The tale of mad Madoff who made off with so many $

By the time you read this most of you will have heard that Bernard Madoff was sentenced to the maximum allowed 150 years in prison. The sentence is far longer than that received by other corporate criminals over the last decade. I applaud the judge for the sentence. I have talked with many of my friends privately about the fact that his prison sentence needed to be severe. One of the big arguments put forth by proponents of the death penalty is that it serves to dissuade potential capital offenders from committing crimes, such as treason or murder. The theory is purely economic to the core: if you want to discourage consumption of something then raise its price. Unfortunately, harsh prosecution of so-called “white collar” criminals has apparently not dissuaded them from bad behavior, as the magnitude of the crimes continues to escalate. Never mind the number of corporate executives who do not break the law but who violate any normal person’s sense of proper ethical behavior.

So what am I rambling on about? Well something that I am reluctant to share but that I think is just. Namely, when an insurance company is asked to award monies in a life insurance case, or a wrongful death case, they estimate the future earnings of the individual who has died an untimely death. They then discount those future earnings back to a present value. That figure represents the worth of that person to a claimant. Usually the average human life is worth between $2-$3 million dollars depending on how much money they make and how much time they have left to earn it. My earnest suggestion for financial fraud is that the total dollar amount of the fraud be divided by the $2-$3 million dollar figure to determine how many lives have been ruined by a fraudster like Bernard Madoff. Treat those “lives” as if the fraudster had committed murder and sentence them accordingly. If the death penalty is going to be legal for one murder, why not for $170 billion forfeiture order against Bernard Madoff. That equates to approximately 56,667 lives that Madoff destroyed. You see, business cannot have it both ways. If they are going to equate lives with a dollar amount (something that is reasonable in my mind), then they cannot object to the same equation being used to judge the gravity of a fraud.

You may think that this sounds harsh, but many of those that Madoff defrauded have literally lost everything that they worked their entire lives to earn. So, in effect, their lives were meaningless from an earnings perspective. That is very analogous to calculating the worth of a life the insurance company way. In my mind, that makes Madoff a mass-murderer of, not only wealth, but also of lives. Who is the worse criminal, someone who commits murder in a moment of rage, or the guy who systematically over decades of time ruins the lives of thousands of people? But, who is eligible for the death penalty? I am serious about this. If we are going to have the death penalty (something that I am opposed to) then someone as calculating and evil as Madoff has to be eligible for execution. And from the insurance industry we have the means of calculating to what degree someone deserves the death penalty. What’s more, maybe the judicial system could finally get the attention of prospective “white-collar” criminals and dissuade them from future acts of massive financial fraud. Thus, far it is difficult to see any evidence that “white collar” fraudsters really respect the judicial system.

Jason