Thursday, December 25, 2008

What do we do to a punk-ass white collar criminal?

Arguing that Bernard Madoff probably deserves not decades, but years in prison, Harlan J. Protass (a professor at Cardozo Law), says:

Remember Jeffrey Skilling? Losses to Enron shareholders of more than $1 billion largely determined his 24-year-plus sentence. Or consider WorldCom's former chief, Bernard J. Ebbers. He got 25 years based principally on the $2.2 billion loss suffered by his company's shareholders. Sure, these men destroyed enormous shareholder value, just as the targets of today's criminal cases allegedly did. But it's hard to contend that they deserved prison terms longer than the average sentence for murder (22 years), kidnapping (14) and sexual abuse (eight).

Horseshit. Think about how many lives you could save with $1 billion, $2 billion, or $50 billion, the amount that Madoff alleges he stole. The amount that our government values a human life at when doing benefit-cost analyses is typically less than $10 million, although some risk regulation, such as that for airlines, spends a lot more per statistical life saved (see this article for an explanation of the basic concept).

Basically, $1 billion spent on extra car safety mechanisms or improved air quality will lead to somewhere around 100 statistical lives saved. If it were spent on something beneficial in the underdeveloped word, like iodine, it could save even more. Granted, Madoff's clients were not going to go spend their money on improving car safety, but the principle stands: this man has taken the equivalent of thousands of lives. If others have to pay a high cost for that, so should he (of course, I'm not sure if I believe in retributive justice, and even then, it depends, of course, on his level of culpability for the crime).


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