Poor little E.T! So all alone and very far from home. His mummy and daddy landed their spaceship to explore the strange and beautiful planet earth. Of course, they told little E.T. to stay close, but you know how little boys and girls are, even those from other worlds! Soon E.T. was all turned around and hopelessly lost. All of a sudden, his mummy and daddy started their spaceship and zoomed away. They didn’t know they‘d left their little boy behind! Then, mean atheist grownups tried to catch E.T. and put him in an alien museum! But E.T. made friends with earth children, and the earth children hid him. They carried him on their bicycles to get away. When the grownups made a roadblock, E.T. used space powers to make the bicycles fly, leaving the grownups far below!
What a heartwarming movie! How wholesome! How uplifting! However, in E.T. Returns - the Sequel -didn’t I hear that was on the drawing board? - E.T. returns as a teenager. He’s surly. He’s sullen. He drinks, fights, and swears. Finally, he incinerates all of planet earth, starting with Wall Street!
Director Stephen Spielberg just lost an everloving fortune to Bernie Madoff, the shyster-financier whose legendary investment fund turned out to be no more than a massive Ponzi scheme, run from his non-descript office on Wall Street. Spielberg's not happy about it. In Ponzi schemes, earlier “investors” are paid off with funds taken from latter ones. Ponzi schemes work great until you run out of new investors. Once you do, they collapse. Mr. Madoff’s hadn’t yet reached the point of collapse. His sons had turned him in.
Bernie Madoff’s financial and personal pedigree was impeccable. Cultured, wealthy, refined, active in philanthropic causes - he had sealed his reputation chairing the NAZDAQ stock exchange. Surely he knew how to make investments behave! His sterling credentials attracted funds from the most financially savvy people in the world, themselves international bankers and hedge fund managers. Like shy debutantes, rich folk would sidle up to him at the country club, praying to be noticed, hoping to be invited to invest with him. A handful of his clients got too inquisitive - exactly how did he achieve his rock-steady consistent returns, anyway? - and he threw them out of his fund! This, of course, ensured that his remaining clients would toe the line - you don’t question a genius! Similarly, a handful of others complained about him to the SEC, at least one submitting a detailed analysis showing the man couldn’t possibly be operating the way he said he was. But the SEC, swayed by Madoff’s elegance and reputation, saw nothing amiss and declined to investigate! Their hero-worship cost Spielberg and other clients $50 billion dollars, at last estimate.
Ironically, Mr. Madoff’s clients included many bankers and hedge fund people who had shunned the CDO’s and credit swap instruments which have destroyed the world financial system. They were yet taking their bows for financial acumen and farsightedness, when their trousers dropped and all the world discovered they’d sent their money to Bernie instead, who’d lost every penny of principle! Isn't the Madoff scandal the spinning hubcap, still clattering long after the din of the main wreck has ended? When the racket finally stops, then maybe the whole demolished ruin of finance can be towed to the Obama collision shop, whose proprietor says he can fix it.
Mr. Madoff is Jewish, and the individuals who trusted him were predominantly Jewish. His scheme, therefore, was an example of affinity fraud, says this blogger. She quotes an WSJ article:
The Madoff tale is striking in part because it is like stealing from family. Yet frauds that prey on people who share bonds of religion or ethnicity, who travel in the same circles, are quite common. Two years ago the Securities and Exchange Commission issued a warning about “affinity fraud.” The SEC ticked off a series of examples of schemes that were directed at members of a community: Armenian-Americans, Baptist Church members, Jehovah’s Witnesses, African-American church groups, Korean-Americans. In each case, the perpetrator relied on the fact that being from the same community provided a reason to trust the sales pitch, to believe it was plausible that someone from the same background would give you a deal that, if offered by someone without such ties, would sound too good to be true.
