Albania is a real country. Mountainous mining country in the Balkans, bordering the former Yugoslavia. As such, this small nation was right at the heart of all the trouble in Bosnia-Hertsegovia we experienced a few years ago. You remember all the “ethnic cleansing” news and bombing raids against the Serbs.

Well, it turns out that almost everyone in Albania fled the country by the revolution of 1997. And the reason they left was that hundreds of thousands had lost everything they owned in Ponzi schemes sponsored and condoned by their government.

In bordering countries like Bosnia, this migration caused tremendous problems. Particularly, since these neighbors were themselves rebuilding after the Russians pulled out in the early Nineties. At the end of the Cold War America borrowed itself into monstrous debt to win.

It also caused problems in older established nations like Italy and Greece until Albanians were absolutely stopped at the border. It wasn’t that easy for countries like Bosnia and more contiguous neighbors not that well organized.

In America, you didn’t hear much about this problem. It wasn’t one of CNN’s mega-stories. And there’s a reason it wasn’t given much attention by the loyal Clintonista media. A reason why we may have been given the “ethnic cleansing” story instead. A play on an old religious fight that had been going on since the Ottoman Empire. Half truths, very useful on such occasions.

The American Story

Many extreme right-wing Americans, those at the opposite of welfare, believe that Social Security is a Ponzi scheme. That Social Security not only depends on more people paying in than receiving benefits, but that it’s unfair to the payees. Even that the people paying today will not get the same shake when they retire.

There’s a tendency for older people to label anything that seems like a con game or rip-off as a “Ponzi” scheme simply because of the dramatic impact Charles Ponzi had on the country when he bilked so many Bostonians out of millions during the Twenties. They’ve heard their parents talk about Ponzi.

Charles Ponzi invented the pyramid scheme. What was later also translated into chain letters and telephone trees. It’s been put to many uses, most of them cons but some good.

What pyramids depend on is the number of tiers and blocks of people under the apex, the person that started building. You start with getting any number of people to join the first tier, then having them each get just as many people for the second tier who do the same thing, so on and so on. People in the lower tiers feed money, letters, pot-holders or whatever back up until those at the top are raking it in hand over fist, each tier taking its percentage on the way, of course.

The trouble with Ponzi schemes or pyramiding this way is that they usually collapse by the fifth or sixth tier, if they even get that far. Everybody gets wise or the system simply collapses in on itself from its own cumbersome weight and confusion.

In other words, if Social Security were truly a Ponzi scheme, it would have collapsed in the Forties somewhere. It would have been freak luck to make it into the Fifties, more than ten years after going into affect. And it certainly wouldn’t be around today.

But this was exactly what had been going on in Albania since the new Democratic government took over in the early Nineties. Get rich quick pyramid schemes were all over the place with the government apparently right in the thick of it. By 1997, those still left in the country revolted and overthrew the government.

For all I know, maybe it was some older right-wing mining engineers that went over there and put ideas in people’s heads. Saying: “Hey, we’ve got 40 million Americans living off a Ponzi scheme. You should try it.”

There was a point where Secretary of State Mad Albright considered sending NATO troops in to protect American citizens caught in the 1997 uprising.

In short, the powers that be certainly didn’t need to add fuel to the fire in America by pointing out what happened in Albania. With its own, much more sophisticated rip-off well underway and about to open a money laundering scheme to pay down the national debt, the American spin doctors put Albania away in the closet. They may have even supported a laugh-at-yourself funny movie to make people believe Albania was a fairy tale.


See:

CNN on Albania

All Publishing - 1998

American refugees

Albanian Editorial