Is the balance of power shifting?

Rupert Murdoch once said in private, I am told on good authority, that the reason he decided to subsidize the neocons (a decision with substantial historical ramifications) was not because of any particular devotion to the tenets of neoconservatism. Instead, funding The Weekly Standard was simply to insure against being defenseless against vendettas by the American media and politicians against his American businesses. As a foreigner of generally conservative political views, he felt he needed to protect his huge investments in America by having at least one set of Jews staunchly on his side.

I doubt if Murdoch cares much about, say, West Bank settlements, but he understands that the small number of people in America who do care about them tend to be passionate, powerful, and rich.

Hillary Clinton seems to have absorbed a similar lesson. In 1991, George H. W. Bush was on top of the world. His Secretary of State James Baker expressed displeasure with West Bank settlements. The next year, Hillary's husband beat Bush 41. Coincidence? Perhaps, but I suspect Hillary wouldn't bet her career on it just being a fluke.

Similarly, Barack Obama has acted quite Murdochian recently, making Hillary Secretary of State and giving crucial insider jobs to Rahm Emanuel (who patriotically rushed off during the Gulf War to serve at an Army base, an Israeli army base) and Larry Summers, greatly reassuring AIPAC.

But are all these political calculuses a little too 2007? Is the assumption that the kind of guy in New York or Las Vegas who cares about Israel in the same way that rich guys in Oklahoma care about the Oklahoma Sooner football team -- but are just so infinitely rich that they must be pandered to -- getting to be out of date? What if the Sheldon Adelsons and Bernie Madoffs lose even more money in this crash then everybody else? How does that rearrange the political landscape?

I don't have any data, but I'm sensing anecdotally that the kind of man who funds Israel hardliners is losing money faster than the average. Today, the New York Times writes in "Standing Accused - A Pillar of Finance and Charity" about Bernie Madoff, the money manager who just admitted to the FBI that he had been running a giant Ponzi scam and had lost maybe $50 billion (billion!) of his investors' money:

“There was a joke around that Bernie was actually the Jewish T-bill,” the executive went on, referring to the ultrasecure investment of treasury bills. “He was that safe.”

Mr. Madoff had traveled far from his roots in eastern Queens, where as a young man he cobbled together a $5,000 grubstake from his earnings as a lifeguard and sprinkler installer to start the famed investment firm that eventually bore his name, Bernard L. Madoff Investment Securities.

He had come to move easily in the clubby Jewish world that iterates between New York City and its suburbs and southern satellites like Palm Beach.

Indeed, in the world of Jewish New York, where Mr. Madoff, 70, was raised and found success, he is largely still considered as a macher: a big-hearted big shot for whom philanthropy and family always intertwined with — and were equally as important as — finance. ...

As Mr. Madoff’s success increased, so too did his interest in philanthropy, which was often handled, much like his business itself, as a family enterprise. He sits on the board of trustees for Yeshiva, whose officials issued a statement on Friday saying they were “shocked” at the news of Mr. Madoff’s arrest. And with his wife, Ruth, he runs the Madoff Family Foundation, a $19 million operation that last year gave money to Kav Lachayim, a volunteer group that works in Israeli schools and hospitals, and to the Public Theater in New York.

Another NYT article reports:

The news was equally devastating for the Robert I. Lappin Charitable Foundation in Salem, Mass., which works to reverse the dilution of Jewish identity through intermarriage and assimilation by sending teenagers to Israel and supporting other Jewish education efforts.

The foundation was forced on Friday to dismiss its small staff and shut down its programs to cope with its losses in the Madoff funds, according to Deborah Coltin, its executive director.

“We’ve canceled everything as of today, everything,” she said tearfully.

Very anecdotal, but I'm definitely wondering if the Obama-Clinton-Murdoch consensus about where the power rests is becoming obsolete. Certainly, finance and casinos will be greatly downsized for years to come. The more liberal (but still connected) media business is harder to forecast -- Hollywood did well in the last Depression because movies are cheap entertainment -- but newspapers are obviously in trouble. (Of course, Sam Zell, another fairly hardline donor, didn't put much of his own money in his now bankrupt purchase of the Chicago Tribune and LA Times.)

Could there be a pattern where the most ethnocentric Jewish rich guys get hit hardest by the crash? John Kenneth Galbraith once said, "Recessions catch what the auditors miss," which certainly proved true in Bernie Maddof's case.

Anyway, even if there is a major rebalancing of wealth, that doesn't mean that political influence will rebalance. It's not just that Jews have more money, it's that they give more of their wealth to influence politics.

The amount of wealth devoted to influencing politics in this country is remarkably small. For example, Murdoch is said to spend about $3 million per year on The Weekly Standard, which adds up to a lot over the decades, but hardly a crippling cost for a billionaire.

What about politicians? The Exile had a lot of fun when Rep. William Jefferson was arrested with $90,000 in cash in his freezer. An American politician has an icebox with $90,000 in it, while a Russian politician, despite having a much smaller economy to loot, winds up with a few blocks of Mayfair or a Premiere League football team.

The news of how little Blagojevich was thinking of getting for selling Obama's U.S. Senate seat to Jesse Jackson Jr. should open some eyes. Do you imagine anybody in China is saying right now: "It only costs $1 million for a U.S. Senator? Are you kidding? Buy me a dozen!"

With an increasing portion of the American economy nationalized, the price of political influence will be increasing. Do you think any former shareholders of Lehman Brothers are kicking themselves right now for not donating more to the last Bush campaign and instead let their old enemy from Goldman Sachs get to put them out of business while propping up Goldman's allies?

That may be the most lasting influence of the Bush Administration: by vastly increasing the power of government, the price of government will eventually go up, too.

My published articles are archived at iSteve.com -- Steve Sailer