Jarmulowsky’s Bank filed for bankruptcy months before the Federal Reserve Banks (the Fed) opened their doors and two decades before either the Federal Deposit Insurance Corpora tion (FDIC) or the Securities and Ex change Commission (SEC) came into being. Since their inception, these regulators have issued myriad regulations and amassed great powers and resources. Even the trend toward mild deregulation, which began during the Clinton Administration, has not significantly changed the climate of strong federal regulators. Yet despite these regulators, the current financial mess is worse than the “Panic of 1907.”

The key to understanding the current crisis is a concept periodically mentioned, though quickly passed over and referred to as “moral hazard.” Pervasive, deep, and accepted financial immorality played a role greater in this crisis than ever before. A more accurate term for the behaviors leading to this crisis, then, would be “moral transgression.” Let’s examine the moral transgressions that caused the current situation and then look at them through the lens of Jewish tradition.

While I am oversimplifying for the sake of brevity, it is fair to say that the following chain of moral transgressions led to the current crisis. After the technology bubble burst and the economy was shaken by the events of 9/11, the Fed tried to prop up the economy by lowering its Fed Funds rate to one percent for much longer than was prudent; a popular Fed chairman who keeps rates low is more appealing than an unpopular one who worries about the long-term consequences of doing so (arguably just bad judgment but perhaps a moral transgression). Further, in this permissive environment, Congress protected FNMA (Fannie Mae) and FHLMC (Freddie Mac) because they were such potent political powers and donors (second moral transgression). This protection allowed FNMA and FHLMC to buy subprime and Alt-A mortgages several multiples beyond their capital base in order to have greater profitability and handsome bonuses (third moral transgression). Bond buyers did not care that the mortgage giants were buying risky mortgages because the debt they were buying was implicitly guaranteed by the government (fourth moral transgression). Meanwhile, the big banks found it difficult to compete in buying prime mortgages and therefore invested more heavily in riskier subprime and Alt-A loans (the risk was securitized away). These big banks paid less and less attention to whether or not the loans were credit worthy since their investments led to better bonuses for traders and ultimately senior management (fifth moral transgression). The rating agencies were persuaded to close their eyes by the tremendous fees generated by the investments (sixth moral transgression). As the public caught on, the bubble expanded even more. People with no experience in real estate suddenly started buying additional “primary residences” with FNMA/FHLMC or bank securitized mortgages with the hope of flipping these homes as quickly as possible (seventh moral transgression). If they could not qualify for a regular loan mortgage, brokers would arrange for consumers to take out no verification stated income/stated asset (SISA) loans — known as “liars’ loans” (eighth moral transgression). Appraisers offered higher values in order to keep their flow of business (ninth moral transgression). Mean while, mortgage brokers and others arranged mortgages that new homeowners would never be able to afford even as the bubble burst in 2007 (tenth moral transgression).

Unfortunately the victims of all of these moral transgressions include many innocent people. At any point along the line, a dose of financial morality might have stopped this slow-motion train wreck. Yet the sad fact is that neither our political leaders (in either party) nor anyone in the mortgage origination chain acted against or spoke out loud anything about these immoral practices.

We might draw on talmudic sources to better understand this sort of immoral behavior. For example <>Brakhot 32a cites the story of a pampered and inebriated young man led to temptation; the parable encourages us to recognize and assume responsibility when we are part of creating an environment that enables moral transgressions. And Brakhot 5b recounts the story of Rav Huna’s rationalization of underpaying a worker. The Talmud even recognizes that earning one’s living through business may lead to banditry if normal business dries up (Kiddushim 30b). Behind the famous talmudic dictum to teach children a trade lies a debate between the sages as to whether individuals should choose a more dependable, less risky profession.

Many of our prophetic teachings and our daily prayers also point out that detailed laws and regulations alone will not encourage moral action. Every day before we recite the Sh’ma, we ask that the Merciful One “put into our hearts to have insight and understanding.” We ask for love and fear of the Almighty and of the Torah so that we will act righteously when tested. Observance of specific commandments emerges from this core behavior of mensch lechkyte. Many of our blessings include the formulation kidshanu b’mitzvotav — we are holy in our actions. Lying on a loan application becomes a lot harder to do in the context of Jewish teaching; it becomes an unholy action.

