Moral Bailouts

By: Rabbi Jay Kelman |

The sight of the CEO's of GM, Ford and Chrysler asking the Untied States Congress for 25 Billion dollars in aid as they flew to Washington on their private corporate jets highlighted the moral crisis which continues to wreak so much financial havoc. The never ending stream of recipients of big fat bonuses, whose ingenuity in creating new financial products is at the root of our predicament, begging for handouts while the hard working labourer faces job losses, home foreclosures and higher taxes down the road.

While there may be good economic reason for these CEO's to use corporate jets in their day to day travels and the resultant savings on flying commercial airlines is most miniscule, such poor judgment and hubris speaks to a much larger issue. Perception is not only important from a public relations point of views (one which these executives arrogantly missed) but also from a moral perspective.

The Talmud in explaining G-d's desire for not only integrity but the perception of integrity presents a parable of a king paying tolls even though the king receives all tolls collected. The perception of leaders being bound by the same laws as all others is crucial to the proper functioning of society and serves as the basis of the democratic tradition where heads of state must also pay taxes. This lesson is often lost on some and would require that corporate leaders share and be seen to share some of the pain of their (ex-)employees.

While financial losses can be devastating it is often the emotional and psychological pain which can take a greater toll on a person's well being. It for this reason that the Torah emphasizes time and time again to have special compassion and bring joy to the "stranger, the orphan, the widow". While the above often were at a financial disadvantage the Talmud makes clear that one may not take collateral even from a most wealthy widow.

The pain of losing one's wealth is often greater than the pain of poverty itself. Thus in a perfect world the obligation of charity extends not only to provide needed sustenance to the poor but to enable them to return to their former position of wealth. The millionaire who has lost his job may be better off financially than the impoverished but may actually suffer deeper scars. While the suffering wealthy may not generate much sympathy (in fact many may privately gloat over their misfortune) the Torah understood the deep pain of loss, even (especially?) in the monetary realm. This notion has been corroborated by modern research which indicates that people express approximately double the emotional pain over losing money thank the joy that they experience when making money.

While Jewish law has no concept (in theory at least) of bankruptcy the Torah prohibits requesting repayment of a loan from those presently incapable of doing so. One may not even "accidently" cross paths with the debtor thereby causing him embarrassment.

Based on the above it would appear that a company forced to lay off significant numbers of workers should eliminate such perks as first class travel, club memberships and the like even if the savings have no impact on job preservation. In keeping with the obligation of giving between 10-20% of one's income to tzedakah it can be argued that before layoffs are instituted management take an across the board pay cut reflecting this charitable norm. And perhaps the government should consider "loans" to those who can not pay their mortgages to be collectible at some future time when conditions permit. Such measures may not solve the economic meltdown but they help in providing a moral framework to guide us.