Golden Rule Economy

The Golden Rule is common among major religions, yet missed the financial industry. Simply stated, What goes around comes around, and sometimes with a vengence! Jesus put it eloquently, “Do unto others as you would have them do unto you,” and Buddha, “Do not hurt others with that which hurts yourself,” and in Hindu, “Do nothing to others which, if it were done to you, would cause you pain.” Where is it written, Thou shalt pay off large returns in a Ponzi scheme?

Bernard Madoff reminds me of another historic figure who also fudged his numbers, Gregor Mendel. Mendel was not a Wall Street money manager; he was a monk. He cooked his books around pea plants to make trait predictions, which gave rise to Mendelian Genetics. He had the right idea, but not necessarily the numbers to back it up in his observations. Nonetheless, his theory is all kinds of useful.

My hope is something similarly good will come of the Madoff scandal, and not just the discovery of another 20 dozen investors who did the same thing. My hope is that we step forward with caution where we put our faith. Sometimes there’s safety in numbers; sometimes you all go down together.