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How an Alberta Economist Counsels Victims of Bernie Madoff

Mark Anielski's guide to 'genuine wealth' gains a new audience.

By Colleen Kimmett, 24 Mar 2009, TheTyee.ca

Mark Anielski

Anielski: Pursue happiness.

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Imagine waking up one day and realizing that all your money was gone, that somebody had stolen it and there was no hope of getting it back, not from the thief, not from the bank that was supposed to be guarding it.

New Yorker Renee Bunnell-Schwartz remembers the shock she felt when she woke up on Dec. 11, 2008, and had to face this reality. That was the day she found out what Bernie Madoff did.

She was one of thousands of people who invested in his $65 billion ponzi scheme. While the biggest losers financially were heavyweights like HSBC and Fortis Inc., individuals who now have nothing to show for a lifetime of investment are left wondering how to pick up the pieces.

The fact that Madoff was recently charged and arrested, and that new IRS rules could offer some relief, are likely little consolation for many.

"It's a very visceral experience," says Bunnell-Schwartz. "Things are not ever going to be the way they were. I had an immediate instinct that I needed to do a couple of things."

One of the first things she did was call up Edmonton economist Mark Anielski. She had read his book, The Economics of Happiness, a few years earlier and admired his work. The two began talking, and their phone conversations recently culminated in a meeting at her 90th Street office overlooking Central Park.

In attendance were five others, who had either themselves lost money in the Madoff scandal or were connected to someone who had.

While Bunnell-Schwartz speaks on behalf of approximately 350 investors who formed an advocacy group in response to the disaster, this inner circle represents a sort of "think tank," she says, that has come together around the belief that the speculative investment market is collapsing and something new must form in its void.

'How to prevent suicides?'

"We have been in emergency mode: how do we pay our mortgage, how do we influence the government to recognize their role in this, how do we keep the elderly people from being taken out of their homes, how do we prevent suicides?" says Bunnell-Schwartz.

"The meeting... was to talk about how we can move past the emergency, restructuring and rethinking about wealth."

But how, exactly? That's where Anielski comes in.

His genuine wealth model was originally created for use by governments and corporations. Now Bunnell-Schwartz, a clinical psychologist, wants to modify it so it can be adopted at an individual level, and used as a tool to help people make better financial and personal decisions in the future.

"I'm always impressed when someone says, 'Oh, I think your model's exactly what we need,'" says Anielski, whose clients have included the City of Santa Monica and the Pembina Institute.

"Here we have a crisis with the destruction of financial assets," says Anielski. "But you still have your skills, the gifts that you have as an individual. Here is also a potential opportunity for people to experience reciprocity and sharing."

This could mean anything from establishing a bartering system for advice or services, to interim loans amongst members, to re-investing in each other's enterprises, he says.

Genuine Wealth Check-Up

Edmonton economist Mark Anielski suggests this approach to assessing your true net worth:

- Assess your values: what are the values and virtues that make life worthwhile?

- Count your blessings: What are your strengths (assets) and weaknesses (liabilities)? What is going well for you and what are the areas you hope to improve?

- Distinguish between your needs and your wants: What do I feel I (our family) need to achieve a good life and happiness?

- Measure what matters: What indicators of progress towards a flourishing good life would be meaningful for assessing my or my community's 'genuine wealth.' Do these indicators align with your values?

- Assess the physical and qualitative conditions of your five capital assets of genuine wealth: human, social, natural, built and financial capital. Are the conditions of these assets sustainable?

- Construct a genuine wealth balance sheet: Create an integrated portrait of well-being indicators (a well-being diagnosis or check-up) showing the strengths and weaknesses.

- Well-being vision: What kind of future do I want? Examine your dreams, visions and goals for improving your well-being and a good life. What kind of future do you hope for? Define these as goals for sustaining your genuine wealth.

- Backcasting: Contrast your genuine wealth assessment against your dreams or vision for a more sustainable and flourishing life. How can these gaps be addressed?

- Establish your own genuine wealth development plan: a personal or community "business plan" that would sustain the strengths of your existing genuine wealth and work on some of the liabilities to well-being.

'Speculative economy is dying'

Bunnell-Schwartz agrees that more money needs to be invested in both local and socially responsible ventures, and adds that the urge to hoard money is part of what's wrong with the current thinking. For her, the genuine wealth model is not just about making different investments.

"It's about putting value on different things," she says. "Inserting value in things like relationships, appreciation of beauty and curiosity and not just trying to get a return on your financial investment."

Although she says that she and her husband were already living a mindful life, "moving forward, I think I may want to adopt more of Mark's principles, of not having debt and living more frugally."

Feelings of shame hang over many of the victims she knows, says Bunnell-Schwartz, some of whom were multi-millionaires but also active philanthropists.

"There are a lot of just normal people who worked their whole lives, built businesses and put everything into Madoff," she says.

