How did Bernie Madoff get away with it for so long? He did it with secrecy, confusion, and above all else he cultivated trust in the right people who would do most of the influencing for him. I’m not so interested in the financial instruments and securities details of the situation; that was mostly a fiction anyways. The man behind the curtain eventually was revealed as a simple con-man but the story of how people came to invest in him is not so simple. Watch this great video by the Wall Street Journal and notice the connection between trust and persuasion that is undeniable. It is essential to his game.
“If it was good enough for the Palm Beach Poobahs, then it says something about me too” is my favorite line from it. I think it summarizes completely the psychological reality that Madoff exploited. At first it sounds simple but it’s far more elaborate of a con game because that kind of trust wasn’t built overnight. It was trust built by status anxiety. If I was good enough for Bernie Madoff, then I am as esteemed as his famous clients whom might have reason to see me as an equal. He was a legitimate member of the inner workings of the stock market industry for nearly 40 years, but chose investor victims who were not familiar with the industry. He took advantage of the asymmetry of information that enables all abuses of power and it only came to light because the economy made folks want to pull their money faster than he was collecting it from new victims. I have no clue as to why the SEC didn’t see this coming. I suspect his pillar of the trading establishment status put a bias on the SEC who were called to investigate his investments as early as 2001.
I won’t get into the brain science behind the title’s claim because it’s already widely accepted as truth. But I think Pearl Jam’s newest tactic to re-release the album that made them a pop icon is really remarkable for their use of a game to bring attention to an album. As an act of persuasion, I think it’s effective mostly because it’s conjuring up all kinds of positive feelings I already have about the music I know I already like. It’s probably been done before, but this one is really slick. They made an interesting 3d game using my favorite web technology, Papervision3d, to unlock each of the songs from their album. It’s kind of addicting….unless you hate Pearl Jam’s music. If that’s the case, then rest assured that no one else is perfect either. I think they are my generation’s Rolling Stones and they don’t cease to entertain my ears.
Here’s a flickr group that I think is interesting. It’s dedicated to the storefronts of McDonald’s. It documents a challenging design problem for McDonalds that they seem to solve quite well. For most of the Midwestern US they simply setup along highways in underdeveloped neighborhoods which allowed them to construct their stores with a consistent design. What I think is fascinating is how it appears they had to or wanted to change their design to fit into the community design standards of places that were most certainly already developed. It’s as if they were trying to reduce community friction in places that might reject big corporate monoculture. Either way, no one can claim that McDonalds is afraid of variety and change.
I think it’s interesting to contrast the message of this song with the message of the Last Lecture by Randy Pausch. Are they really saying the same thing?
By admin | January 11, 2009
I do not know exactly where I am going with this little drop in the ocean of millions and probably soon to be billions of blogs. However, I do know that I find a great deal of things facinating and curious that I just cant keep to myself. This blog will allow me to share those things I find with you. If I am boring to you, then the solution is simple: do not read my blog. If I am facinating and provide useful information then, enjoy.
