanthropies that relied on their generosity and are discovering that probably billions of pledged dollars are simply not there.
From Yeshiva University and Steven Spielberg’s Wunderkinder Foundation, whose loses top one hundred million dollars, to Elie Wiesel’s foundation or the endowment of my own kid’s school, the Madoff meltdown challenges blue chip names in Jewish charities. Among the questions that people are asking themselves is, “how did this happen?” “How did we get into this mess?” “Why did Madoff do this to us?”
The easy answer to all of these questions is a simple one word answer – greed. And like most easy answers to complex issues, the answer is certainly insufficient and probably plain wrong. I appreciate how we are tempted to feast on righteous indignation as a replacement for the financial support which may no longer be forthcoming. But that kind of righteous indignation is nothing more than spiritual junk food. It provides little sustenance for the long-haul even if it tastes great going down.
So what do we need?

Along with a real regimen of justice for Mr. Madoff and anyone else complicit in his scheme, I suggest that we need to discover genuine compassion for all those involved – even Bernard Madoff. Why? Because, from Madoff to the charitable organizations that relied on the wealth he supposedly created, and their leadership who entrusted their money to him, I don’t think anyone was motivated by greed.
In fact, I think that Madoff was motivated, at least initially by shame. And the only way to break a cycle of shame it to meet the ashamed with enough compassion that they can actually bear the responsibility that is theirs to accept. And for Bernie Madoff, that means imagining for ourselves why he really did this as the first step in figuring out what it means and how best to respond.
I doubt that Madoff started out decades ago with a complex plan to defraud major banks and a long list of wealthy Jews. More likely, Bernard Madoff began his career by successfully investing their money and regularly returning solid profits with nary a single bump in the investment road. But over time, those returns were not sustainable, and rather than live with the reality that he was not an omniscient investment god, and helping his old clients accept some down quarters, he started taking money from new investors to pay off the old ones — the classic Ponzi scheme. As the story unfolds, I am certain that this is the picture that will emerge.
Likewise, all of the philanthropists who “invested” with Madoff had one desire: to increase their wealth and their ability to use it in meeting human needs from education to cancer care. Could they have done better due diligence? Should they have researched more fully? Of course. But when we are busy doing good things, it’s easy to overlook the details and imagine that it will all workout. After all we tell ourselves, “it’s all for a good cause.”
It’s really just a modern version of the ancient rabbinic claim that individuals on a journey to do a good deed or perform a sacred task cannot be harmed. Cleary the evidence proves otherwise, but we keep repeating it because we hope that it would be true – it’s such a compelling idea.
So without being naïve about the real challenges created by the Madoff meltdown, I hope that even those of us directly affected by it, people whose good work will be curtailed, can meet this moment with the compassion that might carry us through it. In the compassion we seek, which is more than a weekly offered sentiment of “it’s okay”, we will also find the ability to strengthen the relationships and build the honesty which create the transparency which makes such schemes impossible to sustain for so many years.
Sermons about greed are not likely to prevent a repeat performance of this mess, but that kind of compassion, honesty and transparency are. And which is better, a few moments of sacred rage now, or preventing this from happening again for a very long time?