Finance Minister: Israel's economy being controlled by 30 families is a problem
In Israel, Yuval Steinitz says, there are people whose salaries are so unjustified they are essentially robbing their companies' shareholders.
By Moti Bassok"The fact that the Israeli economy is controlled by 30 families does not constitute corruption. But it does cause economic problems and damages competition," Finance Minister Yuval Steinitz said this weekend during an interview with the Channel 2 television program "Friday Studio."
 |
Finance Minister Yuval Steinitz at the ministry in Jerusalem in April, 2010. |
| Photo by: Tomer Appelbaum |
"We must find ways to reduce centralization without harming the economy," Steinitz said. He noted that he objects to the high salaries among Israeli executives, but also any attempts to rein in oversized wages through legislation.
"Throughout the world, including the United States and Europe, there is great opposition to unduly high salaries, but throughout the world there is also opposition to passing laws against this practice," Steinitz said. "Even President Barack Obama backed down from plans to impose legislation in the United States against high pay for executives."
In Israel, the finance minister continued, there are people whose salaries are so scandalous and unjustified they are essentially robbing their companies' shareholders - "but in business the rule is 'don't be right, be smart.'" Steinitz did not provide any details of his, or his ministry's, plan to fight these exaggerated salaries or whether such a plan even exists.
Regarding the bill being introduced by MK Shelly Yachimovich (Labor) and MK Haim Katz (Likud) - which would reduce wage gaps by capping executive salaries at public companies at no more than 50 times the wages earned by the company's lowest-paid workers - Steinitz said that such populist laws are often proposed in the Knesset.
Why Facebook Connect?
Comment on Haaretz.com articles with your Facebook login, and share your thoughts on your own wall.
- Latest
- Most Viewed
- Most Rated
- Open all
When consumer goods are too expensive for poor people to buy there is a reduction in these goods demand. This throws even more people out of work. In other words the situation will steadily get worse until the prices begin to fall. So the job of the economics ministry should be one of bringing this about. They can do so by making the cost of production less. This cost depends on 3 factors, ground-rent, wages, and dividends on shares respectively which are the three returns for the use of land, labour and capital (Adam Smith 1767 in "The Wealth of the Nations"). So it must be the ground rent that should be reduced, since the other two are unlikely to change and if they do, it will slow the economy instead of encouraging it. Ground rent is high due to speculators in land values (even here in Israel) forcing up land prices and holding useful sites out of use. The answer is to tax land values instead of incomes. Israel Lands Authority please note. You are the people who are responsible for our derth in full employment! Free-up some more sites and charge anyone who does not make proper use of them!
Is there a list of these 30 families? Interesting that there is nothing in the entire article that points out individuals.
I wish I were one of those high-salary earners, but alas I am not...in any case, if talented executives have salary caps they may take up positions abroad instead...so it would be better if they stayed in Israel instead of causing a further brain-drain (like what is happening with talented Israeli academics). Far more worrying is the control of the economy by so few families. Further privatization will no doubt exacerbate this problem. State-owned corporations should be floated on the stock market and not sold off in backroom deals between cronies.
Cap, no. But inform, yes. Every stockholder has the right to know how much money management is getting paid. Require disclosure to all stockholders.
Israel constantly claims it shares values with the US. In this case, Israel is correct. Israel shares the American value of CEO ripping off shareholders and treating them as unsecured creditors. This is one American value Israel needs to dump.
the US being controlled by Dershowiz, Joan Peters, Summer and Aipac, is a bigger problem.
is being incapable of viewing any item without attributing a conspiracy to it
encourage them to give more to help charities.if they do not cooperate then put up theit taxes.