Rahm Emanuel, President Barack Obama’s White House chief of staff, is known for pointing out that it is a shame to waste the opportunity of a crisis. So let us follow the Jewish way in responding to crises. Rambam, in Hilchot Ta’aniyot, writes that it is an obligation to call a fast when a calamity befalls a community. On such fast days, we are to look both toward heaven for help and within ourselves for moral failings. Given the moral causes of our present financial crisis, our rabbis should declare a public fast day in which we, as a community, look inward and join other faith communities in responding to this severe moral failure. Our future might be even more dire if we pass through this financial downturn without acknowledging its source in immorality at the political, corporate, and personal levels. No amount of regulation can prevent the circumvention of laws and rules if our hearts are not in the right place.

Reviewed by Shulamit Reinharz 

One day, Sarah Abrevaya Stein, an historian and private collector of illustrated works in Yiddish, came across a book by Leybl Feldman (1940) with the grandiose title, Oudtsboorn, Yerushalayim d’Afrike. How could Feldman imply that this small town in the South African province of the Western Cape deserved comparison with Jerusalem, Stein wondered. Was it because Oudtsboorn had its own Diaspora — in North Africa, the Ottoman Empire, France, Great Britain, and the United States — wherever ostrich feathers flew?

Stein’s study is much more than this charming story. For various compelling reasons, it is a historic breakthrough. As she informs us, “Economic historians…have not interrogated the involvement of ethnic communities…in the shaping of individual commodity chains. Cultural historians… have…avoided the terrain of supply. Historians of modern global commerce, colonial economics, and consumer culture…have neglected Jewishness as a category of analysis. And, finally, scholars of Jewish culture have been understandably wary of linking Jews to the global market in luxury goods — or to the proliferation of capitalist markets in colonial settings — for fear of reinforcing anti-Semitic stereotypes.” (7-8) The result? “Little serious research on Jews’ involvement in transnational or trans-hemispheric commerce….” (8) [italics added] Until Plumes. Stein is not interested in standing alone, however. She argues forcefully that “we must dispel the stigma associated with linking Jews to capital and international exchange,” (8) and get on with the studies.

In her lively introduction, Stein enumerates how “Jewishness was an asset to many in the feather trade.” (9) But she also argues that “it would be misleading to pin Jews’ success in feather commerce on [their] general traits.” (9) Many Jews in the trade failed, of course, and yet remained Jews. 

Many other factors also played a role in the plume boom: modern forms of communication and transportation, increasing consumer 
demand for exotic fashion, and the actions of nation-states. Nevertheless, Jews were over represented in the feather trade because “they had a background in similar industrial and mercantile trades, because they had contacts across the Anglophone Eastern European and Mediter ranean Diasporas, and because many were immigrants poised to move into new or expanding industrial niches.” (12)

The time was right. Mass immigration brought Eastern European Jews to New York and Western European cities where they were ready for new pursuits just when feather trading was opening up. The movement of Jews throughout the world meant that businesses could develop far-flung branches headed by brothers or other family members. By page 17, Stein presents what she calls one of her central arguments: “Jews brought certain elements of human capital to the ostrich feather trade: background in like industries, contacts of kith and kin within and across sub-ethnic diasporas and political and oceanic boundaries, copacetic relations with the reigning authorities, geographic mobility, and, no less important, economic need.” Each subsequent chapter spells out these elements in sumptuous detail.

But what about the demand side of the equation? As it turns out, women of impeccable taste were drawn to ostrich feathers between the 1860s and World War I for a number of reasons: First, the feathery fashion statement emanated from Paris, the city that defined style. Moreover, women’s magazines, as today, marketed particular choices, including ostrich plumes, intensively. But most important, ostrich plumage was not tied to a season; nor was the fashion associated with the age of the woman, her size, or complexion. “With at least fourteen varieties and countless grades available, ostrich feathers’ appeal also crossed class lines.” Coming as they did from Africa, they represented colonial conquest as well. And, best of all, they were considered sexy, a symbol of emancipation and mobility, because the feathers — and by implication, the women — moved freely. The ideal product: “colonial booty and cosmopolitan trope” combined to create a voracious market. (21)

For every boom there is a bust, and Stein explains why the allure of ostrich feathers did not persist. Today they are an anachronism.

