Thursday, March 29, 2007

Players and Poverty

On Players and Poverty

The Finance Minister Abraham Hirchson is in serious trouble. He has been grilled for 8-hours by the Israeli police on suspicion of embezzlement. According to a report in today’s Haaretz daily newspaper, during his tenure with another organization, Minister Hirchson allegedly embezzled about $500,000 from the Nili non-profit association, about $125,000 in cash, the rest in checks and money transfers. All were deposited into the Finance Minister’s bank account. Haaretz quotes then state comptroller Eliezer Goldberg as saying he shelved a report on the mater in deference to “the right to privacy.”

Two other items tie into this latest scandal of how Israel’s powerful men view society.
One is the sentencing of former Justice Minister Haim Ramon to 120 days of community service for his ‘sexual misconduct’ conviction. However the sentence said there was no ‘moral turpitude’ to the charge, which allows Ramon to remain a member of the Knesset, Israel’s Parliament. Whould he have gone to jail had he been an office worker? You guess.

The other issue is another charge by yet another woman against Israel’s beleaguered president Moshe Katzav, who has been indicted for rape. A new witness has come forward saying that whenever she sees Katzav, she sees a monster.

These are the leading stories in Israel. This is not to mention the case of Zev Rosenstein, Israel’s “master criminal,” recently sentenced to 40 years in jail by an American court for trafficking in 800,000 Ecstasy pills. Rosentstein is considered one of Israel’s leading crime lords. His sentence was to be carried out in the USA away from his Israeli cronies, but was suddenly cut from 40 years to 12, to be served in Israel. Rather than finding himself cut off in some hard-core US prison, surrounded by White Supremacists and Moslem-Americans, or just plain bad-ass criminals, he will serve out his term in relative seclusion in Israel, benefiting from visits from his family, and one assumes access to a mobile phone. It is commonly assumed he will run his criminal activities from jail.

How do these issues tie into a meeting with a credit manager at a bank, former Finance Minister Benjamin ‘Bibi’ Netanyahu, and Bank of Israel Governor Stanley Fisher?
Or former Justice Minister Amnon Rubinstein? Simply, money and connections.

Hirschson was a big-shot Likud activist who reportedly embezzled money not only for himself, but for the Likud party, from the Nili non-for-profit association. The Likud connection may have been how the matter was covered up until now. However, someone leaked the matter to the State Prosecutor and the Press. Now the hounds are at the bottom of the tree howling up at Hirschson.

This matter wouldn’t be so disturbing if it was an isolated instance. Couple it with Ramon and Katzav’s sexual amorality, and Rosenstein’s sudden appearance back in Israel, and the dots start to get connected. The powerful think they can get away with whatever they want, as was made clear in the charges against both Ramon and Katzav. Rosenstein is a wild card. Did he bribe someone? Did he offer to turn state’s evidence in a secret deal to relocate to Israel? Who knows. But people who have leverage get what they want, or try to take it if denied, as was he case with Ramon and Katzav. With Rosenstein, he and his enemies were conducting running street battles that killed innocent civilians.

Amnon Rubeinstein, former minister in many Israeli cabinets, wrote today in the Jerusalem Post that Israel had misused its position to provide succor for the rich at the expense of the poor. He claimed that Bibi Netanyahu’s fiscal policy was successful, but a failure. Israel is again on the economic rise, but still, Israel was shrinking from its obligation to the poor.

Pesach time one sees bread lines in abundance as families turn up at food warehouses to receive enough to feed their families over Passover. Sure, hands out, shopping basket filling with free goodies, is a cause for resentment among the hard-working middle-classes. But Israel has over 200,000 children living under the poverty line; approximately 20 per cent of the population is estimated to be below the poverty line. Rubenstein wants to know what this great burgeoning economy is doing for the lesser among us? Even for what he calls the “working poor.”

Israel is undergoing a process of “Americanization.” Today that looks more like Ronald Regan’s financial policy, which left the homeless to wander the streets, sleep in public parks, and starve to death. America’s soul was replaced with the ‘bottom line.’ With the need to get richer.

