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Now comes the anger

Kevin MacDonald

October 6, 2008

The enormous bailout of Wall Street continues to reverberate. By all accounts, part of the dynamic was that public sentiment changed after the enormous drop in the stock market on Monday (Sept. 29) along with dire warnings about the consequences of not passing a bailout. The market then rose in anticipation that a bill would be passed, but when a much enlarged bill was finally passed on Friday, the message from all quarters was that the US was in for a long, deep recession despite the huge infusion of cash. As this is being written, the stock market is again posting huge losses because of fears that the financial meltdown is spreading to Europe.

It would be surprising indeed if such a result didn’t lead to anger and frustration. People have seen their property values plummet and their retirement accounts shrink dramatically. Many face the prospect of losing their job or earning substantially less. Some analysts have argued that even with the rescue plan we still face a financial Armageddon.

It’s natural under such circumstances to seek someone to blame — especially because this is a man-made disaster rather than a part of the normal business cycle. Conservatives have focused their ire on the pressure that the Democrats in Congress (e.g., Barney Frank, Christopher Dodd, Maxine Waters) brought to bear on Fannie Mae and Freddie Mac to lower lending standards for minorities. Steve Sailer has shown that Karl Rove and the Bush administration were into it up to their eyeballs in an attempt to wring a few Latino votes.

The problem with these analyses is not that they are false. The problem is that these partisan perspectives in the end read like politically correct dogma if one leaves out righteous indignation directed at Wall Street itself. Wall Street, after all, is where so much of that bad paper ended up — the bad paper that they weren’t able to unload to others for huge fees before the collapse. Indeed, quite a few financial analysts paint the following picture which is based on a report that appeared on National Public Radio. (See here for an audio version and here for a transcript):

Because of the growth of the global economy, there was a huge pile of money looking for investment vehicles. The vast US mortgage market was an attractive source of relatively high returns compared to US Treasury bonds, so Wall Street developed mortgage-backed securities to tap into this market. There was a huge demand for these securities — so much so that Wall Street didn't want the party to end when there were no more available mortgages that had been created by traditional credit standards. This led to lowering standards for lending and "financial alchemy" whereby Wall Street created ever more exotic investment vehicles (such as collateralized debt obligations) able to tap into this vast pool of money.

The beauty of the scheme was that everyone was making money hand over fist —  illegal immigrants with no financial assets, real estate agents, mortgage brokers, and the great Wall Street financial firms. Normal homeowners were delighted  because their  homes were going up in value and they were able to refinance their homes and get cash to buy nice stuff.

But none of it could happen without the people at the top of this food chain — Wall Street — coming up with the investment vehicles able to channel this toxic paper to tap into this global pile of money and certifying via credit rating agencies that these products were sound investments. Wall Street was also involved in lobbying and pressuring Congress on issues regarding de-regulation of the financial markets.

Once one accepts that Wall Street itself bears a considerable portion of the blame for this disaster, then it gets interesting.  Much of the debate about the bailout in the media framed the issue as a conflict between "Main Street" and Wall Street. As noted in a previous column, Main Street is basically a code word for middle class whites. And the sticky point is that, as also noted in that editorial, Wall Street is heavily Jewish.

We at The Occidental Observer do not want to prejudge the extent of Jewish involvement in the present situation. This is a complex story whose full details are still emerging. We intend to continue to post articles and commentary on this issue as further information becomes available.

We are not the only ones who have noticed that this dichotomy has overtones of classic anti-Jewish themes. The ADL is concerned about “a dramatic upsurge” in anti-Jewish messages on internet discussion boards devoted to finance and the economy in reaction to the huge bailout of Wall Street. The ADL press release is predictable in its attempt to characterize such outbursts as irrational hatred against Jews: Abe Foxman complains darkly that in times of economic downturns, "The age-old canards [the ADL's favorite word is 'canard'] about Jews and money are always just beneath the surface.”  

Admittedly, the comments compiled by the ADL tend to be one-liners without any attempt to develop an argument: "[Jews] run Wall Street so they should be to blame. There is at my count roughly 1500 of them that should be in the penitentiary. Not a single one will suffer."  Another wrote about the Jews that "They love money nothing else, no faith or religion can be so heartless to their victims." This is about what one can expect to find on public message boards.  

The problem is that we all know that there is more than a grain of truth to the claim that Jews run Wall Street, just as there is more than a grain of truth to the claim that Jews run Hollywood. In fact, as we previously pointed out, Benjamin Ginsberg, a prominent social scientist, noted during the 1990s that 50% of Wall Street executives were Jewish. 

Nevertheless, the immediate reaction of the ADL is to attempt to stifle any such comments and simply label them as “anti-Semitism.” They applaud attempts to remove these statements as they appear, but complain that “the rate at which new posts are arriving prevents [monitors] from removing all of the objectionable material before it is widely read.”  

