¶ Tierce: Today’s verse of the Madoff chapter: New York’s commercial real estate developers. This mess begins to look like one of Stanley Milgram’s disturbing behavioral experiments. While there’s no doubt that the SEC blew this one, it’s hard to feel sorry for investors who overrode commonsense basics in the stampede to “invest.” Especially when Mr Madoff appears to have mirrored their own way of doing business.
The outsize impact on the industry may have resulted largely because Mr. Madoff (pronounced MAY-doff) managed his funds much the way that real estate leaders have operated successfully for decades: He provided little information and demanded a lot of trust.
¶ Vespers: In 1618, the Defenestration of Prague launched the Thirty Years’ War. (Catholics threw some Protestants out the window.) In 2008, the ? of Baghdad ended the American Misadventure in Iraq. (Wouldn’t that be nice!)
Then there is Alan Greenspan, who, looking back in October of this year on the makings of the financial crisis he helped create (I mean, that just happened to come out of nowhere) delivered this “Who Could Have Known?” classic: “If all those extraordinarily capable people were unable to foresee the development of this critical problem…we have to ask ourselves: Why is that? And the answer is that we’re not smart enough as people. We just cannot see events that far in advance.”
The only problem is, many people did see events that far in advance.
Unlike Greenspan, I don’t believe the problem is that we are “not smart enough as people.” As we’ve seen time after time, smart enough people are all too willing to ignore facts they don’t like. Or, even worse, they construct oversight systems designed to be ineffective — and unable to provide to those in power information they don’t really want to know.
Alan Greenspan, of all people! Ayn Rand’s libertarian boy-toy! Too dim to see what he’d done!
Some members of the real estate industry are receiving the news with a mix of schadenfreude and sadness for their peers. Jeffrey R. Gural, chairman of Newmark Knight Frank, the brokerage firm, said Mr. Madoff had turned his family down as investors about eight years ago because they would not invest at least $20 million. For years, he said, colleagues introduced to Mr. Madoff through relatives or country club friends had sung his praises.
“People used to brag how they were getting these great returns when everybody else was struggling,” he said. “They thought Bernie Madoff was a genius, and anybody who didn’t give them their money was a fool.”
§ Nones. The cheering part is the new government’s willingness to learn from the success of ousted PPP mastermind Thaksin Shinawatra:
Mr. Thaksin had presented himself as a can-do chief executive, a prime minister who would run Thailand like a top-down business.
His main political innovation was to win the support of the rural poor, who form an electoral majority, by providing them with low-interest loans, cash and inexpensive medical care.
It is a strategy that Mr. Abhisit, the new prime minister, and the Democrats say they will now pursue as well, challenging Mr. Thaksin’s franchise in the countryside.
§ Compline. Here is a fantastic opportunity to rise to the occasion — something that’s magical only because it’s never obligatory. Rick Warren happens to speak for most Americans on the subject of gay marriage — however lamentable that might be. Right now, that is. There’s something out of proportion about raising a squabble about a detail of what ought to be an accentuation of the positive. One day only!