"The speculative economy is dying and I think we're just the first victims of it," she says. "We're the canaries in the coal mine. If it could happen to us, it could happen to anybody."

Getting to 'a whole new place'

Bunnell-Schwartz -- who calls herself a survivor now -- says she has overcome the initial shock, and even expresses sympathy for Madoff himself.

And Anielski said the mood at the New York meeting was relatively upbeat. But he noticed something there: people were identified by their profession: lawyer, accountant, psychologist, CEO coach.

"When you listen to what their world is, you sort of think...gosh, you still live in this place of luxury," he says. "Are you going to trade an hour of accounting for an hour of therapy? There's only so much need there."

Still, he agrees with Bunnell-Schwartz's assertion that the Madoff scandal is just the beginning. The magnitude of the financial collapse was clear to him strolling around SoHo with his wife on a Saturday morning: most of the stores were closed, he says.

"We asked and one of the merchants told us they only opened three days a week. If that's happening in chi-chi SoHo, you can imagine how the rest of New York is experiencing it."

"We are all playing in a casino," he says. "But there is this opportunity to get back to understanding the language of Thomas Jefferson... that once material needs were met, then the pursuit of enlightenment, the pursuit of happiness was the ultimate objective."

"If we reflect on that, it takes us to a whole new place. America, I think, has some deep soul-searching to do."

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Colleen Kimmett reports for The Tyee and others on sustainability issues.

11 Comments:

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  • frank2

    3 years ago

    All good ideas. We also need

    All good ideas. We also need to shift language a bit. Starting with substituting the word "enough" into all value statements which suggest that "more" is better.

  • PatrickMcEvoyHalston

    3 years ago

    I distrust people who seem

    I distrust people who seem so ready to disown and disparage who they once were (People acquired because they got something they valued by doing so--was it really all bad?). I distrust people who need to believe that everyone is or will be, in their position. (Actually, they won't quite be, 'cause the early "losers" are already a mile ahead in doing all the looking within stuff.) I distrust people who don't understand that when people start romancing frugality and demonizing luxury, the climate may not be ready-right for easeful experimentation and curious exploration: that instead, it's one set for easy demonstrations of your virtue, and pleasing condemnations of those less well "situated."

    As far as the fear of commiting suicide: Many people are going to be relieved that they are now no longer at risk of seeming as if they're on a path straight to hell. They'll just preach sharing, humility, kindliness to neighbours, living the soulful life, spending time with the elderly, and when it's their time, they'll feel a sure in, for sure.

  • Fiat lux

    3 years ago

    The long and short of it is

    The long and short of it is still that what we're witnessing is not a recession, but the collapse of a faulty, fraudulent and criminal economic theory and system, from the top down.

    I was watching Obama on TV last night, saying that now that the banks are beginning to recover, they'll be able to make loans so that people can spend.

    The guy is misled and dreaming. The problem already is that people owe too much and are too far deep in debt.

    Then on top of it, millions have been and are losing their jobs, many of them to phony "free trade" that has nothing to do with real trade, "outsourcing" and globalization, so how can they borrow more and go deeper in debt, and should they be encouraged to do so ?

    Bunnel Schwartz is correct in saying that the "speculative economy is dying" and if it isn't, it should be killed.

    This racket brought incredible power and wealth to a very small percentage, who now own and control the world, causing incredible poverty, misery and death to tens of millions whose lives have been destroyed and robbed by these crooks controlling the markets.

    An economy should work like a road system, where all users, big, or small, and their lives and properties, are equally protected by strict rules and laws.

    This may sound funny to many, but "freedom" can not exist, or survive without protection from predators.

    On our roads we can travel anywhere we want to, without interference, as long as we're following the laws and rules, enforced and protected by an independent security and court system.

    The same should apply to economics, preventing the misuse of powers by predators, who're rewarded and praised as "efficient", the more other vehicles they force off the road and the more lives they ruin on their way to "wealth creation", a bloody lie, if there ever was one.

    Ed Deak, Big Lake.

  • rangergord

    3 years ago

    Maddoff's crime is he got caught

    Meanwhile the central bankers and the government are allowed to go on with their entitlement ponzi schemes, monetizing debts and the resulting inflation, and ever more taxation. The people have no idea how they arrived at where we are and no idea how to move forward from here. Twenty years ago while studying accounting, economics and personal finance I realized that debt would imprison me and was not worth the short term elevated standard of living it brought. While I have not always been able to avoid all debt, I avoided most of it and gained control over my time and accumulated assets slowly but surely. So I can stand here today and say F*** U to the bankers who continually want to lend me money at "low interest rates". I also do not feel the slightest bit guilty for saving 10-50% of the modest income I make working at a job that I enjoy. This collapse has at its roots overspending, too much debt and no savings. If that truth has not yet come home to you, there is no hope for anyone.
    Frankly it is difficult to feel sorry for the victims of madoff. They felt that they were special and that they alone deserved the priviledge of investing in madoff's funds. They are still rich enough that they can spend time feeling all warm and fuzzy about altruistic virtue. Poor people have no time for virtue and idealism.

