Crying All the Way to the Bank

The exit of Bank of Israel Governor Stanley Fischer is a sad day for Zionism. He's also getting out while the going is good.

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It's a sad story, really. If a professor of economics has the good fortune to attain the most desirable job in our country - with all the respect and prestige it entails – but then returns to the United States, what does that ultimately say about us? What does it say about the Zionist dream?

Eight years ago, Stanley Fischer did the most Zionistic thing possible. He left the fleshpots and his family and friends, and made aliyah. He became a superhero here, a superstar, the "responsible adult," and was showered with love, admiration and respect. He insisted on learning Hebrew, and even ran the Bank of Israel in Hebrew, which is no mean feat. So we were convinced he had tied his fate to ours, and would stay here forever – until he surprised us and deserted.

There are many reasons for this significant decision. Fischer says the main reason is the distance from his sons and grandchildren. We should believe him, but what about the possibility of their immigrating to Israel with their families too, with all of them uniting here rather than there? Does this mean Israel has lost its allure for successful people?

There is one major point about Fischer that he doesn't generally discuss in public: His strong desire for peace. It's not a romantic or utopian desire. He believes with all his heart that Israel must achieve peace quickly if it wishes to continue to exist - and he means total peace with the Palestinians and the Arab countries. That is why he is very disappointed - angry, even – with Prime Minister Benjamin Netanyahu, who canceled, minimized and cut off any attempt at negotiations. The diplomatic situation and Israel's isolation in the world also contributed to Fischer's departure.

Fischer created a super-status for himself, and not only in Israel. You only have to see him turning into a leading star at every international conference in order to understand what an asset we are losing. After all, every board of directors of a foreign corporation deciding whether or not to invest in Israel asks himself: "Is the economy stable? Will the debt be repaid?" And when Fischer says "Everything is fine, I'm holding the reins," they invest. That's why his departure will have a negative effect on investments and on Israel's credit rating.

The main job of the governor of the Bank of Israel is to maintain a low inflation rate and financial stability, and 2012 ended with a low inflation of 1.6 percent. The exchange rate is stable, reserves are high and the banks are safe. That is why, if you want a glittering picture of victory, this is the time to resign.

On the other hand, 2013 will be a much more difficult year. The turmoil out there is frightening. It will be necessary to make deep budget cuts and raise taxes, and Fischer no longer wants to deal with that. He is opposed to economic populism. He is opposed to exaggerated government expenditures. Recently, he demanded that Netanyahu and Finance Minister Yuval Steinitz lower the deficit in 2013 to 2.5 percent, but they insisted on 3 percent, which is dangerous and irresponsible. He was also very angry about the budget deviations from the past two years that created the huge deficits.

But here the arrows of criticism should be directed back at him, because Fischer did not raise an outcry, when others were already sounding a warning. He supported physics' law of the expanding universe, which was a mistake. He didn't oppose the unrealistic forecasts in the 2011-2012 budget. It is not enough to talk to Netanyahu in private. Sometimes you have to go to the media and shout: "The emperor has no clothes!", thereby causing the politicians to act.

Fischer was able to withstand the pressures of the wealthy and well connected. He managed to pass the new Bank of Israel Law, which introduces order and proper administration to both the bank and monetary policy. But here, too, we should not forget that he exerted great pressure in order to maintain the exaggerated and distorted salaries within the Bank of Israel - and that is to his detriment. He should not have behaved like the head of a monopoly, only taking care of his own employees.

If there is one thing that is even sadder than his departure, it's the fact that the public is not even angry at him - as though there is a general consensus that it's better for a Jew to live in New York than here.

Bank of Israel Governor Stanley Fischer announcing his retirement on January 30, 2013.Credit: AFP

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