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The Con Job of The Century
[The Libertarian Institute] Over the course of the past century, a number of truly awe-inspiring heists have been carried out by con artists, whose modus operandi is to exploit human frailties such as credulity, insecurity and greed. Con is short for confidence, for the con artist must first gain the trust of his targets, after which he persuades them to hand their money over to him. A con job differs from a moral transaction between two willing, fully informed trading partners because one of the partners is deceived, and deception constitutes a form of coercion. In other words, the person being swindled is not really free. If he knew what was really going on, he would never agree to invest in the scheme.The "Ponzi scheme" was named after Charles Ponzi, who in the 1920s persuaded investors to believe that he was generating impressive profits by buying international reply coupons (IRCs) at low prices abroad and redeeming them in the United States at higher rates, the fluctuating currency market being the secret to his seemingly savvy success. In reality, Ponzi used his low-level investors' money to pay off earlier investors, support himself, and expand his business by luring more and more investors in. More recently, Bernie Madoff managed to abscond with billions of dollars by posing as an investment genius who could deliver sizable, indeed exceptional, returns on his clients' investments. It is plausible that at least some of the early investors in such gambits, who are paid as promised, suppress whatever doubts may creep up in their minds as they bask in the splendor of their newfound wealth. But even those who begin consciously to grasp what is going on may turn a blind eye as the scheme grows to engulf investors who will be fleeced, having been persuaded to participate not only by the smooth-talking con artist, but also by the reported profits of previous investors. Eventually, however, the house of cards collapses, revealing the incredible but undeniable truth: there never were any investments at all. No trading ever took place, and all of the company's transactions were either deposits or withdrawals of gullible investors' cash. Before a con artist is unmasked, nearly everyone involved plays along, either because they stand to gain, or because they truly believe. Sometimes the implications of having been wrong are simply too devastating to admit, and these same psychological dynamics operate in many other realms where most people would never suspect anything like a Ponzi scheme. It is arguable, for example, that the continuous siphoning of U.S. citizens' income to pay for misguided military interventions abroad constitutes a form of Ponzi scheme. If President George H. W. Bush had never used taxpayers' dollars to wage the First Gulf War on Iraq in 1991 and to install permanent military bases in the Middle East, then Osama bin Laden would likely never have called for jihad against the United States. If the U.S. military had not invaded Iraq in 2003, then ISIS would never have emerged and spread to Syria and beyond. Such implications are deeply unsettling, and even in the face of mounds of evidence, most people prefer to cling to the official story according to which the 1991 Gulf War was necessary and just, while the terrorist attacks of September 11, 2001, were completely unprovoked, and all subsequent interventions a matter of national self-defense. Posted by: Besoeker 2021-06-27 |
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