Most influential Jews in finance, economics and business

From the Jerusalem Post's '50 most influential Jews.'

By JERUSALEM POST STAFF
May 23, 2015 22:27
Janet Yellen

Janet Yellen. (photo credit: REUTERS)

 
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The Jerusalem Post has put together its annual list of '50 most influential Jews' who have impacted the world last year, and have the potential to affect change in years to come.

Janet Yellen
Holding the world’s economy in her hands

If Janet Yellen sneezes, the global economy could catch a cold.

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Such is the life of a Federal Reserve chairwoman, who heads the most important central bank in the world.

When she said stock prices were “quite high” in early May, they stumbled – just as they did after her first press conference, when she estimated it would be “around six months” between the end of the government’s bond-buying program and its first interest rate increase.

All around the world, everyone is waiting for Yellen to provide a clue as to when the US will raise its interest rates for the first time since they dropped to zero in 2008. Yellen has already overseen the beginning of the end of the unconventional Quantitative Easing Program her predecessor Ben Bernanke started, and as the US economy gains steam, everybody wants to know when the Fed will take its next step.

Such decisions affect not only the US and its economy, but the value of the dollar, and thus every economy that trades with the US or uses the greenback as its reserve currency. It is no wonder that Forbes magazine ranked her the second most powerful woman the world, second only to the eurozone queen, German Chancellor Angela Merkel, and four spots ahead of Hillary Clinton.

Yellen, who earned her doctorate at Yale University, is the third Jew to hold the role of Fed chairman, following in the footsteps of Bernanke and Alan Greenspan before him. But she will stick out in the history books as the first woman to hold the job, and one of only a handful of female central bankers around the world (notable among which is Israel’s own Karnit Flug).

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If that link to Israel weren’t enough, former Bank of Israel governor Stanley Fischer stepped in as her No. 2 in April of last year.

Jack Lew
Leading the way to economic recovery

Being the first Orthodox Jew to serve as treasury secretary hasn’t stopped Jacob J. Lew, better known as Jack, from getting things done.

After a long, hard recession, the US economy is perking up and leading the way internationally.

In fact, it is doing so well relative to other global economies that the dollar has become, in the view of some, too strong.

Lew, of course, cannot take overwhelming credit for the economy’s turnaround; it was years in the making. But he certainly has some claim to the good news, even as he urges further investments in infrastructure, a rewriting of the tax code and immigration reforms.

Before ascending to the Treasury, Lew served in Hillary Clinton’s State Department, served as the head of the Budget Office, and eventually became chief of staff to US President Barack Obama, whose confidence and trust he earned for his smarts and good judgment. Indeed, The New York Times quoted Obama as telling Lew, “I trust your values. I trust your judgment,” over budgetary issues.

In that capacity, Lew was one of Obama’s top aides in the “fiscal cliff” negotiations that threatened to send America into a self-imposed default – all that while still taking time each week to observe Shabbat.

Ever the policy wonk, Lew once explained to a Jewish group why budgets were so important to him. “I describe budgets as a tapestry: When it’s woven together, the picture amounts to our hopes and dreams of a nation,” he said, according to The Atlantic.

In the coming months, Lew will play a crucial role in selling a potential nuclear agreement with Iran; the Queens-born former banker is, after all, the keeper of the keys when it comes to US sanctions. Already he has been dispatched to ease nerves that the US is going to give away the farm when it comes to easing sanctions on Iran.

Speaking to the Washington Institute for Near East Policy in late April, Lew said it would be “unacceptable” to lift sanctions the day the deal was signed, and that relief would only follow verification measures.

“A comprehensive deal with Iran would not be based on trust. It would be based on intense verification and scrutiny as well as the knowledge that if Iran does not keep its word, we have preserved all our options, including economic and military tools, to make sure that Iran can never acquire a nuclear weapon,” he vowed.

Any US sanctions relief, he added, would come through presidential waiver, meaning it could be easily revoked if Tehran is caught cheating; an international snap-back mechanism would also be necessary.

