Allow me to copy some of the text from the article which one can get full access to by using the following link:  http://www.bloomberg.com/apps/news?pid=20601087&sid=aU5yV7oBvwR8

“Attending tonight’s event will be some of the Wall Street executives who have been on the receiving end of the administration’s criticism, according to the New York Times. The fundraiser is co-hosted by Orin Kramer, a partner at an investment fund, the newspaper reported”.

“This year, as Congress drafts new financial regulations, employees at securities and investment companies have given more money to candidates and the political parties than any other industry, according to the Center for Responsive Politics, a Washington-based research group”.

“Morgan Stanley has long been a major political giver. Its employees contributed $3.7 million for the 2008 elections, fifth among financial companies, according to the Center for Responsive Politics”.

Tonight (October 20, 2009) Mr. Obama (the president that touted CHANGE in his presidential election campaign) is going to attend a $30,400 US Dollars per couple fundraiser organized by Orin Kramer, a partner at an investment fund.  As a Naive American I am quite puzzled by having the president of the USA attend a fund raiser organized by a member of the group that caused the financial meltdown which affected millions in the US and abroad.  This same president is talking about reforming that industry.  Is there something wrong with this picture?  The guilty party (of the financial meltdown) is providing funds to the president because …

But the people attending (also known as American Royalty) this event are not the only ones providing moneys to the Democratic Party (Mr. Obama is a member of the Democratic party), investment companies in general have been donating (bless their hearts) more money than usual to democratic politicians in return of ???

Morgan Stanley, another company whose executives in part caused the economic meltdown that has left millions of Naive Americans without jobs and homes is contributing right and left to the same Democratic Party.  Do you see something wrong with this picture???

Not sure what Naive Americans think is going on in our country.  It appears that the president has to answer to the Democratic Party who put him in office and the Democratic Party has to answer to the contributors who caused the economic meltdown.  So how is CHANGE going to occur ???

 The 60 Minutes story touched on two names that have been lately in the news:  Bernard Lawrence Madoff and Harry M. Markopolos.  Let me first provide some background on these individuals and provide facts on what they allegedly have done.

I will cover a very well known term that describes what Mr. Madoff allegedly did.  Finally I would like to reflect on what this means to Naive Americans like you and me and what could be done.

Bernard Lawrence “Bernie” Madoff (born April 29, 1938 in New York City) is a Jewish American businessman and former chairman of the NASDAQ stock exchange charged with perpetrating what may be the largest investor fraud ever committed by a single person. He founded the Wall Street Company Bernard L. Madoff Investment Securities LLC in 1960 and served as its chairman until his arrest on December 11, 2008.  Madoff said that his Company had liabilities of approximately $50 billion US Dollars.  Mr. Madoff was running the world’s largest unregistered hedge fund.  Banks from all over the world have announced that they have potentially lost billions in dollars as a result.  Madoff’s Company was one of the top market maker businesses on Wall Street.  Madoff was also a prominent philanthropist who served on the boards of nonprofit institutions, many of which entrusted his Company with their endowments.

Harry M. Markopolos (born October 22, 1956 in Erie, Pennsylvania) is a former securities industry executive turned independent financial fraud investigator for institutional investors and others seeking forensic accounting expertise.  Mr. Markopolos tipped off the SEC repeatedly starting in 1999 (the US economic melt down occurred in late 2008), when he argued that it was not legally possible for Madoff to deliver the returns he was claiming (steady 12% year after year).

A term associated with the alleged crime committed by Bernie Madoff is:  ”Ponzi scheme”.  A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from profit.  The term “Ponzi scheme” is used primarily in the US; in other parts of the world it is called a pyramid scheme.  The Ponzi scheme usually offers abnormally high (in this case about 12%) short-term returns in order to entice new investors.  The perpetuation of the high returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors in order to keep the scheme going.  The scheme is named after Charles Ponzi, who became notorious for using the technique after emigrating from Italy to the United States in 1903.  Ponzi did not invent the scheme, but his operation took in so much money that it was the first to become known throughout the United States.

Now that we are acquainted with the players and the term, how should Naive Americans react to the alleged actions from Mr. Madoff?

Harry Markopolos figured out that Mr. Madoff was doing something illegal in about five minutes.  Mr. Markopolos then spent about four hours working on mathematical models to prove that the hedge fund ran by Mr. Madoff was a scam.  We Naive Americans need to think about this.  About 65 Billion US Dollars lost and a single individual in a few hours able to prove what was going on.  Why did the SEC, Wall Street executives and the US government did nothing?

The SEC (that is our government) according to Harry Markopolos is staffed with lawyers that know nothing about financing.  They could probably easily spot a form or document improperly composed or filled (similar to what a computer program could do at a much reduced cost), but apparently the SEC staff is not trained or is incapable to detect financial crimes.  Perhaps the SEC needs to revise their staffing needs.

