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.