  • KWD

    3 years ago

    the meaning of life

    It’s not surprising that a few folks, who invested the fruits of life long “toil” in a something-for-nothing pyramid or Ponzi scheme, would wake up one day a discover the meaning of life. It’s quite cathartic admitting that having tons of money is all that defines your purpose for living. What is surprising is the fact so few have jumped.

    Patrick, somethimes your allusions are elusive. What in heaven's name is "a sure in, for sure"?

  • PatrickMcEvoyHalston

    3 years ago

    Frugality knows little (true) happiness

    Hi KWD. I meant a sure in into heaven. When wealth disappears, so too, for many people, does their burden of sin. They join the righteous.

    Also, it would be nice if there was a turn away from manic capitalism toward something much more generous, easeful and affable. But what I sense now is people EAGERLY looking to define the last period we were in as (simply) sinful (it wasn't great, but I actually grew as a person during this period [with some of this growth owing to my explorations of/adventures with the many purchases I made]--didn't you?), and this makes me think that what will follow is more likely to be about holy judgment than it will, wholesome togetherness. "Speculative economy," "place of luxury," casinos" VS. "frugal living," "soul-searching," "pursuit of enlightenment," "socially responsible ventures": that's the past and emerging present, according to the voices we hear from in this article, and it's a black and white, good vs. evil, drama right out of that (other) Puritan "bible," Pilgrim's Progress.

    The article is supposed to be about how we can live more happily, but don't you be fooled: To this crowd, you need be nothing more than of colour and life--someone who really wants to live a joyous, happy life, and you will be guilty of most unforgiveable presumption. Caliban from Robert Browning's poem, "Caliban Upon Setibos," offers the best advice to those who want the watchful Eye to pass you by: "Meanwhile, the best way to escape His ire Is, not to seem too happy": that is, even if you don't complain, learn to live a life worthy of complaint: be self-denying, self-abnegating, self-sacrificing--entirely and cruelly selfless, and you won't arouse suspicion. (And word-to-the-wise, if you're a writer, don't use successive triple colons: it's a bit cocky and over-bold.)

    Appreciate the feedback.

  • G West

    3 years ago

    What people Patrick?

    The benefits to the insanity of the past 30+ years haven't gone to the majority of people.

    In real terms, the average citizen of Canada is worse off (in constant dollar terms) than he was in 1970.

    You can look it up.

    If anyone ought to own up for their 'sins' it's the rich and the captains of industry - along with a small coterier of enablers (let's use Paul Martin as an example - do a bit more research and you'll see why I picked him) who manipulated the system and the tax code to make their larceny possible.

  • PatrickMcEvoyHalston

    3 years ago

    G West

    I know that all boats stopped rising sometime in the late 70s (I think I heard/learned this from Kevin Phillips, but not sure).

    I don't want ANYONE to own up to their sins. Most people feel guilty when they acquire wealth, so the last 30 years owes to the bulk of people WANTING politicians in who'd strip them of their wealth. Nobody got conned. We've kinda been through this before, G West. I know how you see the last 30 years, and I kinda even like your outrage--clearly born as it is out of seeing people suffer, but please attend to how I see it, how I see people. In sum, again: the dog wags it's own tail: people can actually take pleasure in being treated sadistically, manipulatively--the sadists (i.e., the rich) satisfy the needs of the masochists, who truly are the ones in charge.

  • KWD

    3 years ago

    sinners all

    This current round of recession and financial implosion, preceeded by a period of amassing personal success and prosperity, has found those that have been instrumental in creating the catastrophy looking for someone to punish for their sins; and to appease their Gods.

    Since the ongoing conflict, and sacrifice, in the Middle East has failed to lift the spirits of the masses, and set sail on a new course to prosperity, it’s little wonder America has turned inward to find easier sacrificial offering.

    Aside from the ruination of tens of millions of workers, the number of money “managers”, now (or soon to be) attoning for their sins makes it clear that (the fear of) holy judgment is casting a shadow on the lot of Ponzi capitalists. It’s somewhat ironical that wholesome togetherness (in ghettos and prisons) may be an unintended outcome.

  • PatrickMcEvoyHalston

    3 years ago

    The sacrifices in Middle

    The sacrifices in Middle East will surely pick-up, though, and we'll see with it an increase in solidarity behind Obama, and a turning against America's progressives.

    The only thing anyone in Canada knows about Afghanistan, is that it's a place where young people lose their lives. It's just a big maw, into which we sacrifice representatives of our youthful striving, so we can feel more pure. Many of us are not so far psychically from those deraged bastards, who sacrificed their first born to appease the appetite of the gods.

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    3 years ago

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