Lloyd Blankfein is the chairman and CEO of Goldman Sachs. In 1869, a German-Jewish immigrant named Marcus Goldman founded the company. Thirteen years later, the little commercial paper dealer celebrated its bar mitzvah by bringing on Goldman’s son-in-law, Samuel Sachs. Thus was born what Rolling Stone recently called, channeling their late-great Hunter S. Thompson, “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

Lloyd Blankfein, who with his wide, pursed lips looks for all the world like a Muppet, recently told the Times of London he and the rest of his colleagues at Goldman Sachs are “doing God’s work.”

This is the point when you picture a Muppet in a suit and tie riding atop a giant vampire squid wrapped around our planet. Perhaps the Muppet would be holding a cross, except he’s Jewish. So there would be a Magen David in his hand. Take a moment. Picture it.

It’s funny, isn’t it? Except it’s not. It’s an anti-Semitic wood cut yanked straight from the worst screeds of Henry Ford’s printing press. Some version of the Protocols of the Elders of Zion probably features an illustration close to, if not identical, to my little depiction. I would be annoyed by this, even repulsed by the very image, if Blankfein and Goldman Sachs didn’t make it so fucking easy.

This is a company that made $3.2 billion. In profit. In three months. This year. This year when unemployment has soared to 10.2 percent and rising. This year when that figure rises to over seventeen percent when you count the people who’ve stopped looking for work or scrape by on part-time gigs because they can’t land a full-time job with benefits. By benefits, I mean health care. I don’t mean the multi-million dollar stock options or bonus payments that line the pockets of Goldman Sachs employees, where the average pay this year is $700,000.

This is a company that quite literally played both sides of the housing bubble, selling off $40 billion in mortgage-backed securities while secretly betting those mortgages would turn out to be worthless. When the bubble popped, the losses Goldman Sachs would’ve taken were already passed down the line. Instead, they made a killing.

I’m using the word ‘killing’ on purpose.

Continue reading...

Between the Jewish establishment's imposition of silence and the loosely coupled throng of Jew-hater's who zealously proclaim conspiracy, the discourse over Jews and money is pure zealotry on either side.  The result is a vacuum of alternative perspectives and the absence of any shred of an enlightened public discussion, which only provides fertile soil for a perpetual harvest of rhetorical hate.

That's why Jewcy feels it's critical to highlight voices like Brackman and Jaffe, as we are doing all week, and it's also  why we're very happy that Time magazine just published an article highlighting two Jewish scholars that are publicly filling the vacuum by putting forth an alternative discourse -- one that cites Jewish law as a basis for criticizing the behavior that led to the current financial crisis. The scholars are Yeshiva University economics professor Aaron Levine and Rabbi Eliezer Diamond, a professor of Talmud and Rabbinics at New York's Jewish Theological Seminary. 

The article draws on Jewish scripture (the Torah, the Talmud, and the Mishna) as well as various rabbinical opinions to extrapolate ancient principles relevant to our current economic times:

•Bamboozling the "Blind"
Much Jewish ethical thought flows out of Leviticus 19:14, which reads "Thou shalt not curse the deaf, nor put a stumbling-block before the blind." From an early date, rabbis expanded this into a general prohibition on bad advice. In time, it became part of the language specifically regarding loans, mostly regarding the need for witnesses. But Diamond says it now applies to the whole loan debacle and "any expert who tells someone who probably shouldn't take out a mortgage 'you'll be able to do it, no problem.'" There are a lot of financially "blind" people out there, and a lot of people mis-advised them.

•Hidden Flaws and the "Reasonable Man"
Medieval jurists like Maimonides identified a more specific kind of bad advice. They tackled the idea of the "hidden flaw," which, Levine points out, leads directly to a demand for fiscal disclosure. "If you sell an animal, you had to disclose to the buyer what the hidden flaw is," he explains. Not only that: "the disclosure has to be made so that a 'reasonable,' or average man can decide" whether to buy. Once again, almost the entire chain of transactors in the mortgage crisis is guilty: predatory brokers for not alerting working-class borrowers to the fine print; middle-men selling mortgage debt to investment banks sliced and diced into "tranches" that obscure their riskiness; bankers who used hard-to-fathom financial instruments that leave ultimate responsibility for a loan a mystery even to experts. Like many observers, Levine is particularly exercized about credit default swaps, a largely unregulated field since 2000.) And anyone who willfully ignored the fact that real estate prices must eventually come down.

•The Bath House Rule
An extension of the disclosure concern, Diamond reports, was explored by Jews through the unexpected vehicle of marriage law. The tractate Ketubot in the Mishna dictates that a betrothal is valid only if the bride-to-be has no hidden blemishes that would have disqualified the match, had they been public. However, there is a heavy responsibility on the groom: if he has relatives who could have observed the disfigurement by checking out his fiance in the womens' bath but neglected to do have them do so, he can't complain. This suggests (feminist complaints notwithstanding) that culpability in sub-prime crisis does not lie solely on the mortgage broker who glided over the fact that payments ballooned in the third year; but also on the buyer who happily neglected to read the fine print: : "Ignorance of the facts is no defense," Diamond says.

•Morals of the Mark-Up
Leviticus 25 of the Bible explains that you cannot charge the same price for land that is about to become useless (in this case, by reverting to its original tribal ownership) as for a parcel that still has decades of use left. Rabbinic tradition, says Diamond, interpreted that as a check on price-gouging and ruled that nobody should charge more than one-sixth above market value for anything.