The impending deal with Iran will doubtless be a controversial one, and it is unclear how far Lew’s assessment of the agreement as a “good deal” will counter Prime Minister Benjamin Netanyahu’s repeated warning that it is a “very bad deal.”

But his views will certainly help shape the debate.

Karnit Flug
Bringing the element of surprise to the BOI

Israel’s central bank governor is full of surprises.

It was a surprise when, during the long, ugly, political fight to replace her predecessor Stanley Fischer, she resigned from her role as deputy Bank of Israel governor. It was a surprise when she was picked for her current role after being overlooked twice.

It was a surprise that she managed to become the country’s first female central banker, despite lacking the kind of international profile Prime Minister Benjamin Netanyahu sought.

Since taking up the post in late 2013, she hasn’t stopped surprising.

According to Bloomberg, Flug has surprised economists more than any other central banker in the OECD, issuing unexpected interest-rate decisions six times while serving as acting governor and governor. She has brought the country’s interest rates to historic lows and has hinted that she is unafraid of using “other tools,” such as quantitative easing and negative interest rates, to keep inflation from spiraling below zero and ensure the economy keeps chugging along.

There’s no question that Fischer, an internationally renowned economist who mentored some of the world’s leading central bankers, was a tough act to follow, but Flug has risen to the occasion. Global Finance magazine, which issues an annual report card for central bankers, gave her the highest mark: A. She was one of just seven central bankers to get that score.

With a new coalition taking the helm of the government, Flug, who is also the top economic adviser to the government, is likely to make her mark as well. Though she and incoming Finance Minister Moshe Kahlon share structural approaches to dealing with the economy, the two will likely clash as Kahlon aims to introduce a shake-up in the banking system.

Flug will be fighting for a regulatory approach that keeps banks stable, even if that means they are too profitable, while Kahlon will be pushing for market changes that could undermine their profitability, even if that cuts into their stability.

Shari Arison
‘Good deeds’ go a long way

It’s not every day that the Pope finds cause to meet with a female Jewish billionaire, but this March it happened.

The New York-born businesswoman and philanthropist Shari Arison, whose net worth Forbes estimates as $4.7 billion makes her Israel’s richest woman, found common cause with socially- minded Pope Francis over the proliferation of her brainchild, Good Deeds Day. Since its inception nine years ago, the event that urges people to organize in the name of doing something good, has spread to more than 60 countries. This year, close to a million people put an estimated 3 million hours globally toward doing good deeds.

In Israel, volunteers turn out for an environmental clean-up, activities with the elderly, Holocaust survivors and underprivileged populations and planting gardens.

She has also created a website and network called Goodnet.org that has connected millions of people around the world. In 2013, she released a New York Times bestseller “Activate Your Goodness: Transforming the World Through Doing Good.”

Arison, who at number five is the only woman among Israel’s 15 richest people, inherited much of her wealth from her father Ted Arison, who founded Carnival Cruise Lines. But as the owner (and for many years also the chair) of the Arison gGroup), she put that money into savvy values-based business investments and philanthropic dealings like the Arison Group. Its investment arm, Arison Investments, holds a controlling stake of Bank Hapoalim, Israel’s largest bank, and Shikun & Binui, Israel’s leading infrastructure and real estate company.

Arison also has a “green” streak, founding the water-efficiency company Miya and creating eco-friendly construction projects as a green shopping mall.

She has received many accolades for her altruism and for her business endeavors. In 2013 she was named Honorary Doctore by George Mason University for her promoting values-driven business and philanthropy.

The Interdisciplinary Center in Herzliya, the Greater Miami Jewish Federation, and the America-Israel Friendship League have all acknowledged Arison’s philanthropic efforts. In addition, she has received many accolades for her altruism, including an honorary doctorate from George Mason University.

Danna Azrieli
On the cusp of greatness for the Azrieli Group

This will be a make-or-break year for Danna Azrieli, real estate mogul David Azrieli’s youngest daughter, who took over the chairmanship of the Azrieli Group in July.

