Henry Lehman left Bavaria in 1844 for a peddler’s life in rural Alabama. Within a year he had saved enough money to open a dry goods store in Montgomery, and a few years later he was able to send for his brothers, Emanuel and Mayer. The firm, Lehman Brothers, expanded, moved into cotton trading and in 1958 opened a New York office, where their prestige grew as international financiers and members of the German Jewish royalty. For the next century the holdings company, one of Wall Street’s most storied investment banks, always was led by a Lehman and, regardless of staff demographics after that, always identifiably Jewish.
All that ended Sept. 15, 2008 — the day Lehman Brothers filed for bankruptcy, the United States economy fell off the cliff it had been marching toward and anti-Semitism received a powerful shot in the arm.
“Yes all the jews ... you are all complicit in being a blight on the community ... money money money ... it’s the only song the jews sing and the only thing they eat ... what they won’t do for money….” a reader from New York, identified as Shawna Murray, commented on The God Blog on this newspaper’s Web site, after reading an Oct. 8 post about the spike in anti-Semitism.
Anti-Semites have long fed off fallacious claims that Jews drink the blood of gentile financial calamity. And, reality be damned, they wasted little time before lobbing such attacks this go-around.
Given the anonymous nature of the Internet, it’s impossible to know whether such sentiments signified a new surge in hatred of Jews or were simply a sign of increased efforts by an angry few. But it appears that more than just the usual suspects have bought into the conspiracy theories and abject anti-Semitism. In February, the Anti-Defamation League (ADL) reported 40 percent of Europeans in seven countries — Austria, Britain, France, Germany, Hungary, Poland and Spain — believe Jews have too much power in business and nearly a third blame Jews for the economic crisis.
“Jews run the world,” Draskovics Andras, a leader in the right-wing Hungarian Guard movement, said in remarks televised on Hungarian TV last month. Jews “need only 2 billion people for their tricks, and the rest of mankind will be executed.”
Though less socially acceptable in the United States, anti-Semitic attitudes appear to be just as common.
In January, Neil Malhotra, an assistant professor at Stanford School of Business, and Yotam Margalit of Columbia University set out to determine just how much blame Americans were assigning to history’s favorite scapegoat. And though the ADL regularly finds that fewer than 20 percent of Americans harbor anti-Semitic attitudes regarding Jewish business practices, Malhotra and Margalit’s study suggests that the historic urge to outsource blame is bringing in at least a few new faces.
Primed with news articles related to the crisis, including one about Bernard Madoff, the macher who made off with billions from the American Jewish community and admitted to running a $50 billion Ponzi scheme, study participants were asked the question: “How much to blame were the Jews for the financial crisis?” They then had to choose between “a great deal, a lot, a moderate amount, a little and not at all.”
“Among non-Jewish respondents,” Malhotra told The Journal, “a strikingly high 24.6 percent of Americans blanketly blamed ‘the Jews’ a moderate amount or more, and 38.4 percent attributed at least some level of blame to the group.”
The campaign against the Jews began shortly after Lehman’s collapse. On Oct. 2, a rumor, based on insinuation and wishful thinking, began circulating on anti-Semitic blogs that before going belly-up Lehman had diverted $400 billion — that’s billion with a “b” — to accounts in Israel.
The origin of this claim was a Bloomberg article reporting that before the company’s collapse, its assets fell from $500 billion to less than $100 billion — a drop of $400 billion. A Lehman trustee attributed this to a “proverbial run on the bank.” The article contained no mention of Israel or Jews or any recipient of these billions, but anti-Semites and conspiracy theorists knew the only answer for the money’s disappearance was Jewish clannishness and trickery.
“The reality is irrelevant. Anti-Semites and bigots and people who accept stereotypes have nothing to do with reality. Facts don’t matter. They create their own,” Abraham Foxman, national director of the ADL, said in an interview.
