Rosen, Tancredo losses to Madoff, etc., a source of Schadenfreude for some

February 3, 11:55 AMDenver City Buzz ExaminerRichard Blake

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Revelations that ultra-Conservative, laissez-faire capitalist brothers in arms, KOA talk show host Mike Rosen and former Congressmen Tom Tancredo lost potentially millions in the meltdown of Agile Group are possibly a source of Schadenfreude, (a German word meaning shameful joy or guilty pleasure) for some.  More properly they ought to be object lessons for the rest of us, as well as a call to arms to begin to address the policies that have led to the sputtering of the American economic engine. 

Listeners to Rosen's show may remember his advertisements for an investment firm called Agile Group that catered to "high worth investors."  A lot of listeners, such as myself, might be forgiven for little more than irritation at the ads, which appealed to a demographic to which many of us aspire to, but few achieve.  Agile has just notified its investors that their accounts are frozen until 2010 and that investors could expect no better than a 10% return of their capital, if any at all. 

It turns out that Agile Group handled accounts for both Rosen and Tancredo, The Denver Post, reporting that during Tancredo's ill-fated Presidential bid, he filed papers stating that he had up to $1.1 million invested with the firm. 

At least part of the blame for the losses are blamed on the $50 billion "Ponzi scheme" of Bernard Madoff, with whom Agile clients were informed had received an undisclosed amount of Agile cash.  

While schadenfreude may be running somewhat rampant, especially in terms of Rosen's troubles, it appears that the undeniably intelligent talk show host still fails to entirely grasp the lessons of Agile's demise.  On his radio show Rosen stated that he placed the blame primarily at the door of Madoff and other "crooks."  Certainly Rosen's definition of laissez-faire never extended to fraud.  What he has apparently failed to grasp, however, is that there were more than one Ponzi scheme at work in the demise of Agile Group and Madoff's investment group.  

The creation of securities based on a theory that housing prices would never stop rising, even while the fundamental underpinnings of the American economy were looted might well be looked at as a Ponzi scheme of the highest order.   Betting that housing prices would rise to infinity and that loosening of credit requirements to allow almost every American to make a home purchase would ensure that never ending upward spiral, even while basic American industries and, therefore, jobs were shipped overseas, certainly seems like a bad idea in hindsight.  That that problem might have been and still might be addressed by changing the Tax Code to encourage multinationals to invest in job creation in the United States was and undoubtedly still would be looked at as "protectionism," by both Rosen and Tancredo.  This, despite the fact that such a policy might well have saved Agile and others. 

If, as seems unlikely, Rosen suddenly begins to question the wisdom of things such as the Foreign Investment Tax Credit, a position that Rosen would no doubt regard as completely in opposition to his laissez-faire absolutism, the first signs of a sea change that might begin to bring back American pre-eminence will emerge, giving the Agile Group collapse more meaning than as a temporary source of schadenfreude.