Tracey Barnett: Reality never bites delusional rich

I didn't expect that a single image would forever capture today's entire financial meltdown in my brain.

No, it isn't Ponzi fraud king Bernie Madoff walking into court wearing a bulletproof vest under his business suit to plead guilty last week, having stolen a mother-lode equivalent to about half of New Zealand's gross domestic product.

It isn't the applause that filled the courtroom from his ripped-off victims - including retirees now destitute, collapsed charities, and universities - as he was carted off to jail instead of remanded back to his US$7 million ($13.2 million) penthouse.

It isn't even the thought of his wife scrambling to transfer another US$15 million into her US$70 million personal accounts days before the story broke.

It is something far stranger. It is the image of fashionista Donatella Versace smoking a cigarette, as described in a New Yorker profile.

It seems Ms Versace has the "Smoking Kills" covered over on each cigarette pack with a sticker baring her "DV" initials in medieval script.

As blogger Jason Kottke wrote: "That's as far as I read before deciding that reading yet another article about someone wealthy enough to have a staff helping them opt out of reality is a waste of my time ..."

That one opulent gesture clinched it. Here is an extraordinarily wealthy woman who pastes over an unpalatable piece of her reality every day.

If she doesn't want to see an emaciated face baring oesophagus cancer, Ms Versace has people who can take care of that. She never has to see the possible repercussions of her actions. She has the money to see whatever she wants. Or ignore the truth.

What did Bernie Madoff see when he looked in the mirror every morning for more than two decades of fraud? Did he imagine the faces of the families of two suicides that have now resulted?

Did he look Nobel Peace Prize laureate and Holocaust survivor, Elie Wiesel, now personally broke, in the eye and promise that his humanitarian foundation won't also be robbed of its entire US$15 million in assets because of his "one big lie"?

Bernie Madoff didn't cause today's economic meltdown, but he sure is a fine poster boy of the disease that's ailing us all, the moral bankruptcy of the financial community he once lorded over. As Warren Buffet said: "It's only when the tide goes out that you learn who's been swimming naked."

Suddenly, the Golden Boys we always celebrate for palming that brass ring in their fist are flipping the average Joe their middle finger and we pretend they never had one.

There are so many new greatest hits of slimy moments, it's hard to choose.

Even on our shores, we will be paying for Merrill Lynch chief executive John Thain scribbling out US$3.6 billion in bonuses to his buddies just before his company ship sank.

Do you think he sat up in bed at night worrying about screwing over his own hard-working, average countrymen who would almost immediately have to cover the bill in bailouts, unemployment and repossessed houses - or what the ripple effect his actions would have on the world? He took care of his Big Boys.

Surprise, surprise, our captains of industry are pushing down the heads of the galley slaves to grab the best life rafts as they race first out the door - and we imagined they knew better. Financial power brought these moneymen the illusion of invincibility and, mostly, the actuality of it. In their industry, integrity just slows you down.

Drowning insurance behemoth AIG, which posted the largest loss in corporate history this month, decided it is still bound to dish out US$165 million in bonuses, a large chunk going to the very division that tanked it.

Sure, a contract is a contract. But why are they now so graciously promising to reduce bonuses for 2009 by a paltry 30 per cent? Do they want to retain this kind of gargantuan losing talent that got them there in the first place? Even the President is now trying to stop them.

The crime here isn't losing after a bull-run decade of success. Their grand deceit has been an incredible talent for blurring the line between legal and unethical, and then pretending business as usual doesn't involve moral choices.

Sure, there are honest men out there [and it is still mostly men]. But there is nothing in their industry that rewards them for it.

I want to trust that the guy at the top got there because he followed the rules, not erased them. I want to trust he acts as a moral compass to set the tone for the entire organisation to follow.

I want to trust when you become a world-class player, you understand what that huge weight of responsibility means. But if this financial meltdown has taught me anything, it is that I am as out of touch with reality as Donatella Versace smoking her pretty fags.

www.traceybarnett.co.nz