Israel now has the same need. Companies must show a positive growth, or like in the USA, the CEO is bounced out on his ear. Stockholders want more money, not social welfare. The economy runs on financial growth, not handouts. Streamlining, redundancy, outsourcing, all catchwords to mean more profits.

Credit Suisse just announced a 16 million Swiss Franc bonus to its CEO for bringing in record profits. Okay, that’s a bank. Question: do the Credit Suisse’s bank’s customers benefit, or just the CEO, and the stockholders?

In Israel it was announced today that the five major banks all released record profits for the year. Question: at whose expense? The government is already investigating the high bank fees for the simplest of tasks, and there is even talks of further regulation.

Unlike US banks, Israeli banks keep very skimpy hours of service to the public. And you have to be a math whiz to not only figure out your statement, but just when the bank is open. Some day’s the banks are open only in the morning, from 8:30 to 12:30, or is it one o’clock? Some days the banks are also open in the afternoon, but is it Sunday, or Monday, or Thursday? All in all the banks are open maybe 28 hours a week.

‘Use the internet,’ the customer is told, when complaining the service has slipped by approximately 60 percent over the last three decades. ‘That’s what it’s for.’ Of course for a while the Israeli banks had a telephone service, but you needed a code, and the code kept changing. Turns out so does the internet code. You don’t use your code for a month, it changes, and you have to go back into the bank to get another. Small stuff, but a nuisance.

Do the big shots who run the country have the same rules? Finance Minister Hirschson had a line of credit that far exceeded the Bank of Israel’s limits. Once banks had people calling the customers to remind them they’d exceeded their limit, or the check was going to bounce. Now the banks cry a shortage of manpower to do this. When it is suggested kindly to them that more and better service might help the customers, even though cutting into the enormous profits of the banks, the customer is told, “This is Israel. That’s the way things work.”

One points out the inconsistencies: that Mr. Hirschson doesn’t have to worry about his overdraft, since the banks think of him as a valued customer. Or take Eliezer Fishman, an Israeli financier who ran up a $60 million bank debt, and then defaulted. “Oh, don’t bring that up,” the bank’s assistant manager said. “That’s different.”

Sure it is. Fishman, and Hirschson are in with the ‘boys.’ Little hard working people get trampled, trapped, trashed by the system which has been “Americanized.’ Except it hasn’t. The great-unwashed masses are Americanized. The people on top still carry on as they always did, the ‘old boy network.’ The forgotten but not yet gone former Prime Minister Ariel Sharon was a prime example, a politician who mastered the game of old boyism, bringing his sons into the club with him. This corruption from the top set a standard which filtered down to the very bottom of the rung, to the bank clerk who looks at clients differently, depending on their ‘clout.’

The pity is that the system doesn’t work. This old boyism, this cronyism, this corruption, has stultified the over calcified Israeli bureaucracy to the point that nothing can get done without ‘clout.’ In Arabic the word is ‘bakshish,’ a payoff. Either in money, goods, or services. So the well-connected get richer, get things done, get the contracts and the customers, and the money; the poor stand in lines waiting for hand-outs,from charitable organizations run by well-meaning people who are more interested in Soul than Clout, or from other do-good institutions. The government has cut back severely on welfare payments.

One year the public will stage a protest against this ‘system.’ The well-connected, like the office manger in Ehud Olmert’s office now under indictment with her brother and others for helping businessmen cut their tax obligations, will be frowned upon as crooks, not looked up to as masters of the system.

The poor will have some backing from the state.
Not everyone can make a good living.
Not everyone can be at the top of their class. Not everyone can feed their family.
Tzedeka is one of the principals guiding Judaism. Without some sort of welfare system, a society is like a machine, without a soul, a conscience, or a real purpose beyond basic survival.

Couple this coldness with a layer of corruption so thick even Superman would have trouble blasting through it, and one sees a situation ripe for exploitation by the enemy.
The foibles and faults brought out by the last war in Lebanon are still there. The culture of corruption and cronyism still exists.
The poor are still poor, but equal in one way to the rich: when the missiles start again, they’re both only flesh and blood.
Israel better clean up the system before it is too late to fix it. Israel better get priorities that include compassion and humanity, not just personal aggrandizement and profits. If not, who knows, maybe the Big Guy up there will decide He’s seen enough and wipe out this little experiment called Israel again.

