Bernie Madoff and the Wise Men of Chelm

Champion swindler Bernie Madoff was sentenced today to what amounts to life in prison. And amid the ongoing stories about Madoff, I see the recurring questions:

How could so many smart people have allowed themselves to be swindled? And how could he have done it to people with whom he seemingly had such strong ties of culture and faith?

As Marie Brenner put it earlier this year in Vanity Fair: "What kind of Jew victimizes Elie Wiesel?"

Because so many of his victims were Jewish, and were such highly accomplished people and organizations: From individual investors -- members of the heavily Jewish Boca Rio Golf Club in Boca Raton and the Palm Beach Country Club in Palm Beach -- to universities and foundations: Hadassah, Yeshiva University, American Jewish Congress, the Technion-Israel Institute of Technology, Steven Spielberg's Wunderkinder Foundation, Elie Wiesel's Foundation for Humanity.

Sadly, the success of the Madoff scheme (Ponzi was a piker by comparison) was not such a shock to connoisseurs of the traditional Eastern European Jewish folk tales known as "Chelm" stories.

Chelm is a mythical town that lives in spirit not far from Garrison Keillor's Lake Wobegon. As with Keillor's biting tales about the people of his childhood home (don't be seduced by Keillor's mellifluous voice, his stories have jagged edges), the Chelm stories are funny -- but with sharp teeth.

The people of Chelm are always being swindled by each other or outsiders or being led into the blind alleys of life, usually because they can't figure out that something that looks too good to be true is almost certainly false.

You want a Chelm story? When the sexton got too old to go to the houses and knock on the shutters to let people know it was time for services, the Wise Men of the town ordered that the shutters be brought to the sexton's house so he wouldn't need to go looking for them.

I'm borrowing here from the work of Samuel Tenenbaum, whose book "The Wise Men of Chelm" was published in 1965 and may have been on my bookshelf almost since then. (Sad to say, it's long out of print. Used copies are out there for -- yow! -- $75!)

Tenenbaum includes a tale that seems particularly relevant to the Madoff scheme. It's about a cow.

Somehow the Chelmites become convinced that the cow gives gold along with its milk. They take all their money and pay the owner, a poor stranger, for the cow. Which of course does not produce gold. When the Chelmites track the stranger down, he explains that the cow produces gold only if it is not fed. They must train the cow, he explains, by cutting down the food a bit each day.

Which the Chelmites do. What happens? Take it away, Mr. Tenenbaum:

"Tomorrow!" said the Wise Men, "We shall give the cow nothing to eat, and then we shall have lots of gold, as much gold as we want."

The next day, the town officials and the people put on their best clothes. Everyone was again happy. Chelm would be the richest town in the world! What a treasure they had bought...

They had no chance to milk the cow.

The cow was dead.

The people grieved and mourned.

"Was the cow fair? Was the cow honest?" they complained. "Just as soon as we have her trained, she dies. What can you do with a cow like that?"

... [T]hat taught the people of Chelm a lesson. They would never buy any more gold cows. Buying a goat, however, that gave gold, or a chicken that laid golden eggs, was an altogether different matter.

(From the story "Chelm Buys a Cow – and What a Cow!")

There are Chelm-like stories in every culture, because every culture has evil people who sell gold cows and gullible people willing to buy. It's not that Madoff's victims are stupid. Rather, they have the same blindness as anybody else. As Madoff and his victims prove yet again, Chelm is alive and well in America.