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Overview
In the wake of Bernie Madoff's ruinous investment schemes, Abe Foxman takes a cultural and political look at the many variations throughout history of the assumptions made about Jews and money. These include Jews as greedy global capitalists; Jews as wealthy secret communists; Jews as cheapskates; and Jews controlling the media with their money to unduly influence society. Foxman makes the case that these stereotypes have permeated cultures globally and argues that these beliefs are rooted in deep-seated and pervasive anti-Semitism. As with all forms of bigotry, society at large needs to respond to the persistence of stereotypes by educating the young, denouncing hate speech, and by encouraging Jews, like all groups, to express pride in their ethnic and religious heritage.
Product Details
| ISBN-13: | 9780230112254 |
|---|---|
| Publisher: | St. Martin's Publishing Group |
| Publication date: | 11/09/2010 |
| Sold by: | Macmillan |
| Format: | eBook |
| Pages: | 256 |
| File size: | 258 KB |
About the Author
Abraham H. Foxman is the national director of the Anti-Defamation League (ADL) and one of today’s preeminent voices against hatred, discrimination, and violence in the United States and worldwide. He is the author of Jews and Money, The Deadliest Lies, and Never Again?.
Read an Excerpt
Jews and Money
The Story of a Stereotype
By Abraham H. Foxman
Palgrave Macmillan
Copyright © 2010 Abraham H. FoxmanAll rights reserved.
ISBN: 978-0-230-62385-9
CHAPTER 1
THE BERNIE MADOFF MOMENT
On the evening of December 11, 1995, businessman Aaron Feuerstein was with family and friends at a restaurant in Boston, Massachusetts. It was his seventieth birthday, and a group of well-wishers had gathered to throw him a surprise party.
In the midst of the festivities, someone walked in with horrifying news. "It's the factory. A boiler exploded. People are hurt, and the buildings are on fire."
No one had to ask, "What factory?" Everyone understood the man was referring to Malden Mills, the textile plant that Aaron Feuerstein's grandfather had built in 1906 and that Aaron himself had managed for almost thirty years.
Within the hour, Feuerstein and his friends were part of a large crowd of onlookers, watching firefighters battle the blaze. It had grown into a six-alarm conflagration, drawing 200 firefighters from as far away as New Hampshire and Boston.
What happened in the days and weeks that followed has become a classic story of business and personal ethics, one that I'm sure will continue to be told for generations to come. As I'll explain, it's also an important story for what it reveals about our society's attitudes toward Jews and Judaism. This is an aspect of the Aaron Feuerstein saga that few people have noticed or commented on. Yet it's deeply relevant and profoundly important today, with our economic and social turmoil and as age-old prejudices and animosities have once again reared their heads, fomenting resentment and dividing communities.
The 1995 fire at Malden Mills wasn't just bad news for Feuerstein's company—it was a potentially devastating blow to an already depressed post-industrial community.
Malden Mills employed 2,400 people, many of them recent immigrants from countries ranging from Italy, Portugal, and Israel to the Dominican Republic. Thousands of people relied on the textile business for their survival. Now, many of them had rushed to the scene and were watching their dreams of the future literally going up in smoke.
Paul Coorey was the president of Local 311 of the Union of Needletrades, Industrial and Textile Employees, which represented many of the workers at Malden Mills. A few days later, he recalled the scene: "I was standing there seeing the mill burn with my son, who also worked there, and he looked at me and said, 'Dad, we just lost our jobs.' Years of our lives seemed gone."
When the flames finally subsided, three of the four factory buildings had been destroyed. (The fourth had been saved, in part, through the heroic damage-control efforts of a team of employees that battled the blaze even after firefighters declared it hopeless.) Thirty-three employees had been injured, though thankfully none had died. The damage was estimated at some $500 million. Families throughout northeastern Massachusetts were in despair, wondering where their next paycheck was coming from.
Many people in Aaron Feuerstein's position would have broken down under the shock. But Feuerstein refused to shed a tear. He bolstered his spirits by recalling a favorite passage from Shakespeare's King Lear, in which the distraught monarch vows not to weep although his heart should "break into a hundred thousand flaws." Feuerstein was marshalling his strength for the biggest challenge of his business career—figuring out a way to save Malden Mills and the families who depended upon it.
