Friedman, the author of The World is Flat, did an op-ed piece in the New York Times last week.
He was asked a question: “Just how corrupt is America?”
The context was the arrest of Madoff on charges of running a Ponzi scheme of roughly $50 billion dollars. And the nonsense that has savaged the market.
I have no sympathy for Madoff. But the fact is, his alleged Ponzi scheme was only slightly more outrageous than the “legal” scheme that Wall Street was running, fueled by cheap credit, low standards and high greed. What do you call giving a worker that makes only $14,000 a year a nothing-down and nothing-to-pay-for-two-years mortgage to buy a $750,000 home, and then bundling that mortgage with 100 others into bonds — which Moody’s or Standard and Poors rate AAA — and then selling them to banks and pension funds the world over? That is what our financial services industry was doing. If that isn’t a pyramid scheme, what is?