Bernard Madoff Benefited From That Timeless Classic: The Old Boys Club

Dean Baker wrote an interesting piece this week about the fact that the only two regulators over the past decade who actually did their jobs were women. He speculates that it was because they weren't members of the boys club.

He uses Bernard Madoff's scheme as an example:

If we needed any further evidence that the financial industry suffered from too much deference to insiders, Bernard Madoff filled the gap. He apparently ran a simple-minded Ponzi scheme for 30 years, stealing tens of billions of dollars from wealthy individuals, private charities and even large banks.

When some investors and reporters raised suspicions about Mr. Madoff, no one bothered to seriously investigate because he was such a good guy. After all, he belonged to all the right clubs, generously supported charities and was even a founder of the Nasdaq.

The regulators don't investigate respectable people like Madoff, and this is precisely the problem.