In truth, even before the 1995 fire, Malden Mills and Aaron Feuerstein had represented something quite unusual in the textile industry. Founded as a knitting company, Malden Mills had experimented with various kinds of fabrics and manufacturing processes throughout the first half of the twentieth century. In the 1970s, it bet big on what proved to be a passing fad—the fake fur craze. When sales of the synthetic material plummeted in the early 1980s, Malden Mills had to lay off hundreds of workers in order to avoid bankruptcy. Aaron Feuerstein, by now the CEO, was personally devastated and vowed to avoid such a calamity in the future if he possibly could.
The company's salvation appeared in the form of a new material developed by its researchers. Called Polarfleece, it was a unique polyester blend that wicked moisture away from the body while providing exceptional warmth. Polarfleece—later renamed Polartec—became a favorite fabric among hikers, campers, and winter sports lovers. Companies like Patagonia, L.L. Bean, and Lands' End sold thousands of garments made from Polartec manufactured by Malden Mills. Polartec was also an early example of environmentally friendly manufacturing: Made largely from recycled polyester fabric and even plastic soda bottles, it provided an economically valuable application for materials that would otherwise be piling up in landfills or polluting waterways. The popularity of Polartec gave Malden Mills a new lease on life.
Most remarkable, throughout the bust-and-boom years of the sixties, seventies, and eighties, Aaron Feuerstein and Malden Mills remained committed to Lawrence, Massachusetts. During these years, hundreds of textile companies were shutting down plants in the Northeast and moving to locations in the South or in the poorer countries of the developing world—Haiti, Venezuela, Bangladesh, Malaysia, Kenya. In the process, they saved countless millions in employee salaries and benefits, enriching their bottom lines and their shareholders.
But Feuerstein resisted this trend. Not only did Malden Mills remain in Lawrence, it continued to negotiate fair contracts with its unionized workforce. One union official described Feuerstein this way: "He believes in the process of collective bargaining and he believes that if you pay people a fair amount of money, and give them good benefits to take care of their families, they will produce for you." By the time of the 1995 fire, Malden Mills workers were earning some of the highest wages in the textile business, averaging around $12.50 per hour.
Under the circumstances, many observers assumed that the blaze would become an opportunity for Aaron Feuerstein to do what most business people would have done years earlier. He could take the money from his insurance policy on the mill (around $300 million) and use it to relocate the company to some more "business friendly" location. As for the people of Lawrence—well, they'd have to fend for themselves. Few people would have faulted Feuerstein for choosing this path. After all, that's the way business works, isn't it?
But they didn't know Aaron Feuerstein.
His response to the fire began two days later, when paychecks were due to his workers. No one would have been shocked if the checks had been late. But Feuerstein ordered not only that every check be delivered in full and on time, but that a planned Christmas bonus of $275 be included in each envelope. (He also added a note for each worker: "Do not despair. God bless each of you.")
Then, on the evening of December 14, Feuerstein rose to address over a thousand Malden Mills employees who had gathered in the gym of Central Catholic High School to learn what their future would be. "I will get right to my announcement," he said. "For the next 30 days—and it might be more—all our employees will be paid their full salaries. But over and above the money, the most important thing Malden Mills can do for our workers is to get you back to work. By January 2, we will restart operations, and within ninety days we will be fully operational."
The news stunned the crowd. After a moment of shocked silence, they broke into cheers.
Later that same night, Feuerstein made the rounds of Lawrence's leading charitable organizations, delivering donations as he did every holiday season. In all, he disbursed $80,000 in gifts to groups like the Salvation Army and the local soup kitchen.
Feuerstein kept his word to the workers. He ended up paying full wages to his idled employees for up to four months while the plant was rebuilt and new machinery was purchased and installed. The total cost of those salaries was around $25 million. In addition to the $300 million insurance settlement, Malden Mills invested another $100 million in rebuilding the plant, creating a state-of-the-art textile factory that was the first to be built in New England in more than a century. By February, more than 70 percent of the workers were back at their jobs. Within two years, the plant was producing more Polartec than ever.
