The Myth of the Midas Touch

As the list of victims grows, the Bernard Madoff scandal is proving once again that the easiest prey for get-rich-quick schemes are the rich.

On the PBS News Hour the other night, my old friend Mort Zuckerman, who made billions in real estate and then went into publishing, seemed stunned at the wipeout of $30 million from his charitable fund's investments, which were made by someone he trusted who in turn trusted Madoff.

The same mistake was made by international banks, hedge funds, asset managers, at least one US senator and other money-hungry believers in magic down to the proverbial little old ladies in tennis shoes of Palm Beach, Florida, all of whom deemed it a privilege to be allowed into Madoff's Ponzi scheme, which was showing annual returns of 11 percent and more.

A lifetime of dealing with the very rich has made me suspect that many are one-trick ponies, very good at what brought them wealth, but susceptible of being flattered by flim-flam artists like Madoff, who make them feel smarter than everybody else at maximizing their money (an attitude taken to the extreme by the late Leona Helmsley, who said before going to prison for tax evasion, "Paying taxes is only for the little people.")

The rest of us are more likely to subscribe to the old adage, "If it sounds too good to be true, it probably isn't" and go our financially paranoid ways.

Now the economic waves have wiped him out and Madoff is under luxury house arrest, as prosecutors try to find out what happened to all that smart money. It's highly unlikely that other predators like him won't be washed up by outgoing tide.