My word: The price and value of openness

No wonder Israeli airline staff fear being thrown out of a job without a golden parachute or a handy first-name-term relationship with the owner of a bank.

El al plane at rest 370 (photo credit: REUTERS)
El al plane at rest 370
(photo credit: REUTERS)
It was a week in which some Israeli airline passengers were stranded without flights and many citizens came down to earth with a bump as new Finance Minister Yair Lapid finally came off Facebook long enough to bash the ultra-Orthodox parties now exiled to the opposition and discuss the urgent need for budget cuts and a string of economic measures.
Among those who had a bumpy landing was businessman and investor Nochi Dankner. Considering the great height from which he fell, the drop could have caused him tremendous pain. Dankner’s landing, however, was cushioned by his remaining assets. Or it could be that his name – though no longer as good as it was a few months ago – got him through this crisis, too. Money – even virtual wealth – obviously eases a blow.
Nonetheless, there is a feeling that something has changed, not so much in the Israeli economy as in Israeli society.
Even the fact that economics rather than the security situation dominated the headlines is itself a sign that a new wind is blowing.
Something was in the air (and it was the same something that kept the Israeli airplanes grounded for two days).
The strike by El Al, Arkia and Israir was sparked by the government’s approval of the Open Skies policy. The staff are naturally concerned that their jobs could be threatened by the greater competition from foreign airlines. The government, on the other hand, feels that it will help prevent future strikes, bring prices down, and provide a boost for tourism (although cutting the costs of hotels would more likely encourage both foreign and domestic tourists to stay here, one of several reasons that the proposed hike in VAT is not advisable).
Dankner was affected by an openness of a different sort: He was the target of public scrutiny in the age of Internet.
Even though I grew up in London, like many Israelis I was shocked – even sickened – at the open displays of hatred for Dame Margaret Thatcher as she was laid to rest last week. She was a former British prime minister, not the tyrant leader of some long-suffering dictatorship. I couldn’t understand why people who never met her would celebrate her death. But clearly there were many people in Britain who talk about the ugly face of capitalism and see the image of Thatcher the privatizer and union-buster in their mind.
I found myself suspended in a form of limbo – neither able to fully support the striking workers, nor capable of ignoring their fears; not enjoying Dankner’s downfall, but relieved that the so-called “tycoons” and the country’s banks learned a lesson for the future: that such glaring double standards will not be tolerated.
As one commentator put it, if Dankner needs to pay back the money he owes, he could sell his luxury home. It’s hard to imagine any bank offering an ordinary citizen – Lapid’s fictional Ricki Cohen from Hadera, for argument’s sake – a similarly sweet deal.
Had the 37-year-old, typical middle-class woman borrowed vast sums of money and failed to pay them back, she would not be worrying about her vacations abroad every other year and how to finance the future purchase of homes for her three children.
She’d be worrying how to keep a roof over her family’s heads after the bank foreclosed on her mortgage, how to prevent the sky from falling. Ricki Cohen, or her real-life peers, would stop living in Lapid’s dream world and start living a nightmare.
In financial terms, Dankner took a “risk”: In my lower-middle-class lingo, he took a gamble. And it was my money he gambled with, so excuse me for taking this personally.
Bank Leumi on April 19 announced it was willing to forgive NIS 150 million ($41.3m.) of his Ganden Holdings company debt. The public was less forgiving. More significantly, instead of merely grumbling around the dinner table last Friday night, the ordinary Cohens, Levys and Israelis of all types made their voices heard via the social media and the more traditional press.
Clearly if no one took risks, the country would not move forward, and certainly would not have earned its “start-up nation” nickname, but the guiding principle of my maternal grandfather continues to echo in my mind: Don’t gamble with anything you can’t afford to lose.
Lapid and outgoing Bank of Israel Gov. Stanley Fischer said they would establish a committee to oversee debt issues in general, leading Bank Leumi to suspend Dankner’s “haircut.”
Dankner continues to express optimism, and for his sake and ours I hope it’s justified.
The most important aspect of the affair is that other tycoons and the banks now internalize that the age of dubious deals is over.
Members of the general public might not take to the streets again as they did in the social protests that defined the summer of 2011, but via Facebook, Twitter and other forums they can exert pressure from the comfort of their rented or heavily mortgaged modest homes.
We all know that Israelis hate being “freierim” (“suckers”) and the Dankner case was something they could not take quietly sitting down.
THE AIRLINE strike was more problematic.
Bringing down the price of tickets is not exactly a means of helping those most in need.
Altogether, I am skeptical of the self-proclaimed financial woes of the social protesters who took to the streets in 2011 – demonstrating about everything from the price of cottage cheese to the cost of diapers and daycare – before taking a flight for a vacation abroad.
I appreciate, too, the added expense of security incurred by Israeli airlines and the burden of being unable to fly over many enemy countries, which would cut the time and cost on the flights to the Far East, for example.
El Al can be relied on to maintain service when foreign airlines, like the tourists, stay away in (Heaven forbid) times of war. It has also mobilized to help bring immigrants in times of need in a way that other airlines won’t understand, let alone agree to.
Even during the strike, a flight carrying school students from Sderot to an international competition for young inventors was given permission to take off.
Two years ago I had the definite pleasure of flying first-class to London on British Airways and meeting with the company’s thennew CEO, Keith Williams, to hear about its merger with Spain’s Iberia airline.
Williams, a former CFO, was very pleasant and very impressive. Nonetheless, one of things that left a lasting impression (along with the sheer luxury of the flight and airport facilities) was the way Williams didn’t even blink as he noted that BA had slashed costs partly by cutting personnel from 65,000 employees to 35,000.
No wonder Israeli airline staff fear being thrown out of a job without a golden parachute or a handy first-name-term relationship with the owner of a bank.
Another question was also in the air this week, a far pleasanter one – one known in Hebrew as “tzarot shel ashirim,” the troubles of the rich.
Now that Israel has discovered gas, the question is who will benefit.
Proving he is learning fast, Lapid midweek agreed to sign on a regulation proposed by Energy and Water Minister Silvan Shalom that requires natural gas entrepreneurs to report on their pricing and profitability.
Ultimately, the lines defining who owns the gas – a natural resource and national asset – have yet to be drawn.
Everything is open.
The writer is the editor of The International Jerusalem Post.
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