Danna, who had been vice chairwoman of the group for two years when her father died at the age of 92 last summer, was unanimously voted into the position after years of grooming for the part. While everyone agrees that she has the skill, professionalism and expertise to lead the group, she still has big shoes to fill.

The publicly traded group, one of the country’s 10 largest, owns 14 shopping malls and a series of office and industrial buildings, among other things.

Danna, the only one of the Azrieli children to go into the family business, has much internal support, but there are skeptics as well. Shortly after she took the helm of the company, financial newspaper Globes asked, “Will Danna be able to spread the wings that were restrained for such a long time in the shadow of her father?” For her, 2015 will be the year to silence the critics and prove her business acumen. Under her watch, the group has moved forward with big projects. It inaugurated a new mall in Ramle, it raised NIS 615 million in its first bond offering since going public, and she has promised that the group will expand its commercial space by half within five years.

The group is also re-investing in its existing properties, making sure they keep up to snuff in an increasingly competitive market. It also had to write down part of the value of its Beersheba mall.

Meanwhile, Danna is also actively involved in the Azrieli family’s philanthropic giving, which, as The Jerusalem Post first reported last year, has seen a major increase. The family planned to double its total payout of about $100m. over the previous 23 years in a three to five-year period.

Moshe Kahlon
The 20th Knesset’s best chance for reform

In 2012, Time magazine famously dubbed Prime Minister Benjamin Netanyahu “King Bibi.” Three years later, with somewhat less fanfare, his former Likud minister Moshe Kahlon became the kingmaker.

The former communications minister is well-respected among the Israeli public for passing mobile reforms that led to a drop of some 90 percent in cellular prices, and won 10 seats with his new Kulanu Party promising to bring similar reforms to other over-concentrated sectors of Israel’s economy. Though the election results in March gave Netanyahu the clear mandate to form a government, Kahlon’s positioning as a centrist party gave him an enormous amount of power.

Already he seems poised to make a difference.

In coalition negotiations, instead of seeking high-profile and exciting positions, he sought to consolidate all the elements relating to financial and housing policy under his belt. His predecessor Yair Lapid was criticized for not having such strategic foresight early on, and struggling to obtain cooperation from other parties.

Kahlon got just about every demand he made, meaning he has the opportunity to bring much-needed structural change to Israel’s economy.

Much hangs in the balance. If he is successful in his reforms, he could knock down some of the most burdensome barriers facing the country’s economy, helping open up credit to small- and medium- sized businesses, reduce bank fees and finally lower the over-inflated housing bubble that has made housing unaffordable for so many Israelis.

As the only centrist party in the coalition, Kahlon will also have to pick and choose his political battles. Kulanu’s platform did not advocate building outside “consensus” settlements, which Bayit Yehudi chairman Naftali Bennett is determined to do. Kulanu talked about integrating haredim into the labor force, a prospect that was severely rolled back when the ultra-Orthodox United Torah Judaism and Shas parties entered the coalition. And he will have to figure out how to deal with the billions of shekels promised away in the coalition agreements, which have roughly doubled the estimated deficit for 2016.

The challenges facing Kahlon are numerous, complex and thorny. The decisions he makes in the coming months could very well shape both the economic and political landscape in the Jewish state for years to come.

Jeff Zients
Obama’s economic Mr. Fix-it

What are the economic arguments for US President Barack Obama’s policies in the Middle East? That was the central topic of discussion I had last week in an exclusive interview with Jeffrey Zients, the president’s chief economic adviser, formally serving in the White House as director of the National Economic Council and assistant to the president for economic policy.

Zients is known in Washington as the president’s Econ guy, his Mr. Fix-It: He was instrumental in revamping HealthCare.gov, after a career initiated in the private sector ultimately launched him into public service.

