Sderot
Sderot Photo by Eyal Toueg
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Eyal Toueg
Migdal Oz Photo by Eyal Toueg
Haaretz
Click to enlarge: Map of Israeli communities Photo by Haaretz

We are not supposed to be here. And not only because we are trespassing. We are not supposed to be here because this place looks like the set of a post-apocalyptic film in which some plague has wiped humanity from the face of the earth. In front of us is the public swimming pool of Sderot, completely empty and abandoned in the middle of summer.

This is the second summer in a row in which Sderot's pool - which had been one of the city's prime recreation spots - has been closed to the public. Since 2008 it has been plagued by problems, with the local municipality unable to afford to operate and renovate the compound (which includes an Olympic-size pool, children's pool with a little slide, and another slide ). The cost of the needed renovation is assessed at over NIS 2 million, but the municipality is already facing a budgetary deficit of over NIS 50 million.

At present, then, Sderot's lone public swimming pool is little more than a construction site, enclosed by fences and locked gates, where no one works. Someone left some old furniture on the stage at the edge of the pool complex, where the town used to hold its Independence Day performances. The slides are deserted, weeds are growing wildly, and the city's children have no choice but to go to the swimming pools of nearby communities, where the entrance fee for Sderot residents is three times higher.

Last month, city hall announced that the money had been found for the renovation, and even to upgrade it to an "urban country club" - in part thanks to a contribution from the United Israel Appeal. "I'd wait and see," says a skeptical Yulia, who works at the music school next door to the pool.

In any event, Sderot - beset by unemployment and Qassam rockets from the neighboring Gaza Strip - is not the best place to look for signs of life. "The situation? The situation is crappy," says Dudu, manning his kiosk in the city's half-abandoned shopping center. Most of the shops around the kiosk are closed or empty. Bored employees stand outside the shops that remain open, smoking cigarettes and waiting for potential customers to show up. Dudu, who has three children, says he faces a daily battle for survival.

The municipality, he complains, added an annual NIS 3,000 fee for putting up signs to the burden of the city's business owners. "The sick person comes to the dead person and asks him for money," he laughs, and confides that he is planning a rebellion. "We'll pull down all of the signs in the city. Let's see how nice it will be for them then."

On the road

We embarked on our journey with a simple idea: a trek from the south to the north in a groaning but reliable Hyundai Getz, with a camera and a running tape recorder. The object was to meet as many people as possible along the way, to see as much of the country as possible, and to understand what our economic situation really is now, in the late summer of 2012. Behind every new headline about anticipated economic decrees or price increases, there are ordinary people. We set out in order to hear their voices.

The dry statistics are, by now, familiar to us all. Unemployment is at a three-year high. Last month, the cost of price-controlled bread went up by close to 7 percent. An Agriculture Ministry report predicts price rises of between 6 and 17 percent in the cost of dairy products, eggs and chicken. The cost of self-service gasoline jumped in early September to a record NIS 8.25 per liter. Similarly, electricity and water rates have also increased by tens of percentage points. The cost of housing refuses to decline.

On the other hand, the average wage remains almost the same. Along with the wave of price increases and unemployment, VAT increased by 1 percent, and income tax for those earning above-average salaries is scheduled to go up by 1 percent. Around the country, more than 15 people have already set fire to themselves due to economic troubles. Others are on hunger strikes. Bank of Israel governor Stanley Fischer is warning of an economic crisis. Greece and Spain seem closer than ever before.

But still, we figured, maybe the financial headlines are exaggerated. We set out primarily with the hope of finding something that would help dispel the sense of despair with which many of us are accustomed to consider the situation.

The results were mixed: It matters not if you are wealthy or poor, connected or unconnected to the centers of power in the economy, whether you live in the center or in a development town. If you are an Israeli, then you are concerned, and you do not know what next month might bring. At any given moment, the pendulum can change direction.

