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Tomgram: Andy Kroll, Welcome to America, Sucker
Yes, you've heard plenty about Bernie Madoff and his $65 billion Ponzi scheme, and maybe even about Allen Stanford, the garrulous Texan who built a sprawling Caribbean compound from his $8 billion Ponzi scheme. But what about "mini Madoff," "Miami Madoff" and "Montreal Madoff"? What about all the fraudulent real-estate schemes and farm-grain schemes or the Ponzi built on investments in state-worker uniforms and the one that siphoned off retirement funds from bus drivers? What about the two brothers in Williamstown, Michigan, themselves bilked in a Ponzi scheme, who turned from prey to predator, and used their church and family ties to bilk neighbors out of $50 million for nonexistent gas and oil exploration in the Southwest?
TomDispatch associate editor and regular contributor Andy Kroll has done a remarkable job of mapping the U.S. as a coast-to-coast "Ponzi nation" at a time when an open credit spigot, a booming housing market, and visions of unimaginable wealth on Wall Street left practically every American with dreams of future riches. It was an extraordinary era, one that may have left the "roaring Twenties" in the dust, and its legacy, as Kroll lays it out, is a mood that has its own striking dangers. As he writes, "Disillusionment with the past decade is such that many Americans now simply assume that our world is little but a giant Ponzi scheme."
Kroll concludes: "Ours is now a Ponzi nation. There is a new mood in the land. Just how it will play out is unknown, but a sense of having been conned is still spreading -- as if not just surprising numbers of investors, but the whole country had experienced the last days of a giant Ponzi scheme. With it goes a feeling that what we’ve been living through, even in 'the best of times,' wasn’t an American dream, but pure nightmare. Welcome to America, sucker."
"I landed in this country with $2.50 in cash and $1 million in hopes, and those hopes never left me," Charles Ponzi once told the New York Times. An Italian, who emigrated to the New World in 1903, his glory, such as it was, involved leaving countless immigrants and other Americans with only $2.50 in their pockets and nothing to hope for.
While he was hardly the first Ponzi schemer, he milked his particular con with particular success and dramatic flare in the 1920s. Ever since, his name has been attached to any scam in which you promise outrageous returns -- he offered a 50% return on investment in only 45 days -- and pay off old investors with the money eagerly offered by newer ones. The aura of success only brings in more money until, of course, it all goes bust. Ponzi’s last recorded words to a reporter caught the financial-showman spirit of his time: “Even if they never got anything for it,” he said of those whose lives he destroyed, “it was cheap at that price. Without malice aforethought I had given them the best show that was ever staged in their territory since the landing of the Pilgrims! It was easily worth fifteen million bucks to watch me put the thing over." Read more.