Bernie Madoff and Jewish Angst

Friday, March 13th, 2009

James Besser in Washington

So Bernie Madoff is going to the Big House, and his many victims won’t get to see him strung up by the thumbs.  I’m sure there’s  a lot of disappointment (I sort of liked Elie Wiesel’s suggested punishment for the Ponzi King: put him in a jail cell with a flat panel TV, and run continuous pictures of his victims).

But I wonder: why, exactly, have Jews who didn’t lose money in his record shattering Ponzi scheme reacted so vehemently to Madoff’s record-setting crimes?

Some answers are obvious.  For one, he has shamed a community that’s always hypersensitive about stereotypes of Jewish financial machinations; it doesn’t ease the embarrassment that  most of his victims were Jewish.

There’s a certain shock factor about a man who would rip off not just Jewish charities, some of which have gone out of business, but Wiesel.  What kind of person rips off both the foundation and the personal savings of one of the world’s great humanitarians?

Some of the reaction is also the result of fear about our own Jewish institutions.

Jews give huge amounts of money to do-good agencies, and there’s an assumption that since Jews are good in business (we believe some stereotypes when they’re flattering) the folks managing money at Jewish charities must be good, too.

Not so, we have learned. Many didn’t see the economic downturn coming; when it could no longer be ignored, they were slow to acknowledge its severity and prepare their organizations for an unprecedented hit.  And a few invested big chunks of their organizations’ money in a scheme that your mother probably would have told you was too good to be true.

Bernie also took advantage of in-group feelings – the idea you could trust a guy who goes to your shul, who gives to UJC.  We feel violated by his exploitation of our communal connectedness – the very essence of an “affinity crime.”

But I would submit that most of our ANGST about Madoff has nothing to do with the fact he is Jewish, or that so many of his victims are Jewish.

His gigantic ripoff was exposed just as the nation was starting to come to grips with the fact that some of our comforting assumptions about life – including the belief markets only go up and that endlessly rising prosperity is our birthright – were  going up in smoke.

So was the illusion that many of the people we trusted with our economic futures were both smart and honest.

That includes politicians in Washington who were blinded by deregulation mania and too-cozy relationships with the people they were supposed to be regulating, bankers who put huge amounts of money into get-rich-quick financial instruments they didn’t understand, lenders who somehow thought giving mortgages to people who obviously couldn’t afford them was good for business and friends at the country club who were giving out investment tips that turned out to be the entrance ticket to gigantic rip offs.

Bernie Madoff was part of our rude awakening, a graphic symbol of a wrenching and totally unexpected change in our lives. And unlike the other forces upending our economy,  it was something we could grasp.

You may not know what a “credit default swap” is – obviously a lot of bankers didn’t – but you sure as heck know what outright thievery is.

Bernie deserves the enmity directed at him from victims and non-victims alike.  But he is also a convenient target for our anger and fear about the sudden and upsetting change in our economic fortunes.

About the Author
Douglas M. Bloomfield is a syndicated columnist, Washington lobbyist and consultant. He spent nine years as the legislative director and chief lobbyist for AIPAC.