Here, speaking for the White House, Zients makes the economic case for a nuclear deal with Iran, against the boycott campaigns against Israel, and for a comprehensive two-state peace accord between Israel and the Palestinians.

You are part of a notable tradition of Jewish figures in positions of influence on US economic policy. Your predecessor is Jewish; the Treasury secretary is Jewish, as is the chairman of the Federal Reserve, and her two immediate predecessors. What accounts for this history, and how do you identify with it?

In the Jewish tradition, there is a strong emphasis placed on service to the broader community and to tikkun olam – “repairing the world.” The aspiration that we each can do our part, however large or small, to help improve the lives or others is part of the Jewish tradition that I grew up in. It’s what attracted me to public service. In this administration and in previous Democratic and Republican administrations, there are many examples of Jewish Americans who have played important roles in the development and implementation of economic, domestic and foreign policy. I’m honored to be part of this lineage. It is something we celebrate and acknowledge, particularly this month during Jewish American Heritage Month.

Critics of the Lausanne framework with Iran over its nuclear program fear a nuclear deal will lead to budget displacement: That Tehran will become a richer nation after sanctions are relieved, and that an influx of foreign investment will free up funds for Iranian activities contrary to the American interest. As the president’s assistant on economic policy matters, would you say that is a legitimate fear?

First, the nuclear related sanctions were always intended to secure a verifiable deal that prevents Iran from obtaining a nuclear weapon – something that is strongly in the interests of the United States, Israel, the region and the entire international community. Without sanctions relief, there would be no deal and an Iran armed with a nuclear weapon would be able to project even more destabilizing power in the region.

Sanctions relief under a potential deal will involve the suspension and eventual lifting of nuclear-related sanctions on Iran. Our sanctions targeting a broad array of Iran’s non-nuclear activities, including its human rights violations, support for terrorism, and destabilizing activities in its region, will remain in full effect and will be vigorously enforced.

Now, we absolutely share the concern that Iran may use some of the money from sanctions relief to fund destabilizing actions in the region and beyond. However, our experts and many outside experts assess that most of the money Iran receives from sanctions relief will not be used to support nefarious activities but rather will be focused primarily on domestic economic recovery.

As a result of US and international sanctions, Iran’s economy is in a major economic hole. The Iranian economy is 15- 20 percent smaller than it would be otherwise and the scale of Iran’s domestic investment needs is estimated be at least half a trillion dollars, which far outstrips the benefit of sanctions relief. Iran will be playing catch-up for a long time to come. And politically, Iranian President Rouhani will be under immense pressure to deliver much-promised economic improvement to the Iranian people once Iran starts receiving sanctions relief.

Even the most severe sanctions regime in history has not been enough to prevent Iranian support to militant proxies or terrorism – these accounts have been prioritized and protected, and the financial cost of this behavior is relatively small to Iran. Geopolitical constraints, not financial ones, already limit greater Iranian activity in the region. That is why we are focused on continuing to work closely with our regional partners to expand and strengthen their own capacity as we collaboratively seek to deter any Iran’s destabilizing activities and support to terrorism.

The Senate Finance Committee has backed an amendment to a bill providing the president with fast-track trade authority, which requires any transatlantic agreement to discourage European governments from engaging in efforts to boycott, divest or sanction Israel and Israeli-controlled territories. Does the White House support this provision? How will this affect the negotiations?

The United States and Israel are close partners, and this is manifested, among other areas, in our strong trade relationship.

The United States has worked in the three decades since signing the US-Israel Free Trade Agreement – our first such agreement with any country – to build robust trade and investment ties with Israel. It is also important to keep in mind that we already have robust anti-boycott measures in place regarding Israel and that the Administration’s policies opposing boycotts directed against the State of Israel remain unchanged. For instance, the Department of Commerce’s Office of Antiboycott Compliance already administers existing anti-boycott laws regarding Israel. It is also important to underscore that longstanding and bipartisan US policy with regard to the status of territories administered by Israel after 1967 and opposing settlement activity remain unchanged.

