Analyze This: Devaluing the Lehman name, on Wall Street and elsewhere

By
September 17, 2008 00:27

At two ends of Manhattan, a disservice has been done.




Analyze This: Devaluing the Lehman name, on Wall Street and elsewhere

lehman bros 224.88. (photo credit:AP)

The current Wall Street meltdown is now the worst financial crisis in the US since 1987's "Black Monday" stocks plunge, with the collapse and crippling of major American financial institutions even spurring some analysts to draw comparisons with the 1929 crash that triggered the Great Depression. Hyperbole aside, no ruined brokers or investors can yet be seen hurling themselves out of windows in lower Manhattan. But the turmoil has already caused one fatality; the venerable investment banking firm Lehman Brothers, which after 158 years in business was forced to declare bankruptcy this week. "It is sad to watch Lehman Brothers, one of the grand old names of Wall Street and before that a cotton and coffee merchant from Alabama, struggling to avoid collapse," observed The New York Times, just before it did. While the fall of Lehman is primarily an integral part of the financial drama still unfolding across the US, there's another aspect of its fate worth noting - a social angle that says something significant about the American Jewish experience that is equally sad in its own way. Lehman was indeed founded by three brothers, immigrant Jews from Germany who started out as dry-goods peddlers in the pre-Civil War south, and whose subsequent success as cotton brokers enabled them to become one of the Confederacy's main financial backers. After the war they moved up North to New York City, and expanded from trading commodities into investment banking. The Lehmans also became leading members of Manhattan's wealthy German-Jewish social aristocracy, the small group of tightly intertwined families memorably dubbed "our crowd" by writer Stephen Birmingham in his book of the same name. Several other founding fathers of major Wall Street firms and banks were part of this social group, including Abraham Kuhn, Solomon Loeb, Marcus Goldman, Joseph Seligman and Jacob Schiff. With the implosion of Lehman Brothers, Goldman, Sachs & Co. is now the last of the banks and brokerage houses started by these men that has survived under its original name. Even before their names were changed, their descendents had lost control of these financial institutions; none of these families remained the kind of tight-knit unit that enabled their European Jewish counterparts, the Rothschilds, to remain in charge of their namesake businesses. Nor for the most part did they - not incidentally - share the collective Rothschild inclination to keep connected in some way with their Jewish roots and remain committed to Jewish causes. In contrast to the waves of East European immigrants that followed them, the wealth and social status of the German Jewish crowd enabled them to assimilate fairly quickly into the American gentile majority, many even shedding their ties to the US Reform Jewish movement they helped establish. The Lehman name at least remained publicly prominent in Jewish and mainstream circles longer than the others thanks to the figure of Herbert Lehman, son of one of the original brothers, Mayer. During the Depression Herbert Lehman left his position at the family firm and entered politics, becoming Franklin Delano Roosevelt's successor as governor of New York in 1933 and serving four terms in that position. Lehman was NY's first Jewish governor (and the only one until the disgraced Eliot Spitzer), and later served as the only Jew in the US Senate after being elected to that body in 1949. Yet while he philanthropically supported Jewish causes, in keeping with his background he tended to downplay his own Jewishness through much of his career. Lehman did get more politically involved with the plight of his people during WWII, when Roosevelt appointed him as head of the State Department's foreign relief operations. As Robert and Elinor Slater noted in their book Great Jewish Men: "In 1946, Lehman began dealing with the plight of Jewish refugees who wanted to establish a home in Palestine. Lehman favored free Jewish immigration to Palestine and, once the state of Israel was established in 1948, he became one of its strong supporters. "Later, in 1958, he chaired the committee to celebrate Israel's tenth anniversary. He helped organize the Joint Distribution Committee, the Palestine Loan Bank and Palestinian Economic Corporation." Despite all this, Lehman is largely a forgotten figure to the general public, his historical reputation no doubt suffering from having had to follow in the footstep of FDR and his own lack of charisma. Most New Yorkers born after his time probably know the name today, if at all, from Lehman Brothers and the branch of the City University of New York named after him. There is though in NYC another tribute to his memory; the Herbert Lehman Professor of Government chair at Columbia University, an endowed faculty position at an institution that Lehman generously supported, a factor that no doubt hastened its rescinding of an admissions policy that once restricted Jews as both students and faculty. In 2004, a radical-leftist scholar named Mahmood Mamdani, a Ugandan of Muslim-Indian descent, was appointed to the Lehman chair. Mamdani, a close associate of the late Edward Said, is a fierce critic of Israel, and in both his work and utterances has offered up what sound to many to be rationalizations for terror attacks. In one 2005 interview he noted: "The suicide bomber is more likely born of a youth revolt than of patriarchal authority. The suicide bomber comes out of the history of the Intifada. The first Intifada in Palestine was coterminous with the Soweto uprising in South Africa. "Both were testimony to youth revolts on two fronts: against both external authority - such as the apartheid or the Zionist order - and the internal authority of the generation of their parents... " One could only imagine what Herbert Lehman would say about such sentiments expressed by a scholar holding a position in his name - just as one might likely guess how his father Mayer would feel about the reckless speculative actions of the men who succeeded his leadership of Lehman Brothers only to have now run it into the ground. At two ends of Manhattan, on both Wall Street and at Columbia, a disservice has been done to the Lehman name. The consequences of the former instance are, of course, much more serious and widespread. But the latter too is a symptom of a broader institutional dysfunction, and a sad commentary on how in this case the American experience has ended up devaluing the worth of a once notable Jewish family name. [email protected]

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