Wednesday 13 February 2013

Make a new plan, Stan, and get yourself free

Spanish banks are laying off workers, and getting EU bailouts. The Anglo Irish Bank is being liquidated. Some British banks have been part-nationalized to stave off collapse, and Italy and Greece are struggling to keep their economies afloat.
But Israel – beleaguered, embattled and with few natural resources – has managed to keep its economy not only buoyant but racing away at an enviable speed during these troubled times.
How on earth did we manage it?

Well, there are many that point the praise at the governor of our central bank, the inimitable Professor Stanley Fischer. Yes, Stan The Man, captain of the good ship Bankofisrael, author of the acclaimed Essays on Contingent Assets and Felafel, Go Easy on the Schug, and founder of the Eazy Muney, no-commission, currency exchange kiosk on the corner of Ben Yehuda and David Klein streets, has been widely lauded as the one individual who kept his head when all about him were losing theirs, and steered the Israeli economy through the storm. Not only that, but his policies may very well have beneficial effects on our economy for years to come.

Some of you may have heard of the subprime crisis: the crisis that erupted after mortgages were sold at stunningly low prices to the poor and huddled masses of America. These loans were then bundled together into unrecognizable pretty packages with colourful ribbons and funky acronyms, and sold on and on again to everyone in the financial markets. Trouble came when interest rates rose, and the pitiful householders failed to meet payments and defaulted on their mortgages. The collapse of this market knocked out many major players - banks and investment houses - throughout the financial world. Except for Israel’s wonderful banks, which remained robust. Is this because our banks are all-seeing, all-knowing, all-wonderful? Allevai. No, rather because they’re so slow and hadn’t actually got round to unwrapping the pretty packages (and anyway all the acronyms were in English) so by the time our illustrious banks considered buying the subprime loans, it was too late. (Thank goodness).

Anyway, Stan The Man has, among his many policies, introduced such restrictions on the mortgage market in Israel that would make it impossible for any subprime loan sector to even raise its ugly head here. You need a far larger deposit on a home in Israel before you can approach a bank to give you a mortgage, for example. As if buying a home in Israel wasn’t hard enough for newcomers to the property ladder. Housing in Israel is disproportionately expensive (in terms of how many months’ salary one has to earn to buy an average property) not because of mortgage restrictions, but because the state, through the Israel Lands Administration, still owns most land in Israel and is very reluctant to let any of it go.

By the way, if you follow my blog, I wrote a while ago about the popular politician and former cabinet minister, Moshe Kahlon, and suggested that this is a man to watch. And lo and behold, no sooner had Prime Minister Benjamin Netanyahu finished reading my blog and chosen what his wife should wear for that day, than he went and announced that he was appointing Kahlon head of the Israel Lands Administration in order to shake up the whole system. However, the appointment is still pending: As is usual in Israel, Kahlon first has to fill out the forms in triplicate and then bring his end-of-year First Grade certificate, signed by both his parents, and stamped by an authorized notary that knew his First Grade teacher personally for no less than 12 years. So, it’s not yet a done deal.

Well one of us will have to go. Photo credit: Amos Ben Gershom / GPO

Stan, in the meantime, announced he’s had enough, that after seven years at the Bank of Israel he’s now saved up enough to buy his own parking space in central Tel Aviv, and has decided to retire. Rumours are rife as to his next move. Some say he’s applied to be the next pope, a position that was opened up recently, and indeed there are reports that white smoke signals have been wafting from his office on the 7th floor. Some say he’ll be off to the sun-soaked state of Florida to write his memoirs “Brother, Can You Spare a Shekel?” to be ghost written by five dead former prime ministers of Israel. Others believe that now that Dame Edna Everage has retired, Stan will be launching his own chat show on cable TV.

Back at the ranch, names are being mooted to replace him. In his professional manner, he did say that his deputy Karnit Flug was certainly capable: “I would not have proposed appointing a Deputy Governor whom I did not believe would be able to function as Governor when necessary.” Flug in the past headed the Bank’s Research Department, and was a member of the government-appointed committee that looked into waste and inefficiency in the army. You are welcome to read the findings of that committee, but – BEWARE! SPOILER AHEAD – basically, they concluded that “the army is full of waste. So let’s help them become more efficient, and give them an extra NIS10 billion a year”. A conclusion worthy of Chelm, without a doubt.

Let’s hope that a suitable candidate pops up before Stan jogs off into the sunset in June. For all our sakes.

