February 07, 2009

Kadima: Toxic Legacy of a Subprime Leadership

There are some striking parallels between the global financial crisis and the leadership of Israel, as the discredited Seventeenth Knesset is finally dissolved.

The financial meltdown was caused by banks investing many billions of dollars worth of ordinary people's savings in dubious mortgages. Sound mortgage banking was always based on simple principles: advancing funds against the solid security of 'bricks and mortar' which is realistically appraised and whose borrower has the means of repaying interest and capital. One-by-one, in a commission-fuelled orgy of power-selling, these principles went out of the window.

First came the grant of non-status mortgages. Borrowers didn't need to prove their income, or even that they had a job. Next came valuations and margins. Where a 70 percent mortgage used to be granted against a fair appraisal, banks would now lend their non-status borrowers up to 100 percent against valuations which ranged from over-enthusiastic to downright fraudulent. Last to give way was the 'bricks & mortar' rule which always ensured that the bank could walk up to the property and repossess it. Now they got to granting non-status mortgages, for 100 percent of inflated valuations … on what? On trailer parks. Now, presumably, we could expect to see sheriffs putting up roadblocks to repossess mortgage security on the interstate.

After a while these worthless mortgages started piling up all over Wall Street and Europe. They started smelling rotten. The sanitised version of an old saying goes: "If it looks like s*** and it smells like s*** and it feels like s*** it has to be s***." And so, just like sewerage and toxic nuclear waste, the banks sent this stuff off for ‘treatment and reprocessing’. And back it all came, ever so fragrant and beautifully wrapped in perfumed packages with exotic names like Collateralized Mortgage Derivatives, and an unlimited glossary of innocuous acronyms from MBS's to CMO's.

The net result of all this is that the financial security of our homes, pensions and families had been put in dire peril by the very people in whom we had entrusted our life savings. Now this rot has become toxic and billions have been lost, with hardly a single household left unscathed.

Switch now to Israel. Millions invested their money, their hopes and their future in making a home in Israel. They expected its leadership to make good on those same mortgage principles: an honest statement of values, security for their homes and an expectation that they would deliver what was promised.

The people deserved better than what they got; a subprime government, toxic with 'non-status' ministers who didn't even have to prove their worth or ability to deliver. This betrayal was never more clearly exposed than by the sight of Amir Peretz peering through binoculars with the lens caps still on. For sheer political expediency, Olmert put this trade union boss in charge of Israel's defence whilst putting former IDF chief-of-staff General Shaul Mofaz in charge of buses and transportation. For minister of finance, Olmert chose Avraham Hirschson, who has been charged with theft forgery and embezzlement of millions in public funds.

Jewish homes in Sderot and Akko have never been less secure because of Kadima's miserable failings and, for the evacuees of Kadima's unrepentant disengagement policy, far too many are still living in trailer parks of the kind that – in the USA - will never be mortgageable ever again. As for future expectations, the Kadima leadership was so steeped in corruption and self-interest, that it had no means to deliver anything other than more arrogance to its citizens and contempt for the democratic process.

Having reneged on virtually all the values it espoused at the time of the election, Kadima has, through the blatant corruption of its leaders, disgraced the Jewish nation in the face of the world's press and public opinion. This worthless cabinet of 'yes men' could not summon the guts to walk out on Olmert after the loss of the Lebanon War, nor after Winograd 1, nor after Winograd 2 … nor after any one of the succession of corruption charges and investigations that followed.

In surviving, even to this very day, Olmert has shown himself to be the most skilful and thick-skinned leader ever to occupy the prime minister's office. If only he had used those skills to protect his people just as artfully as he has in self-preservation, he could have been our greatest leader ever. Instead he has betrayed us all and disgraced our people in the eyes of the world. He has sent mounted police on pogroms against Jewish settlers, whilst shipping armoured vehicles and rifles to Mahmoud Abbas. He has repaid rocket attacks from Gaza with 'confidence building gestures' to the Arabs. Up to the start of Cast Lead, the confidence of our Arab neighbours had never been higher - to utterly destroy the increasingly timid and enfeebled Jewish state.

Lest you've become bored of hearing so much of this before, let me say this is not just another anti-Olmert diatribe. It leads to an important question.

Having been so utterly betrayed, embarrassed, disgraced, enfeebled and unquestionably put at substantially greater existential risk by this corrupt and incompetent government … can you imagine anyone voting for them again?

And yet, astonishingly, the early polls taken when elections were announced showed Kadima at close to level pegging with Likud, and are still the same on the eve of this election! The government of Kadima looked corrupt, felt corrupt and smelt corrupt. Now it tries to repackage itself under the ‘fragrant’ leadership of Tzipi Livni. People should not be fooled. Kadima is still subprime and toxic.

The party whose name means 'Forward' threatens to take us all the way back to the 1948 armistice lines. When the late Abba Eban dubbed these as 'Auschwitz Borders' he was speaking at a time when Arabs were running barefoot in the Sinai. Now they are running hundreds of the world’s most sophisticated missiles through tunnels under the desert.

Existential realities in Israel often change by the week. Elections only come round every 3 or 4 years. There are only so many mistakes our people can make before the damage becomes irreversible.

We can’t afford more mistakes with our leadership.

An edited version of my piece appears in Arutz-7

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