Hey! I love this blog, but I thought you should know that, while Tolkien's dwarves were based on Jews, Wagner, a contemporary of his who wrote a fantasy opera, based HIS dwarves on Jews first, and more obviously, and much more negatively. Tolkien made his Jewish dwarves much more complex and protagonist-y sort of as a "I don't think Jews are evil" move against Wagner. So it's still not great, but it's better.
Look, Wagner was one of the worst anti-semites of the last 200 years. He was a key figure in the growth of German anti-semitism in the 19th century. His writings and music were direct inspirations for Hitler. You are damning Tolkien with faint praise.
Now, if we want to recognize Tolkien giving Jews a solid moment of allyship, follow this link. The short version is that Tolkien, when asked by the potential publisher of the German Language Edition of The Hobbit to prove his Aryan credentials, not only did Tolkien refuse, he mailed them a letter containing one of the great all time slams:
Thank you for your letter. I regret that I am not clear as to what you intend by arisch. I am not of Aryan extraction: that is Indo-Iranian; as far as I am aware none of my ancestors spoke Hindustani, Persian, G*psy, or any related dialects. But if I am to understand that you are enquiring whether I am of Jewish origin, I can only reply that I regret that I appear to have no ancestors of that gifted people. My great-great-grandfather came to England in the eighteenth century from Germany: the main part of my descent is therefore purely English, and I am an English subject - which should be sufficient. I have been accustomed, nonetheless, to regard my German name with pride, and continued to do so throughout the period of the late regrettable war, in which I served in the English army. I cannot, however, forbear to comment that if impertinent and irrelevant inquiries of this sort are to become the rule in matters of literature, then the time is not far distant when a German name will no longer be a source of pride.