Sderot, which was established as a tent city for immigrants in the early '50s, has never enjoyed economic prosperity. "When the security situation is rough, everyone embraces you," says Dudu at the kiosk. "Everyone says, 'Here, take a loan,' or 'We'll give cheap loans to settlements on the confrontation line.' But now, when you really need them, they have vanished from sight. Now they don't give you air to breathe. But what can you do? Survive, survive, survive." The instant he says these words, his wife arrives, phone in hand, and states the dreaded words, "They called from the bank." And that is where our conversation ends.

Netivot: the plot thickens

At the grave of the Baba Sali in the Negev city of Netivot, it's business as usual. On a typical midweek afternoon, a young fellow wearing shorts and flip-flops is wrapping himself in a prayer shawl and fervently praying. Families with multiple children and sick seniors try to get closer to the rabbi's grave. In the past few years, the rabbi's disciples - most of them from abroad - have purchased for themselves the hundreds of plots that surround his grave in the city's old cemetery. There are two consequences to this heavy demand for burial plots: First, it led to a buyout contest between wealthy adherents of the Baba Sali, thereby raising the cost of burial significantly; second, there is now a shortage of burial plots in Netivot.

"It may be that more people are coming, now that I think about it," says Y., who supervises the large compound that includes the Baba Sali's grave. "During periods of distress - war, recession - people come more frequently to pray, to seek a blessing," he notes. Just before he himself asks for a donation, Y. comments, "When it comes to contributions, the spring never runs dry."

Netivot, founded as a tent city for immigrants 56 years ago, has in recent years made a name for itself as a southern oasis, thanks to internal migration from nearby cities and development towns. Yet surprisingly, the old commercial center here shows no more signs of life than its Sderot counterpart. The display windows of most of the shops are graced with a sticker that explains that they uphold the rules of modest dress and it is therefore permissible for the Torah-observant to shop in them. One of the local business owners explains that he had no choice. Without the modesty sticker, he says, he would be left without any customers.

Within the commercial center, in the Solomon Farjoun jewelry store, Eytan Farjoun is less than impressed by all the talk about Netivot's prosperity. "In general, the situation here is better, but that is due solely to the small businesses," Farjoun says. "There are no factories here in the city; in that sense, it is a complete failure. All of its success is due to the entrepreneurship of small business owners, who see to it that residents can earn a living and enable Netivot to enjoy a good economic situation. All of this happens in spite of the municipality, not because of it. The best thing you could say about it is that at least it didn't get in the way.

"Let's put it this way," adds Farjoun. "Netivot is currently kept alive by virtue of our receiving tax breaks [from the state] as a confrontation line settlement. If the benefits were canceled, it would be a terrible blow. These benefits are expressed in the form of thousands of shekels per family, and they encourage consumption. Without them, there would be nothing left here."

Outside the shop, the "parliament of the diamond polishers" gathers for its daily session: Eytan's father, Solomon, who established the jewelry store 17 years ago, and his friends David and Mordechai. The three men are former owners of diamond polishing factories, who were compelled to close their businesses when Netivot's diamond industry declined.

Solomon, one of the first residents of the city, owned a diamond-polishing factory that employed some 40 workers. "Fellows who complete their army service are leaving. There is a problem here, and it exists in the most difficult form possible. Not one of my four children lives in Netivot. All of them have left," says Mordechai sadly. "This whole story is going to explode. This city is living on borrowed time."

David, who owns the adjacent toy store and who, until now, has listened to the conversation without saying a word, suddenly informs his friends: "I'm closing the store. I'm going to have a liquidation sale. Enough, I can't go on any more. I did it for two years, I didn't succeed. Enough." Mordechai and Solomon look at David in shock as he gets up and starts arranging the toys in a store that will soon be closing.