Such heavy-handed attempts to squelch discussion of Jewish influence can be seen on a wide range of issues, most notably the role of the Israel Lobby in influencing US foreign policy in the Middle East. When John Mearsheimer and Steven Walt published their work on the Israel Lobby, organizations like the ADL were quick to condemn them as anti-Semites and compared their writing to classic anti-Jewish themes in writings like the Protocols of the Elders of Zion. 

But the bottom line is that there is no attempt to soberly and rationally determine the real extent of Jewish involvement in this disaster. The  entire topic of Jewish involvement in the financial system is taboo. It is not surprising that the police-state tactics favored by the ADL fuel the flames of anti-Jewish conspiracy theories when all attempts to raise the issue of Jewish influence in the financial system or other areas of American life are met with powerful efforts to enforce silence. 

The situation is similar to a previous financial scandal — the one involving Michael Milken, the notorious 1980s junk bond king. As a 1989 National Review article noted, Milken “is Jewish, as were many of his partners and peers. (Indeed, about the only sympathy he has gotten is from those who see his prosecution as an instance of anti-Semitism.)”

Much of the discussion of the Jewish role in this financial scandal centered around the book Den of Thieves by James B. Stewart. Jewish activist Alan Dershowitz called Den of Thieves an “anti-Semitic screed” and attacked a review by Michael M. Thomas  in the New York Times Book Review because of his "gratuitous descriptions by religious stereotypes."  Thomas’s review contained the following passage:

James B. Stewart . . . charts the way through a virtual solar system of peculation, past planets large and small, from a metaphorical Mercury representing the penny-ante takings of Dennis B. Levine's small fry, past the middling ($10 million in inside-trading profits) Mars of Mr. Levine himself, along the multiple rings of Saturn — Ivan F. Boesky, his confederate Martin A. Siegel of Kidder, Peabody, and Mr. Siegel's confederate Robert Freeman of Goldman, Sachs — and finally back to great Jupiter: Michael R. Milken, the greedy billion-dollar junk-bond kingdom in which some of the nation's greatest names in industry and finance would find themselves entrapped and corrupted.

Sounds like a Jewish cabal to us. Thomas later noted that “If I point out that nine out of 10 people involved in street crimes are black, that's an interesting sociological observation. If I point out that nine out of 10 people involved in securities indictments are Jewish, that is an anti-Semitic slur. I cannot sort out the difference. . . .”  

Dershowitz pulled out all the stops in this particular campaign — even purchasing a full page ad in the New York Times (at a cost of $450,000) and ads in three other newspapers.

The difference between the current  crisis and the Den of Thieves debacle is that the consequences to the financial system of the current Wall Street disaster are far greater and they are far more likely to have a negative effect on pretty much everyone. When a new version of Den of Thieves describes in detail the Jewish involvement in the current catastrophe, perhaps not even Alan Dershowitz or the ADL will be able to keep the lid on the bottle.

There are other signs of anxiety about accusations of Jewish responsibility for the current financial meltdown. Tim Rutten, who often writes on Jewish issues for the Los  Angeles Times (see here, here, and here), clearly has his  antennae up for overtones of anti-Jewish rhetoric in the current discussion. In a column titled "Mean St. replaces Main St.," Rutten disputes the Main St. versus Wall St. dichotomy, stating that it has

become a kind of shorthand. Main Street translates as small and rural, virtuous and without guile. Wall Street means urban, greedy and devious. Palin invoked it Thursday, when she proudly labeled herself a "Main Streeter." So did Joe Biden, in recalling his hardscrabble Scranton roots and the talk at his local Wilmington diner.

The obvious political implication of all this historical symbolism — and that's really what it is, at this point is that essentially decent Main Street will prosper if only it is liberated from the oppression of fundamentally venal Wall Street. The problem is that no one is willing to admit honestly that there's no way to punish Wall Street without punishing everybody else.

Rutten may be right that "there's no way to punish Wall Street without punishing everybody else." But that is hardly an argument for forgetting about the very real differences between Wall Street and Main Street.

For people like Rutten, the Main St./Wall St. rhetoric is a short step to populist outrage against Wall Street. It's an "Us versus Them" kind of thinking that must be squelched at all costs. His column narrowly construes Main St. as people living in rural areas, when it is obvious that, as I have noted previously, the term is a code word for the white middle class. And he conjures Wall St. out of existence by arguing that financial markets are truly national and not centered in Wall St. Nice try. But it's rather transparently lame.

This latest disaster may well have some very far-reaching effects on political rhetoric about Jews in the US, at least in the absence of a truly Draconian campaign that effectively keeps such rhetoric seething beneath the surface. And given that the financial crisis is now global, keeping Jewish involvement out of the public mind may be more difficult than ever given that many countries do not have the very powerful infrastructure of Jewish activism and media influence present in the US. In the age of the internet, the task of the ADL and activists like Alan Dershowitz is infinitely more  difficult.

Stay tuned.

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