December 2, 2014
The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014
Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology
The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious
: Trying hard to be 'positive' but never succeeding? Blame Your Brain
April 14, 2014
Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time
: First degree: How America really recovered from a murder epidemic
: When love is not enough: Teaching your kids about the realities of adult relationships
: How you can tell if your financial adviser is setting you up for potential ruin
: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate
: Eating Watermelon Can Help Control High Blood Pressure
April 11, 2014
Rabbi Hillel Goldberg: Silence is much more than golden
: How to value a child for who he is, not just what he does
: A Simple Blood Test Might Soon Diagnose Cancer
: Have A Slow Metabolism? Let Science Speed It Up For You
April 9, 2014
Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?
Samuel G. Freedman
: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau
: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau
: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease
April 8, 2014
Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease
Electric 'Thinking Cap' Puts Your Brain Power Into High Gear
April 4, 2014
A life of love: How to build lasting relationships with your children
Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet
Why 50 million Americans will still have spring allergies after taking meds
Teacher keeps promise to mail thousands of former students letters written by their past selves
April 2, 2014
Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?
Get happy: 20 scientifically proven happiness activities
It's Genetic! Obesity and the 'Carb Breakdown' Gene
Jewish World Review
Dec. 16, 2008
/ 19 Kislev 5769
Breach of Trust: Bernard Madoff's massive fraud will cripple American capitalism.
Scene 1: We are buying an apartment in Warsaw, Poland, sometime in the early 1990s. At every stage of the transaction, both my husband and I have to show up in person, stand in line, and present identity cards. We appear at the notary's office more than once. We appear at the tax office more than once. Finally, we are asked to hand over a briefcase full of dollars. The seller will not accept a bank transfer and does not want to be paid in his country's currency, either.
Scene 2: We are buying a car in Washington, D.C., sometime in the early 2000s. We test-drive a few and tell the dealer which car we want. We hand him a personal check, which he accepts without asking for an identity card. My husband asks if he isn't worried the check will bounce. The dealer laughs, and we drive out of the dealership in a brand-new car.
Two different times, two different places, but above all, two different kinds of capitalism: If Francis Fukuyama, the author of Trust: The Social Virtues and the Creation of Prosperity, were writing this article, he would describe the Warsaw of the first scene as a "low trust" culture and the Washington of the second as a "high trust" culture. One could also call them a "place where financial transactions are irritating and time-consuming" and "a place where financial transactions are easy," respectively. Such labels do not last forever, though. In the nearly two decades that have passed since the early 1990s, bank transfers, telephone transactions, and the use of the local currency have all become the norm in Warsaw. The question now is whether American capitalism will also change over the next two decades and for the worse.
Reading the accounts of the collapse of Bernard L. Madoff Investment Securities, it is impossible not to conclude that it will. The scale of this fraud stretches far beyond anything a car dealer or even the purchaser of an apartment might commit, of course:
Among the victims of Madoff's extraordinary pyramid scheme are major banks (BNP Parisbas, Nomura Securities), famous people (Mort Zuckerman), and Madoff's friends from the Palm Beach Country Club. In the wake of Madoff's arrest, charities are going to close, and previously rich people will become poor. Worst of all, everyone who invests anywhere will think just that much harder, take that much longer, demand that much more documentation. And they will do so not only because of Madoff, but because of the subprime lenders, Wall Street investment banks, and Enron fraudsters who have worked so hard to erode our faith in the reliability of our system.
The deeper irony here is that all these schemes were only possible in the first place precisely because we have, until now, lived in a culture with such extraordinarily high levels of trust, a culture in which a customer's bona fides are accepted without question and wealthy people are thought to have earned their money. In our culture, someone like Madoff was trusted precisely because he was rich; because he was a member of the Palm Beach Country Club; because his company worked out of expensive Manhattan offices, most of which were occupied by people doing real jobs. It occurred to no one that a small group of select insiders was also operating a massive fraud scheme on the 17th floor.
