New York. -- Watersheds in history like watersheds elsewhere are easy to miss. With cameras focused in on domestic unrest and historic international changes, the far-reaching importance of Mr. Bush's denial of loan guarantees to Israel is about to be overlooked.
This denial heralds the decline in the political fortunes of U.S. Jews and of Israel. American Jews have been slow to credit the decline or its source. It is "socialism" in the broadest sense, both the Israeli commitment to it and the identification of U.S. Jews with it. The denial of the guarantees has begun to bring all of this home.
The emerging pattern of decline, highlighted by a much weakened AIPAC, the Israel Lobby, includes loss of the Jewish seat on the Supreme Court, the diminished political importance of Jews, who have no home in either political party, and the compromising of Jewish wealth and influence.
Mr. Bush is a hostile president: He has speeded the process, but it is unrealistic to think a friendlier president would have slowed it. In fact, columnist Mona Charen was correct when she wrote of the guarantees "that Messrs. Bush and Baker, whose hearts are not in the right place, may be inadvertently doing Israel a favor" in denying them.
Actually, those who blame President Bush for preying on Israel's weakness ask too much. Two decades of Israeli economic irresponsibility have set loose worse instincts. Like the fall of socialism, an event intimately relevant to Jews, Israel's weakness reaches everywhere. Jews in America and Israel stand at the edge of a new time. How will they adjust?
For American Jews the failures of Israeli socialism are seen as disasters and threats, portents of anti-Semitism and worse. But this response will make no sense to most people, to whom it
seems Jews often have no clear idea of their own interest. It will strike them as on a logical par with the Jewish embrace of liberal causes such as civil rights, or as equal to the spectacle of one of the world's most prosperous capitalist communities lending enthusiastic support to a woeful socialist tyranny from which the best and the brightest have been fleeing in droves for years.
The Jewish investment in Israel and in civil rights was expected to yield greater acceptance for Jews in America. If national policy pro-Israel and race-blind, then anti-Semitism in Scarsdale or Bethesda must be unpatriotic and anti-democratic.
Things have turned out differently. The pro-Israel policy has helped isolate American Jews and nurtured Israel's dependency the U.S. The civil-rights movement has turned against Jewish purposes, beginning with the introduction of quota systems. Yet Jews have not changed their support of these policies. The reason? They strengthen the power of the state. This is the heart of the matter: The increase of state power is what Jews regard as their interest.
Of course, the logic of Jews, as of any people, is a calculation of interest. And in all of these expressions of Jewish corporate and individual interest there is a single theme. It is protection against anti-Semitism. State power has been seen as the guarantee of this protection.
Jews living in freedom, as in Germany's Weimar Republic in the 1920s, have exercised two political options, whether as a group or as individuals; whether in favor of Jewish things or against them -- for no small part of the Jews' interest is affected by the ambivalence of Jews about being Jewish at all. It is an affiliation unlike others.
Either Jews have found themselves favoring movements and activities whose final tendency is to convey power to the state by taking it from local institutions -- in effect, siding with the socialist impulse to eliminate the distinction between the public sphere and the private sphere. The other option was Zionism. All of this backfired.
Zionism, the idea of Jewish independence, has backfired twice: First, Israel is not independent, but dependent on the U.S. and on U.S. Jews. Dismantling socialism is the condition of Israel's survival. But Israel cannot do this, the second backfiring, until the Jews stop giving money.
Jewish "pro-Israel" money is exactly what props up Israeli socialism and makes investment impossible. Israel has taken in $40 billion in aid and charity in the last 8 years, but only $180 million in net new investment. This is why 300,000 people are unemployed. Similar problems are what prompt even Stalinist North Korea to set up free export processing zones (FEPZs) to attract foreign capital.
But U.S. Jews are responding to Israel's plight, which their charity has helped to create, with calls for more aid and charity. The pleas of the Israeli Russian immigrant leader Yuli Koshrovsky, urging Israel to build export zones of its own, have as yet been heard by only the most daring of American Jewish philanthropists.
The socialism of Israel and American Jews has dragged both communities down: Israel's aid-seeking has reduced the position U.S. Jews to a point where a president seeking re-election discounts them. After years of supporting aid to Israel as the "pro-Israel" position, and of identification with liberal causes, Jews are at this moment being forced to consider that aid to Israel is really anti-Israel, and that "liberal causes" are indistinguishable from the use of state power by groups and individuals hostile to Jews.
Separating themselves from aid to Israel and from statism in the U.S., the direction for American Jews seems clearly to lie in perfecting local institutions, including private property and its promises. Of course this is also the "contribution" they are best suited to make to Israel. Certainly it is the one Israel needs.
Robert J. Loewenberg is president of the Institute for Advanced Strategic and Political Studies in Jerusalem.