So who says all CEO’s are bums? If you listen to those in the Obama administration you would think that being a CEO is worse than being a lawyer. Well there is an Israeli CEO, Eli Yones of Mizrahi Tefahot Bank, who may change the president’s mind. You see Mizrahi Tefahot Bank is actually quite profitable,and as such Yones was entitled to and deserved a very large bonus. Yet he decided to decline it so that his employees would receive it for their hard work.

According to Globes: “Yones said, “Continuing the bank’s profit trend and the ongoing improvement in its image and positioning as a stable, successful, and leading bank are the result of hard and goal-oriented work demonstrated by the bank’s employees last year. There is no doubt that they deserve appreciation and financial compensation for this. Nonetheless, we must not ignore the difficult economic reality and expectations that the recession will worsen in 2009.”Yones advises that Mizrahi Bank’s 2008 bonus budget be smaller than the bonus for the bank’s 2007 profits. The 2008 bonus should reflect the employees’ achievements as well as the economic crisis and public mood.As for his own bonus for 2008, Yones said, “In such times, I believe that the bonus budget should go entirely to the employees and managers of the bank.”

How about showing Yones some appreciation for his bold and selfless move?

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With no real clarity as to who will be the next Israeli prime minister, an editorial in the business daily Globes, says that regardless of who forms the new government, that person should ask Bank of Israel head Stanley Fischer for help forming economic policy. I must admit that I think that Globes is an excellent paper, but this op-ed left me scratching my head.

The author writes, ” The answer to all these lies in the plan each candidate for the premiership has for dealing with the economic crisis, assuming they have such plans. One can assume that in the case of both Livni and Netanyahu, the main plan is to ask Governor of the Bank of Israel Stanley Fischer what to do. What they will hear is what the governor has been saying for weeks: fiscal expansion is possible only as a temporary measure; the non-bank credit market must be expanded; the financial system must be strengthened.”

‘assuming they have such plans”… what on earth is he talking about. Netanyahu has a detailed economic plan. Remember; lower corporate taxes, lower income taxes… targeted fiscal stimulus and privatization. You would think that a writer for a business paper would know that.

The other issue that I have is that BOI head is considered the end all of economists. I know that Israeli politicians never bothered asking during his confirmation hearings, but his policies led to the Asian crisis back in ‘98, which then spread to Russia, Latin America. He was the head of the IMF. As we have mentioned here many times, Fischer was late in understanding that Israel was quickly sinking into an economic slowdown.

i think it’s time that we stop putting Fischer on some kind of economic pedestal. Maybe we should take a look at his record, especially, as the Globes author wishes for, Fischer is going to set Israeli economic policy?

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It’s no secret that Israeli bank profits have taken a hit, and that even with historically low interest rates, they haven’t been quick to pull the trigger and open up their lending coffers. It’s also been well documented that the local banks have concentrated loan portfolios, choosing to forgo lending to you and I in favor of handing over the keys to the safe for the 10 tycoon families that control the Israeli economy. Even with many of these tycoons having funded their international real estate holdings by issuing debt locally, and having little chance of actually paying back the principal, the question of the solvency of the Israeli banking system has yet to be raised publicly. Until today.

Globes reports: “As far as I know, no bank in Israel is at risk of collapse,” Ministry of Finance director general Yarom Ariav told “IDF Radio” (Galei Zahal) this morning.”

Wow! Where did that come from? When you hear that you immediately think that there probably is a problem bubbling away.  The bank of Israel and Ministry of Finance have been so far behind this economic crisis. Now we have a director talk about a bank collapse. Sure sounds fishy to me.

I am not hear to scare the public, but i think that bank customers need to be extra vigilant and keep their eyes and ears open to interpret both what’s being said and what’s not being said.

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For the first time in months we have a real proposal that will help extricate Israel from the economic crisis. Instead of another proposal calling for spending billions of taxpayer dollars to build bridges that aren’t needed, PM wannabe Benjamin Netanyahu, has called for a comprehensive overhaul in the tax code calling for steep cuts in both personal and more importantly corporate income taxes.

Finally we have someone who understands that if citizens can keep more of there money, they can then invest, spend and save it according to their needs. The problem with all these other proposals is that with big time increases in government spending you end up taking money from individuals and they have less to create new wealth.

According to Globes: “Netanyahu said, “Over the course of four years, we will lower the top personal tax rate from today’s 46% to a level of 35%, and we will lower the top corporate tax rate from 27% to only 18%.”

Netanyahu added, “The tax cut will be spread over the entire term, and lead to everyone paying about 20% less than what they pay today”.

He also called for more privatization of government held monopolies like the electric, and water companies as well the ports.

With the world on fast track to socialism, it’s so refreshing to hear a leader speak with common sense, and a firm knowledge of what will actually save the economy.

I know that certain newly sworn in presidents believe that we all need to suffer in order to fix the economic issues that we all face, and that ‘greed’ was what caused all these problems, but ‘greed’ is what powers the economy forward. It’s not a bad thing but a good thing. the greed that Netanyahu talks about is about letting you and I keep more of what we earn, incentivize us to make more so that w can better our lives. Is that Greed? The fact is that as personal incomes rise, so do donations to charities. It appears that there is a correlation between making more and giving more. That doesn’t sound much like greed to me, and that’s the kind of personal sacrifice that should be encouraged.

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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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