Support Those Who Deserve Support

The acute financial crisis currently felt the world over has now reached Israel as well, and will require the government to make some far-reaching decisions. Naturally, the main consideration guiding decision-makers will be financial in nature, but the government needs to know - and internalize - that when the time to make a decision finally arrives, it will also have to take into account moral and social considerations.

Most of the burden will be cast on the shoulders of the Israeli taxpayer, and so without broad public support, the government's decision will have no moral validity. Such support hinges on the public being convinced that the government is acting morally and free of foreign considerations. It must especially be convinced that there is no preference for the interests of the wealthy.

The government's first duty is to take care of ordinary citizens, mainly the thousands of employees losing their jobs, as well as those who might join them in the future. The safety nets that the state affords the unemployed and laid-off must be reinforced, deepened and augmented.

But this is not enough. The crisis might - as has happened in the United States - put key market institutions at risk of imploding. The collapse of banks, pension funds or provident funds would mean a severe blow to hundreds of thousands of people, and any responsible government would act - for lack of choice - to prevent such a situation.

But the key question is the manner in which the government will opt to intervene. It must protect the small-time depositor and saver, but it must never spend billions of taxpayers' shekels to rescue tycoons who recklessly borrowed funds through bonds - be it from the banks or the public - and who are now unable to repay their debts.

When the bank crisis hit Israel some 25 years ago, the government secured investors' money and the value of their stock by nationalizing the banks, taking over their shares and depositing them into a government firm known as M.I. Holdings. Over time, the state has sold these shares to new men and women of fortune, and put much of the money that had been lost back into public funds.

The government needs to act now as well. Not all the large firms in the Israeli economy or the big men of the business world are experiencing difficulties. Teva, for example, is in no danger of collapsing. Stef Wertheimer is not about to go under, either.

We all know who they are. Those who acted irresponsibly are required to face the results. Those close to power should not be given any special treatment.

The government may well need to assist banks that are unable to collect their debts from giant firms, or cover these firms' bonds in which funds or the public had invested. If that occurs, the state will need to take control of those firms' shares - which will have been in the banks' possession anyway - and deposit them in a new M.I. Holdings firm.

Much has been said about the connection between money and power. There is nothing wrong with power supporting and assisting people of means, because capital is the fuel that drives the economy. But there is plenty wrong with power taking care of tycoons - who are naturally close to power - after they have failed.

There is no greater corruption, and it must not be supported.