The Bezzle Grows

TW: There is usually a logic to these crises even if we do not focus on the logic until too late.

From Mike Scherer at Time:
"In his 1955 book "The Great Crash: 1929," John Kenneth Galbraith, the British economist, explained concisely why Bernie Madoff is unlikely to be the last corrupt financier to be shoved into sunlight.

'At any given time there exists an inventory of undiscovered embezzlement in - or more precisely not in - the country's business and banks. This inventory - it should be called the bezzle. It also varies in size with the business cycle. In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly. In depression all this is reversed. . . . Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks.' "