Jacob Frenkel, the Man Who Wasn't There

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I refuse to join Haaretz's jubilation at the appointment of Jacob Frenkel as Bank of Israel governor, as stated by its senior commentator Nehemia Shtrasler on Monday, or in the editorial on Tuesday. This appointment can teach us a lot; let me explain why.

The leading candidate for the post from within the Bank of Israel was Karnit Flug, Stanley Fischer's deputy. She will, in fact, step in for Fischer in the next few weeks or months, until Frenkel will be cleared for the post. This might necessitate legislation, as Moti Bassok reported Monday, since Frenkel was already appointed to two terms as governor. This obviously means that Flug is qualified for the job, otherwise she wouldn't be trusted with running the Bank of Israel for three months.

Flug is a woman. This was an excellent opportunity to appoint a woman to the post, and one who grew within the Bank of Israel, at that. This is a classic example of the infamous "glass ceiling" that keeps women from being promoted to top posts. But this ceiling isn't made of glass; it is made of something else entirely, as we have seen. Women find it much harder to rise through the ranks of large organizations, at times being subjected to chauvinism or sexual abuse, and often being overlooked for promotion due to pregnancies and motherhood. Since a viable candidate has finally come along, wouldn't it make sense to appoint her – for the first time the bank's history – as the governor?

In contrast, let's examine who did get the post: Mr. Jacob Frenkel. He has already served as governor for nine years, and as opposed to Flug, wasn't too keen on the job. Both Frenkel and Netanyahu said that it took a long process of persuasion until he agreed. It was only a few years ago that Frenkel held a senior post in AIG as it collapsed, before it was bailed out. Last decade, before the world financial crisis, he declared that the economy would overcome the problems of cyclicality, i.e. crises. Frenkel obviously can't boast a record clean of failures and mistakes. He's no superman.

Then there's the question of his whereabouts since he left the Bank of Israel for greener pastures, and the troublesome fact that he was hardly here. All his jobs were abroad. Even when he served as governor he loved flying off to other countries and staying there, so much that when he finished his term he was demanded to return funds for accumulated days abroad. Since he left his post he has stayed away on a regular basis. Why is that important? Economics is never a pure science bereft of social and cultural context, and that's why it is taught in social studies faculties, not science faculties. Frenkel wasn't here in recent years. He missed the waves of social protests. It is doubtful that he can comprehend the change that took place in the Israeli public's consciousness and awareness while he was head of JPMorgan International.

As far as Netanyahu is concerned, Frenkel is the ideal appointment. More of the same. Liberal, capitalist, jet-setting, first class, cigar in mouth and all that jazz. No doubt he is an internationally acclaimed economist, very able and said to be good-natured. He is an Israel Prize winner, and is considered one of the best governors the Bank of Israel has ever had. Still, the message of this appointment cannot be overlooked. Apart from expressing their lack of trust in Flug and other leading local economists, the prime minister and finance minister are making a point: nothing will change. The protesters and demonstrators, all those now painted as 'populists' can continue to bark to no avail. Incidentally, Yair Lapid also believes there's no point in barking. In his Facebook page he wrote of the activists demonstrating against gas exports, saying "I don't wish to harm their democratic enthusiasm, but no megaphone will ever make it through to a government meeting." Did you get that, idiots?

Lapid also recalls his meeting with Frenkel before the elections. (On a plane, of course, where else?) "More than a year ago I was flying back from the United States to Israel and I was writing the fifth or sixth draft of Yesh Atid's economic platform. At one stage I was interrupted by a cheery voice, greeting me. I looked up and saw Jacob Frenkel, the former governor and my current neighbor. "Would you like to see what I'm working on?" I asked. Frenkel nodded, took my laptop and returned to his seat. Three days later I received a file with a long list of suggestions and remarks, each wiser than the last.

"Ever since, we've kept in touch. After I was appointed finance minister he came to visit me at home, and this time too, he had numerous wise pieces of advice. His best advice, incidentally, had nothing to do with economics. 'You don't get enough sleep,' he told me, 'that's silly and it does no good to you or your post. The state of Israel demands that sleep like a human being.' That never happened but it's still an excellent piece of advice."

The sheer beauty of it all; the heart soars like an El Al flight. Lapid's impossibly round and sweet style, reminiscent of his infamous Riki Cohen post. And of course there's the bonus: now we know that our finance minister doesn't get enough sleep. Even after the future governor of the Bank of Israel demanded on behalf of the state of Israel that he should sleep better.

The importance of this text is that we understand the warm mood that went with this appointment. One prime minister who brought back the governor that held the post in his first term as prime minister. One finance minister that appointed a governor who is his friend and neighbor, and even looked over his party platform and made a few suggestions. Granted, there should be good working relationships between the governor, the prime minister and the finance minister, but I'm not convinced it should all be so rosy and sweet. Certainly not in this era. If Lapid and Netanyahu were truly brave or sensitive to the socio-economic situation they would find a governor who would challenge them from day one. Or at least appoint a woman to the post, one who already served as deputy governor. But they thought it over again and again until they chose Frenkel. They probably knew exactly what they were looking for.

Jacob Frenkel.

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