So what about Wall Street executives?  The answer from Harry Markopolos was simple.  When you [Wall Street executives] live in a glass house, you do not throw stones.  Our financial system public and private is corrupt to the core.  Most (one should never generalize) people in financial positions making from hundreds of thousands of to Millions of Dollars a year are not going to upset the status quo.  If there are no police officers to enforce speed limits, we will speed on all and any types of roads, if we could retrieve money from our accounts over our current balance we would, if we would have the opportunity to cheat on our spouses and not get caught, we would, etc, etc, etc.  Suddenly what Bernard Madoff allegedly did to many Naive Americans does not seem so bad.

According to records the list of people and organizations that Mr. Madoff allegedly ripped covers about 162 full pages.  At about 66 names per page it adds up to about 10,000 people and / or organizations.  The greed and lack of morals and ethics of, at the time, very well respected and influential person, affected 10,000 people and organizations.  If you take the entirety of unscrupulous Wall Street executives and higher management, you can easily come to the conclusion that what is going on with the US economy is the result of such individuals.

Naive Americans should contact politicians and demand that legislation be enacted to protect us from Mr. Madoff and people like him.  Sounds like a good idea, but Mr. Markopolos went a step further and did it many years ago in front of the SEC and nothing happened.

Mr. Madoff was so sure of his scam, connections and power that he publicly told investors on several occasions (you can see one of them on-line by visiting the 60 Minutes web site) that it was impossible for a financial institution to violate SEC rules and go undetected.  The public (he meant Naive Americans) does not understand such a simple fact.  The aftermath is that nothing of that was or is true.  Bernard Madoff stole 65 billion US dollars with little consequence.

So what should Naive Americans do about Wall Street?  I would say nothing directly.  What we can do is put extreme pressure on politicians to pass new legislation to put check and balances in our financial system to avoid what some greedy people did and will do over and over again.  Stiffer penalties should be made mandatory for people convicted of financial crimes.  The fathers of our nation did not trust each other.  They wrote into our constitution checks and balances to avoid some family or group of people to rule the United States of America like a monarchy.  At the time, that was their main concern.  With time the main concern has shifted to greed.  Naive Americans in general want to make money but do not wish to work for it.  This is not a problem specific to Wall Street.  This is a problem spread through our entire society.

Please press your local and federal representatives to pass legislation to induce CHANGE and most important make sure we CHANGE our personal ways.

I am sending you this letter in hopes you clarify how your stimulus package(s) are going to help Naive Americans that are or have worked in Wall Street and are loosing or already have lost their jobs.  I am also interested in finding out what your administration is doing or going to do to prevent the issues that caused the US economic meltdown not to repeat.

As I have stated on previous blogs, I am a computer scientist not associated in any way with Wall Street.  I have read several articles on Wall Street and watched several segments on the subject on national TV.

The financial system in the US is completely corrupt.  Greed had been the motivation for most people involved in the financial industry, which I will refer to in general as Wall Street.

The Oxford on-line dictionary defines Greed as follows:

Noun intense and selfish desire for food, wealth, or power.

All is well with being greedy as long as it does not compromise moral and ethical principles.  Given that you are a lawyer by trade, I assume that you are familiar with the base principle of morality (which has nothing to do with any religion):

Do not do to others what you do not want others to do to you.

Based on the news, it appears that some (very few in the opinion of most Naive Americans) Wall Street executives are under scrutiny by the US legal system to determine if they have committed crimes.  The issue with this is that many Naive Americans have become very good snake oil sales people (deceiving others) and like to walk on a thin gray line between what is criminal and what is not.  No matter what people in Wall Street say or how are they represented, they all knew what was going on and they did nothing to correct or stop earlier in the game.

As you well know, most of the economical issues the USA is currently experiencing were precipitated (not started) by a law passed towards the end of the Clinton administration (way before the 8 years of George W. Bush while you were a politician in the state of Illinois and the few months of your administration).  It appears that greed, lack of responsibility, lack of morals, etc, etc, etc was not only something found in Wall Street but it was (and still is) spread all over our society.

This Naive American fully understands that it is important to recognize the past, but it is a complete waste of time and resources to just complaint and not CHANGE.  Sounds familiar Mr. President?  We need legislation to be passed to address the issues that led a small set of Naive Americans to take advantage of the majority without any legal consequences.  We also need to make sure that checks and balances are in place in Wall Street so greedy Naive Americans are not able to repeat what they have done.

A few weeks ago I was watching the news on national TV.  A Wall Street analyst stated that executives in his business live a different reality.  They need to be greedy and get paid millions of Dollars a year.  I can assure you that you can fire all Wall Street executives and in less that 24-hours such positions would be filled by better qualified Naive Americans which would be eager to work for a reasonable salary (no more that $400,000 Dollars per year) and get stock options from stock holders to motivate them to excel in their jobs.  In America we do not believe in blue blood or monarchies.

Regarding the stimulus package, how is it going to help Naive Americans that used to work in Wall Street?  Building roads, making buildings green, getting healthcare and unemployment benefits are not going to the problem.  The caps on Dollar amounts and periods for unemployment benefits might be fine for Naive Americans that had very low incomes, but not for middle and upper middle class workers from Wall Street.  Most Naive Americans are part of the middle class (which sadly is shrinking and could / will bring serious problems down the line).  Middle class Naive Americans need well-paid jobs that produce goods and services that may be consumed in and outside the US.  Well-paid jobs that demand skills and know how have gradually been outsourced.  Manufacturing has been affected by globalization.