Wednesday 30 January 2013

We are all winners in a democracy, except for some of you

Helen Suzman died four years ago this month. She was an indomitable anti-apartheid activist and politician in South Africa, during its darkest times. She came to represent what the African National Congress party called “a thorn in the flesh of apartheid” or, as the South African Prime Minister P.W.Botha preferred, “a vicious little cat.”
She stood against the appalling segregationist laws at a time when the white electorate continued to vote for the party of racism. Helen Suzman established her own liberal party, and remained that lonely small voice in the vile field of South African politics for many years. She continued to run for politics, and lead a party, when she had no hope of “winning”, no ounce of a chance of forming a government.
The epithet she deserved, truly, was tenacious.
Tenacity (from the Greek λληνες meaning “OMG I think I’m stuck”): the art of hanging on, of pursuing a cause, even if all around you are losing theirs. 

Which brings us neatly on to what happened here in Israel last Tuesday, a glorious summers day, when thousands of citizens fanned their barbecues, and headed to the ballot boxes, via the beaches and the parks.
Israel was voting for the 19th Knesset, and we had a plethora of political parties to choose from. So let’s have a quick indulge in a little psephology. And why not? We deserve it.

For those who can’t quite remember exactly what the word means, psephology is the study and analysis of elections. It comes from the Greek ψῆφος for pebble, as the Greeks used to cast their votes with pebbles.
First you need to understand Israel’s simplistic, and flawed, electoral system. The system considers the country as one single consistency, and votes are cast for party lists; each party submitting an ordered list of candidates prior to the vote. When all the votes have been counted up, the 120 seats in Knesset are divided based on a simple proportional division. If the Pyjama Party, for example, gets 10% of the vote, they’ll get 10% of the seats (that is 12).

The Israeli ballot box this week was brought to you by the letter B. Photo: Haaretz

Of course with any system, involving maths, figures, equations and remainders, it doesn’t divide exactly.
Habayit Hayehudi, led by beamish Naftali Bennet, won 12 seats with 345,935 votes, while just 14,135 votes behind came Shas, led by three men in black suits and beards, which won 11 seats.
While further down the results table, we find Hatnua, the vehicle for Tzipi Livni, winning 6 seats with 189,168 votes, while 16,786 votes behind came Meretz, the liberal party, which funnily enough also got 6 seats.
In other words, Bennet’s extra 14,000 votes won him an extra seat in parliament, but Tzipi Livni’s extra 16,000 votes didn’t.

And what about voting for a party that didn’t manage to pass the arbitrary 2% threshold? We’re talking about parties that add colour and spice to politics: Ale Yarok (the Green Leaf party) which believes it would all be so much better if we could just chill out, got no seats, despite its 45,000 votes (more than 3 times that vote-gap between Bennet and Shas!); Am Shalem, promoting less religious-secular divide by treating everyone equally, led by a man with a long beard; Otzma LeYisrael, one of whose campaign ads was disqualified for being racist, but who garnered over 60,000 votes; or Dor, formerly the Pensioners Party, which stunned one and all in 2006 when it won 7 seats in Knesset.
In total, 263,044 people cast votes for parties that failed to win a seat. That’s a lot of disenfranchised (from the Latin disenfranchisiatorum, meaning “Hey, why wasn’t I invited?”) citizens out there.

Sure, in other democracies, there are millions of voters whose choice of candidate doesn’t get in, but at least they still have their own, constituency-based, representative. Here in Israel, you have no one.

And then there’s the ephemeral nature of it all. Politicians jump ship, swap parties, set up new movements, all in the name of the game and the prospect of a finger in the public pie. Likud still seems to be running the show, granted (albeit its showing slumped at the ballot box, despite swallowing up the Israel Beytenu party) while other parties seem to come and go like the seasons. Kadima, a veteran party of, ooh, at least six years, was the largest party in the 2006 elections, winning 29 seats. Last week, it plummeted (plummet, from the Greek πίκουρος, meaning “Hallo! Can anybody hear me up there?”) to only 2. Ehud Barak’s Independent Party, established in 2011 for reasons I can’t go into here without spoiling your lunch, didn’t even bother contesting in 2013. While the second largest party (Yesh Atid) and the seventh (Hatnua) were established just now, when you popped out to put the kettle on.

Which explains why 53 of the 120 members of Knesset 2013 are brand new politicians. Now don’t worry about the old ones. They get very generous payments to help them adjust to the cruel world outside of politics. The minimum “adjustment” grant is NIS111,843, or one year’s average wage in Israel. In addition, they receive an annual payment for life to cover phone calls, newspapers, etc., all at the taxpayer’s expense.

Sorry, I’m wrong, our politicians are indeed tenacious: Tenacity, from the Hebrew מגיע לי meaning “I’m not giving up my perks, pull the other one.”