Outlook The following words by JK Galbraith should be read by every aggrieved Allen Stanford investor (the words after that are less essential, being mine). "To the economist, embezzlement is the most interesting of crimes. Alone among the various forms of larceny, it has a time parameter. Weeks, months or years may elapse between the commission of the crime and its discovery. This is a period incidentally when the embezzler has his gain, and the man who has been embezzled oddly feels no loss. There is a net increase in psychic welfare. At any given time, there exists an inventory of undiscovered embezzlement in, or more precisely not in, the country's banks and businesses.
"This inventory – perhaps it should be called the bezzle – varies in size with the business cycle. In good times, people are relaxed, trusting, and money is plentiful. And even though money is plentiful, there are always many people who need more. Under these circumstances, the rate of embezzlement grows. The rate of discovery falls off, and the bezzle increases sharply. In a depression all this is reversed. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks."
Stanford, the billionaire playboy fraudster (insert other clichés here) is beginning a probable life sentence after being found guilty of running a $7bn (£4.4bn) Ponzi scheme – like Bernie Madoff, but with a fine moustache and a supposed interest in cricket that seemed unusual for a Texan.
Stanford has supposedly been beaten by another inmate while awaiting trial, and is now suffering from amnesia. The English Cricket Board chairman Giles Clarke must be praying that everyone else is too.
The ECB's deal with Stanford to stage Twenty20 cricket matches looked extraordinary back then. Who was this guy? Neither Mr Clarke nor anyone else at the supposedly staid Lord's bothered to ask. He was rich. End of questions.
It's not just the cricket authorities that were wowed by Stanford's rented helicopters. His already wealthy investors believed that they were getting something no one else could. A cunning scheme. An unregulated offshore fund outside of the reach of those beastly governments they so firmly despise until they decide they need compensation.
They were in a certificate of deposit, a supposedly risk-free investment that also generated spectacular returns. The court found that Stanford offered "improbable and unsubstantiated high interest rates". Behind every successful fraudster are bunch of investors, in this case, already very rich people who felt entitled to more than mere mortals can attain.
Greedy folk, in other words. Like Montgomery Burns, the miserly industrialist from the Simpsons, they will live forever and better than anyone else. This doesn't make these investors notably stupid, just human. Just much less smart than circumstances have conspired to trick them into believing. Sitting ducks for Stanford and Madoff.
If there is a lesson here, it may only be this: fraudsters are different from the rest of us. They panic later. This is normal life: my overdraft is beginning to look dicey, his payday loans are clearly problematic and your mortgage is just killing you.
For Stanford such worries occur, if ever, many years down the line.
After every major fraud case, there's an assumption that this disaster must not be allowed to happen again. There's a push for the sort of fresh regulation very rich people always fight against (until they lose, when they'd like it put in place retrospectively). And lawmakers put on stern faces.
All that will really happen is that there will be a pause, then another boom, then another Stanford and another Madoff. Perhaps in league.
The bezzle has gone away but temporarily. It will be back.
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