When Pekude and Ponzi Meet: Thoughts for Founder’s Day
Rabbi Jerome K. Davidson
Hebrew Union College-Jewish Institute of Religion/New York
Founders’ Day – March 19, 2009
In September I had the privilege of speaking in the Chapel as you prepared to go to your congregations for the Holy Days. It was a most challenging time, preceding the election that would decide the course our nation would take for the next four years. The text was Nitzavim—Moses’ charge to the people gathered together, to establish a just society in their new land.
Today, time and text are far more personal. We, as a nation, are struggling through the consequences of a destructive orgy of irresponsibility created by greedy, corrupted people misusing their positions and power. In sharp contrast to their behavior, the text speaks of the accountability and integrity leadership demands.
When asked by Rabbi Idelson to speak today, I took an anxious look at the parasha to see what was in store for me. It turned out to be an a-ha moment, the Torah so often provides that for us. Vayakel-Pekude are frequently squeezed together and Pekude often receives short shrift from us; we’ve had enough reading about the Tabernacle by then.
But Pekude is indeed a powerful word in the lexicon of our faith. In the text it speaks of accountability, honesty, the very essence of the Torah’s teachings of personal morality.
Eileh pekude hamishkan “These are the accounts of the Tabernacle, drawn up at Moses’ bidding.” Moses wanted the people to know, in the construction of the Tabernacle, that they got what they paid for.
Tanhuma Pekude puts it in very human terms:
Why did he render account?
Because the scorners of his time gossiped regarding him,
What did they say? They looked at his back and said one to
another: What a neck! What legs! Eats of that which is ours,
and drinks of that which is ours! His fellow would reply: Fool!
A man who is in charge of the work of the Tabernacle, talents of silver,
talents of gold, uncounted unweighed and unnumbered – what else do
you expect – that he should not be rich! When Moses heard this, he said:
By your lives! As soon as the work of the Tabernacle is finished, I shall
render them an account. As soon as it was finished, he said to them:
“These are the accounts of the Tabernacle”.
Today we call it transparency. Yesterday, in calling for regulatory reform, President Obama said, “You’ve got to be accountable to somebody.”
The Israelites in the wilderness received their Pekude, a reckoning. We, in our wilderness, received our Ponzi, a wreckage, not solely the result of Bernard Madoff’s
schemes, but from countless executives who created enormous financial havoc and human misery.
We know what happened, though more is revealed daily. It is quite clear that mortgage companies, banks, investment houses all created a kind of pyramid scheme with subprime mortgages sold to people having no way of paying for them, then repackaged and sold as corporate bonds to all looking for extra yield. Until the house of cards collapsed on the backs of the American people. The credit agencies, Moody’s and Standard and Poor’s, mishandled their analyses of bonds backed by home mortgages, perhaps understandably, since they are paid by the issuers of the bonds they rate. Lehman Brothers and Merrill Lynch were given solid investment grade ratings. Rather than expose financial risk, the rating agencies disguised it.
The perpetrators of this financial tsunami claimed they could have done nothing to have prevented it. One of many such declarations, this from the former CEO of Bear Stern’s asked, “What actions could we have taken beforehand to have avoided this situation? I have not been able to come up with anything.” These excuses are disingenuous at best and criminal at worst. Headlines now cry out of household wealth falling by trillions.
The banquet of consequences at which Americans have been forced to sit, includes loss of homes, savings, jobs, businesses and confidence about their future and that of their children. Indeed it is a banquet of fear and anger.
All this, before Madoff. He only exacerbated the economic disaster as it played out, creating a perfect storm of financial ruin.
As we know, Bernard Madoff masterminded the largest Ponzi scheme in history, 68 billion dollars lost, decimating the financial resources of countless individuals and charitable institutions, by selling phantom stocks for which he provided falsified accounting statements. Many of his victims were Jews. In my own community and congregation in Great Neck and surrounding towns, dozens of families lost millions of dollars. Not only did the funds of Jewish institutions vanish in New York, California, Florida and Minnesota, some individuals are now near penniless, selling their homes, living with children. You may be certain generous donors to the College have been severely impacted in their ability to support this very place.
