Laughing all the way to the bank
Bank of Israel Governor Stanley Fischer is basking in the after-glow of yet another complimentary economic report. As of late, economic reports have been singing the praises of Israeli economy. Thus, it emerges from one of the recent reports, prepared by the Bank of Israel Research Department, that if — and let's hope such an event never happens — one of the local Israeli oligarchs goes bankrupt, along with his leveraged assets and outstanding bonds, which he would have no intention of honoring, no bank in Israel will be losing its stability.
And why should an event of this kind undermine the stability of the Israeli banking system when the fantastic profits made by the banks are derived primarily from the fees and interest rates, amounting to billions of shekels [annually], that they charge their small business and household clientele rather than the heavy borrowers in the market?
The cast-iron stability of the banks is anchored in the aggregate wealth of the Israeli public, and the Bank of Israel Governor is committed to guarantee that this stability will never be undermined. It is founded on the mass of households struggling to earn a living, forever burdened by their interest carrying debit balance. When it comes to the really big debtors, the banks are lenient, erasing at the stroke of a pen huge debts accrued by unbridled, insatiable credit gobblers. They have no such sympathy for the vulnerable, defenseless weak, enforcing draconian, strict rules on them.
The looting of the public's money in favor of incredible wage gaps reminiscent of the legendary Arabian Nights, of the kind found in the affluent oil emirates, has not skipped Israel. Here, too, an aristocracy of capital [aristocratic banking elite] has emerged and flourished, prosperous enough to purchase any leading football club in Europe.
My bank manager, for instance, earns 33.5 times more than his employees. And bank employees are among the highest-paid wage earners in the market, with an average gross monthly income of 28 thousand shekels, an income of which most Israelis can only dream. Last year alone, expenditure on wages in the Israeli banking system reached over 17 billion shekels, accounting for 60 percent of the overall expenditure of the banks in Israel.
Of course, it is not the genial teller at your neighborhood bank that enjoys such an enviable income. There are huge wage gaps between the rank-and-file and the executive echelons throughout the Israeli banking system. It is no wonder, then, that in line with the profit policy that benefits bank executives, the Israel Bankers Association is the major body opposing comparison of work conditions for contractor employees, including the banks' subcontracted cleaning staff and security guards. Indeed, it could not care less about either the cleaner or the guard.
However, if we do some counting up, we will find that, in recent years, bank managers have earned tens of millions of shekels per manager. The income of a bank manager in Israel in the past five years is equivalent to the annual budget of a medium-size development town. The bank where I have found my own Gaddafi let its manager take home nearly 90 million shekels in return for his work in the last few years.
A government that allows such wage gaps is one that encourages its youth to take to the streets in protest. It is an irresponsible policy that nurtures inconceivable social gaps and ultimately brings the masses down, buckling under the burden, while the privileged stratum of economic executives are swimming in pools of money, erecting luxury palaces and, above all, are completely detached.
Many lament the violence that has raised its head in Israeli society. Only a few stop to think about the relation between the surging violence and the outrageous income of Israel's economic executives. The latter see nothing wrong with their salaries, with the lavish bonuses padding their bank account, as if they belonged to the Libyan [Gaddafi-like] tribes [reaping the riches of the people]. And all this, given the gloomy social reality, where Israel is topping global poverty and social inequality charts.
When 20 executives take home an overall sum of 250 million, a quarter billion, shekels, it is a fist in the face of Israeli society and, talking of [recent violence on the play fields and in] football clubs, it is much more painful than any head butt delivered by any footballer.