“Sometimes in bigotry you use a modicum of facts to build your conspiracy,” Foxman said. “If the economy was not in crisis, bigots could not use the economy as a platform on which to operate. Lehman, Bear Sterns, the current Fed chairman, the previous Fed chairman — but that assumes a classic anti-Semitic canard that all these people are in these positions because they are Jewish and therefore act out their Jewishness.”
This is familiar territory for the Jewish people. From poisoning the well to plunging Weimar Germany into desperate poverty, Jews have often been blamed for otherwise explainable tragedies (such as poor sanitation and war reparations).
Anti-Semites looked to the business pages and found Jewish names being mentioned in almost inverse relation to the stock market’s decline.
They turned to Washington and found Jewish economists being blamed for policies that precipitated the crisis and labeled as Jews several policymakers who aren’t, such as former Treasury Secretary Henry Paulson and his successor Timothy Geithner.
And then in early December, anti-Semites received an early Christmas gift: Bernard Madoff.
Never mind the culpability of the policies of President Bush and President Clinton, the mortgage lending practices of the likes of Countrywide’s Angelo Mozilo — let alone the conspicuous consumption of the American consumer.
Anti-Semites prefer to discount the facts and cling to convenient Jewish names and faces.
“I am actually grateful for this opportunity to publicly speak about my crimes, for which I am so deeply sorry and ashamed,” Bernard Madoff told a U.S. District judge in New York on March 12. “As I engaged in my fraud, I knew what I was doing [was] wrong, indeed criminal.”
With this statement, Madoff, the biggest con man in American history, plead guilty to 11 counts of fraud and accepted the fact that he almost certainly will die in prison.
On top of stripping billions from Jewish nonprofits and their megadonors, Madoff confirmed every ugly stereotype anti-Semites tend to promulgate about Jews. Crooked. Wicked. Consumed by a lust for mammon to the point of moral bankruptcy. Madoff was a walking stereotype — as Foxman said, “a cherry on the top for bigots.”
But Madoff, 70, did not cause the economic collapse. In fact, if the stock market hadn’t plunged about 35 percent between mid-September and mid-November, he and the so-called mini-Madoffs now coming to light likely would have continued their fictitious businesses and have kept robbing Peter to pay Paul. Far from a cause of the recession, the wreckage brought on by Madoff — “scoundrel of scoundrels,” in the words of Nobel Peace laureate Elie Wiesel, one of his multimillion-dollar victims — was a consequence of it.
There were, however, plenty in legitimate corners of the financial services industry who deserve their share of blame. It’s just that their mistakes have nothing to do with their identities as Jews.
Shortly after news of the economic crisis broke, NBC’s “Saturday Night Live” aired a sketch that poked fun at people the comedy show’s writers thought were getting rich on taxpayer money. In a skit depicting a press conference on the federal government’s $700 billion bailout, an actor impersonating George Soros, the billionaire Holocaust survivor, said in a thick accent that he had pocketed the government’s money, which he converted to Swiss francs because he was shorting on the U.S. dollar. Yuppie speculators and “deadbeats” who were approved for loans without credit or jobs also were pilloried. Herbert and Marion Sandler got the worst of it.
The Sandlers had sold Golden West, a savings and loan reportedly filled with bad assets, to Wachovia Bank for $24 billion in 2006. “Actually, we’ve done quite well. We’re very happy,” Marion Sandler said in the sketch, as the screen subtitles identified her and her husband as “people who should be shot.”
Whether these caricatures were anti-Semitic or simply satirical has been a point of debate, in this newspaper and others. Regardless, the Sandlers certainly weren’t pleased.
“I have been listening to this crap for two years,” Sandler told the Associated Press the morning after the SNL sketch. “We are being unfairly tarred. People have been telling us to speak out for some time, but we didn’t think it was appropriate. That was clearly a mistake.”
