There is no more dangerous mix than the unifying of forces between Raanan Dinur, director general of the Trade & Industry Ministry, and Ilan Cohen, director general of the Prime Minister's Bureau. When these two get together on one proposal, then all believers in the free market should hunker down and pray.
Cohen submitted a proposal last Wednesday to the ministerial committee on disengagement matters, which had earlier been worked on by Dinur. The idea was quite wacky, and it bore Ehud Olmert's signature. The decision states that all state-owned companies will be obligated "to take on workers from those evacuated from Gush Katif or the Northern West Bank settlements in a number no less than 1 percent of the existing work force." And for any company that dares not to take on such workers, "it will pay the treasury for each worker not taken on a sum of NIS 500,000."
I wrote last week about this insanity, a fit of madness that would make Cuba and North Korea proud, a decision that sends the economy back a generation. It is clearly anti-economics, Bolshevism par excellence. Governmental cynicism. The lowest form of electoral economics. A decision that sets aside every economic consideration and makes every government enterprise subordinate to a political employment bureau - and to hell with whether they need to become more efficient or compete in the market.
When Eyal Gabbai, director of the Government Companies Authority, and Kobi Haber, head of the Budgets department, saw the proposal, they were alarmed. Gabbai slammed it at the meeting, and Ariel Sharon publicly chastised him, saying "We'll pass the decision in any case."
Haber meanwhile began working on Dinur, and after a long slog, managed to persuade the government to take a softer approach, such that the government companies should give preference to the evacuees only when they are seeking new staffers, and only then if the individual has the right qualifications.
This is still a bad idea, but a lot better than the original. But don't imagine that Dinur and Cohen have given up. They are this very minute concocting another Bolshevik idea.
In another month, on January 1, new rules forbidding going over a predetermined overdraft level will come into force. The thinking behind the rules, from Banking Supervisor Yoav Lehman, is correct. The excess of overdrafts ought to be curbed because it is costly and arbitrary. A customer does not know when a check will bounce or not, the banks play on this uncertainty and charge the earth for the overdraft over the limit. The risk for banks also rises, as they lose control over the extent of credit.
But now it seems that bringing in the changes has gone wrong. The banks have yet to set the limit for each account holder, who have yet to sign the relevant forms, and thus many companies have refused to take checks signed for January or February, fearing that they will bounce.
There is also the snowball effect, because once a business' check bounces, then the whole world knows and no one will give that firm credit, it could fall into financial straits and end up kaput. And if we add on the fact that interest rates are going up by 0.5 percentage points today, then January and February are looking pretty bad. A liquidity problem could cause a slowdown in economic activity, closure of factories and difficulties for thousands of households.
This is the last thing Sharon wants. He wants to make things easier prior to the elections, not to make things harder. So the banks and the PM's office are putting the pressure on Lehman to put off introducing the new rules.
Leumi and Hapoalim want more, a delay of half a year, which would give them more time to charge the exorbitant overdraft rates, and also to think up new charges such as "form preparation fees."
Lehman has two options: to put off the new rules or allow a longer adjustment period. For his own sake, he should go for the latter.
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