Who is the biggest King of Fraud -- Bernie Madoff or Henry Paulson? A common sense discussion in layman's language of our casino capitalism..

Who is the biggest King of Fraud -- Bernie Madoff or Henry Paulson?

Which bring us to our odious comparison between Henry Paulson and Bernie Madoff.

For two decades Bernie Madoff ran a classic Ponzi scheme. He probably got into it slowly, made the 12% a year he promised his customers for a good while, then fell short and thought he'd make it up later, maybe did make it up later, but gradually got in over his head, and then just kept going, because as long as his sucker friends kept investing with him, he could pay enough of them their 12% to keep going. Only when the present crisis struck did he lose his nerve because he figured too many of them would want too much of their money back, so he finally confessed to his sons, who turned him in. They were more honest than their father -- he probably confessed to give them a chance to split with the takings, but they wisely decided not to take this paternal opportunity.

In our stinky comparison, what did Henry Paulson do? Besides expanding leverage from 12:1 to 60:1 when he was CEO of Goldman Sachs, he took his firm from $20 billion in debt to $100 billion of risky debt by the time he left. Good for you, Henry. Today Goldman Sachs has had to give up being an investment bank -- i.e. a speculating cheat -- for being an ordinary bank....