Richard Stanley
Well-Known Member
The following excerpted Atlantic article is a review of a book, Fraud: An American History From Barnum to Madoff, by the Duke University historian Edward Balleisen.
The review furthers the book's focus by placing Trump within this framework of understanding.
Let's remember episodes like Trump University, but perhaps, more importantly, is Trump's efforts to make himself appear like his blue collar base. (See the red highlighted below.) This from a man who lives in his three story penthouse lined with gold and hoity-toity artwork. No sir, he eats Macdonalds and KFC. Once in a blue moon, and for photo-ops. Remember that baby face interview with Rona Barrett? He was either acting then, or now, or both.
The excerpt mentions that the 1970's represented the high point of America's efforts to rein in fraud, but Reagan's supposed 'libertarian' streak began to dismantle these efforts, or at least, led to the still ongoing impulse to do so.
The review furthers the book's focus by placing Trump within this framework of understanding.
Let's remember episodes like Trump University, but perhaps, more importantly, is Trump's efforts to make himself appear like his blue collar base. (See the red highlighted below.) This from a man who lives in his three story penthouse lined with gold and hoity-toity artwork. No sir, he eats Macdonalds and KFC. Once in a blue moon, and for photo-ops. Remember that baby face interview with Rona Barrett? He was either acting then, or now, or both.
The excerpt mentions that the 1970's represented the high point of America's efforts to rein in fraud, but Reagan's supposed 'libertarian' streak began to dismantle these efforts, or at least, led to the still ongoing impulse to do so.
...
Fraud is a phenomenon that knows no borders, but American exceptionalism, as Balleisen shows, includes a special vulnerability to fraudsters and con artists. As he points out, “Many of the world’s most expensive and ambitious frauds have occurred in America” because “openness to innovation has always meant openness to creative deception.” The country’s lionization of entrepreneurs and inventors creates tempting opportunities for those trafficking in highly implausible scenarios. It has made the U.S. home to genuine innovators, from Thomas Edison to Oprah Winfrey, but it has also facilitated the far-reaching deceptions and empty promises perpetrated by people like Bernie Madoff on Wall Street and Elizabeth Holmes in Silicon Valley. Madoff’s Ponzi scheme was the largest known financial fraud in history, and Holmes’s biotech start-up Theranos faces multiple lawsuits and federal investigations after its products didn’t work as claimed. (Holmes and the company deny any wrongdoing.)
Misrepresentations are usually made possible by two factors: their complexity and their proponents’ social craftiness. Madoff and Holmes used both of these to their advantage. When it comes to complexity, the basic principle is that the less people understand of an underlying business proposition, the more vulnerable they are to being taken in by pretenders. Schemes involving science or math have been particularly successful because the knowledge needed to evaluate such proposals critically is not widely distributed in the population. This makes it easy to pass off nonsense as the next big thing. Balleisen’s book is littered with variations on this science-and-math theme, from lightning-rod scams to Americans’ passion for lotteries. These stories have a poignant edge, considering how many recent innovations originally were poorly understood and seemed totally fantastical, but worked anyway (such as paying for groceries with a mobile phone). Even for skeptical consumers, it can be difficult to distinguish between flimflam and genuine opportunities.
While complexity provides cover for con artists, it’s their social wiles that draw in their prey, known as “marks.” The scammers’ job is to make themselves seem not only trustworthy, but familiar: just like their marks, only more successful. The easiest way to perpetrate this deception is on members of one’s own demographic group—a phenomenon known as “affinity fraud.” In the 1920s, for example, Charles Ponzi, newly arrived from Italy, preyed on other immigrants through his eponymous pyramid scheme—a pattern repeated with other immigrant groups, including those from India, Eastern Europe, and Latin America, in the ensuing century. Immigrants, along with people from rural areas, have long been favored targets of fraud; as Balleisen writes, “demographic groups likely to suffer from informational gaps” are shut out, whether willfully or accidentally, from crucial knowledge about the world.
Being of the same demographic group also helps a big-talking salesperson fine-tune the image of success that he or she must project in order to convince an audience. Elizabeth Holmes promoted Theranos in part by imitating the personal and management styles of previous Silicon Valley wunderkinds—right down to wearing the same kind of plain black turtleneck long associated with Steve Jobs. Madoff, for his part, gave lavishly to charities in order to insinuate himself into Jewish philanthropic networks, whose members’ trust—and money—he needed in order to prop up his scheme. Madoff succeeded in impersonating a successful person so well, said one finance-industry executive, that “There was a joke around that Bernie was the Jewish T-bill,” referring to U.S. Treasury bills, considered to be the ultimate secure investment. “He was that safe.”
