When the computers at Sony's Film HQ in Hollywood were hacked and embarrassing professional secrets leaked out, seasoned observers could be forgiven for thinking: "Is this really happening?"

It wasn't so much the drip-drip of studio gossip, although that at first was fascinating in a titillating sort of a way - the revelation of stars' salaries, who got paid what, what some people really thought of Angelina Jolie (the phrase "minimally talented" will enter the 2014 lexicon as much as, say, "conscious uncoupling.")

Harmful, nigh ruinous titbits filtered out almost daily, culminating in the exchange between studio head Amy Pascal and uber-producer Scott Rudin discussing President Barack Obama's taste in films featuring black leading figures.

Then came the debacle over the so-called comedy The Interview, starring Seth Rogen and James Franco, which was first cancelled and then tamely released on the internet after hackers supposedly from North Korea - the film is about the assassination of the country's leader, Kim Jong-Un - threatened all sorts of mayhem. Hollywood, that seat of outspoken liberalism, was in shock to think bosses could cave in so meekly. George Clooney lectured from his high horse, ashamed that "nobody stood up"; and even Obama publicly declared the move "a mistake". Have you ever heard of such a panicked mess? It's the biggest mishegas in the history of Hollywood.

Of course, in the old Hollywood, run by those Jewish moguls like it was their fish stall or schmutter shop on the Lower East Side, things would never have got this far. You think Harry Cohn, Louis B. Mayer and Samuel Goldwyn, Adolph Zukor (Paramount) or the Warner brothers, Jack and Harry, would have let the mask they were carefully making slip so grievously? Sony Films, run at a distance by a Japanese corporation, have certainly besmirched that culture's honour and their reputation is now at rock bottom, lying in smithereens of disrespect, unveiled as a toxic culture.

It is generally accepted that the Jewish moguls founded Hollywood to create an American dream that aided their own dreams of assimilation. "The outsiders who dreamt up America" is how the group has been labelled and the names of MGM, Columbia, Warners and Paramount can basically be traced to within an 800km radius of Vilnius, as my old Observer colleague Philip French first revealed in his now classic 1969 book The Movie Moguls.

Excluded by what they came to see as a WASPish East Coast elite, so the story goes, these businessmen found fertile ground in the sunny climate of California. Many idealistic images of American life depicted in early Hollywood movies are an immigrant's dream of a brave new world, stories of the triumph of the determined little guy battling overwhelming odds.

There's a story about Louis B. Meyer told in Neil Gabler's book An Empire of their Own: How the Jews Invented Hollywood, that says he was so desperate to become an American that he officially changed his birth-date to July 4.

The litany of stars who changed their names to disguise Jewish roots is well known - Betty Perske (Lauren Bacall), Bernie Schwarz (Tony Curtis) and Issur Demsky (Kirk Douglas) - and stands as testament to the determination of the moguls to ensure the continuation and growth of their businesses and their visions to give the public what they thought they wanted.

In the heyday of their studios (roughly 1924 until the early 1960s), things were run with an iron hand and a ruthlessness that came from the streets, from the scrap-metal yards where Meyer first laboured, or the meat markets where the Warners hardened their business sense and sharpened their knives - not for nothing did their studio become known as the "working class" studio during the hard-scrabble recovery of the early 1930s.

Particularly, it was the stars' images that were protected by press agents. No scandals leaked out, even in the days of gossip writers such as Hedda Hopper or Louella Parsons. The playground, social-media-age emails between Amy Pascal and Scott Rudin about Angelina Jolie and Barack Obama simply would not have occurred back in the heyday.

"I made a series of remarks that were meant only to be funny, but in the cold light of day, they are in fact thoughtless and insensitive - and not funny at all," explained Rudin. Can you imagine the old moguls making such mealy-mouthed, lawyer-scripted, corporate-crawling mea culpae? Never. Humble pie was not on the old menu.

Sony may have belatedly recouped some money by releasing The Interview - incidentally, written and directed by Jews - online and through various new platforms. Some may come to view this as smart operating by Sony. I mean, they could hardly have paid for greater publicity. Yet Sony's brand lies in bits, accused of not supporting its film-makers, of betraying free speech, of being petty, two-faced, untrustworthy and cowardly. Oy vey!

The old moguls ran their shops like family businesses, or like Friday-night dinners. Sure, there'd be arguments and shouting, but it stayed indoors. Never would such vulnerability have been allowed to be shown in public. Faced with global mockery and systemic meltdown, the old boys would simply have stubbed their cigars out in fury and ordered some new clichés.