Jerusalem: discount stores

According to the stereotype, the ultra-Orthodox are poor by choice and do not overly suffer the problems that trouble the rest of the population in Israel. But at the local supermarket in the prosperous Haredi-religious neighborhood of Har Nof in Jerusalem, the prices are far from cheap. "Look around you. Does it seem cheap here?" says Shmulik, 36, who studies in a kollel (a yeshiva for adult males, in which students receive a stipend ) and is the father of three. "In order to buy their food inexpensively, the people here go to the nearby branch of Osher Ad or to Rami Levi. Our saving grace is that the chains have understood the purchasing power of the Haredim. If the average large purchase of a secular family amounts to NIS 1,000, the average purchase of a Haredi family with nine or 10 children amounts to at least NIS 1,600, and the competition here is fierce. Osher Ad and Rami Levi are always competing among themselves with sales, and you go from one to the other in an attempt to find the best bargains."

At the huge branch of Osher Ad, Y. , 28, is standing and staring at the shelves filled with food, cleaning and plastic products at rock-bottom prices. He sashays through the shelves of bread, cruises through the large produce department, scans his lists and looks for a certain spice. Y. is tall with blue eyes, and walks past dozens of signs that bear the discount chain's slogan - "Without tricks, without shticks" - without seeming to understand what it's all about. "I'm not Israeli," he says. "I never made aliyah. Right now, it [becoming a citizen] doesn't seem like the financially sound decision. I would have to pay a lot more taxes, especially if one day I decided to go back to America."

In the meantime, Y. works off-the-books at an American company that assists immigrants from the U.S. with their property taxes. "I would be happy to do everything legit, but I can't afford to," he says. "I spend NIS 3,500 a month on food. Most people my age are working but still need help. Luckily, I earn a good living. And my wife, who runs a music school, earns even more than I do."

Migdal Oz: hanging on

"Welcome to the last kibbutz in the world, a bastion of socialism," says Avigdor, Spector, the secretary of Migdal Oz, a kibbutz in Gush Etzion. On his office door is a proud sticker: "Agriculture will win." Already seated inside are Amos Nir, the kibbutz's secretary, and Shimon Sorek, the man responsible for the kibbutz's economy. "Take, take an apple," says Amos, stretching out his hand and placing on the table a green fruit that looks more like an anorexic pear scored by black holes - worms.

"We are a kibbutz that operates according to the old model," declares Avigdor. "One of the last ones left. What that means is that the members' wages go entirely to the kibbutz. Each person has a personal budget for basic needs, and the rest goes to the kibbutz coffers."

Migdal Oz, founded in 1977 and now home to 435 residents, is one of the few kibbutzim that still proudly flies the flag of the old-time kibbutz movement (the one that has gone bankrupt almost everywhere else outside Gush Etzion ). Even in Gush Etzion, situated in the West Bank, south of Bethlehem, it is an aberration. Next door is Neve Daniel - the "bastion of capitalism," as Amos terms it - with its two-story and three-story homes, and its late-model cars. Conversely, Migdal Oz has a single clothing store, a seminary for religious girls, a modest community center ... and that's about it. "We are modest people," says Avigdor. "Farmers. Our kibbutz earns nearly all its livelihood from farming, which leads to a very large question mark with regard to the future. One of our primary income sectors is the dairy barn, and the dairy market is now in a state of terrible uncertainty. No one knows what tomorrow will bring."

Most of the kibbutz's income is dependent on agriculture, the dairy barn and the Maoz Industries factory owned by the kibbutz, which produces control panels for aircraft - meaning that if one day there is a three-pronged threat of famine, legislation that harms the dairy farmers and regional peace, the kibbutz could be left with nothing.

"Happy? Don't exaggerate. We are Jews here, after all. Currently, we are keeping our head above water, but not much more than that," says Avigdor. "We lack the resources for development, for absorption, for expansion. I don't know of a single farm today that is considering expanding its dairy operation, and things are not so simple in the military-industries market either. We are trying to find other sources of income, but mainly we want to maintain what we have and find something else related to what we are already doing."

A large portion of the kibbutz's income derives from the fact that about 40 percent of the members work outside - as doctors, architects, teachers or some other profession. "We try to raise their motivation, to see to it they bring in higher wages, that they not be mediocre in their places of work," Avigdor says. "We very much want to expand."

