By Jim Hoagland
Sunday, December 21, 2008
Bernie Madoff had his fun with the $50 billion entrusted to him by investors. Now the media have their fun chronicling the downfall of the financier once affectionately known as "the Jewish T-bill" for his ability to generate guaranteed returns -- until his Ponzi scheme collapsed.
Bernie isn't the story, or the Madoff, that interests me the most. Andrew and Mark, his sons and business associates, are. They reportedly went to the prosecutors after their dad confessed to them what he had done. If that version is accurate, the younger Madoffs' reactions, and emotions, might tell us a lot about a huge problem the entire world now confronts.
That problem is the awakening of the world's youth to the raw deal their parents and grandparents -- my generation, in toto -- are handing them, and the growing anger the young feel about the fetid stables of debt, scandal and corruption they are being left to clean.
I don't know what to call the generations on the rise, but Generation Xcess would do just fine for the one now in charge of global affairs. We have taken the greatest financial, technological and political opportunities the world has ever offered and abused them for our own pleasures, greed and egos. We read about Bernie Madoff so avidly because deep down, Bernie is one of us. He got what he could while he could.
That is particularly true, but not uniquely true, of Americans. Bernie was one of all of us who refused to vote for politicians who would raise our taxes and make the nation live within its means, even as we went to war. Bernie was one of all of us who did not demand more diligent supervision of financial markets as long as the outsize returns kept flowing. And in his own special way, Bernie was one of all of us who wasted energy in myriad forms, kept on consuming imported goods even when it meant going into debt to foreign lands that do not wish us well, and cut budgets for regulatory and law enforcement agencies even in the fat years.
So we got what we didn't pay for, too. And so will our children. They are awakening to this grossly unfair state of affairs.
This is a generational tragedy only a Shakespeare could love. But the playwright would have to become a foreign correspondent to write this one. The fuse of anger is already lit in Europe, where young people are more accustomed to taking to the streets to play out family and generational conflicts in political terms and the police are accustomed to responding forcefully.
Two weeks of student riots and protests in Greece have left at least 70 people injured and hundreds of businesses and shops vandalized. Sparked by the police killing of a 15-year-old protester, Greece's wave of unrest certainly reflects immediate local causes as well as deeper concerns about jobs and political fecklessness. It is hard to know just what to make of protesters hurling Molotov cocktails at the national Christmas tree, as occurred in Athens. Nothing good is my guess.
But the same dry kindling of the Greek uprising is scattered around Europe, where youth unemployment rates are double or triple those of the population over 24, according to the Organization for Economic Cooperation and Development, and retirement benefits are politically untouchable. Similar tensions are rising in China as the global recession deepens, in oil-producing countries such as Russia and Iran that are caught in the whiplash of rising and falling prices, and most of all in developing countries with broken governments and economies that punish the educated young disproportionately.
Last week, France, which knows a thing or two about youth riots, dropped a controversial education reform plan rather than risk student unrest now. It then unveiled new efforts to ease access to jobs for minority groups. And in a quietly terrifying speech in Madrid, Dominique Strauss-Kahn, the head of the International Monetary Fund, warned in only slightly veiled terms that violent protest may erupt on a global scale if governments continue to provide inadequate or confused responses to what could quickly become "a global depression" in 2009.
There was also a whiff of alarm in the Federal Reserve's slashing of interest rates last week. Such alarm is not misplaced. Americans as a group are slow to show mass anger or despair. But the Madoff case -- and the callous insulting of the future that it exemplifies -- has lit a global fuse that policymakers must take into account, urgently.