Gene Expression

Crime & punishment & Madoff

Even Bernard Madoff Doesn’t Deserve This:

Remember Jeffrey Skilling? Losses to Enron shareholders of more than $1 billion largely determined his 24-year-plus sentence. Or consider WorldCom’s former chief, Bernard J. Ebbers. He got 25 years based principally on the $2.2 billion loss suffered by his company’s shareholders. Sure, these men destroyed enormous shareholder value, just as the targets of today’s criminal cases allegedly did. But it’s hard to contend that they deserved prison terms longer than the average sentence for murder (22 years), kidnapping (14) and sexual abuse (eight).”


What do you think? My own “gut” is to say no, Madoff does deserve as much time as a murderer. A murderer can kill one person. Bernard Madoff has inclicted suffering upon thousands. Some elderly individuals who have lost their life savings will almost certainly have reduced life expectancy due to inferior care now that they can’t afford home attendants, not to mention their quality of life. Multiply this sort of thing by thousands, and the extermination of cultural capital which is going to ensue because of the lack of trust, and it seems to me that some classes of white collar criminals do deserve as much jail time as violent offenders. And money is an imperfect, but correlated, proxy for the sort of damage these individuals inflict upon others through their actions.

I’m not the only one thinking in such crassly utilitarian terms:

In some ways this does seem out of whack with violent crimes, but one could argue that these fraud cases actually require a great deal of pre-meditation and ultimately cause untold suffering and literally destroy many lives. Some would also argue that economic offenders pose little future threat because they’re generally stripped of powers that would permit continued criminal conduct, but it does not strip them of their ill-gotten wealth and the lives they lead before they were caught, supported by the crimes they committed.

There are checks in our legal system to allow judges to use common sense to reduce radically long sentences produced by the guidelines. But I for one hope they don’t in Madoff’s case presuming he’s found guilty.

There is simply no way that Bernard Madoff et. al. will be able to repay their debt to society. That’s a fact.

Comments

  1. #1 sarcastico
    December 22, 2008

    Should a person who committed a deliberate and ongoing fraud that deliberately robs thousands of people of their future be seen in the same light as a murderer? NO, the fraudster is much, much worse.

    I don’t condone murder, but I have thought about it. I suspect most people have. Violent reactions to situations are part of our animal heritage. There are people I think society would be better off without. I am rational enough not to act on those thoughts. So while I don’t condone murder, I can, on some level, understand it.

    I can’t understand how someone could knowingly and deliberately engineer a scheme that willfully defraud thousands of people of their life savings. I say that is a greater crime than murder and the punishment should be as harsh as any our society allows.

  2. #2 TGGP
    December 22, 2008

    Hopefully Anonymous makes a similar point:
    http://hopeanon.typepad.com/my_weblog/2008/12/brain-droppings-december-21-2008-part-2.html
    William Black also seems to be banging that drum in his contributions to the latest Cato Unbound:
    http://www.cato-unbound.org/issues/what-happened-anatomies-of-the-financial-crisis/

  3. #3 Matt McIntosh
    December 22, 2008

    Apparently I’m with you — my initial reaction to the bolded sentence in your quotation was “actually it would be very easy”. Most people are not worth a cool billion, that is to say they’ll never generate that much value in their lifetimes, so punishing wealth destruction on such a massive scale more harshly than murder is completely appropriate. But then, by that standard all the major branches of the federal government ought to be hung.

    “These are the thoughts that kept me out of the really good schools.” — George Carlin

  4. #4 jim
    December 22, 2008

    I agree on these massive frauds like Madoff. There is a risk of using white collar prosecutions as political punishments for incompetence or bad luck. Sarbanes-Oxley has, imo, over-criminalized the regulation of modern corporations.

    Guys like Madoff deserve extreme punishments, of course. I doubt any punishment he suffers at this stage will have any deterrent effect on anybody else, though. The guy’s scheme worked for decades and he only got caught in his old age. Many frauds would happily do that. The lesson they are learning is the need to skip town earlier.

    But even getting caught many would-be frauds would trade living like a king for decades in exchange for spending their last few years in prison.

  5. #5 Comrade PhysioProf
    December 22, 2008

    If anything, financial crimes have been underpunished historically.

  6. #6 Jimmyjohn
    December 22, 2008

    One difference between Madoff and a murderer is that Madoff’s victims were willing participants. They leveraged personal contacts and influence to put their money in a ‘privileged’ investment scheme that paid higher earnings than could reasonably be expected. His victims were people with the means to get the best advice and make the most informed decisions about their investments. It may be that greed clouded their judgement – grifters like Madoff need greedy victims in order to do business. I’m not saying Madoff shouldn’t be punished, but he’s not a murderer or rapist.

  7. #7 razib
    December 22, 2008

    Madoff’s victims were willing participants.

    overgeneralizing. this is true for the biggest investors, but obviously some unwitting dupes were swept up (i.e., trusting a financial planner who decided to play games with their money). there are thousands of people with a non-trivial impact here. there’s enough room for both schadenfreude due to the just consequences for the greedy and sadness at the victims.

  8. #8 bioIgnoramus
    December 23, 2008

    If murderers were properly punished – by either execution or life imprisonment – then the contrast would be less striking. P.S. Am I the only reader who just doesn’t understand what is meant by “repay their debt to society”?

  9. #9 James Raider
    December 23, 2008

    T REALLY HAS TO DO WITH WHERE KICKBACKS COULD BE MADE EFFECTIVE

    Before Madoff sees the inside of a jail cell, he will open doors into the Wall Street underbelly that has seen little light of day.

    From New York to Geneva, corruption is rampant and complex on Wall Street, including the process of accumulation of this much cash..
    -
    http://pacificgatepost.blogspot.com/2008/12/is-madoff-really-anomaly.html
    -
    MADOFF AND HIS METHODS are not so unique.

  10. #10 Paul Merda
    December 26, 2008

    I agree wholeheartedly. Guys like him need to be punished for the suffering they have placed upon many thousands of people. Crazily enough, a murder only affects a small group of people, what these white-collar guys have done is affected many thousands. I personally would like to see a death penalty in cases like this only because, rich people are afraid to die, so if we tell them that we will kill them if they scam us, I would have to think there would be some actual deterrent effect….instead of using the Death Penalty on gang-bangers who aren’t afraid to die. My 2 cents anyway…

  11. #11 Michael
    December 27, 2008

    My thought? Make the punishment fit the crime. If people like Madoff are so eager to engage in risky behavior, we should help them! There are these places called Iraq and Afghanistan where we could use a few good danger junkies . . .

  12. #12 Shoshana Magdieli
    December 28, 2008

    He shold be punish by working the rest of his life for a $1 a week and live in a 1 room apt take all his beloging sale and divided to the non profit organization

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