Tuesday, March 20, 2007

Sit Down, Turn Around, Pick A Box Of Oranges

One of the nice aspects of Passover is that the holiday brings out the charitable nature of the Israelis. Offical statistics say that a full twenty-percent of Israelis live below the poverty line.

Friday is the end of the work week in Israel. Almost all the open air markets around the country shut down for Shabat. Leftover produce is tossed in the garbage, if it can’t be refrigerated. Friday afternoons see the poor scrounging through the garbage bins near the open air markets, filling their plastic bags with fruits and vegetables.

Come Passover help comes in more official forms. Charitable organizations usually run by ultra-Orthodox men. Warehouses are stocked with dry goods, matzot and grape juice. A few days before the holiday frozen chickens, fresh fruit and vegetables are added. When those in need come for their packages, everything is included for an entire family to enjoy a festive seder.

This spirit of giving may come from collective guilt, or simply from a generous spirit. Tzedeka is a time-honored tradition in Judaism. A family is encouraged to give up to 10 per cent of their income. Some give more, some less. The pleas for donations that everyone receives in the mail are annoying. Still one guy I know makes out a donation for “Chai” and mails it back to each organization that asked for a donation.

Giving isn’t restricted to Passover, of course. Because poverty isn’t only something that surfaces on the holidays. It is endemic to the culture. Some blame this on the “Americanization” of Israel.

As Israel becomes more a market driven economy, traditional values like Tzedeka go out the window. The bottom line isn’t helped by giving away money. Money becomes the one mark of distinction, as evidenced by the car one drives, the clothes one wears, the jewelry the female of the species can put on display as a means to intimidate those lower down on the scale of material comfort.

Israel’s economy is no longer in the “start-up” mode, where everyone is helped out no matter what their needs or contribution to society. Now the standard is ‘pay as you go.’ Health care now carries a charge. Subsidies have been dropped from many food items. There hasn’t been an active Minister for Welfare in who knows how long.

Just as the volunteer organizations took up the slack left by the government during the second War in Lebanon, many of the same organizations provide a hot meal for the needy on a daily basis. Come the holidays a greater effort is required.

A couple of days ago this reporter was in an orange grove in Kibbutz Kvutzot Shiller, on the outskirts of Rehovot. An organization called Sulchan L’Shulchan is in charge of providing produce to those soup kitchens and support groups around the country. One of the sources of food for Sulchan L’Shulchan is this kibbutz orchard.

The orchard, we were told it is about 600 dunam (about 150 acres), is owned by a wealthy man from Rehovot who donates his crops every year to the poor. Shulchan L’Shulchan is in charge of the fields. Groups of schoolchildren of all ages, factory workers, hi-tech engineers, volunteer a morning, arriving in suitable clothing to help pick the fruit from the trees. Some months its oranges, others avocados, others tangerines.

The day we were there a group of grade school children from Ashdod piled off of two buses and headed into the orchards. The children were part of the “Tali” network of schools which inserts some Jewish traditions and learning into a secular school. In this case the children had learned about “Tzdeka” charity, and the sources for it in the ancient texts, then put the learning into practice by coming out to the fields to pick fruit meant for the Passover tables of needy Israelis.

The fruit was gathered in plastic boxes, and hauled away by a tractor to a packinghouse, where it was picked up by trucks and driven to distribution centers around the country.
Yaniv was the student’s guide. He wore a sort of Greek fisherman’s cap, but his was made in Russia, but he wasn’t Russian, rather a purebred Israeli. Yaniv was religious. About thirty, he had a beard, and his peyote (side curls) were concealed by his cap. He wore jeans and a work shirt and boots.

“I’m surprised at his ability to communicate with these secular school kids,” said Miriam, a visitor to the field as part of the Tali support staff. “I never see ultra-Orthodox outside of their black garb. And they always put me off, but he’s a good guy.”
Miriam was encouraged by what she saw. “All this volunteering, I mean, it gives me hope that Israelis are all that selfish after all. That they really do have a heart and soul. I thought they’d lost it.”