“Unfairly tarred” is another point of debate. By September, Wachovia had become so fiscally troubled, in part because of Golden West’s toxic assets, that the bank had to be saved by Wells Fargo. Sandler did not respond to a request for comment for this story, but NBC apologized and has edited the Sandlers out of the version of the sketch that can be seen at NBC.com and Hulu.com, the latter of which is partially owned by NBC.
To be sure, there are people who happen to be Jewish who deserve blame for their role in the financial crisis. And many would argue that the Sandlers are among those topping the list. But it’s hard to argue that their actions, like those of former Lehman Brothers CEO Dick Fuld or former Fed Chairman Alan Greenspan, have anything to do with being Jewish.
These were decisions made as banking executives and economic policy leaders, and not at the diabolical direction of the Elders of Zion.
In fact, the genesis of the global economic malaise was as American as Chevy trucks and apple pie.
The collapse began as a crisis in credit markets, which had been contaminated by the U.S. housing market, which had been precariously propped up by bad lending practices and rabid real estate speculation. All the while, consumers kept spending more and more. Dismal salary increases were no deterrent for homeowners. There was plenty of cash stashed inside that exponentially appreciating home for a new motorcycle or boat or Hawaiian vacation.
The profits weren’t real, but homeowners spent as if they were. Bankers were all too eager to keep supply in line with demand. And Washington politicians gladly looked the other way.
Indeed, economists say the meltdown had too many moving parts — speculative home buying, lax financial regulations, low interest rates, etc. — to pinpoint one clear catalyst.
“The current problem is one of certain confusion by so many people; there are so many fingerprints on this thing,” said Roy C. Smith, a professor at NYU’s Stern School of Business. “We don’t have an answer to who the culprit really is.”
“I’m not willing to say that person or that agency is to blame,” said Mark Thoma, an economics professor at the University of Oregon who writes the Economist’s View blog. “There were several faults, any one of which if it wasn’t there would have made a big difference.”
But what’s clear, economists agree, is that the colossal downturn was not the work of just Jews — no matter how anyone manipulates the evidence.
In a Time magazine list of 25 people to blame for the financial crisis, six Jews were among the culpable parties. The ratio is about 10 times Jews’ representation in the general population, but it is unclear whether that measure is different from that of Jewish involvement in the financial industry. What is known, though, is that while Jews are prominent and prevalent, they do not dominate the financial industry. In fact, not a single CEO of the 10 largest commercial banks, as of Sept. 30, was Jewish.
How is it then that Jews came to be so strongly identified with Wall Street and the world of international financing?
Long before 23 Dutch Jews arrived in the colony of New Amsterdam in 1654, moneylending was one of a few professions open to European Jews, who often weren’t allowed to own land or join the guilds. Moneylending was prohibited of Christians by the Catholic Church; Jews were familiar with businesses built on large amounts of risk and preferred jobs that endeared them to those in power. The glove fit — for some, a bit too well. In some cases exorbitant interest rates led many Christians to believe that Jews were more intent on destroying their debtors than on making money. The most infamous depiction, of course, is Shakespeare’s Shylock, a fictional character who has done more to color the Jewish people than just about anyone in literature — biblical or otherwise.
“The more Jews became involved with commerce, the more non-Jewish society associated them with commerce and finance, the more they became negatively stigmatized by it and the more they were excluded from noncommercial activities, such as agriculture,” said Jonathan Karp, an associate professor in Jewish studies at State University of New York, Binghamton, and author of “The Politics of Jewish Commerce: Economic Thought and Emancipation in Europe, 1638-1848.” “There was an element of a vicious cycle or a self-fulfilling prophecy that pushed Jews more and more into these activities.”
The art of charging interest was passed from father to son and so on, and though the church’s restriction eventually faded, Jews had the experience and a leg up. This would pay a pretty penny for a handful of German Jews who immigrated to the United States in the mid-to-late 1800s. Here they found a proven formula for success that was rooted in the ingenuity necessary for diaspora life and their Old World familiarity with moneylending: from rural peddlers to international financiers in a matter of only a handful of years.