While one might predict that a book of this sort could explain how Jews affected the trade, it may come as a surprise that Stein reminds us how “deeply trans-hemispheric currents of capital, bodies, and goods affected modern Jews….” (27) By asking both questions, she intends to blur the line that divides economic and cultural history.

Abraham, Isaac, and Jacob were business people. The Torah gives us an audit of their wealth. Surely they were blessed by God and just as surely they knew how to engage in the commerce of domesticated herds and flocks. The framework of a life lived with justice, righteousness, holiness, and purity is this real, normal, messy, and hurly-burly world. Adam is put in the Garden to “till it and to tend it.” We are expected to work that garden to make it grow and to benefit from its produce. And to then bring it to market.

The free marketplace, in which producers and manufacturers of goods meet people who want to purchase their goods, is the realization of two fundamental Jewish ideas. What is it that constitutes the marketplace? First there is the obligation to improve civilization by learning about nature and learning how things work. This is known as science. This is necessary in order to develop a better chair, a better medicine, a better computer. Technological advance is the result of human beings seeking to build civilization and to better the human condition. Some one who gets up in the morning with nothing to do and no place to be, who sits idle, is not contributing to Yishuvo Shel Olam, to the development of civilization. The second is free will. The marketplace is constituted of free will. Human beings freely manufacture goods through their God-given intellectual and emotional resources, which enable them to acquire knowledge and use judgment and wisdom to create ever better goods. The human manufacturer meets the human customer and they engage in the free will exchange of value for goods.

The Talmud Yerushalmi expresses a simple truth when it says that, in the main, the existing price for goods is the proper price because if it is too high the customer will not purchase and if it is too low the entrepreneur will not sell. In general, Jewish law prefers the mechanisms of the free market for providing the greatest good for the greatest number of people. Surely there are occasions when the rabbinic courts intervene in the interests of justice and righteousness. 

One of the great questions that believers face is if God created the world then how does any one human being have a right to the exclusion of all human beings, to own private property? Indeed, through the mitzvot of the sabbatical and jubilee years, the Torah on the one hand affirms the right to the private ownership of land but then places significant limitations on it. However, this applies only to land.  This does not apply to material wealth gained through industry and commerce based on all other sorts of activities. Indeed, the right to own private property is one of the fundamental ways in which human beings attest to their individual sanctity. Private property is witness to the human being extending his or her sanctity over something in the real world.

Judaism seeks to hold on to two good and sacred principles. One principle is the obligation to build civilization through the human ingenuity and creativity that is expressed in the free market. At the very same time Judaism knows that this will not work for certain people. This is captured in the Yom Kippur service, as the prophet Isaiah reminds us:

This is my chosen fast…share your bread with the hungry, take the homeless into your home, clothe the naked, when you see him or her do not turn away from your very own flesh.

At the very same time, upon exiting the Holy of Holies, among the High Priest’s last prayers for the day of Yom Kippur is “for a year of corn, wine, and oil. A year of prosperity…of dew and rain and warmth, of ripening fruits…A year of no inflation, a year of plenty.” The High Priest prays for the health of the free market.  Judaism expects the obligation to build civilization to go hand in hand with the obligation to engage in tzedakah.

In With All Your Possessions: Jewish Ethics in Economic Life, Meir Tamari writes “No anti-commercial tradition existed in Judaism as existed in Christian social thought.” The recent collapse of financial markets does not come as a surprise to the Jewish tradition. There are mitzvot and halakhot because there will always be people who will seek their interests through dishonesty. The free market is based on truth-telling and trust. Trust has been broken and needs to be reinforced and reestablished. Judaism’s commitment to the free market remains intact.

Like many other Jews who grew up secular, I initially approached the idea of God with skepticism and even disdain.  For most of my life, whenever I heard the word “God” I cringed and immediately activated my selective listening skills to tune out the irritating static of exclusionary religious fervor, or chosen naiveté, as I understood religion to be.  But this is not a story about changing sides through discovering a great and enduring faith.  There isn’t a pat lesson in my journey to the rabbinate about how I finally understood an eternal truth in God and learned to speak and to hear the word “God” with renewed wonder and awe.  The truth is that every time I am about to utter the word “God” from the bimah, I seize up in a tiny way and a swarm of thoughts rushes through me.  I imagine someone in the fourth row getting irritated.  I ask myself if I’m up for the challenge of improvising a few descriptive substitutes for the word itself.  I wonder who is not hearing what I mean to say and who is sitting back and taking comfort in her faith or feeling validated in his spiritual journey. 