In an attempt to increase its income, Migdal Oz is launching a unique absorption program, in which 15 families will be accepted for a trial year. After that, they will decide if they wish to remain in the settlement. "Obviously, we could achieve greater individual well-being if we were to increase income. But we are not going to accept someone who is choosing the kibbutz because he is looking for an easy life," says Avigdor, who doesn't even live on Migdal Oz himself. Instead, he is now establishing his own cooperative kibbutz in the Beit She'an area. "You pay a high price for it, for this cooperative lifestyle. But what you get in exchange from the kibbutz is incomparably greater than what you put in. If you ask me, the answer to all of the social protests is large kibbutzim."

Faced with the bounty one finds in some of the surrounding villages and towns, they sometimes have a hard time explaining what socialism is and why it is important. "The surrounding communities are very successful, truly prosperous, and our children learn in schools together with their children," Avigdor says. "They spend time with them, and come home with ways of thinking that originate in other homes and with cries of enthusiasm about homes that are four stories high and fancy cars, etc. Here is where the informal education comes into the picture, in order to explain who we are, and why we are this way.

"One of the philosophers of religious Zionism used to say: 'Be a socialist in your home and a capitalist in your occupation,'" Avigdor smiles. "We are running businesses outside; it is sometimes hard to come back into the cooperative atmosphere. But although it is not very affluent, the kibbutz has already been saved in the past from a few difficult situations, and is very, very resilient."

"A year and a half ago we had a discussion, in what we call an 'open space,' in which we broached the subject of privatization," says Shimon. "The society on the kibbutz, as of now, wants to live as a cooperative. There isn't a single person around this table that does not want it to continue, but it may be that this could change in another two or three years. Let's hope there will be enough fruits."

Shifon: the phone never stops ringing

Shifon Bakery is a minute's drive from Migdal Oz. It is the largest - and, currently, only - bakery in Gush Etzion. Moshe is sitting, praying for the phone not to ring. The bakery, located near the industrial zone of Neve Daniel, is almost empty, except for a family of six that is sitting down to eat. For Moshe, the owner of the bakery, it is a rare moment of quiet. Until the phone rings, and his face falls. "Are you here in the Gush?" he asks, looking worried, before he continues, "I'm sorry, I really can't."

Afterward Moshe explains that the call was from Petah Tikva, from a family that was seeking a food donation. "I receive dozens of calls like that every day," he says. "We support about 20 families here on a daily basis, bringing them rolls and stuff. Sometimes I have to say no and it isn't nice to do so, but I have my limits, too.

"Not long ago, I was forced to raise prices," he adds. "Not on all of the products, but flour had gone up, eggs went up, all of the raw materials. I didn't have a choice. People are now thinking twice before they buy. I am lucky, because bread is a basic staple, so we are feeling the decline less here, but you still have to explain to a customer why the price of a certain item increased to NIS 15, why he has to pay such and such an amount. It isn't easy."

Inside the Green Line, many Israelis buy into the stereotype that almost all settlers are well-to-do and enjoying economic prosperity and improved infrastructures. "It is simply not true," says Moshe. "We have communities in distress here. Just before you came in, a fellow called me and said, 'My son's circumcision is tomorrow. Can you help me out with the food?' He didn't even want money, just food. 'I am inviting people to the ceremony tomorrow, I don't have anything to offer them. Maybe you have rolls you could give me?'"

While he is speaking, in the security cameras Moshe spies two women, a mother and daughter, tarrying for a relatively long period of time in front of the cash register. He immediately guesses what is happening. They are asking for a deep discount. "I've been here for nearly seven years," he says. "There isn't a single person in Gush Etzion who has asked for our help and didn't get it. But we are simply being slaughtered by the taxes. Tax reductions? The opposite is the case. Over 30 percent of my income goes toward taxes. In the end, there is no choice: You also have to cut your payroll. I have already had to fire two employees." Before he can finish the sentence his phone rings and, once again, he looks worried.