One of the greatest casualties was that of trust within the Jewish philanthropic community. Presumed good friends and fellow supporters of Jewish institutions were targeted by Madoff. Philanthropists will tell you, one always gives more generously because of the person who is asking, because of the confidence and faith that is shared. That has now been destroyed.
Bernard Madoff is in jail. Robert Pinsky, the nation’s poet laureate a few years past, commenting on Dante’s Inferno, pointed out that a betrayer is placed alone in the depths of the underworld. “Dante, like the Talmud,” Pinsky said, “teaches the evils others do to me are as nothing compared to the evils I do to myself…. To betray everything you are connected to, is to be alone at the bottom.”
What has all this to do with you, future rabbis, cantors and educators? Pekude reminds us, as an exemplary biblical teaching, that whether you are comfortable with this realization or not, you are going to be the future moral leaders of the American Jewish community.
And Founder’s Day is a good time to acknowledge that all you learn from your extraordinary professors here, is to prepare you to lead in devastating times such as this. To judge, in the context of morality, those who brought it about, and in the years ahead to guide your communities when our society’s ethical compass may again be lost. The lessons of Bible, rabbinics, liturgy, history, philosophy and education are preparing you with the intellectual and ethical understandings you will need.
And the Founders of the Hebrew Union College-Jewish Institute of Religion would agree. Isaac Mayer Wise began the shaping of the American Jewish community so that our faith might speak relevantly and powerfully to our lives in this land. And Stephen Samuel Wise, a courageous voice for justice, attacked, among others, the steel magnates for denying the rights of labor. On one instance he pointed to a member in his congregation and publicly announced, “Thou art the man.”
Our responsibility only begins with the Jewish dimension of this economic chaos, but it cannot be ignored. We and the entire Jewish community are deeply involved in this unfortunate situation, not just as victims, and not simply as innocent bystanders. As Rabbi Abraham Heschel was quoted by one of you from this pulpit recently, “Better than being able to spot blood in an egg, learn to spot blood in money.” Especially as Jewish leaders we have a stake, a role and a responsibility.
Not alone for fear of anti-Semitism, because so many of those involved are Jews. Your congregants will whisper about that, and the ADL reports a significant rise in anti-Semitic expression on the web recently.
But I am less concerned about what non-Jews will say than what we Jews do not say, and Jewish leaders have said very little. As Rabbi Joshua Davidson recently wrote: “While mega theft remains an ecumenical pursuit, when you add Madoff’s name to the list of the last two decades - - Boesky and Milken and the rest - - for a people small in number, we are too well represented among the list of crooks.”
Rabbi Jack Stern, Jr., in a sermon given after a number of scandals in which Jews were prominently involved, commented: “if we subscribe to the Jewish principle that kol Yisrael areivim zeh la-zeh, ‘all Jews are responsible to and for one another’; then we cannot say that it is their business and they are lone practitioners. If we as a Jewish community respond with pride to the number of Nobel laureate Jews, we cannot refuse to respond to the number of crooks who are Jews.”
In the concluding session of our class on Social Responsibility last semester, Al Vorspan spoke about what he called “the Jewish robber barons.” He said, “I shudder to think what Jeremiah would be saying today.” We know what Jeremiah said 2500 years ago, when he thundered, “from the smallest to the greatest, they are all greedy for gain… they all act falsely…. They have acted shamefully; they have done abhorrent things - - yet they do not feel shame.”
It is much too easy to wipe away the stain by saying Bernie Madoff is a sociopath, too sick to feel others’ pain. It is simplistic to explain the collapse of once great financial institutions with the “few rotten apples” excuse. A vast number of people participated in these outrages, and too many were Jews.