In terms of the United States’ economic interests in the Middle East, what has changed from the 20th century to the 21st? Is it your assessment that the US has an economic interest in peace between Israel and the Palestinians?

One thing that has changed in recent years is that the US energy position has changed quite significantly. The United States is now the largest oil and gas producer in the world. As production has increased, consumption has declined due in part to tighter fuel economy standards. Today, our reliance on foreign oil is the lowest it has been in over 40 years. At home, this has created new jobs, reduced our trade deficit, moderated energy prices, sparked a domestic manufacturing revival and kept more money flowing into our own economy.

Globally, our increasing energy supplies help reduce the world’s vulnerability to global supply disruptions and price shocks and afford us a stronger hand in pursuing our international security goals, such as sustaining international sanctions on Iran.

But this has not changed the basic fact that energy markets are globally linked and the world still depends on energy supplies from the Middle East. As the president himself has said, the world still depends on the region’s energy supply, and a severe disruption could destabilize the entire global economy.

This is why we remain committed to ensuring the free flow of energy from the Middle East to the world.

More broadly, the United States continues to have a profound interest in an economically and politically stable and prosperous Middle East. In an increasingly globally interconnected world, we have a strong interest in promoting economic growth and stability abroad. When our Middle Eastern partners’ and allies’ economies are growing and creating jobs and opportunity for their people, it is good for US businesses, good for US national security, and good for the global economy.

This interconnectedness means that the United States absolutely has an economic interest in a lasting peace agreement between Israelis and Palestinians. A peace agreement has the potential to significantly advance intra-regional trade in the Middle East, opening up for the first time the possibility of trade between Israel and 19 of its neighbors. This in turn would fuel greater economic opportunities and growth for Israel, and for the entire region.

As Fed Vice Chairman Stan Fischer said when he was governor of the Bank of Israel, the Israeli economy “could grow much faster if we were to achieve peace with our neighbors.”

Experts suggest a two-state solution could inject an additional $3.4 billion a year into the tourism sector alone.

Similarly, a two-state solution would lead to rapid economic development in the West Bank and Gaza. One EU-sponsored study suggests that a peace settlement could spur Palestinian GDP growth of nearly 85%. And the rest of the region will also benefit, with one Israeli-Palestinian think tank estimating that the development of trade corridors through Israel has the potential to increase international trade between Arab countries by at least $2.5b.

You are a product of the private sector, and have recently been credited with streamlining public programs. Can the government be run as efficiently as a private company? Can it be as innovative?

 Prior to joining the Obama Administration in 2009, I spent my professional career in the private sector, where I was fortunate to help lead two companies from early stage through two public offerings, and was involved in a range of public and private companies both as an investor and a Board member. I saw firsthand how a productivity boom transformed private sector performance over the last two decades, with improvements in operations and technology that revolutionized entire industries – increasing output, lowering prices, and increasing customer satisfaction at the same time.  When I came into government, I was struck by the fact that government agencies had missed out on those gains, and too often were operating without the systems, processes and tools for increasing efficiency that are taken for granted in the private sector.

 The good news is that we have the opportunity to move quickly to adopt proven best practices from the private sector to make government work more efficiently.  Here in the U.S., under President Obama’s leadership, we’ve done just that through successful efforts to eliminate wasteful information technology spending, modernize and improve citizen-facing services, and create new programs to recruit new talent and develop existing talent to drive change and innovation.  One example is the Presidential Innovation Fellows program that we established in 2012 to attract top innovators into government.  Already, we’ve seen this program produce results that save taxpayers money, fuel job growth, save lives, and provide tangible benefit to the American people. 

Are you incorporating any economic models from abroad in your advice to the President on how best to tackle income inequality?