Over the past few months, I have had countless conversations about God.  In my neighborhood in Mt. Airy, I’ve sat together with Atheists, Secular Humanists, Reconstructionists, and students of Jewish Renewal to talk about God: to try to push through the barriers of language, to talk about what we really believe and mean to say.  We examine certainty and uncertainty, doctrine and dogma, Jewish peoplehood and forces greater than peoplehood alone.

In my student pulpit, my b’nai mitzvah students are openly struggling with the idea of God in the prayers they are learning.  We spend most of our class time examining the problem of God from different angles.  What does it mean to say, “Baruch she’amar v’hayah ha’olam” (Blessed is the One who spoke and the world came into being) if you don’t believe there is a Great Speaker.  What does it mean to be a chosen people if there is no Chooser?  When we recite the blessing over the Torah that says, “asher natan lanu Torat emet” (who gave us Torah of truth), what are we affirming to be true?  (One student posited that perhaps the Torah holds only a fraction of the truth in the universe and that a huge percentage of truth may be distributed among all the other scientific and religious traditions of the world.)

No matter where they locate their opposition to God, what I tell my students is that although they may reject a theology, that decision isn’t enough; then, they would be building their Jewish identities upon what they are not, or what they do not believe, instead of who the are. In thinking about God, they have to take an additional step. They need to be able to affirm something about themselves or their tradition or the world that reflects what they experience as true during this time in their lives. And that’s how we go about studying Torah.

In a Mussar class I am taking at RRC with Rabbi Ira Stone, my habitual efforts to stave off God through fancy substitutions and twists of logic do, in fact, get challenged in a fundamental way.  In practicing Mussar, I find myself challenged to always remember my obligation to others, whether these others are an excessively slow driver ahead of me, a classmate, or a nefarious political leader.  By extension, as Rabbi Stone teaches, my state of obligation to the human other extends infinitely toward the Divine Other.  Although the theology deserves a treatise of its own, the parts of the teaching that rise to the surface through the language of Mussar are that God is the source of the human ethical impulse, and, perhaps more pragmatically, my own personal choices about how I behave toward others in the world necessarily flows from of my ethical consciousness.

For me, the value of all this discussion about God or no-God among the Jewish people must be measured by how well it enables us to live ethically, to affirm our identities in relationship to our tradition, and to reach greater understanding of those who do not share our beliefs or our faith traditions.  Just as surely as all members of the human family inhabit the same planet, we all have the capacity to use our intellects, our bodies and our spirits for forces of destruction or for forces of good.  Whichever of the mythical 70 languages of Torah best teaches us to become better, healthier people, it is a language worth learning to speak.

When I was in my early twenties, I stumbled upon God by accident. In search of a connection to other Jews, I had started going to synagogue. Once there, I found God’s presence in the songs that filled the sanctuary, in the bonds of friendship and mutuality that held the synagogue together, in a joke shared over a brownie in the oneg room.

Much of my participation in shul life has taken place at lesbian, gay, bisexual, and transgender (LGBT) synagogues – at Congregation Sha’ar Zahav in San Francisco and Congregation Beth Simchat Torah in New York City. These synagogues are crucibles of creativity that welcome, nurture, and honor diverse expressions of Jewish and LGBT life. They are big tents that have become home to traditionally observant Jews, secular Jews, and everyone in between.

Under the flaps of these tents, I have learned that we are the inheritors of vast and complex traditions with multiple points of connection and entry. These, then, are the pressing questions: Do we feel connected to something larger than ourselves – whether that is community, tradition, history, God, or something we call by an entirely different name? And, if not, how can Jewish communal life open doors to help us find these connections?

For the record, I do not believe in a supernatural God that works miracles or intervenes in our lives. I experience God as that which is infinitely larger than each of us and also as that which dwells inside each of us. I am alarmed by the rise in religious fundamentalism but I hold human fundamentalists — Jewish, Muslim, and Christian — responsible for this, not God. I wrestle with the Bible’s stories about a violent, punitive God that burns with anger, but I believe that God’s presence in our lives is loving and compassionate. And I believe that, when properly harnessed, this love can be a force that guides us as we repair the world’s broken places.