The sense of common heritage, of community, also makes it less seemly to ask hard questions. Pressing a fellow parishioner or club member for hard information is like demanding receipts from your aunt — it just doesn’t feel right. Hucksters know that, they play on it, and they count on our trust to make their confidence games work. The level of affinity and of trust may be especially high among Jews. The Holocaust and generations of anti-Semitic laws and practices around the world made reliance on other Jews, and care for them, a survival instinct. As a result, Jews are often an easy target both for fund-raising appeals and fraud. But affinity plays a role in many groups, making members more trusting of appeals within the group.
I’d never heard the term “affinity fraud,” nor am I aware of specific schemes targeting Jehovah’s Witnesses. I’m sure there have been some. I’ve just not heard of them. Of course, I do know of business deals between brothers going south or sour. You know - say Tom Sowmire invites Tom Oxgoad to go in halves with him to build a shoe horn factory. Surely they’ll make a killing! However, Sowmire - a passable enough Christian, is really not very bright as a businessman, and soon the whole project has gone down the drain. That’s why we get a lot of counsel through our publications to the effect that Christians ought not be stupidly naïve when it comes to business matters: don’t put trust in every word, count the costs, get all details in writing….that sort of thing. Jesus said that “the sons of this system of things are wiser in a practical way toward their own generation than the sons of the light are.” (Luke 16:8) It’s a disquieting observation, but there is truth to it.
Then there was the period about 20 years ago when the friends started to get sucked into multi-level marketing schemes. You know…you sell a line of health products. You persuade some of your customers to also sell your products, which makes you a distributor. They, in turn, persuade some to sell for them, and you get a cut of everything downstream. It’s seductive. The pitch is that you will be helping your friends, providing them with stuff they really need. The glossy advertising shows you and your family lounging around your fancy swimming pool, with your mansion and luxury cars in the background. Ideally, you are thumbing your chest, just like in those innumerable Watchtower pictures decrying materialism. Multi-level outfits love to target close-knit religious communities, like ours. Members of such communities have a lot of friends who are sitting ducks for sales pitches. It got so that everyone could tick off a half dozen or so brothers they knew who were hawking vitamins, or internet plans, or drain plungers - buttonholing all their pals. But one brother observed that if he was going to enthusiastically speak to all about anything, it ought to be about the truth. Since he didn’t do that, it seemed disingenuous to do it for the sake of nose hair clippers.
Anyway, the JW organization endured it for a short while, then starting coming out with articles that you don’t go using “theocratic contacts” for personal gain. Not setting rules, you understand, but by repeated counsel, an atmosphere was established in which you would never dream of pushing your line of deodorants upon spiritual brothers. Now it’s a little like passing gas in public - it’s not that it’s forbidden, but nobody does it.
From a distance, it might seem that Jehovah’s Witnesses are like salesmen - hawking religion. But those who approach their ministry that way are not effective. Me, I enjoy the ministry, but I make a wretched salesman. I’m always thinking about why the other person doesn’t need whatever I‘m offering. Consequently, I’ve stayed away from sales as a career. One time, though, I came across a product that I thought I could sell….a type of insurance. I applied for the job, signed up for training, obtained an insurance license. Alas, it turned out to be arm-twisting. The supposed people who had already shown interest - so that you would not need to do cold calling - had actually shown interest a long time ago, and had already been bludgeoned a dozen times or so by arm twisters before you got their number. So they weren’t in very good humor. A training video demonstrated how one might overcome sales resistance - the householder involved was reduced to tears (by guilting him) until he finally signed on. The company (whose stock price just hit a 13 year low) considered this a sterling example of salesmanship. How else could you help such a person, it was pointed out. It wasn’t work I could see myself doing, so I dropped out, but to this day I regret not standing up then and there and telling them all how despicable their video was.
Ah well, that’s the business world for you. It is what it is. If you’re not very careful, you’ll find yourself using other people (or being used by them). But thanks to Bernie Madoff and the parade of bankers preceding him, perhaps all that stuff will go down the drain. Nobody has any money anymore.