Think of Madoff’s enabler, J. Ezra Merkin, whose Ascot Fund invested with Madoff the wealth of a multitude of New York Jews, along with the funds of 30 schools and charities, including Yeshiva University and Ramaz, money they thought that Merkin was carefully overseeing. But it all found its way into the bottomless Madoff trough. For this, Merkin received huge fees, even from the charities on whose boards he sat. Merkin, president of the Fifth Avenue Synagogue, a venerated art collector, was regarded as “one of the wisest men on Wall Street.” Madoff’s accountants, Friehling and Horowitz, have just been charged with fraud. And others, catch the names, Schwartz, Greenberg, Huld, Cayne, these powerful Jews presided over the debacle, for which, as the public well knows, they each received hundreds of millions of dollars in payment for their failures.
Leonard Fein, at another time when Jewish names were spelled out in the headlines of infamous insider trading, wrote: “There cannot be any Jew left who still believes that being Jewish offers automatically, immunization from the flaws that afflict all humankind… of greed… of dishonesty… of indifference.” We may take pride in our people’s historic pursuit of righteousness, but that passion is not inherited.
Looking beyond the specifically Jewish element in this American tragedy, we need to acknowledge, as Walt Whitman put it, our nation’s “maniacal appetite for wealth.” The dimensions of greed are great, and we need to bring the message to our people of what to watch out for, in their homes, schools and communities, even before checking for blood in the money. We truly have to warn about greed.
In spite of Madoff’s jailing and the disgrace and perhaps indictments to come of many others, the acquisitive nature of our society will remain intense. It is true that for now people are cutting back from lavish expenditures, even those who may not need to, and private jets are not PC for the moment. As David Brooks wrote on Tuesday in the New York Times, “that part of American culture that stokes ambition and how to get rich enthusiasms, has gone silent,” but, he added, “this pause will not last.”
The recent clamor over AIG’s bonuses presents a vivid and painful example. This company that has received 170 billion dollars in federal bailout funds from American taxpayers, has given 165 million dollars away to its staff in the form of bonuses largely explained as retention incentives. Much of the money went to the employees in the financial product unit responsible for creating the derivatives that caused AIG’s near collapse, thus requiring a huge inflow of federal funds. 33.6 million dollars went to 52 people who have already left the company. This shocking episode reflects mismanagement, arrogance and deception, all grounded in greed.
It is good that the President is furious and that congress is raging over the issue, threatening a variety of responses. It would be refreshing, as Tom Friedman suggests, that the brokers at AIG who got the 165 million in bonuses, voluntarily return them. It would be exhilarating if one of them spoke out and said we don’t need this, we don’t deserve this, we have enough without it. Someone once asked Mr. Rockefeller, “How much wealth does it take to satisfy a man?” He answered, “Just a little bit more.”
We have seen how greed detaches basically decent people from their ethical moorings, and they go the way the tide of opportunism pulls them. Greed convinces them, you don’t have to be accountable, you are above the law. Greed teaches arrogance, I deserve to have what I want. Greed puts moral blinders on people so that they see only what they want to gain, not the consequences of their over reaching.
We owe it to our people to speak of those consequences, sometimes devastating; to share our faith’s wisdom with them. Of course, there is a book in the Bible about this, Ecclesiastes:
I multiplied my possessions. I planted vineyards.
I laid out gardens and groves… I bought slaves
and cattle... I further amassed silver and gold…
then I looked on all the works that my hands had wrought
and all was vanity, a striving after wind.
When Gertrude Stein asked, “What if when you get there there isn’t any there there?” she was not playing with words. When the goal of life is wealth, we become people of means but not of ends. The deeper values in life have been replaced by our obsession with “making it.” Net worth becomes self worth. Life is equated with things.
You will see the results in the kids you teach, you probably already do. Entitlement, writes Harvard child psychiatrist, Robert Coles, describes children of privileged families who think they own the world. Whatever they have, they believe they deserve. And that leads to elitism. If we deserve our bounty, the needy must deserve their condition as well. What dangerous attitudes for our younger generation to nourish.
When Amos denounced those who “lie on beds of ivory, lolling on their couches, feasting on lambs from the flock, but they do not know the pain of others,” he could have been speaking about the bonus recipients of our tax money, who surely believe they have it coming, no matter how many millions of homeless, jobless Americans have to bear the pain.
