Hard Look / Nobody's rescuing Shaya
It's impossible to understand why the new prime minister and his swollen cabinet are even engaging with the stupid recommendation by the "100 days team" to save the tycoons using our money. It's even harder to understand why Histadrut labor federation chairman Ofer Eini, supposedly the savior of savers, is promoting the cause of rescuing the tycoons.
Don't believe the gobbledygook being pushed by some of the media: Rescuing the tycoons will not reduce poverty, stimulate the economy or save jobs.
The companies that are in desperate financial straits because of their bond repayments employ almost no one. And even if one tycoon is forced to sell off a company or give up shares, nothing will happen to those workers.
So why is the entire economic establishment busy day and night with the bailout plans? Because those who are pushing it are well-connected, in tight with the ruling powers, or think the ancien regime, where a few billionaires controlled everything, should continue. And how do we know that the good of the economy is not really the true desire of Ram Caspi, Eliezer Fishman, Zohar Goshen and all the others pushing the bailouts?
Here is a test case: Shaya Boymelgreen, whose group is slowly collapsing around him as it does not have enough cash to pay back the over NIS 1 billion it owes banks and bondholders.
Boymelgreen, like other Israeli businessmen, bought real estate at the top of the market: Azorim, Lagna and others. Just like them he raised hundreds of millions in the market, and just like them he took out huge bank loans. His firm, Azorim, also has a well-known name, history and significant operations in Israel - and its survival is important to the economy.
But no one is doing anything to save Boymelgreen. No one cares about him because he is an ultra-Orthodox American Jew who only recently moved his operations to Israel. He has a foreign accent and little presence here, he has no friends at the banks or the Israel Securities Authority, he does not employ any former senior official in any of his firms and he is not connected to Netanyahu or Eini's courts.
Finally, it is a bit strange that firms that need rescuing and whose bonds trade at huge yields still pay their managers millions in salaries and bonuses. Before they talk of state aid, they should first return what they were so generously paid over the years, including in 2008, the year of the great crisis.
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