Subscribe to Print Edition | Tue., September 02, 2008 Elul 2, 5768 | | Israel Time: 02:36 (EST+7) web haaretz.com   Back to Homepage Haaretz Toolbar Diplomacy Defense Jewish World Opinion National Print Edition Car Rental Books Haaretz Magazine Business Real Estate Easy Start Travel Week's End Anglo File

The elderly, the capitalists and the hooligans By Guy Rolnik Tags: Budget, Finance Ministry America's industrial leaders found the culprits behind the crisis: the establishment 1 About the cuts to child allowances, it could be said that they focus on people who mainly refuse to work. About the cuts to unemployment benefits, it could be said that this furthers government policy of encouraging people to work. About the dozens of cutbacks to education and healthcare, one could say they're steps to force wasteful systems into becoming more efficient. But when it comes to the elderly, the finance ministry's arguments sound hollow and grating. Finance Minister Roni Bar-On managed to push his budget for 2009 through the cabinet, though its chances of passing through the Knesset are another question. But given the political chaos wracking the nation, passing a budget that preserves responsible deficit and expenditure targets delivers an important message to taxpayers, investors and the business sector. Advertisement Under pressure from the Pensioners party, the finance ministry also decided to increase allowances for the elderly by NIS 350 million, a move meant to correct long-term erosion that reduced their value to less than 16% of the average wage - about NIS 1,100 a month. However, the ministry did stick one nasty element back into the budget - cutting welfare stipends for about 16,000 elderly people according to a new means test. A retired couple that receives an old-age allowance of NIS 1,850 a month and a pension that brings their monthly income to NIS 7,500 won't be entitled to a full welfare stipend. I asked ministry officials last week what the idea was behind cutting welfare stipends. The ministry spokesman said, "The economic concept is to focus stipends by level of need. Means tests are meant to ensure that old people with low income will get higher allowances than old people with high income." The spokesman added that the ministry had suggested alternatives to the National Insurance Institute, including to cut NIS 100 million from transfers to the institute. But the NII had refused the alternatives and chose this instead. Old people with high income? A pension of NIS 7,500 a month is high income? The millionaire retirees from the army have dozens of lobbyists in government and Knesset - former generals; the giant monopolies have thousands of lobbyists at party centers who pull the strings of ministers and Knesset members; the tycoons have hordes of lobbyists who move parliamentarians like pawns on a chessboard. The 16,000 pensioners who can barely scrape by on the money, the ones the finance ministry is defining as having "high income," had no lobby last week, and if they did, it was a feeble one. In Israel of 2009, only the rich, the powerful and the violent have lobbies. During the economic crisis of 2002 and 2003, the state was forced to cruelly cut back old-age allowances because the state was going bankrupt. In 2008, it didn't face financial bankruptcy. The idea of cutting welfare stipends attests mainly to the bankruptcy of the ministers who approved it. There is absolutely no need to cut the welfare stipends. On the contrary, they should be significantly increased and there are huge resources to draw on for that purpose, without breaking the budget. The broader public sector has dozens of vast pork barrels - institutions, organizations, monopolies and committees with sky-high salaries, bloated pension terms and mainly, tens of thousands of unnecessary workers and functions. The finance ministry knows these pork barrels well. Welfare stipends should have been last on its list of cutbacks. Earlier this month, a local Detroit paper revealed a secret meeting between the bosses of Big Car - Ford, General Motors and Chrysler. They didn't meet to discuss competition with Japan, relations with the unions or new standards imposed by American regulators. No - they had a far simpler solution for improving their bottom lines. A check, a fat one, something like $40 billion, which they think the U.S. government should give them. Why does this brazen gang of carmakers think the taxpayer should inject $40 billion into their companies, through long-term subsidized loans that might never be returned? For good reason. If everyone else is getting some, why not them? In the last year, Washington has injected vast amounts of money into a long line of companies that stumbled into trouble: the investments firm Bear Stearns is getting up to $29 billion, mortgage financing institutions will receive up to $300 million and private mortgage banks may be getting as much as $100 billion. The Federal government is being forced to rescue the financial giants because of fear that their collapse would trigger a chain reaction destabilizing the entire financial establishment. But why on earth would anybody pay to keep Big Car driving? Big Car has an excellent explanation: Their troubles are all the government's fault, the weak dollar sent oil prices soaring, which killed the market of their most profitable products - the gas guzzlers. Are all car manufacturers in America in trouble? Not at all. A whole lot of them are doing beautifully. They are the foreign ones that set up shop in the U.S. such as Toyota, and they're making money hand over fist. Moreover, much of the losses at Big Car are due to liabilities, which date from profligate benefits for their workers promised when times were good, and also from expanding into tangential businesses that didn't do well. But once the Fed starts throwing money around, pouring tens of billions into the financial markets, it becomes legitimate for every sector to demand a piece. And what about the gigantic bonuses, the stock options and shares that top executives at the car manufacturers are now asking for as handouts, like during the good years? Ahh, that isn't relevant now. When share prices are rising, it's because they're talented, and when share prices are collapsing, it's the taxpayers' problem. The next president of the U.S., be it McCain or Obama, will have to make some hard decisions about a lot of sectors in America. The most important decision will be whether there are two kinds of capitalism - one for good times and one for bad. We found some comfort in an unexpected place last week. The European press has been reporting on a niggling problem: Business and service providers in Greece and other vacation spots on the continent have been complaining about bad behavior by the denizens of a certain country. The tourists from that country are loud, belligerent and pose a nuisance to the locals. The good news - they aren't Israelis. The bothersome tourists are British, fueled by alcohol, and the U.K. Foreign Office has been advising Britons to curb their inappropriate behavior. So the next time somebody clucks their tongue at you when you're abroad and says, "Only Israelis behave like that," you can smile and shrug that it's apparently a relic left from the days of the British Mandate. Bookmark to del.icio.us   Weathering the storm Israel and the U.S. prepare to tackle Hurricanes Mahmoud and Gustav. Taking the high ground Actress Helen Mirren stopped using cocaine to prevent Nazis from profiting.