In fact three different groups were in the fields at the same time as the Tali Ashdod kids. One group was from the Cleveland Hebrew School, on tour in Israel. Yaniv said “we get groups from all over the country. Depending on the season, we get groups nearly every day. And the food gets picked up by the various organizations.”

“I feel like I’m helping someone,” said Tomer, a fourth grade Tali Ashdod student. “People who don’t have as much as I do.”

Parents of these schoolchildren also showed up to pick. Ricki Cohen wore a tight powder blue training outfit and pink running shoes. A pretty woman with a Charlie’s Angels blondish hairdo and designer sunglasses, Ricki said, “I was raised to believe we are supposed to help out where we can. I’m always volunteering. If I can help someone else have a good Pesach by spending a few hours picking oranges with my kids, I’m happy to do it.”

When it was over the little group of kids picked nearly five tons of oranges. All for charity.

As Miriam said, maybe there is hope for the country after all.

Friday, March 16, 2007

Whose Leader Is This Anyway?

Israel’s Prime Minister Ehud Olmert admitted it: he is unpopular. This is about as surprising as finding out that lions roar. Anyone who reads a newspaper in Israel, watches TV or listens to the radio is told several times a week that Olmert is unpopular.

Sometimes the reporters quote facts and figures, showing Olmert behind his Kadima protégé Foreign Minister Tzipi Livni in the polls. Other times the reporters quote Olmert’s rivals, like Likud head Bibi Netanyahu, or Labor hopeful Ehud Barak.
Each of these people has a vested interest in blaring the news that Olmert is unpopular.
Each has their own agenda.

Even Israel Security Agency chief Avi Dichter wants to be Prime Minister. Turns out that’s partly behind why he is always making headlines with new proclamations of impending disaster. Nothing gets headlines like impending disaster.

Manipulating public opinion is an art. Done well careers are built and fortunes are made. Done poorly, or inappropriately, careers are ruined. Who recalls Alexander Haig’s gaff after U.S. President Ronald Regan was shot by John Hinkley, Jr.? “I’m in control,” Haig told the TV cameras. He meant well, that the country was in good hands. But the message was sinister: he was in control. Fine, but who asked for him to be in control? He sort of skipped the entire electoral process, as well as the chain of who assumes control of the US government in case of an assassination. Haig’s career was flushed down the toilet with that mistake.

Or take Howard Dean’s misstatement while running for the Democratic presidential nomination. Who even remembers what he said? But it was enough to make him look stupid, frazzled, and all too human. Flush that nomination down the toilet, too.

Going back farther we have Richard Nixon sweating on camera when debating the debonair John Kennedy. Flush that election down the toilet as well.

Which leads to the question: what makes a leader, and why do people follow?

In Israel today the population is worried. Iran is threatening Israel with nuclear annihilation; Hezbollah is threatening more rockets, with larger warheads and greater range. Hamas in Gaza is copying Hezbollah, digging underground bunkers, stocking up on more powerful missiles, getting ready to attack.

Now, just when the kettle is starting to boil, PM Olmert told the AIPAC convention that if the US pulls out of Iraq, Jordan might fall to Islamic fundamentalism.
Olmert, who we’ve already determined is about as popular as a wolf in a hen house, didn’t make any friends at AIPAC with that comment. He may have pleased George W. Bush, but most of the AIPAC folks didn’t vote for Bush, either.

So, is Olmert just playing nice guy, supporting Bush and his policies, as a way to stay friendly with the White House? After all, Olmert is still the Prime Minister, Israel is still a country, and Bush is still the President of the USA. All sorts of things come out of that relationship. Military stipends, US government orders for Israeli products, planes, tanks, guns, training, you name it. Olmert may have been politically correct to make nice to Bush, even if it pissed off the Democratic supporters in AIPAC.