In conclusion, pouring money that will never be recovered into the economy is just going to postpone and / or stretch the symptoms.  If the stimulus is coming from taxes, loans, or printing currency, things will just get worse.  The USA needs massive and deep CHANGES in our economy and society in order to get us back on track and leave our children and generations to come a better place to live in.

Yours truly;

The Naive American

PS:           Mr. President, please read the About section in the www.naiveamerican.org site to get a better flavor of what has and is happening with the USA.  Then prove me wrong by inducing the proper CHANGES!!!

Then came the 1960s and the 1970s. The Naive American behaved like a pubescent adolescent. We engaged in promiscuous sexual behavior and experimented with illegal drugs. Our culture venerated celebrities (i.e., rock stars, pop stars, movie stars) that portrayed unacceptable ways of life. During this period, our education, economy and manufacturing started to loose quality and fall behind.

Then the 1980′s came. Naive Americans were mesmerized with Wall Street. You could legally “place a bet” in the stock market (whoops my mistake, I meant “purchase stocks”) and, with some luck, you could get huge returns on your investment by selling or keeping some and collecting dividends. This practice allowed many Naive Americans to enjoy a comfortable lifestyle without working. What a lure (much better than religion or politics)! Stockbrokers and fund managers were appearing all over.

Graduating high school students flocked to universities and colleges seeking soft degrees in business administration and liberal arts instead of the tough engineering and science disciplines. Why work when you could sit in a plush office with a phone, an assistant, go to lunch meetings, play golf and make considerably larger salaries than people that actually work for a living (design and produce goods and services).

This trend continued through the 1990s and through most of the first decade of the new millennium. A few months ago reality came crashing down on the Naive American with repercussions all over the world. Now we have one more reason for people all over the world to hate us. We have not been scoring well since the early 1950′s.

So what is the problem and how can we fix it?

The smart, hard-working American is a thing of the past. Naive Americans don’t want to work at any level. Keep in mind, this all started in the 1950′s so this syndrome has had enough time, like a cancer, to spread through several generations of Naive Americans.

One of the first big symptoms was nicely labeled as Globalization. For the Naive American, globalization has little to do with selling our goods and services outside the US but with the price we need to pay for them. For example, the Walton family with their two well-known chains of retail stores Walmart and Sam’s Club were leaders in promoting “globalization”. In order to get prices down (and increase their profits) they would encourage manufacturers to move their operations overseas or replace comparatively more expensive components made in the US with ones produced in China, Taiwan, Korea, etc. In order to compete many companies followed suit. Next time you visit one of their stores do not look at the brand labels. Pay attention to the country of origin. Even food is starting to come from China. I have found seafood, cans of mushrooms, apple juice and other products labeled “Product of China”. An interesting fact to note is were these two companies are headquartered and associate it with some “career politicians” that were guests in the White House while this “globalization” was being promoted and in full swing. When done, associate them with their political party.

The effects of globalization had the largest direct impact on blue-collar workers. They make up the lower and lower subsets of the middle class.

Globalization was not enough for greedy Naive Americans running larger companies and their cronies the “career politicians” who receive advice from lobbyist paid by large companies. The new fashionable term became “Outsourcing”. Outsourcing encompasses all working Naive Americans that traditionally fall in the upper and center subsets of the middle class. It includes all types of professionals (i.e., accountants, engineers of all disciplines, physicians, scientists of all types) and had the added bonus that it also includes the entire middle class (i.e., assembly line workers, mechanics, clerks)

I’ve read articles (and seen firsthand) of company executives gloating that they are saving costs by outsourcing. Such remarks are generally welcomed by Naive Americans that hold stock in such companies. Naive Americans want to receive larger dividends, regardless of the consequences for the company employees or the US economy. Outsourcing became a trend during the Bush administration. Once again, which political party is responsible?

Yes fellow Naive Americans, the people responsible for the economic meltdown in the US (and the world) are not just incompetent politicians. Companies are run by accountants and business majors, but a great responsibility lies in most Naive Americans that (for the past couple decades) looked to “Wall Street” to provide wealth without any hard (or intelligent) work.

In order to remedy the situation, the Naive American needs to stop listening to TV commercials from Scott Trade and others alike and start working hard. Work was, is and work will always dignify people and will bring peace of mind to all of us. We need to make our “elected career politicians” do what the working class of Naive Americans need to change our economy (or don’t elect them). Our political leaders need to be scrutinized to ensure they don’t receive payoffs from special interest groups. In other words, our “career politicians” need to be held accountable for their actions.

Let’s wait and see how president elect Obama and his staff induce CHANGE in the next four years. One last bit of advice, don’t hold your breath. Work as hard and smart as you can so CHANGE will come from within and not DISAPOINTMENT from our government.