It would be wonderful to close the story of Aaron Feuerstein and his remarkable company right here. Unfortunately, life doesn't always provide a fairy-tale ending.
The enormous debt that Feuerstein assumed in order to finance the rebuilding of the Lawrence factory eventually caught up with the company. After a business slump in 2001, Malden Mills was forced into Chapter 11 bankruptcy. The company went through several reorganizations during the next eight years, eventually emerging under a new name (Polartec, LLC) and a modernized business model. Feuerstein—by now in his late seventies—lost control of the business in 2004 and was forced to step down by the creditors who held majority shares. The magnificent family business tradition his grandfather had established and that Aaron Feuerstein had brought to fruition was no more.
In some quarters—not many—the financial troubles of Malden Mills were a cause for rejoicing. One cynical economic commentator used the bankruptcy as an opportunity to mock Feuerstein in a Christmas Eve column titled, "Altruism? Bah, Humbug." The writer's central idea was that Aaron Feuerstein's generosity to the workers was the cause of the company's collapse, and that if the CEO had been more ruthless in his behavior, the firm might have survived without having to resort to bankruptcy.
I suppose this is possible. But the economic troubles of Malden Mills didn't begin with the 1995 fire. The truth is, it's amazing that Aaron Feuerstein managed to keep a textile company operating in Massachusetts, employing thousands of local workers, and competing successfully with low-cost producers from lower-cost states and countries around the world. The company's years of survival through the twentieth century and into the twenty-first strike me as a testament to Feuerstein's business acumen, not the reverse.
Even today, Polartec is defying the odds. Polartec fabric continues to be produced in Lawrence, Massachusetts, though the factory operates on a more limited scale, employing between 835 and 1,000 workers at a time depending on seasonal demand. Who is to say those jobs are valueless? Surely not the thousands of working-class people whose mortgage and tuition payments and grocery bills have been covered by Polartec paychecks for all these years. Humbug? No—good business and humane behavior rolled into one.
In the years since 1995, many people have come to know part of the story of Aaron Feuerstein and Malden Mills. President Bill Clinton honored Feuerstein during his 1996 State of the Union address, and the CBS news magazine Sixty Minutes ran a feature about him in 2003, dubbing him "The Mensch of Malden Mills." (Mensch is a Yiddish word that describes a person of honor and integrity.) Feuerstein has become something of a folk hero and a role model for thousands of people, especially in business.
But not everyone who admires Aaron Feuerstein knows about the source of his powerful personal morality. Feuerstein happens to be an Orthodox Jew, who draws his guidance on all ethical matters from Jewish tradition, religious teachings, and ultimately the Hebrew scriptures. And this aspect of Feuerstein's story—so central to his life, yet largely neglected in the mainstream accounts—is the one I want to emphasize here.
As many news stories about Feuerstein noted, he is a lover of great literature who enjoys memorizing poetry by Shakespeare and Emily Dickinson. But far more important to him is the Torah, which he makes a point of reading every night.
In applying biblical teachings to practical business questions, Feuerstein is following a family tradition. In a speech on "The People and the Community" at MIT, he recalled his grandfather's practice of distributing paychecks to the workers at Malden Mills before sunset, citing the book of Deuteronomy (24:14–15) as justification: "Do not take advantage of a hired man who is poor and needy, whether he is a brother Israelite or an alien living in one of your towns. Pay him his wages each day before sunset, because he is poor and is counting on it. Otherwise he may cry to the Lord against you, and you will be guilty of sin." And by "alien," Feuerstein emphasized, "they meant all people, all faiths, all races." Perhaps Feuerstein was thinking about the generations of immigrants to America who had supported their families through work at Malden Mills.
One newspaper columnist wrote that, as a boy, Aaron had actually questioned his grandfather's pay-disbursal system, wondering if this departure from standard American business practices was really necessary: "Young Aaron consulted his rabbi, who happened to be his maternal grandfather. His other grandfather, he was told, was right. In Leviticus, it is written, 'You are not permitted to oppress the working man because he is poor and needy.' Aaron memorized the passage in Hebrew—and lives by it."
