What was the lasting effect of the Bernie Madoff Scandal on our society -- the effect that make it important?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The Madoff scandal is important for two reasons -- it has two major effects on society (other than impoverishing the people that Madoff swindled).

First, the swindle makes it more likely that there would be regulation of the financial industry.  When things like this happen, people in government tend to try to pass laws to ensure that they do not happen again.  This could make more regulation of the financial industry (which economists say is a bad thing) more likely.

Second, it reduces the amount of trust that people have in one another.  Societies (and economies) are built largely on trust.  If we do not trust that money that we invest will come back to us, we will not invest and the economy will be hurt.  If we do not trust one another, we treat each other worse than we otherwise would and our society is hurt.

So, by doing what he did, Madoff may have hurt our economy and our society.

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