Then there’s the economy. Olmert says he’s a good manager. Unpopular, sure, but a good manager. The economy is thriving. He is responsible for that. He was the Finance Minister, and now the Prime Minister. Who else, if not him, can take credit?
And Israelis like their economic security. Rockets may fall on Kryiat Shmona, but as long as the shekels keep flowing, it’s not that important. After all, who ever goes to Kyriat Shmona anyway?

The issue of war is sometimes used to great effect to take the blame away from politicians for mishandling the economy. That wasn’t the case in the War in Lebanon II. The Israeli economy was flourishing, and still is. Talk of war doesn’t do the economy any good, but it didn’t hurt either, it seemed. Except the country spent a bundle fighting Hezbollah to a draw, losing over 100 soldiers in battle, maiming hundreds more. Too bad.
But what does it mean, tachlis (in reality) as the Israelis say? Not much, unless you’re a bereaved friend or family member, or wounded soldier. Like Kyriat Shmona, not many people got killed, did they, and that was six-months ago.

So we’re back in the race for political leadership in Israel. Olmert may well be accused of mishandling the War in Lebanon by the Winograd commission investigating the war. Recommendations may be made that he resign. So far he’s not budging from his seat of power. He likes it. Who blames him?

It is more than possible that the IDF may soon “invade” Gaza to attempt to neutralize the growing Hamas missile threat. The Israeli press mentions the possiblity more every day. Rumors of an impending invasion are circulating in towns and cities, talked about by soldiers who are undergoing special training. But is this invasion necessary, or a sideshow to turn public attention away from the issues at hand: poor government management in the face of existential threats?

When one steps back, one wonders why a man, or woman, decides to assume the mantle of leadership: and how they get to power? If all men are equal, why do people follow one person over another? Why does Clinton win favor, and Nixon get threatened with jail? Why did Nixon get to power? Did J. Edgar Hoover stay in his throne because of his files on powerful people, because he was smart and did a good job, or because he had Charisma?

Mao, Stalin, Hitler, Hussein, Achmanejad, Idi Amin, cannibalistic African tribal leaders, all have one thing in common: they gain public support, then surround themselves with bodyguards to protect themselves. Hitler brought amphitheaters to their feet with cheers. But he was a homicidal maniac. How can we judge leadership? Who even wants to be a leader? What are the motivations? Ego? Power? Wealth? Status? Prestige?

Franklin Delano Roosevelt reportedly said that as a member of the educated privileged classes it was his duty to serve the common good. Wonderful thought. Was it true? Let’s assume it was. But today, whom do we have with those ideals? Moses was a modest man, shy, who used his brother as his spokesman. He was a reluctant leader, chosen by God himself, so the story goes. But today, who stands up to be chosen? Those who want to do good, or those who want something good for themselves, or their buddies, or both?

Olmert isn’t a homicidal maniac. Neither is he popular. Maybe the two go together? In some ways he is doing a good job. In other ways he is at the helm until someone else steps up to the bridge. Should another storm blow in, he may wind up aground on a sharp coral reef. Or the storm may just pass over, like the last one.

But sooner or later someone is going to have to take the helm because the weather forecast is for more storms, some even converging. In that case, we just may need divine intervention to make it to calm waters.

Let’s just hope that a popular, charismatic leader doesn’t show up, one that turns out to be so enamored with power that no one notices until its too late they’re as crazy as a loon. Given those alternatives, maybe a milktoast manager with a weak smile is a better choice. Probably why no one is in a hurry to dump Olmert.

Wednesday, March 14, 2007

Intel Is Swell, or not?

According to the Hatzofeh newspaper, which caters to Israel’s religious community, Yuval Diskin's , the head of Israel’s Security Agency, recently testified in the Knesset testimony regarding the strengthening of Hamas in the Gaza Strip. Diskin warned that, "If the IDF does not take the initiative and deal with it soon, in a broad ground action to 'clean' the Gaza Strip of its great arsenal of war materiel, it will find it difficult to carry out the mission when compelled to at Hamas's initiative."

