Subscribe to Print Edition | Fri., October 10, 2008 Tishrei 11, 5769 | | Israel Time: 01:41 (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 October failure By Ari Shavit Tags: Yom Kippur war, Israel news Yom Kippur 2008 is a Day of Atonement for the economy. And yet, the image that came up in the meeting of economic experts with Tzipi Livni and Ehud Barak this week harked back to Yom Kippur 1973. That is the situation, more or less, one of the experts said. The Egyptian army has come as far as Be'er Sheva, the Syrian army is on the shores of the Kinneret, and the government has not yet decided whether to open the emergency storage facilities and call up the reserves. The government is paralyzed in the face of this unprecedented challenge. The result of the new economic-social failure, for which Ehud Olmert, Roni Bar-On and Stanley Fischer are responsible, might be no less dramatic than the results of the political-security failure that brought about the Yom Kippur War 35 years ago. We should listen to the expert-prophet of doom. Three years ago he precisely predicted the crisis on Wall Street. Two years ago he predicted correctly that an economic tsunami was on its way to Israel. He is not the only one. In quite a few Tel Aviv high-rise office buildings sit fairly conservative professionals who are seeing the worst. Senior economists who do not tend to have extreme opinions are anxiously watching what is happening and not happening. Without discussing things among themselves, experts are analyzing the global financial crisis and the Israeli economic breakdown in similar terminology and sometimes using the exact same words. Everyone agrees there is not a day to waste. It is one minute to midnight. The virus is one of a lack of responsibility, of zealous and foolish faith in the market's mysterious hand. This faith, which became religious dogma after the Berlin Wall fell, led to the process of the market's destruction, a process that strengthened over about 20 years. The cheap money of recent years turned the market's destruction into a cancer. Wall Street's conservative values eroded. Stable, cautious and traditional banking was replaced by an adventurer system of hedonistic and greedy financial institutions. The greed became a component in a game for the sake of the game. Advertisement Capital of mythic proportions, which was disconnected from real industrial capital and real economic values, was busy cloning and upgrading itself without restraint. Without the threat of socialism to rein them in and lacking the moderating presence of the state and regulation, global capitalism went into a tailspin. It lost its ability to right itself and became a bizarre and corrupt bubble that had to burst. The experts in Tel Aviv are not Shelly Yachimovich and Dov Khenin. They are central, veteran market players who have seen for years how the market has been losing its balance; how the market that believes only in itself is swallowing up the country, dismantling society and eroding the middle class; how the time to sober up has arrived, the time for penance, they say. What has been will no longer be. The major recession descending on America, Europe and Russia will continue for years and spawn a new world order that will no longer heed the market's powers as if they were a god and idols. The problem is Israel. The virus of irresponsibility has struck it three times. Once in the 1990s, when it adopted blind faith in the market, which led to widespread privatization, the concentration of huge amounts of capital in the hands of a few tycoons and the creation of dangerous social gaps. The second time was when Israel recklessly reformed its capital market. That led to the unfettered issuing of corporate bonds, most of which were financed by speculative activities abroad. They are casting a cold shadow on the local financial system to the tune of about NIS 100 million. Israel's third mistake came during the past year, when it kept interest rates high, the shekel strong, and pursued a dogmatic policy of non-government interference. This led to the quiet withering of industry and production. These three strategic mistakes stemmed from worshipping the market, ignoring society and disgust with the state. All three stemmed from the illusion that the private sector and business can replace the political and public realm in everything and everywhere. All three show that Israeli capitalism in recent decades has suffered from a lack of good judgment and responsibility. There will be no choice. Just as the Bank of Israel intervened yesterday, so the government will intervene. With criminal tardiness, the state's powers will be called up and thrown into the fray. Israel will bleed economically, but will overcome. And when we return from battling the immediate crisis there will be no choice but to do battle with the crisis in values. After we overcome the market failure we will have to heal the cultural failure of worshipping the market. Until next Yom Kippur, Israel will have to do soul-searching that is not economic alone. The state will have to redefine itself as a social-democratic society that balances market forces with the basic values of partnership, fairness and responsibility. Bookmark to del.icio.us   A man of peace Vatican defends wartime pope Pius XII against charge he turned blind eye to Holocaust. Feminine features An Iranian motor company unveils plans to design cars specifically tailored to women.   1.   It is clear 16:22  |  Danite 08/10/08   2.   #1 you`re just a marxist who like elections 16:51  |  Leon 08/10/08   3.   That is what Israel had 17:08  |  Mark Lincoln 08/10/08   4.   Leon 18:48  |  Mark Lincoln 08/10/08   5.   Leon 20:18  |  Danite 08/10/08   6.   Mark LIncoln 20:21  |  Danite 08/10/08   7.   Is the Sky Falling? 23:11  |  FOX 08/10/08   8.   Danite 23:45  |  Mark Lincoln 08/10/08   9.   Is the Sky Falling? - Fox 04:28  |  Mark Lincoln 09/10/08   10.   Fox - no one knows what is in the sky - that is why it`s falling 04:32  |  Mark Lincoln 09/10/08   11.   Fox - it is not the great unwashed that is panicking 04:38  |  Mark Lincoln 09/10/08   12.   Communism and Capitalism 04:41  |  Mark Lincoln 09/10/08   13.   Attonement 05:03  |  Mark Lincoln 09/10/08   14.   #Fox. Israel may be Capitalistic... 06:50  |  Maureen Ann 09/10/08   15.   Bank Failures 08:13  |  American 09/10/08   16.   this mess is the creation of modern Governments 09:25  |  Pheonix 09/10/08

Read & React Bradley Burston: For the journalist, on Yom Kippur Responses: 123 Edgar Bronfman: Judaism must recognize mixed marriages for Israel's sake Responses: 136 Arab lawyer detained after refusing to remove pants during airport check Responses: 185 Nadav Shragai: Settlers have become punching bag of the media and the left Responses: 65 Acre sees worst violence in years as Jews and Arabs resume clashes Responses: 171 More Headlines 00:10 Acre sees worst violence in years as Jews and Arabs resume clashes 22:25 Israeli Arab lawmaker: Acre violence is Jewish pogrom against Arabs 00:02 Russia hints it won't sell advanced missiles to Iran 18:03 Fatah says Hamas stalling on Palestinian unity plan 01:14 Israel on standby as global financial rescue takes shape 22:51 Syria releases two U.S. journalists who entered state illegally 23:46 New Nazi parody aims to smash German Third Reich comedy taboo 22:36 N.Y. rabbi: Animal rights backers threatened me over Yom Kippur chicken slaughter ritual 14:22 Germany launches nationwide crackdown on neo-Nazi youth group 23:57 Lebanese union to sue Israel for 'claiming ownership' of falafel 18:30 Nasrallah: We have not abandoned plan to avenge Mughniyeh 20:15 Vatican defends wartime pope against charge he turned blind eye to Holocaust 16:06 Delegation of Israeli doctors to Gaza denied entry 17:01 Left-wing terrorist turned neo-Nazi tried for Holocaust denial Previous Editions Select Day 09 oct 08 oct 07 oct 06 oct 05 oct 03 oct 02 oct 01 oct 30 sep 29 sep 28 sep 26 sep

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