Rattling the Cage: Let them eat egg roll

Why should Israeli workers and their families have to pay with their livelihoods for Wall Street's greed? Why can't the Olmert government step in?

By LARRY DERFNER
March 19, 2008 22:28
4 minute read.
larry derfner 88

larry derfner 88. (photo credit: )

The consensus here is that because of the crash on Wall Street and the cheapening of the dollar, thousands and thousands of Israelis are soon going to lose their jobs to the Third World. It's seen as a fait accompli - nothing can be done to stop it. And nothing should be done. "Instead of manufacturing in our Ashkelon plant where we have over 100 employees, I'm going to be forced to send the manufacturing out to Turkey - and I'll have no choice but to fire experienced workers," an electronics company owner told Yediot Aharonot. "The jobs will move to India and China," said the general manager of Motorola-Israel. "We're still debating over the number of firings; the production, I'm sorry to say, will be moving from our Petah Tikva plant to Hong Kong," said a plastics company owner. The shock waves from America are destabilizing Israel's economy, Israeli owners are about to start firing local workers en masse, the jobless here are going to have an extremely hard time finding work - unless they move to the Third World - and not a word has come from the Histadrut or the government about keeping these thousands of jobs at home. The reason for this silence is simple, matter-of-fact: The Histadrut and the government aren't going to do anything at all to save these jobs. The Histadrut would like to, but doesn't have the power anymore. The government has the power - meaning the money - but refuses to use it. This is a moment of crisis for Israeli industry, and this crisis is not homegrown. The reason all these Israeli workers stand to lose their jobs to China, India and elsewhere is not because their companies were poorly managed, not because the workers themselves were inefficient, but, economists agree, because American financial institutions such as Bear Stearns ran a pyramid scheme with bargain-basement, sub-prime mortgages. Why should Israeli workers and their families have to pay with their livelihoods for Wall Street's greed? Why can't the Olmert government step in? If the government were to spend the money necessary to subsidize the wages of these employees, at least until the world economy righted itself, these companies wouldn't have to fire those workers and send their jobs overseas. If the government can give financial incentives to Israelis living in the West to lure them back home, why can't it give financial incentives to Israeli companies to keep Israelis employed right here? AND MAYBE somebody should say a word about some of these ridiculously rich owners and top executives who will sack low-wage workers by the hundreds rather than accept the slightest drop in their own spectacular standard of living. If there can be a national campaign to shame Israeli youths out of dodging the draft, why can't there be a national campaign to shame Israeli multimillionaires out of firing modestly-paid people who have families to support? At the very least, why can't there be a "package deal" to save these jobs whereby the workers accept a small pay cut, the companies accept a drop in profits and top-level salaries, and the government contributes its share in wage subsidies? Just until Wall Street and the dollar are strong again? The reason there can't be such a thing is because this is considered socialism, or bolshevism, or whatever new curse is being shrieked these days by the right-wing hordes. When the government spends the taxpayers' money to prop up factories, that's communism. But when the Bank of Israel spends the taxpayers' money, $600 million of it, to prop up the Israeli capital market, that's sound economics. When the US Federal Reserve spends a huge amount of the American taxpayers' money to prop up Bear Stearns so J.P. Morgan can buy it for a pittance, that's wise leadership. What it really is is "socialism for the rich," and this is the only idea being heard in Israel today about what should be done to protect the economy - and by the economy, people mean the share prices of the big companies traded on the stock market, they mean the banks, the brokerages, the financial institutions. The government and Bank of Israel should do whatever's necessary to save them. But the jobs of factory workers? Screw 'em. Ship 'em to China, that's where they belong. As for the factory workers themselves, and their families, we'll do what we can. There are, however, honest-to-God believers in the free market, people who are against socialism for the rich and poor alike, who are opposed to propping up Bear Stearns, the Israeli capital market or anything else, and who really do believe in laissez-faire economics, in the natural wisdom and justice of the free market. And just look where it's gotten us: American lenders were free to flog cut-rate mortgages to people who couldn't afford them, then these wizards were free to work some sort of financial alchemy with the proceeds, and the result is that masses of poor Americans are threatened with bankruptcy and homelessness, the world economy is shaking, and, in Israel, thousands and thousands of working people are looking at a future on the unemployment line. Nobody in the world needs to be convinced anymore that communism doesn't work. But 19 years after the fall of communism, it's time we changed the subject. The subject of our era is capitalism, and it should be clear by now that while capitalism works better than communism, it doesn't work that well, either. Capitalism has its victims, too, and it's because governments did nothing to help them in an earlier time that communism got started in the first place.


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