The Amish Side of Bad Investments
Yes, even some individuals in the the Amish community are facing financial troubles. According to a WKSU News report from Kevin Niedermier, a 77-year-old Amish man named Monroe Beachy "defrauded thousands of Amish investors of millions of dollars". Beachy has been charged with one count of mail fraud.
According to the WKSU article, over the course of 20 years Beachy ran a business known as A&M Investments in Sugarcreek, Ohio. A & M Investments had nearly 2,700 investors in 29 states. Beachy lost more than half of the $30 million that investors entrusted to him. US Attorney Steven Dettlebach claims that "Beachy told clients he was investing in safe, federally backed Ginnie Mae bond funds", but instead Beachy actually put the Amish investors' funds into riskier investments like junk bonds, mutual funds, and risky stocks.
Nevertheless, Beachy would send investors falsified quarterly statements claiming that their funds were safe. As Beachy gained new investors, he used money from the new investors to re-pay earlier investors -- in the manner of a textbook Ponzi scheme. However, as anyone who is familiar with Ponzi schemes knows, such schemes do not go on forever. Ponzi schemes are doomed to collapse at some point.
Last year A&M Investments closed and Beachy declared bankruptcy after losing nearly $17 million from the scheme. Beachy's clients (many of them are Amish) were deceived into believing that their funds were in secure investments via fictitious statements. As a result of the collapse of the Ponzi Scheme, Beachy is being called an "Amish Bernie Madoff". However, according to ABC News, unlike Madoff, Beachy "did not pocket the collected money" and remained a member of the Amish community and lived a simple lifestyle with a horse and buggy. If convicted, Beachy could face up to 20 years in prison.
According to WKSU's Kevin Niedermier, this is not the first time that members of the Amish community have fallen prey to a recent scam. Niedermier: "The Amish community also invested heavily in Akron-based Fair Finance which went bankrupt 2 years ago owing more than 200-million dollars." Yea, verily, "what do people gain from all the toil at which they toil under the sun?" Alas, "do not human beings have a hard service on earth, and are not their days like the days of a laborer?"
One would think that a somewhat isolated religious community of devout individuals that persists using 18th c. technology while wearing plain, historically prairie-style clothing and whose primary source of subsistence comes from farming would be immune to the greater financial crises facing the world. But alas, even the Amish are vulnerable to an uncertain and dire financial environment. The fact that even the Amish have been struck by financial deceit is an unfortunate testament to the sorry state of business ethics and economic affairs in this country.
It is enough to make one say, "Vanity of vanities! All is vanity." Indeed, "What gain have the workers from their toil?" Even so, a wise man once said, "The lover of money will not be satisfied with money; nor the lover of wealth with gain. This also is vanity."
Nevertheless, it is significant to note that unlike the Madoff Ponzi scheme, members of the Amish community are coming together to assist the victims of Beachy's Ponzi scheme. Whereas US society in all its capitalistic glory often does not appear to afford a sense of communalism and willful giving to those who have fallen prey to financial scams, the Amish community comes together and takes care of its own. From the ABC News article: "When somebody has a tragedy, [Amish] people come together and give of themselves to help those get back on their feet again." According to a Plain Dealer article written by James McCarty, "Members of the Amish community in Sugarcreek were embarrassed by the unflattering light the Beachy case cast them in. Rather than relying on bankruptcy court, some of the Amish would prefer to resolve the case within the community. Many have donated money to pay back the victims, and thousands of dollars have been raised."
According to the Plain Dealer article, Amish victims of Beachy's scam were upset at being dragged into court rather than resolving the matter in the community. Verily, I can recall someone once saying, "Make peace and come to terms quickly with your opponent while you are on the way to court." (Matthew 5:25) After 2000 years, one has to wonder if that message has ever gotten through to most in Western civilization. I recall something else someone once said, "In your patience you shall win your souls"; such advice is fitting in the midst of a global financial crisis.
Could you imagine mass amounts of people donating funds to compensate those who lost vast amounts of money in Madoff's Ponzi scheme? It is funny and a bit sad to think that perhaps our highly-cultured, civilized, high-tech "Information Age" American society can stand to learn something very important about human behavior and community from a religious group that generally does not use electricity and still uses horses and plows for farming.
Economically, there is something to be said for communal living. Yes, it's not for everyone, but communal living does have its advantages. Last summer I discussed the advantages of kibbutzim in the world given the financial crisis.
I think in light of the current economic depression, individuals would do well in rethinking communal living. It would be nice to see a few kibbutzim get established in the US among willing, patient, and devout individuals. At the very least, communal living appears to be a strong hedge against the stress, deceit, risk, alienation, weariness, estrangement, exhaustion, and pressure that go along with living in contemporary American society. In communal living, people can live close to their daily labor; parents are able to see their children; families can live and work in peace. Risk is more easily spread among many households rather than risk being imposed on singular households. Any failed investment of the Amish is hedged by their investment in their community, their religion, and their way of life.
Though some of the Amish may have lost a significant portion of their financial wealth from scams, their spiritual wealth derived from their community is retained -- and perhaps can act as a hedge against any financial losses sustained.
If the reality that the Amish have been hit with financial scams shows us that even they too are vulnerable on a socio-economic level, so too the Amish community's response to financial calamities has something important to tell us. "There will always be poor people in the land. Therefore I command you to be openhanded toward your fellow Israelites who are poor and needy in your land." Nearly 3,500 years later, we're still waiting for the message to sink in. It's a sad testament of the state of the US economy.
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