Read & React CIA papers show Arafat ordered murder of U.S. diplomats in Sudan Responses: 115 Ex-Ambassador to U.S.: Israeli Arabs in Galilee are secessionist threat Responses: 119 Israel to U.S.: We're ready to consider leaving northern Ghajar Responses: 109 Akiva Eldar: Labor collapsed after party's leaders sold its soul for trappings of power Responses: 16 More Headlines 21:39 Officials: Israel foiled two Hezbollah kidnap attempts abroad 20:12 UN human rights chief tries to sway Israel, U.S. on anti-racism summit 01:23 Sources: Hamas' inflexibility, tensions with Egypt stall Shalit talks 22:58 Hamas popularity among Palestinians declining, poll finds 00:38 Nigeria gunmen release Israeli hostage after 6 days 17:35 Actress Helen Mirren: I gave up cocaine when I heard Nazi war criminal profited from it 02:26 Palin support of Buchanan is 'propaganda by Democrats,' says Fla. Republican 00:16 Israeli chemical company could reap profits from Hurricane Gustav 16:45 Bradley Burston / Hurricane Mahmoud 12:14 ANALYSIS / Olmert racing against clock for deal with Palestinians 16:32 High Court: Ex-MK Bishara will continue to receive his pension 23:28 IDF: Soldiers who fired at mentally ill man in Na'alin acted appropriately 17:50 Iran: We haven't bought Russian anti-aircraft missile batteries 16:22 Cars allowed into Rachel's Tomb area for first time in years Previous Editions Select Day 01 sep 31 aug 29 aug 28 aug 27 aug 26 aug 25 aug 24 aug 22 aug 21 aug 20 aug 19 aug

Special Offers Advertisement Fattal Hotel Chain Perfectly located hotels on best resorts of Israel. JMG your online solution Jewish Singles Personal Ads Find the love of your life on JDate.com MBA in Israel in English APPLY NOW! Limited spaces available Israel's Premier Real Estate Website www. israel-property.com Hebrew Summer courses From $39.95 ISRAEL BONDS Build Israel Israel bonds - a multi-purpose way to celebrate Israel's 60th Eldan Rent a Car Israel's leading car rental company offers you a 20% discount on all online reservations Junkyard Junk a car - get free towing nationwide and a tax-deductible receipt

Home | TV | Print Edition | Diplomacy | Opinion | Arts & Leisure | Sports | Jewish World | Underground | Site rules |

Real Estate in Israel | Travel to Israel with Haaretz | Hotels Israel | Restaurants Israel | Tourist attractions Israel | Shops Israel

birthright Israel | Search engine marketing

Haaretz.com, the online edition of Haaretz Newspaper in Israel, offers real-time breaking news, opinions and analysis from Israel and the Middle East. Haaretz.com provides extensive and in-depth coverage of Israel, the Jewish World and the Middle East, including defense, diplomacy, the Arab-Israeli conflict, the peace process, Israeli politics, Jerusalem affairs, international relations, Iran, Iraq, Syria, Lebanon, the Palestinian Authority, the West Bank and the Gaza Strip, the Israeli business world and Jewish life in Israel and the Diaspora.

© Copyright  Haaretz. All rights reserved