09 April 2010

Rove, Dean: Parties share blame for Madoff

Karl Rove and Howard Dean held a debate at the SEFCU Arena on the State University of Albany campus last night. For the most part, from the local reports, the content of the debate was as predictable as the presence of Green Party protesters outside the venue. The Greens objected to the university funding an appearance by Rove, whom they regard as a war criminal. As the protest was reported in advance, the news moved Mr. Right to repeat his usual complaint that the Left, not the Right, was the true party of intolerance. The truth, I suspect, is that there are different kinds of intolerance characteristic of Left and Right respectively, but in this particular case the charge, however tenuous, that Rove was involved in war crimes, served to deflect the countercharge that the Greens merely wanted to suppress Rove's freedom of speech.

The most interesting moment in the debate (in the modern moderator-plus-prerecorded-questions format; Lincoln and Douglas need not apply) came when Rove described the Democratic healthcare-reform legislation as a kind of Bernie Madoff scheme. Dean's comeback was to ask Rove, "Who allowed Madoff?" By conventional debate standards, this did nothing to refute Rove's charge. In any event, the Republican rejoined by reminding the crowd that Madoff began his scam during the Carter administration, and was only brought down by investigators under George W. Bush. Dean scoffed at the latter claim, factual though it was, but Rove affirmed that Madoff was taking his lumps in prison today because of actions undertaken by the Bush administration.

While Madoff himself has claimed that he only began to engage in fraudulent practises during the 1990s, Rove's account reflects the opinion of federal prosecutors who claim that he had begun his Ponzi practices back in the 1970s. When Dean blurted out an assumption that Republican misregulation or indifference allowed Madoff to flourish, Rove countered that Democrats under Carter had neglected to nip Madoff in the bud. For the sake of argument, let's adopt Rove's history of Madoff. In this account, the evil one began his nefarious scheme under the noses of Democratic appointees. From then until 2008, Madoff continued to operate under the administrations of Ronald Reagan and George H.W. Bush (Republican), Bill Clinton (Democrat) and for most of the George W. Bush administration (Republican). During this time, Democrats controlled both houses of Congress most of the time until 1994, and Republicans ran both houses from then until 2006. While suspicions were first expressed back in 1992, the earliest known whistleblower denounced Madoff in 1999, under a Democratic President and a Republican Congress, and was rebuffed for years afterward by the SEC. Madoff fell from grace in the last weeks of a Republican presidency, under a Democratic Congress.

If you assume, as both Dean and Rove do implicitly, that the party in power is responsible for keeping an eye on investment brokers and preventing Madoff-style practices, then objective observers must conclude that both parties dropped the ball. On their own terms, Democrats and Republicans alike "allowed" Madoff to do his thing. Whether the government under either large party could have caught Madoff early is a subject for another debate. The moral of this story, as told by Rove and Dean, is that both parties either failed to notice or simply ignored the Madoff malignancy. If voters hope to elect leaders who'll prevent the next big Ponzi scheme, whether it comes from Congress or Wall Street, the cumulative testimony of two party leaders should show them that the institutions of the American Bipolarchy aren't cut out for the job.


d.eris said...

"both parties dropped the ball."

Now that's an understatement.

d.eris said...

One could add to the list of such failures ad infinitum.