Kfar Yona: No money for organic

At a playground surrounded by verdant lawns in Kfar Yona, east of Netanya, the children of A. and G. are running from side to side, playing. Their mothers, meanwhile, sit on the asphalt pavement, taking care of their younger children and trying to hold back the tears. "We go to sleep and wake up every day with the feeling that it shouldn't be like this," they say sadly.

A. and G. are members of a small but very tight community of mothers whose children are being homeschooled. We meet them at one of their weekly sessions. They are all married to high-tech professionals, lawyers or accountants. Well set up, some would say. "It turns out that I am in the top 10 percent, but I don't feel it," says A., whose vocation is behavioral education. "More than that," she adds, "I don't understand that if I am in the top 10 percent [and struggling], how are the others getting by?"

Because they chose to homeschool their children instead of placing them in the public school system, these mothers have, for the most part, been forced to give up their work (or at least their full-time work ). The real cost that the high cost of living exacts is on the lifestyle they have chosen for themselves. "At least one family will not do home education this year," A. declares, suddenly standing up. Her girlfriends, who are hearing about it for the first time, are taken aback. It turns out that only a short while ago, another woman had left their small, tightly-knit group. "It's because of the economic situation. We simply cannot afford it," she says. "Home education is an expensive thing. It's not that public education is cheaper, but it enables you to work. We need another salary coming in. The mortgage eats up one-third of the salary, and that keeps going up. Electricity and water are increasing. Food is expensive, and the cost of healthy food is just crazy.

"The state's resources are not going toward education," A. continues, "and all we want is to see to it that our children receive a proper education - that they come out polite, with good manners, and not vulgar bullies like the public system produces. Because what else can you get from a class of 40 pupils with one teacher?

"We've already made every possible concession," she adds. "No trips abroad, no plasma televisions, no big house. We buy clothes secondhand and don't go out to the movies, because it costs NIS 160 for the family. We've conceded everything for the sake of home education. And now we can't do that, either." If they are not able, with their modest expense structure, to educate their children at home and feed them high-quality food, then what's the point, they wonder. At least, that is what N., one of the other mothers, shouts when she bursts into the conversation. Half shouting, half crying, she shrieks: "Forget it! It's not going to help to be interviewed. We just have to leave this country! If I could, I would leave. I dream about it. I've had it!"

When we ask if the weekly group sessions are usually this volatile, Y. responds, "Increasingly so. We have to feed junk to our children, because we can no longer buy organic food." A. adds: "We only eat meat on Shabbat, and all week long we live vegetarian. I cannot live vegetarian when a pepper costs NIS 9. Excuse me, but I have to buy processed food."

Ben Shemen: from mares to financial nightmares

At the affluent Ben Shemen moshav in central Israel, Raviv "Tzuki" Yitzhak, who owns one of the local horse stables, surveys the horizon with concern. "I no longer have a mare of my own," he says, and looks at the families of visiting Haredim who have brought their children for horseback riding. "Every sector in Israel is affected by what is happening in the economy, and we are no different. There are parents who used to give their children two lessons a week who went down to one lesson, or who boarded a horse here and had to cut back because of the situation. Today, everything has to be more calculated. Wherever you can avoid unnecessary expenses, you do so. Once it was easier, say, to own a motorcycle just for the fun of it, or to have a horse of your own. Once you could also pamper yourself with four or five workers. Today, you try to extract the maximum from every employee. Once you could end the month NIS 2,000 in profit. Now, you end the month even or you go into another NIS 2,000-3,000 of overdraft. There's nothing you can do about it; these are the times we live in."

Klil: Beauty and worry

Klil, a communal settlement in the Western Galilee, is one of the most beautiful places in Israel. In the past few years, the small settlement - located about ten kilometers east of Nahariya and surrounded by green mountain vistas - has become a tourist destination. Visitors have streamed to the bed-and-breakfasts of Klil and neighboring villages, buying objets d'art or food from the numerous businesses there. Klil was established in the '70s as an ecological settlement: It is not hooked up to the national electrical grid, but instead gets its power from solar energy. One consequence of this policy is no air conditioners.

