Taking Stock / Hear No Evil, See No Evil

1. Shaul Mofaz

Transportation Minister Shaul Mofaz is annoyed at the Finance Ministry's "uncaring" attitude. Last week, he fired off a press release in which he quoted El Al Chairman Izzy Borovich and slammed the treasury for instructing government officials to fly Alitalia, which charges less than the privatized Israeli national carrier. This, wrote Mofaz, demonstrates an "uncaring" attitude toward Israel's aviation industry.

"Uncaring" - an excellent choice of word. Because "uncaring" could also describe the attitude of much of elected officialdom toward responsibly managing taxpayer money.

Mofaz thinks that Israel's public servants should faithfully stick to El Al. True, it is not a government company any more; it is a privately owned firm belonging to the Borovich family. But Mofaz thinks that Israel's public servants should fly an "Israeli" airline.

Doesn't Mofaz know that the only way to lower prices and get better services is through competition? Doesn't he understand that the Israeli government's deal with Alitalia makes El Al sweat and might enable the state to squeeze better terms from it in the future?

What does he care. Like all too many of his colleagues in the Knesset and cabinet, Transportation Minister Mofaz has no great interest in the interests of the taxpayer, who finances the airline tickets used by him and his cronies.

But Mofaz and his associates are very concerned with the interests of El Al workers and employees of many other monopolies.

In the past, this overweening concern for the airline might have been excused on the grounds that El Al belonged to the government. But it no longer does; it belongs to private businessmen and stock market investors. Yet Mofaz wants the state to fly Israeli.

Doesn't he know that the walls of protectionism were torn down 15 years ago? That local industries underwent thorough reforms that doubled exports and lowered domestic prices?

No. He obviously does not need to know that: He certainly made it to a series of top posts in the army and government without being armed with that information.

2. Avi Balashnikov

Another government official deeply worried about the uncaring attitude of treasury officials, and keenly attentive to his electorate - the people who own and work at El Al - is Knesset Director General Avi Balashnikov. A week ago, he announced that Knesset members would continue to fly El Al, and the treasury and its money-saving deals be damned, evidently.

Beautiful, Avi! Impressive. This is a man of unshakable blue and white principles who kowtows to no finance minister, who is willing to take up arms against those horrid treasury men who would sell our souls to the Romans.

Over whose money is Balashnikov going to war? His own? Of course not: This is the Knesset budget, a budget that gets approved year after year with zero public supervision.

Like Mofaz, Balashnikov is consistent. In his prior jobs, he was also attentive to giant corporations and their steamroller unions, and a bit less attentive to the interests of the taxpayer.

Until six months ago, Balashnikov was director general of the Communications Ministry. Under his reign, decisions aimed at dealing with the juggernaut oligopolies in the communications sector were put on ice. There were proposals on his desk to promote competition in the telecommunications sector, but he had to think them through - and think and think.

However, one can understand him: The citizens who pay the cellular bills do not constantly ply his office. The top brass at the phone companies did.

3. Amir Peretz

A decade ago, Shimon Peres and Yitzhak Rabin received the Nobel Peace Prize. Israelis have since also been awarded Nobel prizes for economics, including Daniel Kahneman. We think the next Nobel prize for economics should go to Defense Minister Amir Peretz.

A week after the defense establishment began the spin of the decade - an attempt to increase its budget by NIS 30 billion a year (NIS 30,000,000,000, in case big numbers confuse you) - Peretz declared (last Thursday) that he would make sure that the extra money for defense did not come at the expense of welfare.

Goodness. So where is that NIS 30 billion supposed to come from?

1. Raising taxes.

2. Borrowing.

3. Cutting civil servants' travel costs.

4. Cutting the budgets of non-welfare related ministries.

5. None of the above.

The answer is 5, of course.


1. Raising taxes would be nice, but history teaches that it hurts economic growth and would especially hurt the middle class. It is not a practical answer in a global environment of falling tax rates.

2. Borrowing is a good idea too, especially while the United States is still protecting us with loan guarantees. But loans have to be repaid, and they bear interest, too. Israel already has about the highest national debt in the world, relative to GDP, and interest payments (not defense) are its biggest budget item. Clearly, the cost of more loans would end up being paid by the welfare budgets.

3. Peretz probably would not lend a hand to annoying El Al (or the workers of any other monopoly with power in the parties' central committees).

4. Cutting non-welfare ministry budgets sounds terrific, but if Defense, Welfare and Education are spared, as well as interest on debt, only 13 percent of the budget is left. It is going to be quite a challenge to squeeze NIS 30 billion out of 13 percent of the budget.

Therefore, all we can do is nominate Peretz for the Nobel Prize in Uncaring Economics, based on his proposal to increase the defense budget by NIS 30 billion in the very week that the annual poverty report came out.