In view of such a masterful deception, it would seem imperative to have strong protections in place against fraud. Yet, as Balleisen makes clear, American laws and cultural norms have vacillated for decades between protective regulations and the rule of caveat emptor. For example, while the 1970s represented a high point in the institutionalization of consumer protection, the Reagan era onwards has seen a systematic dismantling or disabling of those institutions as part of the politics of small government. In that larger historical picture, the election of a man whose business career was defined by, in the words of the New York Times reporter David Barstow, “an operatic record of dissembling and deception,” is not an anomaly, but the predictable culmination of a long-term trend in American life. ...
https://www.theatlantic.com/business/archive/2017/07/americans-con-fraud-balleisen/535281/
Fraud is a phenomenon that knows no borders, but American exceptionalism, as Balleisen shows, includes a special vulnerability to fraudsters and con artists. As he points out, “Many of the world’s most expensive and ambitious frauds have occurred in America” because “openness to innovation has always meant openness to creative deception.” The country’s lionization of entrepreneurs and inventors creates tempting opportunities for those trafficking in highly implausible scenarios. It has made the U.S. home to genuine innovators, from Thomas Edison to Oprah Winfrey, but it has also facilitated the far-reaching deceptions and empty promises perpetrated by people like Bernie Madoff on Wall Street and Elizabeth Holmes in Silicon Valley. Madoff’s Ponzi scheme was the largest known financial fraud in history, and Holmes’s biotech start-up Theranos faces multiple lawsuits and federal investigations after its products didn’t work as claimed. (Holmes and the company deny any wrongdoing.)
Misrepresentations are usually made possible by two factors: their complexity and their proponents’ social craftiness. Madoff and Holmes used both of these to their advantage. When it comes to complexity, the basic principle is that the less people understand of an underlying business proposition, the more vulnerable they are to being taken in by pretenders. Schemes involving science or math have been particularly successful because the knowledge needed to evaluate such proposals critically is not widely distributed in the population. This makes it easy to pass off nonsense as the next big thing. Balleisen’s book is littered with variations on this science-and-math theme, from lightning-rod scams to Americans’ passion for lotteries. These stories have a poignant edge, considering how many recent innovations originally were poorly understood and seemed totally fantastical, but worked anyway (such as paying for groceries with a mobile phone). Even for skeptical consumers, it can be difficult to distinguish between flimflam and genuine opportunities.
While complexity provides cover for con artists, it’s their social wiles that draw in their prey, known as “marks.” The scammers’ job is to make themselves seem not only trustworthy, but familiar: just like their marks, only more successful. The easiest way to perpetrate this deception is on members of one’s own demographic group—a phenomenon known as “affinity fraud.” In the 1920s, for example, Charles Ponzi, newly arrived from Italy, preyed on other immigrants through his eponymous pyramid scheme—a pattern repeated with other immigrant groups, including those from India, Eastern Europe, and Latin America, in the ensuing century. Immigrants, along with people from rural areas, have long been favored targets of fraud; as Balleisen writes, “demographic groups likely to suffer from informational gaps” are shut out, whether willfully or accidentally, from crucial knowledge about the world.
Being of the same demographic group also helps a big-talking salesperson fine-tune the image of success that he or she must project in order to convince an audience. Elizabeth Holmes promoted Theranos in part by imitating the personal and management styles of previous Silicon Valley wunderkinds—right down to wearing the same kind of plain black turtleneck long associated with Steve Jobs. Madoff, for his part, gave lavishly to charities in order to insinuate himself into Jewish philanthropic networks, whose members’ trust—and money—he needed in order to prop up his scheme. Madoff succeeded in impersonating a successful person so well, said one finance-industry executive, that “There was a joke around that Bernie was the Jewish T-bill,” referring to U.S. Treasury bills, considered to be the ultimate secure investment. “He was that safe.”
In view of such a masterful deception, it would seem imperative to have strong protections in place against fraud. Yet, as Balleisen makes clear, American laws and cultural norms have vacillated for decades between protective regulations and the rule of caveat emptor. For example, while the 1970s represented a high point in the institutionalization of consumer protection, the Reagan era onwards has seen a systematic dismantling or disabling of those institutions as part of the politics of small government. In that larger historical picture, the election of a man whose business career was defined by, in the words of the New York Times reporter David Barstow, “an operatic record of dissembling and deception,” is not an anomaly, but the predictable culmination of a long-term trend in American life. ...
https://www.theatlantic.com/business/archive/2017/07/americans-con-fraud-balleisen/535281/