by John Feffer
In 1993, I arrived one fall evening in the Romanian city of Cluj. The railway station was mysteriously full of people, and the city outside was crowded and frenetic. I was mystified. Why did this rather obscure Transylvanian outpost suddenly seem like New York City?
My contacts in Cluj eventually provided me with an explanation. Romanians were flocking to a “bank” based in Cluj called Caritas that was giving out eight to one on the investment. News that the payouts had turned several people into millionaires was attracting hordes of people eager to take advantage of this unprecedented opportunity. The upscale stores in town had difficulty keeping their luxury goods in stock for consumers flush from their payouts.
It didn’t last long. Caritas was a pyramid scam. The first investors received the promised return, but they were paid out of the receipts of the next round of investors. Ultimately, one in five households in Romania were invested in the scam. But like all pyramid scams — also known as Ponzi schemes — Caritas eventually collapsed, with nearly half a billion dollars in debt. This economic catastrophe fell hardest on the people with the least amount of money and the most desperate hopes of advancement.
The other insidious part of the story is that quite a few people invested in Caritas knowing that it was a fraud. But they calculated that they could get in and out before the pyramid disintegrated.
It is often said that Donald Trump is a confidence artist, a snake-oil salesman, a fraudster. The truth is much more disturbing. The U.S. president is a Ponzi scheme unto himself. He has gotten many hardworking people to invest their hopes and dreams in him...
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