The initial settlers of Klil, and those who arrived in their wake, gained control over some particularly large tracts of land. The spaces between the homes are so large that, at first glance, it's not completely clear that it even a village. So why in the world are residents of Klil be so worried?

"Living in Israel means you are facing a situation of incessant struggle, that you are simply worried around the clock," says Tammy Shoer, who owns the local cafe, as she lights another cigarette. "You worry all the time, too, I'm sure. This is Israel, after all."

Klil has about 440 residents, who combine entrepreneurship and ecological awareness. Many of the residents have opened small businesses, which include a shop for ceramic art, cafe, cheese shop, bakery among other businesses. Shoer, in her late 60s, used to be a teacher. "I taught for 35 years. I taught high school, junior high, kindergarten. I have a surfeit of diplomas - one for kindergarten teachers, one for teaching in the north, a BA, an MA, all sorts of certificates for completing professional training courses. And my pension comes to NIS 3,500 a month. Lucky for me I have this place," she says mournfully.

Shoer moved to Klil over 20 years ago with her husband, the architect Shlomo Shoer. Her cafe, situated in a large Bedouin tent, is strewn with rugs. "It's a funny story," she says. "One night, a married couple with a baby knocked on our door. They wanted to know if we had any land on which they could erect a Bedouin tent. My husband said to them, 'Sure, we have room near the orchard. If you agree to look after the orchard, you can stay there.' In the end, they lived here for three years, and after they left we remodeled their tent and opened up this place."

Before she opened the cafe in 2006, Shoer had opened another business: renting out tents for overnight stays. The compound that she and her husband own has another Bedouin tent they rent out for gatherings and workshops. She says her guests have a tendency to remain longer than expected and build themselves more comfortable sleeping accommodations than those afforded by the tent. For instance, there is a renovated carriage in which a semi-famous musician is now living with her partner. When these guests leave, Tammy and her husband buy back the buildings from the guests, essentially paying guests for their own hospitality.

Other than the fact that there are no air conditioners in Klil, it is hard to believe that anyone there could be troubled by anything. "The bank calls us about once a week to ask when we will be making a deposit," Tammy laughs. "We always know that when the call is from a unidentified number, then it's the bank, and that's never a good thing.

"The only thing the I can change in the world is my mood," she concludes. "I cannot stand what is happening here, to put it mildly, but I have to look after my own spiritual hygiene. I try not to get mired in the muck and I try to worry less."

Hatzor Haglilit: hair today...

In the Galilee town of Hatzor Haglilit, nearly all of the commercial center's shops are shuttered. The only ones that have survived are a grocery, two fish stores, two hair salons, a small clothing store and a falafel stand. In the past few years, Hatzor Haglilit has been hard hit by the crisis that has blighted businesses in the north.

Yariv Hemois working in the only business that's still operating on the second floor of the commercial center. "I am totally happy," says Hemo, a 28-year-old hair stylist who was born in Safed. About five years ago he moved to Hatzor, where he opened his own hair salon. "How did I do it? Proper management," he explains as he works. "From age 14, I worked with other people, sometimes for no money, just so I could learn. I saved up, I got a little help from my parents and the rest from the bank. I didn't open until I knew I was able to make a go of it. And now I am optimistic. My business is only getting better." The fact that he works in an empty commercial center, he says, does not have any effect on his business: "A good hair stylist is like a house. If you're good and skilled, people will come.... I constantly have to learn new things and develop. But I am content."

However, the atmosphere is less optimistic on the street. "They've destroyed the country, they've destroyed the economy," says one of the city's original residents, without clarifying exactly who "they" are. "I went to the supermarket today and had an anxiety attack," she says. "The day before yesterday, I bought bread and it was NIS 11; all of a sudden it went up to NIS 15. I do not understand what they might be thinking." Two members of the local council who walk past us are labeled "corrupt" by a few of the local residents.