A report in the daily Haaretz newspaper reported that Diskin claims that perhaps as many as two hundred Hamas military men are currently being trained in Iran. But the one that could give the Intel crowd pause deals with the new Hamas missiles reportedly capable of flying out of Gaza and landing in Kyriat Gat, home of Intel’s mutli-Billion dollar Fab plant.

Intel has had a Fab (Fabrication Plant) in Israel for over twenty years. The plant in Kryiat Gat opened about a decade ago and augmented Fab 8, located in Jerusalem.. A recent government decision to grant more tax credits to Intel resulted in the massive chip maker’s expansion of the Kyriat Gat plant, but at the expense of the old Jerusalem Fab, which is to be closed down soon.

Intel has used the Israeli plants to great effect. Not only are wafers of chips manufactured in Israel, but Intel’s Israeli R&D center has succeeded in producing some of the most significant advances in chip design for the American mother company. The Pentium 4 was designed at the Haifa R&D center, as well as work on the duo chip.

Intel might now be worried about their productivity and investment in Israel, though.
Should Hamas send a missile at Kyriat Gat, it will upset the beleaguered chip manufacturers processing ability. Hamas, in one blow, could damage both Israeli and American interests.

Skittish foreign investors have shied away from Israel. One client of an Israeli hi-tech firm based near Tel Aviv refused to come to Israel to visit the corporate headquarters and manufacturing facility of an Israeli company, worried about a missile attack. And this was six-years ago. Then the company commissioned us to prepare a filmed tour of the plant to be sent to the customer. Today even that wouldn’t assuage the customer’s reticence at placing a hefty order with the Israeli company.

Israel’s economy has been robust over the last few years, and even grew during the recent War in Lebanon II. However, those missiles struck the north of the country, mostly farm land and sparsely occupied towns and cities. A missile that hits Kryiat Gat would send Intel scurrying for cover, and many other investors snuggling up beside them.

The issue isn’t only people like Warren Buffet buying Iscar for $4 Billion, the issue is people placing orders with Israeli manufacturers fearing that the orders will never be filled due to security concerns.
Perhaps Intel might be best served by doing it’s own R&D, looking into some hi-tech way to protect it’s plant from missiles. Perhaps designing and implanting their own security, since Israel has yet to come up with a system that defends against missiles.

One smack of a missile in Kyriat Gat may be the sound heard round the world.

The generals are still at it as well, casting around for blame, some well-meaning others with an agenda. Gen. (Res.) Amnon Lipkin Shakat, formally Israel’s Chief of Staff, blamed the IDF for the foibles of the last war in Lebanon.

The Winograd Commission investigating the war, said its initial findings would be made public in April. Reportedly the commission blames PM Olmert, Defense Minister Peretz, and ex-Chief of Staff Halutz for much of the problems.

PM Olmert has already said that he had a plan in place prior to the outbreak of the war. Sources inside the IDF dispute this, saying there was no plan nor were any discussion held with the PM or Minister of Defense.

Both Peretz and Olmert are getting slammed in the polls. Neither man has a double digit rating, with Peretz near the bottom of his Labor Party list for possible leaders.
Inertia seems to have set in, though. No one is rushing to call for new elections. Many of the Knesset members are comfortable with the coalition the way it is. Transportation Minister Shaul Mofaz recently appointed a Kadima crony to a high ranking job, and was taken to task in the press. It is unlikely the appointment won’t go through.

A few people in the streets are also complacent about the Prime Minister and the government. The economy is good, one hears, why shake things up. The problems raised by the last war will be solved. Israel will survive. Wait until the elections.

This may well be the case. But the media is still full of reports of impending disaster, of missile build-ups in Lebanon, Hamas terrorists training in Iran, Syrian weapons shipped to Hezbollah. Nor has anything positive been said about the preparations for a missile defense system to protect the Israelis against Hezbollah, Hamas, or Iranian rockets. Lastly, the bomb shelters are still in disarray.

When and if the government is tested again, one hopes there are solutions the government isn’t making public. One hopes.

Otherwise, it may be up to Intel’s Andy Grove, a Czech Holocaust Survivor himself, to come up with a missile defense program aimed at saving Intel’s investment in Israel, with the added benefit it may just also save Israel.

One hopes.