For the unbelievers out there, this is going to seem Sunday school, but bear with me. As you will see in the end, my intentions are not religious but trying to clarify the relationship between Jews and Western people.
«After the destruction of the Second Temple the Oral Law proponent Pharisees won out and codified the Oral Law in the Talmud, which is vicious in its portrayal of gentiles.»
Right. The Old Testament religion was centered on the Temple. According to the Old Testament, God made a pact (covenant) with Moses so the sins could be forgiven by sacrificing animals in the Temple, as an offer to God. The Old Testament is full of this. Many of the laws of the Old Testament are focused on the Temple and how you have to abandon the local high altars and sacrifice in the Temple. It was about centralization.
Then, the Pharisees developed some new traditions (a tradition is a doctrine that is transmitted by oral teaching and not by writing). These traditions were later called the Oral Law, were not in the Old Testament and were not accepted by everyone. There were different degrees of disagreement with these traditions.
Jesus attacked these traditions (Mark 7, 1-13) and said that He was going to replace the Temple by his body as a way of forgiving sins (John 2, 18-22). Christians believe that the sacrifice of Jesus forgives the sins (Matthew 26, 27-29): it is a new covenant («new testament») that replaces the old covenant of Moses.
In short, Jesus makes obsolete the Temple as a way of forgiving sins. The Temple is not needed anymore by his followers. Saint Paul confirms in Hebrews 9:11-15
This is important because the Temple was destroyed by the Romans in 70AD. So the Old Testament religion was not possible anymore. The Christians already had their solution. But, what about the Israelites that didn’t want to become Christians?
Karen Amstrong explains in «The Case for God»:
Rabbi Yohanan had absorbed this lesson. Shortly after the destruction of Jerusalem, when he and his companions had occasion to walk past the ruined temple buildings, Rabbi Joshua had been unable to contain his grief: «Woe is it that the place, where the sins of Israel find atonement, is laid waste.»
But Rabbi Yohanan replied calmly, «Grieve not, we have an atonement equal to the Temple, the doing of loving deeds, as it is said, ‘I desire love and not sacrifice.’ «[…].
After the fall of the city, a community of scribes, priests, and Pharisees gathered there and, under the leadership of Yohanan and his pupils Eliezer and Joshua, began the heroic task of transforming Judaism from a temple faith to a religion of the book. The Torah would replace the Holy of Holies, and the study of scripture would substitute for animal sacrifice. […] «
The Israelites that didn’t want to become Christians simply invented another religion. A religion not centered on the Temple (which was gone) but centered on studying the traditions and deriving laws from them. They wrote the traditions on the Talmud in the first centuries of the Christian era and then spent the following centuries, deriving laws from the interpretation of the Talmud, and then using these interpretations to derive new laws, and then using these new interpretations to derive new laws, and so on and so forth.
As with Christians, the Old Testament is read because of devout reasons (the poetry of the Psalms is magnificent for , but it is not followed as a law you have to adhere to. You cannot follow the Old Testament because you don’t have a Temple. Christians replaced the Old Testament with the teachings of Jesus. Jews replaced it with the Oral Law (Talmud) and all the interpretations derived from it.
In short, we have three religions. The Old Testament religion, which was followed in times of Jesus. Christianity, founded about 30AD. And Judaism (Talmudism) which was founded about the second century, which is the youngest religion of all three. Christianity and Judaism come from Old Testament religion. There were prophecies in the Old Testament about a new religion arising in the future (and Jesus confirms in the New Testament). Christians think that it applies to them and Jews think that it applies to them.
This is important because you see the sentence «Jesus was a Jew!» all the time, because people conflate Judaism with Old Testament religion. This is not even wrong. Jesus was a Israelite, he followed the Old Testament religion (but founded Christianity). As anybody who reads the Gospels can see, he was the archenemy of the Pharisees, the intellectual ancestors of the Jews. He despised the Oral Law, which is the basis of Judaism. Saying that Jesus was a Jew is like saying Stalin was capitalist.
This is important because this has made the relationship between Western people (whose traditional religion is Christianity) and Jews completely insane. When Christians see Jews, they imagine that they are seeing Biblical characters, the People of God, the Chosen People (but the New Testament says that the Church is the People of God, the New Israel). This has a lot of implications but I won’t explain them, because I know that you are seeing them.