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Tuesday, February 8, 2011

Melmotte vs. Madoff

The main plot of TWWLN revolves around a wealthy financier, Augustus Melmotte, who sells shares in an imposter railroad venture.  Melmotte's recent arrival in London is shrouded in mystery, since little is know of his past.  Strong speculation suggests he was born in New York, though he has spent a significant amount of time on the Continent.  Nevertheless, he has arrived in London with an exorbitant amount of money and no one is sure of how he acquire, though rumor has it he may have been a banker.  In order to gain traction with his railroad scheme, Melmotte surrounds himself with young men, inexperienced in the world, who have no knowledge of financial dealings.  This arrangement allows him to manipulate these faux transactions and pay out minimum funds while adding to his own personal wealth.

The storyline immediately reminds one of the Ponzi schem of Bernie Madoff, brought to light in 2008.  Like Melmotte, Madoff is a Jewish, supposed financial guru who falsified investment documents to those who entrusted him with their money.  He bled off the money of those investments, though no such investments existed.  Because he dealt mostly with charities, there was no threat of huge cash-ins.  Thus, the scheme was able to be sustained.

Both men were successful in deceiving so many people because their word was considered as good as gold.  They were presumed to be trustworthy due to their influence and unfathomable financial resources.  Melmotte's wealth was presumed to be bottomless, particularly when he hosted the Emperor of China at a state dinner at his residence.  He spared no expense, though Trollope reveals that all costs were paid for on credit.  No vendor doubted payment from the great Melmotte however.  Similarly, Melmotte bought the property of the financially-strapped Longstaffes, though no money actually exchanged hands.  Later in the novel, Melmotte is exposed as having sold the property before paying for it.  Because Melmotte's prosperity was never questioned (though it should have been), immediate payment was not demanded.  Interesting enough, Melmotte's eventual downfall is commenced by the financially irresponsible Dolly Longstaffe.

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