In other cultures maybe most other cultures very rich people are suspect by definition. Recently, I met a wealthy Russian and automatically assumed he was the beneficiary of some shady scheme: How else would someone from that part of the world get rich? In fact, he turned out to be the CEO of a Western-owned company in Kiev, Ukraine, and totally above board. But I know why I made the mistake: I still remember and Russians still remember the fraudulent "privatization" deals and complex money-laundering operations that created so many Russian billionaires over the last two decades. I also remember the extraordinary saga of the MMM company, which in the 1990s defrauded some 2 million Russians of $1.5 billion, using what will now surely be known as the second-largest pyramid scheme of all time. Back then, we thought such blatant fraud could only take place in the lawlessness of the post-Soviet world.
We were wrong. Madoff's pyramid scheme, far broader than anything MMM dreamed up, was made possible by our own tradition of lawfulness. And now he will help bring that tradition down. Here's a prediction: In the coming years, American capitalism will become slower, more cautious, less productive, and less entrepreneurial. We're still a long way from Eastern Europe of the 1990s or from the Latin America or Russia of the present. But maybe not as far as we think.
Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
Gulag: A History
Nearly 30 million prisoners passed through the Soviet Union's labor camps in their more than 60 years of operation. This remarkable volume, the first fully documented history of the gulag, describes how, largely under Stalin's watch, a regulated, centralized system of prison labor-unprecedented in scope-gradually arose out of the chaos of the Russian Revolution. Fueled by waves of capricious arrests, this prison labor came to underpin the Soviet economy. JWR's Applebaum, a former Warsaw correspondent for the Economist and a regular contributor to the Wall Street Journal and the Washington Post, draws on newly accessible Soviet archives as well as scores of camp memoirs and interviews with survivors to trace the gulag's origins and expansion Sales help fund JWR.
Comment on JWR contributor Anne Applebaum's column by clicking here.
12/09/08: In praise of charismatic politicians
12/03/08: Moscow's Empire of Dust
11/20/08: Getting Past Mythmaking In Georgia
11/12/08: In Praise of Political Rock Stars
10/03/08: Election Day myths you must resist
09/30/08: Not just a metaphor: Lehman Brothers was economic's 9/11
09/04/08: Class of '64
08/28/08: Did Hillary really help the Barack cause?
08/27/08: Show of Power, Indeed
08/19/08: What Is Russia Afraid Of?
08/13/08: When China Starved
08/11/08: Two of the world's rising powers are strutting their stuff
08/05/08: How Alexander Solzhenitsyn's The Gulag Archipelago changed the world
07/29/08:The Hour of Europe Tolls Again … But are European politicians up to the task?
07/15/08: Why Does Obama Want To Campaign in Berlin?
07/01/08: Citizen Athletes: How did a guy who can't speak Polish end up scoring Poland's only goal of Euro 2008?
06/24/08: Why do we expect presidential candidates to be kind?
06/17/08: Pity the Poor Eurocrats
06/12/08: Is the World Ready for a Black American President?
05/28/08: The Busiest Generation: America seems to value its children's status and achievements over their happiness
05/20/08: Leave Hitler Out of It: The craze for injecting the Nazis into political debate must end
05/13/08: A Drastic Remedy: The case for intervention in Burma
05/07/08: A Warning Shot From Moscow?
04/23/08: Radio to stay tuned to
04/17/08: China learns the price of a few weeks of global attention
04/01/08: Head scarves are potent political symbols
03/26/08: The Olympics are the perfect place for a protest
03/19/08: Could Tibet bring down modern China?
03/12/08: Have political autobiographies made us more susceptible to fake memoirs?
03/05/08: Why does Russia bother to hold elections?
02/20/08: Kosovo is a textbook example of the law of unintended consequences
02/06/08: A Craven Canterbury Tale
02/06/08: French prez' whirlwind romance reminds voters of his political recklessness
© 2008, Anne Applebaum