From few sources, other than your sermons, songs and lessons will parents be encouraged to give their children examples of the deeper meanings in life, and to inspire idealism in them to care for the vulnerable and disadvantaged in our society.
I have to warn you this is not going to be easy. Our high expectations are challenged daily by a perversion of values that are fundamental to both Judaism and to America. As an example of what we are up against, consider this comment from Eli Weisel, who lost 37 million dollars from his charitable foundation and personal wealth, by investing with Bernie Madoff. “We gave him everything. We thought he was God.”
How could Weisel say such a thing? Because he acknowledged that we have deified the rich by placing them in a protected, “sacred” place in our society. A crook like Madoff was held in such esteem that his fraudulent activity escaped scrutiny from not only his victims, but from the Security Exchange Commission itself. Harry Markopolos, a Boston investment officer, who blew the whistle on Madoff nearly a decade ago, again and again, was never believed because Madoff was so highly regarded.
So too the “legal Madoffs,” as Al Vorspan calls them, for the line that separates their actions from those of Madoff himself is very thin, the celebrity CEO’s, they got away with alacrity, along with their hundreds of millions in bonuses, because somehow it seemed they deserved it. I suspect Treasury Secretaries Geitner and Paulson, who extended all that bail out money to the bankers and investment corporations they had worked with for years, placed no regulations nor restrictions on our tax dollars, because they had emerged from that same national religion of finance. And now adherents of that faith, attack President Obama, who is demanding regulations, as a radical saboteur of capitalism.
Remembering Pekude’s call for accountability, our task is to teach Judaism’s high ethical expectations, and do so with no ambiguity. For in those teachings there is no ambiguity. “You shall not lie, nor deal deceitfully, nor falsely with one another.” “Were you honest in your business dealings?” will be the first question, God will ask of us in the hour of final judgment.
And the charlatan in our tradition is despised. A 16th century Polish scholar, Zvi Hirsch Koidonover warned: “One must be on guard against the person who acts as if he were righteous, who kisses the prayer book, who recites songs and prays day and night, yet in many matters is a crook…. True piety is determined by one’s attitude to money, for only he who is reliable in money matters may be considered pious.”
When we think of the brazen proclamations of self righteousness and innocence spoken by the infamous CEO’s who have been lining up in front of congressional investigating committees for the past several months, ponder these words of our teacher Dr. Borowitz. “The rabbis of the Talmud term this attitude ‘azut panim,’ literally, ‘strength of face.’ One musters the inner strength to face down every twinge of conscience in oneself and every glimmer of human reproach that might arise in the eyes of others…. We need to create wherever we can, communities that will restore a healthy sense of moral shame.”
To speak to your people about shameful behavior, about acquisitiveness, materialism and greed will not be popular, but where else shall the message be broadcast? Not on CNBC! I assure you, the schools in your communities won’t touch such a theme. And there is mostly silence in the Jewish community on personal morality.
There is much you can do. Congregational symposia on ethics in business, medicine, law, and financial professions, even an adult course, will help open up these matters for discussion. As will curricula in the Religious School. And dialogues with churches and mosques whose religious teachings, as ours, reflect an abhorrence of immoral choices.
Public policy advocacy for government regulation is critical, and your social action committees should get to it, before we cycle out of recession to more prosperous times when things seem to be going too well to bother.
But ultimately this sacred message, like the sacred objects in the Tabernacle Moses accounted for so carefully, you must carry yourselves, not on wagons drawn by oxen, not even with blogs and facebooks, but with your own voices, on your own shoulders. You can do that, we know you can.
“So how do you lead?” Rabbi Jacob Rudin, my senior rabbi in Great Neck, told the ordination class of the Hebrew Union College nearly 50 years ago, “You hold the Torah high and teach its eternal truths. You give their lassitude no peace. You light a candle, however small, against the darkness, however great. You go forward when others say, stand still. You speak when others say, keep silence.”
Such accountability is the mission of Founder’s Day for all of us.