As a rabbinical student, I have worked in congregational, hospital, and community settings where I have had conversations with Jews and non-Jews from across the spectrum of American life. One woman, who is homebound and severely debilitated, talked about the abundance of blessings in her life and her awareness of God’s constancy and loyalty. Another woman described how she feels utterly abandoned by God, even though she felt strongly connected to God as a child. She told me she does not believe God will ever return to her but she goes to synagogue each week without fail. One man talked to me about his strongly secular and cultural Jewish identity and then wanted me to pray the Mi Sheberach with him. And another man, certain he was receiving pastoral support from me, told me long stories about the joys and sorrows of his life without ever mentioning God.

In none of these conversations, did a referendum on God’s existence seem helpful or desirable. Rather, my role was to open up a space in which people could talk, find support, and seek out new sources of connection – whether human or Divine or both. The story at the beginning of Genesis 18 seems like an instructive guide in making sense of this.

While Abraham is recovering from his circumcision, three guests approach his tent.  Abraham and Sarah bring water for washing and hurry to prepare food. From here, Jewish tradition derives teachings about the importance of visiting the sick and welcoming strangers. Both of these teachings underscore our commitment to fostering connection and support. Throughout the exchanges of Genesis 18, it is unclear if the guests are human or divine. This ambiguity perfectly captures the spectrum of ways in which we find and create connection. Perhaps that which sustains us is purely the product of human hands. Or perhaps God’s messengers fill our lives, bringing support as we need it.

When I first turned up at synagogue one erev Shabbat, the tent flaps hung wide open for me. I took my seat under the tent’s protective roof and found a hundred new sources of connection. And, while I sat there, I learned my sustaining piece of Torah. What matters most is whether the tent is open on all four sides and, once there, whether there is food for our hungry bellies, water for our road-weary feet.

Because money plays such an important role in our lives, it is perhaps no surprise that our relationship to it is complex and paradoxical. In many ways, money bestows power, yet money also has enormous power over us. 

Our ability to live comfortably, to have opportunities and the leisure time to enjoy them, to be free from the fear of going hungry, to provide for our children, to improve the lot of others and to obtain positions of prominence in society — all these depend, to a greater or lesser degree, on the extent of our financial security. But precisely because it is such a powerful force in our lives, money frequently overpowers all other considerations in our system of values and so makes it harder for us to live healthy, meaningful lives.

If the recent global financial crisis proves anything, it is that the pursuit of money, taken to its extreme, can even lead to financial ruin. When we glorify money and treat it as an end in itself, we may subordinate our value system, our spiritual needs, our integrity, our respect for others, and (ironically) even our financial security all in the pursuit of greater wealth. How, then, shall we establish and maintain a balanced and healthy relationship with money?

Jewish Guidance for the Use of Money

Judaism challenges many of our most fundamental assumptions about money. We almost universally assume that if we make money, it is ours. Yet, Judaism teaches us to be grateful to God for our prosperity and not to take undue credit for our material success. The Torah puts this very directly and succinctly: “Beware lest your heart grows haughty and you forget the Lord your God . . . and you say to yourselves, ‘My own power and the might of my own hand have won this wealth for me.’ Remember that it is the LORD your God who gives you the power to get wealth.” (Deuteronomy 8:14, 17–18)

Given that we owe our prosperity to God’s beneficence, the Torah requires us to share the gifts that we have with the poor and the marginalized in society. The rules governing the agricultural gifts for the poor (Leviticus 19:9–10; Deuteronomy 24:19–21) were clearly designed to reinforce the principle that everyone in society must share in the collective good fortune of others.

The Torah also prohibits us from using our financial power to oppress others. We may not charge usurious interest or any interest at all to other members of our own community.  (Exodus 22:24; Leviticus 25:35–37; Deuter onomy 23:20–21) Moreover, the cancellation of all debts every seventh year ensures that creditors cannot use their financial advantage to create a permanent class of debtors. (Deuteronomy 15:1–3)

Finally, Jewish teachers over the centuries have cautioned against allowing the value of money to eclipse other values in life. When our sages ask, “Who is rich?” the answer is not “the one who has the greatest net worth,” but “those who are satisfied with their share.” (Avot 4:1) The goal is not to amass more wealth but to cultivate more serenity with the material success one has.

