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Our Economic Echo Chamber

The Jewish Council for Public Affairs has been telling its members that Congress needs to pass what it calls a “second stimulus” bill — a hodgepodge of welfare payment increases and transfers from the federal budget to states. What this bill would stimulate besides government spending is debatable. In fact, it is unlikely to help the economy at all.

But that doesn’t matter to the JCPA. It is not interested in the economy, that world of risk and competition and innovation. It is interested in welfare programs. And if Congress will spend money on welfare, the JCPA simply wants it to spend even more.

Problem is, there is no counterbalancing voice in the Jewish community speaking up on behalf of the people who have to pay for such government largesse — the taxpayer.

Unlike the area of foreign policy, where the community disagrees often over issues related to Israel, antisemitism, Iran, Iraq and so on, there is little debate within organized American Jewry over domestic economic policy. Not a single Jewish group is devoted to making the case for free-market economics, as the JCPA and United Jewish Communities do for the welfare state.

It’s time we have this kind of debate. I don’t blame JCPA and the federations for making the case for more welfare payments. The Jewish federation system is tied to a huge network of social service agencies whose primary source of income is not your check to the federation’s annual campaign but your check to the Treasury. The dirty secret among Jewish social service providers is that Uncle Sam — not Uncle Shmuel — is a major source of their funding. It is pure self-interest that motivates their focus on how we divide the pie.

My focus, however, is on how to grow that pie, and I am hardly alone. There are many prominent Jews who have advanced the cause of free markets by their own example or by their academic work.

That the JCPA and the federations spend no energy pressing for pro-growth policies — which would include not just lower taxation, but also less regulation of labor and fewer trade barriers — is a shame. There is not a single ethnic or religious group in America that has benefited as much from America’s free market as have the Jews.

What explains this aversion? Surely, it’s not hard-wired into our intellectual DNA. Scrape the bark of almost any Jewish family tree, and you’ll find a few self-made men and women of modest if not spectacular success. My maternal grandfather set up a table outside a department store in Paterson, N.J., and started selling shoelaces; he steadily expanded his inventory and customer base. Eventually, he took over the store.

But among Jews today, the impulse to start new businesses has waned. Increasingly, young American Jews are trained by their parents to seek relatively uncomplicated career paths in the law, medicine and other professions. While these are honorable fields, filled with opportunities for innovation and competition, they do not offer the kind of brutal, in-the-trenches combat of, say, the scrap metal or shmatte trades of our grandfathers.

We have gone from a group of people that made stuff to a group of people that know stuff. And that makes Jews unique economic actors. We may understand the value of attaining a college degree or the challenge of financing a jumbo mortgage, but we don’t necessarily understand the concepts of asset depreciation or return on investment.

Those who have never had to make a payroll, or known real financial risk, would not understand the impact of so-called “living wage” standards on employment levels, the effect of legislative mandates on health insurance costs or how business fees and taxes hurt workers.

No wonder Jews don’t howl in protest as Jewish organizations, there to represent their interests, lobby for more taxpayer-funded government spending. No wonder Jewish organization leaders fail to utter one word in favor of lower payroll or death taxes. (I should point out one rare exception: James Tisch, formerly the chairman of the Conference of Presidents of Major American Jewish Organizations and still chairman of Loews Corp., once protested that the JCPA had moved beyond its mandate by fighting against a proposed tax cut.)

After all, as a demographic group constituted largely of professionals, our concerns do not flow naturally to the problem of high marginal tax rates on entrepreneurs — the people who employ professionals.

What’s worse — and perhaps most problematic, from a policy perspective — is Jewish aversion to economic exceptionalism: The idea that those who create massive value in our economy — the top 5% of income earners — should be celebrated and even honored, even if they don’t give back. Instead, Jewish organizations look at those people as easy marks, and subscribe to economic policy no different than two wolves and a sheep voting on what to eat for dinner.

We are a community detached from the hard reality of economic life for most Americans — not just those who earn very little, to whom we do devote great energy and charity. We are also largely ignorant of the needs and concerns of the strivers who aim to become high-income job creators, to whom we offer nothing.

Today, those people — many of them immigrants, by the way — own small shops and businesses, and their economic futures are determined not by the quality of their college degree or by their professional networks, but by their hard work, innovation and the active encouragement or discouragement of government. In short, these are the people who used to be us.

Noam Neusner served as President Bush’s principal economic and domestic policy speech writer from 2002 to 2004.

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