Madoff's Fate Little Comfort For Victims
SCOTT SIMON, host:
Now, of course, we turn to one of the biggest economic and even human stories of the week, and that's the sentencing of Bernard Madoff to 150 years in prison. Many investors lost everything in Madoff's Ponzi scheme. There have been some pretty heartbreaking stories. We're joined now from Chicago by our friend Joe Nocera, New York Times business columnist. Joe, thanks for being with us.
Mr. JOE NOCERA (New York Times): Hey, thanks for having me Scott. Nice town you got here.
SIMON: Yes, it's a wonderful time, isn't it? It's the best. You were with some of Bernie Madoff's victims at synagogue the day after sentencing.
Mr. NOCERA: I was, Scott. It was an informational gathering, primarily with some lawyers and accountants trying to help them talk about this. And really what I primarily came away with was a real sense of sadness and a feeling that even six months later most of the victims that I saw there were primarily feeling traumatized still.
SIMON: Yeah. Do they have any hope of recovering anything real in good order?
Mr. NOCERA: Well, it depends what do you mean by real. It's a really complicated set of issues that they face. I mean there's a lot of people who are suffering who were, as they call - say in the game net winners, i.e., over the course 10 or 15 years they took more out of their account than they put in, you know, because they had hypothetical interest and returns and gains. And those people aren't probably going to get anything. They are wiped out. And there is another class of people who are what they call net losers, i.e., they put in more than they took out.
And in the end, those people are going to get something. You know, it could wind up being as much as 30 cents on the dollar, depending on how much success the trustee has in, you know, sort of reclaiming money from others and suing people and doing various other things to find Madoff money.
SIMON: Are the victims, who of course are victims together, nonetheless in the ugly position of kind of squabbling with each other?
Mr. NOCERA: Well, that hasn't happened that much yet. But I do think ultimately that is going to happen because they are in different categories. And you know, there are already some lawsuits aimed at the trustee, claiming that he is incorrectly gauging how to deal with the claims.
Mostly right now they're aligned in the sense of anger and injustice, and they're all sort of mad at the trustee, just because they don't have anybody else to be mad at this point now that Bernie's in jail. But I think there's a real possibility a year from now there will be huge divisions between the victims.
SIMON: And a year from now will there be a change in the laws?
Mr. NOCERA: Oh, well...
SIMON: That ostensibly would have…
Mr. NOCERA: ...first of all, you don't need a change in the law to catch Bernie Madoff. You just need SEC that's paying attention. But you know, I do, a year from now, there will be new, this new consumer protection agency. Let's hope that gets through. And you know, in the end, a Ponzi scheme is against the law, Scott. And what you need is more vigilance by the regulators, which of course we all now know we didn't have. So I actually think that's more important than new laws on the books.
SIMON: U.S. Labor Department announced this week the loss of 467,000 jobs. The unemployment rate edged up to 9.5 percent. I don't want to say this was all supposed to be behind us, but when does the effect of the stimulus package start?
Mr. NOCERA: Well, first of all, these are really discouraging numbers, because the month before the job loss was in the 300,000 range. So there was a sense that things were starting to get better, and this month suggests that they're not.
Look, Scott, the stimulus, you know, there are some people who believe that it would have been worse without the stimulus. And there are some people who believe that we need a new stimulus package that's even bigger, because it's not stemming the tide. The stimulus was never going to stop, you know, a huge rolling recession. It's really only going to help us on the margins, which maybe it is and maybe it isn't. It's really such a hard thing to gauge.
But I would say these numbers were not fun to read and they suggest that we're in this for the long haul.
SIMON: Joe Nocera writes the Talking Business column for The New York Times, speaking this week with us from Chicago.
Joe, thanks so much.
Mr. NOCERA: Thank you, Scott.
SIMON: You're listening to NPR News.
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