Tom Purcell, 4/13/2009 [Archive]

Pyramid Scheme

The Pyramid Scheme

By Tom Purcell

I was just a naive kid at the time. That's how I got snookered.

It happened in the spring of 1978. My best friend Ayresie and I had quit our jobs as cooks at the Ponderosa Steakhouse to start a business rebuilding retaining walls. We put an ad in the community paper and some fool -- attracted by the cheap labor, no doubt -- entrusted his driveway wall to us.

After a week of hard labor we completed the job. After we paid for our supplies and Mitch Morton's dad's truck -- we'd hired Mitch to haul off the excess stones and dirt -- we were each left with a profit of $100.

My father was eager for me to put my very first profits into my college fund, but I had a better notion. I was going to "invest" that money and turn it into thousands.

An interesting scheme had come to our community, you see. To participate, you needed $100. You'd give $50 to the person who brought you into the scheme. Then you'd mail another $50 -- inside a birthday card -- to a name at the top of a list of 10 names.

Your name would then be placed on the bottom of the list and your task was to find two other suckers to cough up $100 each -- each person would give you $50, so you'd get your $100 back -- and then each person would find two other people and so on.

As your two people brought in two people, your name would then be on four lists; as those four people got two people, you'd be on eight lists, then 16, 32, 64, 128, 256, 512 and so on.

So long as the scheme continued to expand -- so long as you were one of the early participants in the scheme -- your name would move up to the top on thousands of lists. Thousands of participants would send you $50 in the mail.

That's exactly what happened to the lucky early participants. They made thousands of dollars off the deal -- though their postal carriers wondered why so many people were so interested in their birthdays.

But of course the scheme was unsustainable for the rest of us. It was a classic pyramid scheme -- a simple shifting of wealth from the many to the few.

You see, in time, there weren't enough suckers to risk their $100. The scheme finally collapsed under its own weight and a lot of people ended up just as I did.


I learned from the experience, though. I learned that every pyramid scheme has three stages. The first was enthusiasm -- the folly that huge returns would come pouring in. The second was realization -- that you've been duped out of your hard-earned dough. The third was embarrassment -- you felt shame and regret for letting your emotions cloud your judgment.

This knowledge has helped me avoid numerous financial schemes over the years.

I was puzzled that tech stocks kept soaring in the '90s, when few tech companies we're earning profits, and I avoided that collapse.

I was puzzled that housing prices were doubling and tripling earlier this decade, when the average income remained the same, and I avoided that collapse, too.

And now I'm puzzled by the latest nutty idea -- that our government can prop up our economy through massive expansion and spending.

President Bush was no stranger to such spending. In 2002, he was the first president to propose a $2 trillion budget. In 2008, he was the first to propose a $3 trillion budget.

But President Obama puts Bush to shame. Despite a severe economic downturn, he's the first president to propose a nearly $4 trillion budget -- and he's enthusiastic about it!

Whereas Bush nearly doubled our debt (from $6 trillion to $11 trillion), Obama wants to nearly double it again (from $11 trillion to $20 trillion) in only 10 years! Such a public debt would be unsustainable.

Even a 16-year-old kid wouldn't be dumb enough to invest in a scheme like that.

© 2009 Tom Purcell. Tom is a humor columnist nationally syndicated exclusively by Cagle Cartoons newspaper syndicate. For more info contact Sales at (805) 969-2829 or email Visit Tom on the web at or e-mail him at

RESTRICTIONS: 'Tom Purcell's column may not be reprinted in general circulation print media in Pennsylvania's Allegheny, Beaver, Butler, and Westmoreland Counties. It may appear only in the Pittsburgh Tribune-Review and its sister publications.

Download Tom Purcell's color photo - Download Tom Purcell's black and white mug shot photo
Why not run a cartoon with the column? We recommend the cartoons below as a good compliment to Tom Purcell's topic.
Click on the thumbnail images to preview and download the cartoons.

Related Cartoons

 Con  Opportunity for Obama
By: Daryl Cagle
March 12, 2009

Economic Summit COLOR
By: Nate Beeler

April 2, 2009

Economic Summit
By: Nate Beeler

April 2, 2009

 Con  Era of Responsibility
By: Adam Zyglis

February 27, 2009

 Con  Cant Budget - Color
By: Jeff Parker
Florida Today
March 27, 2009

 Con  Cant Budget
By: Jeff Parker
Florida Today
March 27, 2009

Bloated monster
By: Eric Allie

March 5, 2009

 Con  Bloated monster COLOR
By: Eric Allie

March 5, 2009

We do not accept and will not review unsolicited submissions from cartoonists.
Sales & Information: (805) 969-2829
Billing Information: (805)
Technical Support:

FREE cartoons for your website if you're already a paying print subscriber!
Artwork and columns are copyrighted by each creator. All Rights Reserved. Unauthorized reproduction prohibited. Privacy Policy | Terms of Service