Achziv: empty refrigerators

You wouldn't expect to find empty refrigerators in Achziv. You might assume that the place where Eli Avivi established his own state (Achzivland ) in the early '70s - complete with passports, flag and anthem - a place that for decades served as a home to bohemian youth seeking sexual experiences and a sense of freedom, you would find a refuge from the depressing atmosphere that engulfs present-day Israel.

We arrive at noon on a Thursday, the perfect time for taking a dip at the gorgeous Mediterranean beach, but Achzivland is completely desolate. Rina Avivi, Eli's hardy wife, is busy making phone calls. And Eli himself? Where is Israel's first hippie? "He's out doing errands."

Shai, a polite, bespectacled young man, has been working at Achzivland for three years. "It is obvious that we are feeling the decline here, too," he says. "I see it from my angle. Once, guests would leave lots of food in the refrigerators. They'd leave us workers so much food that we had to throw most of it out. Now, they take everything with them - a quarter-carton of milk, the last slice of cheese, an almost-finished loaf of bread. Come, I'll show you."

Shai takes us to see the refrigerator of a family that checked out of Achzivland that day and opens the door wide: the refrigerator is completely bare.

"We've been coming here for a week, every year, for the past 15 years, and we will continue to come until Rina gets tired of us," say Sarah and Noam , from the West Bank settlement of Elazar, who are staying there together with their six children. "At Achziv, you are asking us about the economic situation?" they ask. Sarah is a school principal and Noam is a documentary film producer. It takes two minutes for the smiles and happy atmosphere to devolve into three simple sentences: "Will we be able to leave anything to our children? Will they enjoy the things that we enjoy? We cannot see the horizon."

Kiryat Shmona: drifting to the center

Yaniv Bonen is eating lunch at the usual meeting place for Hapoel Ironi Kiryat Shmona soccer fans, the city's sole source of pride in the past few years. He remarks that his three best friends have left for the center of the country, "because there's no work here." Bonen himself remains here to work in his father's factory, which manufactures cooling systems. Otherwise, he says, he himself would have moved away. Meanwhile, he is completing a degree in economics at nearby Tel-Hai Academic College. Deep down though, he knows he will have to leave soon, whether he wants to or not.

"Some people who are studying toward a degree may find themselves a job in high tech, at Mellanox Technologies [headquartered in Yokne'am] for example, but most have to work in the center of the country. Economists, psychologists, what have they got to do around here? So they get a degree and then they leave. If I did not have a family business here, I would have left after getting out of the army, along with my friends," says Bonen.

"There's no choice," he says, referring to the attempt to secure happiness or riches outside of Tel Aviv. " I am completing a bachelor's degree in economics and management, and when I finish I am planning to find work at an investment house in the center. I aspire to get ahead on my own strengths . But one day I will return home. The warmth here, the atmosphere here, you can find it in the small places. In the center of Israel, everything is competition and accomplishments. Here there is still a feeling that you are a human being."

Metula: real concern

Beit Lishansky, one of the veteran institutions of Metula, was founded by Miriam Lishansky in 1936 as a restaurant and guesthouse. An impressive structure designed in the Bauhaus style by the architect Moshe Gerstel, it was built on the ruins of an earlier building from 1896. The illustrious family history is evident everywhere at Beit Lishansky: in the old black-and-white photos of the pioneers who built the building, in the menu that describes the structure's various incarnations, in the old guest book.

The day before we arrived was the first August day in the restaurant's history when no one came in to eat. And we were the first arrivals when we visited the following afternoon. A weekend in Greece is less expensive than a weekend in the Galilee, so the only domestic tourists you will see nowadays are ultra-Orthodox families. They fill the north during the period between Tisha B'av and the start of the school year, driving up in their family pickup trucks.

