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"The eastern front will reawaken, decked out in Shiite garb and more threatening than ever? I am not trying to frighten anybody with Red Riding Hood fairy tales. By anybody looking ten years ahead and not making these calculations is making a mistake? This whole story about the pensions of the career officers is an ugly spin. Is that a national problem, the pensioners? Even the ritual of lashing at the Defense Ministry procurement delegations is pathetic" (Rafael CEO Yedidia Yaari, TheMarker, June 14, 2006.)

Oh, really.

* Grandma, why do you have such a big actuarial obligo? Why have pension liabilities to defense establishment workers soared from NIS 20 billion to NIS 90 billion from the start of the 1990s?

Sweetie, that's so we can protect you better while you sleep at night. It's state security, honey, things you don't understand and shouldn't talk about.

* But Granny, why do we have to pay pensions costing millions of shekels to defense workers from the age of 42? Everybody else, hundreds of thousands of people, lives off national insurance and only a few rich people can get pensions like that.

Sweetie, that's so we can protect you better, from yourself as well, because sometimes you don't know what's best for you. You're still small.

* But Grandma, why is your budget so big? The 2006 defense budget is identical to that of 2002, when the intifada was raging and before Iraq imploded.

That's what the budget should be, my pretty. Little sweet things like you can't understand the strategic threats hanging over your heads. There is no connection between what you, the civilians, perceive as a security threat, and what we in the defense establishment see. We see ten years ahead.

* But Granny, why are the salaries of the non-military workers, civilians who work for the army, tens of percent higher than their peers make in real life?

Sweetie, that's so they can do their jobs in peace, free of worry. People working for the security services aren't regular people like you, little Red Riding Hood: what's good for the ordinary economist, a psychologist, a social worker, an engineer or driver or secretary is not right for defense establishment people.

* Granny, that Rafael manager said that dogging after the bloated, redundant procurement delegations is 'pathetic'. What does 'pathetic' mean, Grandma?

Pathetic is a little man, usually from the private sector, either self-employed or an employee, who pays for the massive waste of the public sector and army from his taxes. When he retires and looks at his pay slip, he'll understand what pathetic is.

* Granny, why is your profit so low? I read in the interview with the CEO of Rafael that it's a flourishing company netting $20 million a year, but that's only 2.2 percent of turnover.

Sweetness, that is actually a lot! There were years in which Rafael lost hundreds of millions of shekels. So that 2.2 percent is a rare achievement for us. Anyway, you can't measure us in regular terms applicable to civilian companies, because we are protecting Jewish lives.

* But Grandma, when you say you netted $20 million, does that include the more than NIS 7 billion infusion from taxpayers to cover the pension and retirement plans for the Rafael workers?

No, it doesn't include that, honeybunch. Rafael is a defense company so manpower costs aren't counted in the results that our PR people send to the press. It's like the pro forma reports of companies on Wall Street: what isn't convenient doesn't get in.

* But Granny, that massive infusion was part of a one-time reform turning Rafael from a government authority into a company. Today, Granny, the government doesn't have over sums like that. We have a responsible economic policy, don't we? Everything goes to socially correct purposes.

Yes, honey, in the last year the treasury infused about a billion and something shekels into the military industries to finance their losses. But that's peanuts that papers don't report about, because Shas is not involved.

* Granny, why do you heap so much praise on the Defense Ministry? Is it because you live on its teat, sucking most of your revenues from it?

No, little one. Granny always knows what's best for you. Granny just wants what's good for you.

* Granny, that Rafael CEO said there's no need to cut back the defense establishment, and that the money for the sick and the poor should come from the "black economy", the ones who don't pay taxes. Say Grandma, why would anybody want to pay taxes in this country, anyway?

Because they know, sweetheart, that their taxes are allocated efficiently, honestly, fairly and for their own greater good, by systems that are measured only in terms of productivity, quality and efficiency, and which never squander their time on battling to preserve their power, their wage terms and their pensions.

* Granny, I want the hunter to come now.