American Jews Are Rich, But Will They Vote With Their Wallets?

American Jews are indeed richer, on average, than other Americans, which has never stopped most of them from voting Democratic. Until now.

Speaking to a group of supporters of the state of Israel last week, most of them, I would imagine, American Jews, president Trump opined that American Jews, being rich, will vote for him to protect their wealth. This comment was one among many others in which president Trump expressed support for Israel that is unprecedented for a sitting (or in fact any) American president. But of course rich liberal American Jews seized on that comment, calling it anti-Semitic.

There is nothing anti-Semitic about calling American Jews rich simply because, on average, they are. The way statistics work is often misunderstood, so let me try to explain it this way: say you know that the average weight of a bass fish in your favorite bass fishing hole is 3.5 pounds and the standard deviation is 0.5 pounds. Well then, assuming a normal probability distribution for the weight of bass (which is a good assumption because that’s how nature works), here is what we know about the weight of the bass currently on your hook: the likelihood of its weight being between 3.0 and 4.0 pounds is two thirds, or about 67%. The likelihood of its weight being between 2.5 and 4.5 pounds is 95%. The more standard deviations you throw in there, the higher the likelihood, but it will never be 100% until your limits move all the way to zero on the lower end and infinity on the upper.

Put in a different way, statistics tell you what you may reasonably EXPECT with regards to any individual within the sample population, but never anything precise about any given individual. If you meet a person in America and that person is Jewish, knowing only that much about them, you can reasonably expect that person to be richer than a non-Jewish American you meet next. That being said, if the non-Jewish American you meet next is Bill Gates, your expectation would be wrong. That would not mean, however, that Jewish Americans are not on average richer than non-Jewish Americans, only that you have had an exceedingly unlikely event happen to you: you just randomly met Bill Gates.

American Jews are richer, on average, than non-American Jews because they are on average better educated and in today’s world, again, on average, education is correlated with wealth. So yes, American Jews hold, communally, a much larger piece of the American pie than their fraction of the general population would suggest, likely ten times higher and quite possibly more like 30 times higher. So if Jews are 1.5% of the American population, they likely hold at least 15% and possibly up to 45% of the private wealth in America.

These are just facts and it is also a fact that the disproportionate wealth of American Jews gives them disproportionate influence in American politics, up to a point. The influence that American Jews can buy with their wealth is offset by the majority of them voting against their financial interests, especially in recent decades. One of the privileges of wealth is being able to afford virtue signalling. If you live in a $2 million house in Westchester county, NY, while far from being considered rich in your own community, you can afford to vote Democratic in local, state, and government elections, because it simply makes you feel like a “mensch”, a good and charitable person and because it is a cheap way of doing that.

It is cheap because you are rich enough to make use of accountants and lawyers who will navigate on your behalf the Byzantine American tax code and find every possible way for you to minimize your taxes on income, real estate, capital gains, inheritance, etc. Thus having made yourself feel better that you just voted for higher taxes from which, supposedly, the less fortunate will benefit, you do everything to successfully avoid paying these higher taxes, pushing the burden down on those who are less fortunate than you, but not poor enough to receive welfare or other government benefits and who cannot afford your costly tax minimization schemes.

Since 70% of Jews are reliable Democratic voters and since they tend to cluster in reliably Democratic states like New York and California they have made themselves politically less influential in presidential elections than their wealth would allow them to be, with the exception of the all important state of Florida. This “being taken for granted by the Democrats” strategy is not at all smart and it is, surprisingly, one that American Jews share with African Americans, but the Jews do it anyway because their need for virtue signaling overcomes their need for being politically influential in presidential politics.

So president Trump was half right: Jews are rich. He was also, at least historically, half wrong: Jews do not vote their wallets in presidential elections. Except this year there is a caveat. Trump’s deregulatory and low taxation policies coupled with near zero interest rates and unlimited liquidity created the most favorable business environment in many generations, a fact that is reflected in equity prices. And it is those sky-high equity prices that underpin everything: they serve as collateral for business lines of credit and are counted as “net worth” for the purpose of personal loans such as mortgages.

Since, as we have already established, American Jews are disproportionately rich, they also have, on average, disproportionate exposure to the roaring equity markets and their lifestyles are disproportionately linked to those markets as well. Democratic candidates for the presidency, the House of Representatives, and the Senate, all vow to implement policies that would immediately cause the American equity markets to go into a tailspin of epic proportions. These policies include major hikes in corporate taxes and in the taxes of individuals who create jobs, as well as major regulatory efforts, including those in support of the wealth redistribution hoax known as climate change or the green agenda.

If your acceptance by the board of that fancy condo building depends on your net worth being just so, if your exposure to equities is in the seven figures, you may think twice about a 30% correction in equity prices. If you are leveraged, in your business or personal lives, against those prices being where they are right now, such a correction is likely to cost you a cash margin call, which is a highly undesirable experience as those who have lived through it might attest.

Voting for Democrats is a luxury. So far, it has been a luxury that most American Jews could afford and did. But the consequences of their fake “do-goodiness” never amounted to more than slightly higher fees charged by their CPA’s and tax attorneys and perhaps a few more dollars to the security operators in their condo buildings and gated communities as violent crime, fueled by their Democratic votes raged outside.

Today, this year, things may just be different. The consequences of a Democratic win in the White House and on Capitol Hill may, for the first time ever, cost rich American Jews real money. These consequences can delay their plans for business expansions, for the purchase of that second or third house, or leave them no choice but to raid their kids’ trust funds. These are what we would call “real world consequences” and they are very real and very likely indeed should Trump have to leave office after only one term.

A third of American Jews, most of them Orthodox or Israeli expats do not vote for the Democrats. Another third are young and know nothing about the real world, so they will vote Democrat no matter what. But that last third, the older third, the third that may hate Trump, but not nearly as much as they would hate to see a double digit correction of their net worth in percent terms and six figures or more losses in absolute terms, this last third of American Jews may just think twice.

This hesitation may prove lethal to Democratic ambitions in Florida and very painful to their fundraising efforts everywhere else. Who knows, it may even cost Democrats their chances in places like Pennsylvania, Wisconsin, Minnesota, and Michigan, where Jews cluster in affluent communities around university campuses.

It is a hell of a thing to do to push a button that is guaranteed to shave off 30% or more of the value of your stock portfolio and Jews have the fattest portfolios of them all. On average, of course.

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