Bernie Madoff’s Ponzi scheme was bad and criminal. But when they decide on who should be the poster child epitomizing the screwed-up thought processes of Wall Street at the heart of the current recession, my vote goes to  John Thain, the former chairman and CEO of Merrill Lynch.

Thain didn’t do anything that was illegal - although New York Attorney General Andrew Cuomo’s office isn’t finished with him yet.

No, Thain’s spending $1.2 million a little over a year ago to fix up his office was legal. Just stupid. The signs were there in the fall of 2007 that mortgage-backed securities were failing. We knew it here in Tucson after the August failure that year of mortgage lender First Magnus Financial Corp. And Merrill Lynch was hugely exposed to the risk subprime mortgages.

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Early last year as other financial insistutions began disclosing their positions in those securities - and writing them down - Thain almost publicly held on to the notion Merrill Lynch’s securities shouldn’t take huge write-downs.

Then, at the end of 2008, as he must of have known Merrill Lynch was getting precariously close needing financial intervention, Thain pushed through $9 billion for early bonuses to executives that normally would have been paid in January. Three days later, Merrill’s merger with Bank of America was announced.

After the merger, Thain even argued he deserved a bonus for “preserving” Merrill Lynch instead of letting collapse. He didn’t get the bonus.

Then, Bank of America officials say they got a surprise when they discovered Thain neglected to tell them of $15.31 billion in fourth-quarter losses at Merrill Lynch.

At the request of Bank of America Chairman and Chief Executive John Lewis, Thain resigned Jan. 22. But as of last week, Thain was still defending his actions - even defiantly insisting BofA officials knew what he had been doing all along.

I’ll admit I’m not the smartest when it comes to investing. I have an account at Merrill Lynch - and other places, too - that prompted me to start paying attention to Thain’s shenanigans early last year. They worried me enough to withdraw our cash out of our account there. But I have to wonder if a lazy investor like me saw the potential economic train wreck coming nearly a year ago from 2,000 miles away from Wall Street, why couldn’t someone closer have done recognized it sooner?

Then again, nobody found out about Madoff, until he effectively admitted he was breaking the law.

Thain may not have broken any laws but it’s clear he doesn’t get it. Undoubtedly there are others on Wall Street who still think the same way he does. This is the same crowd that crows about how good the free-market economy works when they’re getting money from it. But now that they’ve made a mess of things, they’re clamoring for bailouts from the government.

It’s called “Clueless on Wall Street” and John Thain is the poster child. 

 E-mail comments for publication to editor@azbiz.com. Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237.