As for the specific decisions he made after the Malden Mills fire, Feuerstein has repeatedly cited Hebrew teachings as his inspiration—for example, these two famous quotations from the firstcentury scholar Hillel: "In a situation where there is no righteous person, try to be a righteous person" and "Not all who increase their wealth are wise." Sayings like these were the guiding stars by which Feuerstein steered his company during the dark days of 1995.
No wonder Feuerstein's life and work are now being used by some religious teachers to illustrate the crucial Jewish concept of tzedaka.
This term is usually translated as "charity," but it means more than what the English word usually implies. Tzedaka comes from the wordtzedek, which means "justice." Thus, in the Hebrew tradition, charitable giving is seen not merely as an act of kindness prompted by love or generosity. It is also an act of justice that fulfills our innate sense of what is fit and proper. Therefore, withholding tzedaka is not merely selfish and ignoble, it is literally a crime, a violation of one of the most important obligations in the life of a Jew. Hence the Talmudic saying, "Tzedaka is equal to all the other commandments combined." And hence, too, the requirement stated in Deuteronomy—and widely practiced in Jewish communities throughout history—that Jews should give a specified percentage of their incomes, such as 10 percent, to help the needy. Such a donation is not a mere free-will gift—it is demanded by the sense of justice embodied in our faith.
This concept of tzedaka as a social obligation to our fellow humans underlay the difficult, some would say self-sacrificing, choices that Aaron Feuerstein made. Because he viewed the workers at his textile plant as his equals in the eyes of God—as, of course, they are—Feuerstein had no other option than to do what he could to keep them whole, to prevent them and their families from suffering privation as a result of the tragic fire.
And because he was deeply rooted in a lifetime of Jewish practice, worship, study, and prayer, the notion of doing what was easy and self-serving—simply pocketing the insurance payments—never even occurred to him. As Feuerstein remarked when a reporter asked about the money, "And what would I do with it? Eat more? Buy another suit? Retire and die? No, that did not go into my mind."
Aaron Feuerstein represents the best in American business. But he also represents Jewish morality in action—the behavior of a mensch in those challenging moments when life confronts us with the choice between what is expedient and what is right. Many of those who know about his ethical example consider him a hero for our times. And as later chapters in this book will make clear, Feuerstein's ethically grounded approach to business decisions places him squarely at the heart of Jewish tradition. Among the world's great religions, Judaism is the one that places the greatest emphasis on moral behavior in relation to money—a fact that most non-Jews have never been taught.
Unfortunately, not everyone chooses to follow the ethical path that Aaron Feuerstein has walked.
Feuerstein's dark counterpart in the business arena may be another man who has garnered far more publicity and attention for his very different behavior—the fraudulent investment manager Bernard Madoff.
The outlines of the Madoff saga are well known—in fact, judging by the volume of coverage his case received, probably far more widely known than the heroic story of Aaron Feuerstein. And this disparity itself is one reason why I find the contrasting stories of Feuerstein and Madoff so revealing.
Born in Queens, New York, in 1938, Bernard Madoff graduated from Hofstra College in 1960, and in the same year founded Bernard L. Madoff Investment Securities LLC. Beginning as a penny-stock trader, Madoff gradually developed a wide-ranging network of clients for whom he bought and sold stocks as well as providing investment advice. His company also developed innovative computer technology to disseminate stock prices, which helped lead to the creation of the automated stock-trading system known as NASDAQ. In time, Madoff become a prominent leader among NASDAQ dealers, even serving as the organization's non-executive chairman. He also developed extensive personal ties among government regulators of the financial markets, ties that many say helped him avoid close scrutiny when questions were raised about his company's practices.
(Continues...)
Excerpted from Jews and Money by Abraham H. Foxman. Copyright © 2010 Abraham H. Foxman. Excerpted by permission of Palgrave Macmillan.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
1. The Bernie Madoff Moment
2. The Story of a Stereotype
3. The Facts Behind the Myths
4. The Stereotype Today
5. When Everyone Has a Megaphone
6. Not So Funny
7. Damned If We Do, Damned If We Don't
8. Society's Response.