Taking Stock / Danger! Shihab - Ah, Nasdaq Alert!

What does the Shihb-3 have in common with Nasdaq?

Believe it or not, the Iranian nuclear missile and the tech index can serve exactly the same purpose.

Economists and defense spin-meisters were the ones to discover that the Nasdaq and Shihab can both be harnessed to battle the Israeli army's worst enemy: budget cuts.

Exactly how well the Shihab will serve Iran remains unclear, but it's certainly served the Israeli army's PR barrages beautifully.

The IDF first test-launched the Shihab in the summer of 2003. At the time the government was assiduously slaving to prepare a budget for 2005. The Finance Ministry had an eager-beaver new minister who had vowed to slash public-sector pork barrels, and who had the defense establishment in his sights.

Be prepared!

The conditions for defending its budget were extremely inconvenient for the army. Not only had violence in the territories abated, but worst of all, the eastern front had almost entirely collapsed after the U.S. rolled over Iraq, leaving behind 150,000 American soldiers.

But the army did not lose its head. Its intelligence chiefs immediately whipped out scary pictures of the Iranian nuclear missile. Military affairs correspondents were advised of the tremendous strides Tehran had made in its development.

And one sunny summer morning a picture of the missile, almost life-size, graced the front pages of the nation's biggest-circulation daily.

The message was stark: Okay, Iraq had fallen, Syria was in a state of terrified paralysis, the intifada might have died down, but none of that meant a damn against the Terror of the Shihab.

The 2005 budget debate is about to begin, the dreaded Shihab has yet to land in Tel Aviv, the Americans are still sitting tight in Iraq, the Syrians are crawling in suppliance to start negotiations, the Texan is still astride the White House, and last week, the Israeli defense establishment took another body blow: Arafat died.

We naive types might think that the threats against Israel are abating again.

But goodness gracious, that's just because we didn't notice the terrible new enemy glaring at us over the oceans - Nasdaq.

After the boom on Wall Street, high-tech began to recover, and last week, the army banged its drums warning of a "brain drain from the Israel Defense Forces."

The army has an idea

The Wise Men of the IDF then got to the point. The defense establishment, they explained to our correspondent, is concerned about the proximity of economic recovery with the reforms in the army - extension of career service for non-fighters and termination of non-contributory pensions, meaning career soldiers would have to set aside a chunk of their salaries for their old age like everyone else does.

Now we get it. The Finance Ministry is trying to gradually flay the thick rolls of flab cushioning the defense establishment from reality, and the army is desperately trying to find new ways to frighten us and prove how badly we really need it.

We, the people in the business sector and high-tech, have some advice for all the Big Brains that Go Bang in the IDF: if you're on a career track in the army, think twice before you step out into the real world of civilian high-tech.

If you leap, you'll find that the reality of the high-tech scene isn't that happy-go-lucky picture painted by the press, especially when companies go public or get sold.

Here are a few simple exercises for those military "geniuses." The monthly pension that former soldiers got when retiring at the hoary old age of 42 is between NIS 7,000 a month for junior officers, to NIS 10,000 or NIS 12,000 with a few special rights, to NIS 20,000 a month for senior officers.

Now multiply that pension by your lifespan expectancy, and you'll find that your average army big-brain will be getting half a million to a million dollars.

We have a news flash for you army types. In civilian life, very few people aged 42 or 45 have a pension plan worth half a million to a million dollars.

True, high-tech does have a few multi-millionaires who pulled off flashy exits on Wall Street. There are a few dozen managers with eye-popping salaries. But they are the minority.

Most high-tech workers won't be exiting investments on Wall Street, or making six-digit salaries. They are constantly under the threat of dismissal and of losing their pension plans. In most high-tech environments, workers constantly have to learn new tricks to stay on the cutting edge: competition is fierce and new kids streaming in know new things. You trudge in place, or bet on the wrong company, and you'll find yourself in the street.

The sheer size of Israel's defense establishment, the way resources are allocated between the fighters and the administration, and the wage and pension terms are all scandalous, in both economic and social terms.

It is time for Israel's leaders to create a long-term strategic plan to reduce the force and make it more efficient instead of spending their time beating on war drums and spinning for the press. How dangerous is the Shihab-3, really? We don't know. But we do know how to do math.