It began with the Our Crowders — those aristocrats of post-Civil War New York, the Lehmans and Seligmans, the Loebs and Schiffs, the Goldmans and Sachses. “The New Crowd,” as Judith Ehrlich and Barry Rehfeld dubbed the next arrival of Jews on Wall Street in a 1989 book by that name, took over in the hyper-aggressive, private-equity days of the 1970s and 1980s. Many of these business leaders still work on Wall Street today; no longer is it a profession of necessity.
“I don’t think Jews are predominantly drawn to finance anymore. Jews are drawn to a whole variety of prestigious and lucrative professions,” said Derek Penslar, a visiting professor at Columbia University and author of “Shylock’s Children: Economics and Jewish Identity in Modern Europe.” “They have been drawn to banking and the stock market; to medicine and law; to academia. I think Jews are simply attracted to pursuits that require higher education and promise good money or a prestigious reputation. They are oriented toward brainwork, but not toward finance.”
It should be said, too, that the financial crisis — just as rough on the Jewish community as the broader American public — certainly has not been good for the Jews. Charities supporting Jewish causes have been hammered. Jewish megadonors have lost substantial chunks of their wealth and have tightened the purse strings. And professions with heavy Jewish representation have been decimated: the financial industry, real estate and construction, law and, not to be forgotten, media.
Looking forward, Jews have landed on both sides of the debate over the recession’s cause and course of action. While many worked for the banks that leveraged themselves beyond belief, and in some cases out of existence, and many worked for the government agencies that could have reigned-in an economic bubble built on low interest rates and an out-of-control housing market, many others were sounding the alarms during the years that preceded the current crisis.
This reality was replayed last month on Comedy Central’s “The Daily Show” when, hours after Madoff plead guilty, Jewish host Jon Stewart coolly excoriated the also-Jewish CNBC personality Jim Cramer for his network’s “cheerleading” the inflated economy and for the frenetic nature of the stock advice he belts out on “Mad Money.”
“We’re a big network. We’ve been out front, and we’ve made mistakes,” an unusually contrite Cramer said. “We’ve got 17 hours of live TV a day to do. But I —”
“Maybe you could cut down on that,” Stewart quipped.
Then in defending the advice he dishes on “Mad Money,” Cramer said, “The show has evolved as the market got tougher.”
To which Stewart offered a correction: “I think evolved might be a strong word. Mutated.”
The six-minute interview — or interrogation — became an immediate moment of cultural catharsis. Comedy Central also uploaded unaired portions of the interview onto one of its blogs, Indecision Forever, which quickly was peppered with more than 3,500 comments, the vast majority of them thanking Stewart for calling Cramer on the carpet.
Anyone who saw “The Daily Show” on March 12 — the show’s audience of 2.3 million was second in 2009 only to Inauguration Day — understood the differences between these two small-statured, big-brained, larger-than-life Jews from quite similarly modest backgrounds:
Hero and villain.
Watchdog and booster.
Prophet and king.
It didn’t matter that Cramer wasn’t responsible for the mania in home buying or irresponsibility in bank lending, that he was simply a TV personality who shouts commands to buy and sell certain stocks. It didn’t matter that, as Megan McArdle wrote for The Atlantic, “Going after Jim Cramer is like trying to fix your marriage by getting new drapes.”
Though he admittedly had offered some bad advice since Wall Street collapsed six months ago, Cramer became the fall guy for just about anything that’s wrong with the economy.
You could even call him a scapegoat.
But lost in all the scapegoating — often the case when Jews are blamed for someone else’s problems — is the crucial lesson of the U.S. and global financial crises: Most Americans and many in industrialized countries got drunk on money that didn’t exist and comfortable with lifestyles they couldn’t afford. Now the world is suffering a pretty nasty hangover.