[Time Magazine]

Chabad has always kind of scared me (though of course I know and love many Chabadniks) not least because they seem to have infinite amounts of cash. Turns out, some of that cash is being laundered, and some of it is being pocketed by various guys who work for Chabad. Which begs the question, What Would Menachem Mendel Do?
Embezzling: Is Mukzeh (but Sunday-Friday it's cool)
Jpost reports:

Administrators in the Israeli branch of the Chabad Hassidic sect are allegedly embroiled in a multi-million shekel embezzlement, tax evasion and money laundering scheme involving local businessmen, police said Wednesday.

Police arrested four men on Tuesday connected with the sect who are suspected of embezzling and aiding Israeli businessmen in tax evasion by accepting tax-exempt "donations" to Chabad which were later returned laundered.

A Channel 10 report said that among the business leaders suspected of using the money-laundering facilities allegedly run out of Kfar Chabad was Arkadi Gaydamak. Gaydamak, according to Channel 10, had made NIS 1 million in donations to the fund - but was far from the only prominent business figure suspected of involvement. Police said that they would continue to investigate both Gaydamak as well as the other businesspeople.

Police arrested Yosef Aharonov, director of the non-profit Young Chabad Association, which is the main supporter of Chabad activities in Israel. Aharonov's driver, Levi Edrei, and Young Chabad employee Dov Livitin were arrested, too.

Later on in the article Asst.-Cmdr. Avi Mansour, head of the criminal investigation against Chabad reminds us that last year, when Yosef Segal was arrested for embezzling more than 17 million shekels, he continued to be employed by Chabad.

Full Story

Weirdly, it looks like Chabad was the one being ripped off in both these schemes.
The Rebbe: is not amused
This might be a good time to check out some writing on why it’s a bad idea to steal or cheat in business.
I like this dvar Torah by Rabbi Jay Kelman of the Business Ethics Center of Jerusalem:

We must make things perfectly clear. A Jew who is ethically wanting, no matter how meticulous in his relations with G-d, is not a religious Jew.

Much more important than the diagnosis of the problem is finding a cure. While the evil inclination will continue to resist efforts to curb its appetite for money, this yetzer hara can be 'defeated' as we challenge it for productive purposes. Not so long ago, everybody, including observant Jews themselves, thought that traditional Judaism could not survive in America and were thankfully proven wrong. Similarly a concerted effort to address this problem is bound to have positive results. The first step towards a solution is recognizing the gravity of the problem, and the centrality of the issue to the definition of being an observant Jew.

It is time to make this issue a priority. We must teach and re-teach the basic Jewish values of honesty, full disclosure, and integrity in all of our dealings. Our rich heritage includes such teachings as: the flood happened because of the sin of robbery, that the first question that G-d will ask us is whether our business dealings were conducted honestly, that it is a Biblical obligation to follow the civil laws of your country of residence, that due to dishonest weights Amalek comes (Midrash cited by Rashi Devarim 25:17), that robbery is "more difficult" than adultery (Baba Batra 88b), that G-d abhors social sins but can tolerate idolatry (see commentary of Meshech Chochmah to Exodus 14:24). We must stress the notion that our prophets have told us over and over again that absent social ethics G-d does not want, in fact He even despises our sacrifices (Isaiah 1). And we all know that prayer has replaced sacrifices.

We must not allow those whose business practices are not up to Torah standards to be held as role models for a Torah lifestyle. We must ensure that all of our activities are conducted in a manner that will result in a kiddush Hashem. We must continue to work until people will stop and say what a wonderful Torah the Jewish people have, look at the honesty and integrity of those who keep it.

So here’s a novel idea: tonight, do your best to light Shabbat candles on time, and ALSO keep your hands off money you didn’t rightfully earn.

Gosh, Chabad has so much to learn from me.

Since yesterday was Labor Day here in the States, and since I actually had class on Labor Day (not that I’m bitter) I’ve been thinking about Jewish law in connection with physical labor, laborers and business.
Working For the Man: not as bad as working on the street
We’ve talked before about slavery and how much of a problem it still is in the world. Recent estimates put the number of slaves in the world today around 27 million. This number includes many millions of women used as sex slaves, and several million children.

But labor issues are relevant in less extreme situations as well. You can always try to buy fair trade, which helps to ensure that farmers with small farms and/or artisans are being paid a fair price for their services and goods. And maybe the easiest way to keep some the labor mitzvot is to always pay for what you buy right away, especially when it involves labor. This means everyone from your contractor to your bartender.

Leviticus 19:13 says, “Do not defraud your neighbor or rob him. Do not hold back the wages of a hired man overnight.” Which is to say, if you hire someone to do work for you, and they do the work, don’t leave them high and dry—even if it’s only for a little while.

We tend not to think about this kind of thing because it seems obvious, but in my experience Jewish organizations are incredibly bad at paying on time. One of my first jobs was working for a synagogue, and they didn’t pay me for more than three months. I had to go begging for my money a number of different times. And yes, I know this is a problem largely because Jewish orgs are often in a major budget crunch, but that’s really no excuse. We should always pay for what we get at the very first opportunity.

This is really the tip of the iceberg when it comes to the Jewish take on business ethics. It’s not just about treating workers with respect, and freeing captives. There are rules about embezzling, fraud and bankruptcy. The Talmud even tells the story of a labor strike during the Second Temple Period.

For an overview of other halachic stances on business scenarios check out this comprehensive listing of links from the Darche Noam Institute. Now go tell your secretary she’s a rock star, and buy some fair trade chocolate for your plumber.