The prime minister and finance minister don't want to oust Bank of Israel Governor David Klein because of the criticism he has leveled at the government, or the fact that he is unwilling to cut nominal interest rates. Ariel Sharon and Silvan Shalom's war goes far beyond that: They are fighting for public support, making sure that when the economy slides further, the unemployment level mounts even higher and the financial crisis arrives in full force - the finger is not pointed at them.
Sharon and his cronies have succeeded with similar tactics against the Labor Party. In their long and comprehensive media campaign, they have made Labor guilty of the terror attacks and of the war in the territories, dubbing the party "the Oslo criminals." Now Sharon is pulling the same stunt on the naive leader from Haifa. When the time is ripe, Mitzna will be accused of selling out his country and shunning responsibility, the obvious causes for all of the crises that we are yet to experience under Sharon's new government.
With a scapegoat in the foreign arena, Sharon is only missing an alibi for the economic sphere. Obviously, he and his finance minister play no part in the crisis. They have nothing to do with the security situation (which is entirely Arafat's fault) or with consecutive, unrealistic budget plans. Who is guilty? David Klein. If only he had slashed interest in time, Israel would have become Switzerland by now.
Sharon and Shalom will have no problem getting the government to approve Klein's dismissal. This is the same government that was willing - within half an hour, without any discussion and without even reading the bill beforehand - to endorse a law that would have ruled out any independence for the central bank. How long should it take them, then, to kick out a governor ... say, 35 minutes? Their only obstacle then will be the High Court of Justice.
In most countries, the governor of the central bank and the government do not see eye to eye. This is because the government is controlled by politicians who think short-term, while the governor has the long-term in mind. Since the governor does not need to run for reelection, he does not have to hand out political favors to anyone. The Western world lives with these differences of opinion and no governor has ever been fired there - which cannot be said of Third World countries. Since, over the past two years, Sharon and Shalom have managed to bring our standard of living closer to that in the Third World, it is no wonder that they are now trying to adopt its other standards as well.
Sharon and Shalom hate Klein because he tells them the truth as it is. His rebuke reflects the hard reality of our lives, and it is his duty to the public to state the facts openly. The same politicians who are now asking him to gloss things over will be the first to turn on him when the economy collapses: Why did he keep quiet? Why did he not herald the disaster?
According to Western standards, a governor of a central bank can be sent home for a blatant lie, a criminal offense or unethical conduct. But ousting a governor for telling the truth? This can happen only in a country where the government has no use for the truth.
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