Expanding opportunity for all Americans, and addressing poverty and inequality, has been a central principle of President Obama’s economic agenda from day one. You’ve seen it in what he has fought to accomplish in areas like healthcare, reforms to our financial system and our tax policies, and investments in workforce skills and education. President Obama believes that in America everyone should be empowered by the country they call home, not limited by the zip code into which they are born.  That’s why the President’s agenda is focused on expanding opportunity for all:  restoring economic security to hard-hit American families; building stronger neighborhoods and communities; and ensuring young people have the opportunity to reach their full potential.

When it comes to providing the President with advice on how to further achieve our goal of making our economy work for every American, we evaluate ideas from all available avenues, and look to adopt successful examples from around the globe. One example is our focus on increasing the use of apprenticeships to help American workers acquire the skills they need to succeed in good jobs that are available in today’s economy. Hands-on apprenticeships, where workers earn and learn at the same time, are a proven path to good, secure middle-class jobs. In fact, 87 percent of apprentices are employed after completing their programs, with an average starting wage above $50,000. And apprentices earn a significant premium for their skills — as much as $300,000 more than their peers over a lifetime, according to some studies. Our efforts to expand apprenticeships by encouraging apprenticeships in a more diverse array of industries was informed in part by successful efforts to design, market and promote apprenticeships in the United Kingdom.

Matthew Bronfman
Major investor in Israel, involved philanthropist

Businessman Matthew Bronfman is one of the biggest American-Jewish investors in Israel – with a share in supermarket chain Shufersal and the local franchise of Swedish multinational ready-to-assemble furniture giant IKEA, as well as real-estate holdings; until 2013 he was the largest shareholder in Israel Discount Bank, before deciding to divest his holdings.

Son of late World Jewish Congress leader Edgar M.

Bronfman, the 55-year-old is also a major philanthropist who chairs the international steering committee of Limmud FSU, an organization that aims to strengthen the Jewish identity of Russian-speaking Jews around the world. Among his other philanthropic activities, Bronfman chairs the American Jewish Committee’s ACCESS young leadership program, which trains Jewish professional to shape public opinion and policy around the world.

At a Limmud FSU gathering in New Jersey in late March, shortly after Israel’s elections, Bronfman sat down with The Jerusalem Post to share his thoughts on Israel’s economy.

“Israel is an incredible country for entrepreneurship, with a great entrepreneurial spirit,” said Bronfman, while noting that the wealth created “is not necessarily spread equally across the board” and at the same time knocking what he described as excess regulation and a socialist policy undertone that is detrimental.

“The government should reduce regulation and reduce the power of the unions,” contended Bronfman. “The country needs to be more capitalist in its DNA to allow more people to rise up.”

Talking about the high cost of living in Israel, Bronfman said the government needs to tackle the issue.

“The cost of living in Israel is high, but the good news is there are ways in which the government – if it chooses to – can lower the cost of housing; it can loosen regulatory bureaucracy around new developments. There are ways for the government to deal with this issue – they could subsidize, they could get rid of taxation. There is an issue, it has been identified, and the government needs to react to it.”

The supermarket chain owner also put the onus on the government to help reduce the cost of food. “If you want to lower the cost of food, it can’t come from us. We make around 2 percent on big volume, but very small margins with fierce competition and more stores opening all the time. I said to [Yesh Atid leader] Yair Lapid, when he was finance minister, that the only way to do it is to lower the value-added tax [and address the] lack of competition in terms of supply. Suppliers make a lot of money, government makes a lot of money, but we don’t make a lot of money.”

Bronfman warned that excess taxation was pushing successful young Israelis to seek better opportunities elsewhere.

“If you overtax those who are successful, they will leave – and we see a lot of that,” he maintained. “We see a lot of young Israelis leaving; for Berlin, for North America, for Silicon Valley.

At every airport I go to, I hear Hebrew. The government needs to focus on how to increase the middle class, to help the young people coming out of the army and out of university get started.”

As for whether he will deepen his investments in a country he describes as, like America, “a land of opportunity,” Bronfman replies, “We are focused on growing the businesses we have, and as other opportunities come along, we’ll take a look.”

Contributors: Niv Elis, Michael Wilner and Ilan Evyatar.

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