Taking Stock / Baa Baa Frenkel Sheep

1. Last week Prime Minister Ariel Sharon summoned his economic adviser, Prof. Jacob Frenkel, to a barbecue. Come on! Arik said jovially, it'll be a gas. There'll be press, TV, we'll have a laugh at Silvan's expense, have a bite to eat. You won't be sorry.

When Arik calls, who wouldn't jump? Frenkel came, ate and drank, had his picture taken and went home, meaning to London, sated. The next day all the papers reported that Arik was tackling the economy seriously and was considering naming this economist of international repute, a man esteemed worldwide, as Israel's next finance minister.

Frenkel considered the issue. Then on Thursday, he got another invitation. This seemed a little bizarre to him. They'd already broken bread, clinked their glasses and had their picture taken. Now what? Why trek all that way from London to Jerusalem? Nothing had changed, had it?

Moreover, between the two meetings, the Prime Minister's Office had been disseminating hints that Bank of Israel Governor David Klein would be forced to walk the plank. Frenkel was mortified. For years he had propounded the importance of an independent central bank. How would he look as the close adviser to a man planning to behead the governor?

But when Arik calls, who wouldn't jump? Frequent meetings with the prime minister while he's scheming to oust his central bank boss do nothing good for the reputation, but on the flip side is his close relationship with Ariel Sharon. And a close relationship with the prime minister is a nice, gratifying thing.

So Frenkel came, had his picture taken, went, was interviewed, kept mum and sent his associates to explain the meeting to the press.

Frenkel also mumbled a few words about the importance of maintaining an independent central bank, ostensibly defending Klein while avoiding insult to his host, who thinks the concept of an independent central bank is a real thigh-slapper.

Only come Saturday night, when the Prime Minister's Office announced that the finance portfolio hadn't even been offered to Frenkel, did that most seasoned politician among Israel's economists grasp that at that barbecue at Sharon's - he himself had been the main course. That he was no more than another sheep in Sharon's economic flock.

Last week, we predicted that reports of Sharon wanting to hire Frenkel, and fire Klein, were merely spin. The only question was why so many people cooperated with Sharon's political and PR machinations. Yesterday we learned that at least some of the participants in the Sharon show hadn't even realized they were on stage.

2. Yaakov Neeman, say Prime Minister's Office associates, is Sharon's leading candidate to replace Bank of Israel Governor David Klein. If not, he's a candidate to be finance minister, and if not that either, then one thing is clear as day: he's the highest-ranking member of the team forming the coalition.

That's downright impressive, to be a man so talented he could be central bank governor, finance minister or a member of the team shaping the next government.

Yet let us take a moment to recall who Yaakov Neeman is.

Yup, he's the lawyer representing Israel's richest businessmen, a man whose chief expertise is in relieving these people of having to pay taxes.

This is the man who, one morning in March 1999, advised the prime minister - then Benjamin Netanyahu - that he quit his job as finance minister. The next morning he was off skiing in Switzerland. A few days later it became apparent why he needed to wallow in snow: he had to cool off fast. Mere days after resigning his government position, he was in New York, in the capacity of a private lawyer, representing Erwin Eisenberg in the deal selling the Israel Corporation for $330 million.

That deal created a bit of a problem for Eisenberg. Certain people at the Income Tax Authority insisted he owed $120 million tax. Eisenberg didn't think so, not after the special laws enacted especially for his family.

Who could be better than Neeman to unsnarl that itty-bitty tussle between the taxman and Eisenberg. A few days before resigning as finance minister, Neeman had appointed a brand-new tax commissioner, whose job it became to handle the negotiations with Eisenberg's representatives over that pesky tax bill.

You can trust Neeman to follow the letter of the law, the regulations, the mandatory "cooling off" for high-ranking public servants, and the civil service directives. But you can also be sure he never forgets his clients, especially the big ones.

The only question is, how long a cooling-off period would Neeman sentence himself to undergo if he serves as finance minister, governor or coalition-builder, before returning to his private practice. A day? Two? An hour?

3. Frenkel will apparently not be Israel's next finance minister, and Klein won't be ousted.

A roundup of the last two weeks of economic-oriented uproar at the Prime Minister's Office shows that Sharon chalked up quite a triumph.

He had a laugh at everyone's expense, he used Frenkel, he humiliated Silvan, he tantalized Mitzna, he brought Neeman closer and he gave Klein a hefty kick. Economic and other analysts all concur: When it comes to political machinations, Arik is The Man. He's got the knack of economic tricks too, he's the ultimate political animal.

There's just one other little thing - that troublesome Israeli economy. That doodad that's been losing altitude at warp speed in recent weeks, that place where another mega-corporation collapses each week, that arena in which thousands of people are losing their jobs. That economy whose rating is about to be downgraded, that one paralyzed by terror.