The debate continues as to whether or not Bernie Madoff's $64.8 billion scam is the largest in American [or world, for that matter] history. That said, no one seems to be in any hurry to rename the type of fraud Madoff allegedly perpetrated in his "honor". For the foreseeable future, anyway, it looks like it will keep its current name of "Ponzi scheme", from its first notable operator, Charles Ponzi [left].
It's a little surprising that Madoff was able to play his game as long and as large as he did; in addition to the classic Ponzi case [this explanation, from the Mental Floss web site, is the best I've seen], more than a few others tried the operation, to varying degrees of success, before its revival in the new millennium by Madoff [here's a list from Wikipedia that includes a few of them]. You'd think that at least some of the investors would know better.
And it's not even as if Ponzi invented the whole thing in the first place. Wikipedia's article on 
Ponzi schemes notes that Charles Dickens, of all people, wrote about such a scheme in his 1857 novel Little Dorrit [there is, incidentally, no evidence that Dickens ever actually carried out a Ponzi scheme. He did use a ploy common to many authors until fairly recent times; namely, selling subscriptions to upcoming books. The money taken in was used to help support the writer until the work was completed, or to defray publishing costs. In exchange, the author would usually include a list of subscribers in the first edition of the book, as a sort of "dedication". Dickens was said to play the "subscription game" better than most, reputedly delaying the release of new works until the optimum amount of subscription money was collected. He is also credited with the practice of releasing books by chapters, forcing the reader to keep buying new segments until the work was complete (and probably paying more in the process than if the book had come out whole).].
Ponzi schemes notes that Charles Dickens, of all people, wrote about such a scheme in his 1857 novel Little Dorrit [there is, incidentally, no evidence that Dickens ever actually carried out a Ponzi scheme. He did use a ploy common to many authors until fairly recent times; namely, selling subscriptions to upcoming books. The money taken in was used to help support the writer until the work was completed, or to defray publishing costs. In exchange, the author would usually include a list of subscribers in the first edition of the book, as a sort of "dedication". Dickens was said to play the "subscription game" better than most, reputedly delaying the release of new works until the optimum amount of subscription money was collected. He is also credited with the practice of releasing books by chapters, forcing the reader to keep buying new segments until the work was complete (and probably paying more in the process than if the book had come out whole).].It should be noted here that Ponzi schemes are not limited to unscrupulous individuals or groups. Consider this article from CNNMoney.com, via Yahoo!. In looking at the ten US states suffering the worst in the current economic crisis, it notes that two [Nevada and Florida] are hurting because of a lack of new "players" [businesses and residents, respectively]. Is it just me, or are these two states running a Ponzi? What if the Federal government steps in to prop them up? (Logic tells us that investing in a Ponzi scheme, even in the late stages, should be profitable, if Government intervention leads to compensation of investors) Should bad behavior, even if necessitated by selfish state residents who consistently have refused to allow tax increases, be rewarded? Just asking...
A personal note: I live in what may be the most-economically-challenged corner [Niagara Falls] of the most-economically-challenged region of New York State [Western New York]. In one of my other blogs [Challenging The Thunder; why not stop in?], I look at the history of Niagara Falls daredevils, stunters who have attempted to go over the Falls in a barrel, or [in one disastrous case] a kayak [Yeah. Really. This guy was nuts. Plunging in a barrel makes a lot more sense. It really does. Trust me on this one]. Although both the US and Canada now make every effort to stop potential feats of daring before they turn tragic, it was not always so. Some early challenges were actually sponsored by local merchants, and at least condoned, if not welcomed, by authorities. Maybe it's time to return to that mindset. Hey, as long as the daredevil signs a document freeing the Government from any legal responsibility for his or her demise [which, of course, means all such stunters would have to be over the age of 18], why not? Tourism has been down on both sides of the border the last year or two; maybe the prospect of imminent death would draw a crowd. It works for auto racing. Let me do some math here...okay, the combined width of the American and Canadian Falls is around 33-hundred feet. okay, what's the record distance for a motorcycle jump? 395 feet, last time I checked. Alright, a rocket-powered motorcycle might be able to do it [don't laugh: someone once tried to ride a rocket-powered jet-ski the width of both Falls. Probably would have made it, too, except that his safety parachute failed to open. Sources disagree on whether his body was ever found; either way, it probably wasn't pretty...]. Okay, rocket-powered motorcycle, back-up parachute...wait, we can't do it....
-Mike Riley
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