Today our need for a set of core values to keep the power of money from overpowering us is greater than ever. Some basic Jewish values to guide us include:

• Honesty: Earning money honestly, without misrepresentation or fraud, and compensating those who work for us fairly, without taking advantage of their vulnerabilities, are essential to creating and preserving trust between people.
• Humility: Recognizing that our money is the product of many hands besides our own will tend to curb our tendency to self-aggrandizement. We will use our money best if we begin with a sense of gratitude, rather than of entitlement.
• Generosity: Our willingness to share liberally of what we have with those less fortunate is essential to securing the common good and protecting the human dignity of every person.
• Extrinsic Value of Money: Money is valuable solely for the ways in which it enables us to survive, and then to live more fully. We need to cultivate a healthy relationship to money, one in which moral values define our use of money, rather than the reverse.

Money, or its functional equivalent, will be with us for the foreseeable future. Without a set of values to guide us, money itself will become an end in itself. But since money is “value-free,” this almost certainly leads to the pursuit of greater amounts of money and greater freedom in using it. Jewish values will help ensure that one of the most powerful tools for human flourishing continues to be harnessed for good.

In Mishneh Torah 9:6 we learn: “A person who owns houses, fields, and vineyards that if sold during the rainy season would fetch a lower price than during the summer, should not be made to sell them; rather, [the person] should receive out of the proceeds of the poor person’s tithe [community tzedakah fund] up to half the value of the properties, so that the person should not be forced to sell at the wrong time.”

In last month’s column about the housing crisis, John Weicher proposed that we help individual homeowners on “the basis of objective information: the current financial situation of the homeowner and their efforts to meet their obligations,” and that deciding to help them on the basis of their motivations for borrowing the money is a “moral and practical mistake.” I certainly agree with this last statement. I also suggest that we use Weicher’s text above as a guide for approaching current challenges in the homeowner mortgage crisis.

The Mishneh Torah takes into account current market conditions in order to protect the homeowner and promote long-term stability in the real estate market. An agricultural economy depends on loans and the easy availability of credit; in that era a law would not be made that impeded the flow of credit (note Hillel’s famous prosbul negating the nonrepayment of loans made in the later years of a seven-year cycle in order to ensure credit). Our society, too, depends on the easy availability of credit.

The current economic climate is reasonably equivalent to the rainy season mentioned in the first paragraph. With housing values at a low point, a person who cannot make his or her mortgage payments ought to be helped from communal funds. The rule, though, protects the community by setting a cap; the resources of the community need to be balanced with the needs of the poor. Without sufficient public funds to bail out every mortgage, some criteria must be established.

For example, the ability to pay is an important criterion, but how much? Many of the current questionable loans are considered predatory — made in violation of the principle of “gnivat daat” — exercising truth in advertising or financial transactions. Tens of thousands of hardworking people who were able to pay initial mortgages cannot pay the recalibrated mortgages that were aggressively sold to them with false marketing. These loans need to be renegotiated. There are both traditional and contemporary rules about fair lending practices and appropriate interest rates. Furthermore, low-income homeowners are less likely to default if they borrow from community development financial institutions with whom they have direct relationships.

The halakhah from the Mishneh Torah is also sensitive to economic cycles. With unemployment currently high and predicted to rise over the next year, perhaps “ability to pay” needs to be understood as a person’s ability to pay over time, perhaps in two or more years. 

We may also find guidance in Mishneh Torah 10:17, which outlines the eighth, or highest, degree of tzedakah: making a loan or entering into partnership with a poor person to help that person become self-reliant. In today’s 
housing crisis, not making a particular loan might impoverish the individual. For many people who are facing foreclosure, all of their savings/wealth is tied up in their homes. From the standpoint of tzedakah, one of the criteria for granting redress might be the number of (meaning, how few) other financial assets the person has.

Finally, the wellbeing of the community as a whole is an essential Jewish value. Everyone loses when homes are foreclosed: neighborhoods deteriorate and property values decline, especially in poorer neighborhoods. The economy as a whole will not recover from a recession until the housing market becomes healthy. Jewish texts offer clear guidelines about how to confront today’s economic crisis — how to use resources to renegotiate and sometimes subsidize mortgages. The strategic use of public funds today will cost the taxpayer far fewer dollars than allowing mass foreclosures.