There was a time when Beit Lishansky occupied a strategic position in the heart of the bed-and-breakfast area of Metula, next to the legendary Arazim Hotel. As long as there was no war or Katyusha missile attacks, business prospered. "What's happening is that only Haredi tourists are coming here. They took all of the rooms around here, but we aren't kosher," says Clary Lishansky, who for 15 years has managed the establishment that her husband's family founded. Her son Yisrael, a teacher by profession, assists her in operating the place in the summer months.

"I am concerned about the future," says Lishansky. "The cost of living is killing us. With the families that do come in, I see that they are restricting themselves to two or three items on the menu; they cut up a single pizza into 10 portions. I just mentioned to Yisrael that at a certain point we will have to raise prices. We are lucky we don't have to pay rent."

She has been forced to plow her own money back into the restaurant, but says there is one line she won't cross: "I am not willing to lower standards and harm my good name. I am not willing to give smaller portions or buy less expensive raw materials, as others are doing. Which is why people say that my chocolate mousse is the best around. I am facing a situation that, if it continues next month, I don't know how I will be financing the business. I'll have to take from my savings."

A few meters away from Beit Lishansky, the Arazim Hotel also looks entirely desolate as well, but apparently looks are deceiving. "If only every day could be like today," says one of the owners, Dani Belsky, 78. All through the many tense years on the northern border, the mythological hotel played host to foreign correspondents, to UN soldiers and to a long list of officers and diplomats.

Now, Belsky has to come to terms with a new reality on the ground. Most, if not all, of his clientele are domestic Haredi tourists. "We had to coordinate things," Belsky says. "There are population groups that you cannot house together with them, in order to avoid friction. But when all is said and done, we are talking about a single week. This year, our August is especially short - only one week. Because the religious don't start vacation before the Ninth of Av, and the school vacation has been shortened by a week. So what do we have left?"

Tel Aviv: Everyone is stressed

Finally, we return to Tel Aviv. We chose the one place where we knew we would find foreigners with European accents who are certain that Israel is the most fun-filled place in the world - the Tel Aviv promenade, which in the early evening hours is inundated with a potpourri of tourists, speaking French, English and Portuguese.

"You certainly won't want to talk with me, because at the moment I am not liking Israel too much," says David Gadge, from Paris. He owns two clothing stores there and is vacationing in Israel with his children. "A beautiful country, but I'm feeling too crowded here, and it's too noisy. And everything is pressure. We live in Paris, but it is more expensive here. We'll be back here again, to my dismay, because I have family here. "

"Israel is wonderful, we just love it here," says Randi, a mother of three from New York. "But every time we are here I cannot understand how the Israelis live. It's a hard country and I feel a little sorry for them. I know it isn't easy here."

Claudine Sasson, a mother of three from Italy who owns a clothing company there, smiles as she regards some Israelis who are shouting at each other. She herself is already half-Israeli. "Israel is a wonderful place," she says. "I have been coming here with the children every year for the past 15 years, and the advances that you have made are astonishing. Someday I will make aliyah, too. True, it isn't easy here and it is very expensive, and the Israelis are stressed out, but it isn't easy in Italy, either. Who has it easy these days, anyway?"

The multidisciplinary artist Honi Hameagel, who walks by holding a beach chair in his hand, offers his own perspective on the gloomy mood in Israel before telling us to stop our foolishness and let him go and sit by the sea. "Leave it alone, this is the State of Israel. The State of Israel is of no interest to me. I am a citizen of the state of the sea," he says.

"Going to the beach every day, eating cottage cheese, cucumbers - when there's no money for cottage cheese - sleeping well, that's all. What more does a person need?" he asks. "Everyone's problem is that they seek luxuries. In the state of the sea, everything is good."

The moment he completes this sentence, a young man who has spotted our camera starts shouting at Honi that he should vote Likud. In seconds, Honi's state of serenity is transformed into a typical Israeli argument about politics. And the state of the sea? It will have to wait for him to end his argument about the State of Israel.