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Faced with implacable MKs demanding ever rising allocations for their constituencies, Finance Ministry decided to raise a new generation of MKs. Elementary school curriculum will include classes on financial responsibility.

Financial Ministry’s proposals of cutting thousands of government sinecures are rejected. Ministers demand financing for their pet programs. The budget increases despise possible economic slowdown the next year. The army, lacking strategic goals, will waste $12 billion in 2008.

Japan government’s funds will go into industrial projects in the “peace valley” between Israel and Jordan. Due to its remoteness and harsh climate, the industrial park is likely to attract ecologically dangerous factories. One such factory exploded today near Beersheba; eight workers hospitalized and road to Beersheba blocked for hours.

The Finance Ministry considers permitting casinos. The issue, however, is hardly financial but a moral one. Casinos will handsomely add to Israeli pantheon of brothels and shops selling pork, vodka, and neo-Nazi literature.

Heftsiba’s story is yet to emerge. It is not clear how Heftsiba’s top managers could expropriate so much money for the company failed in a booming real estate market. The role of Peace Now needs to be investigated. Peace Now forced freeze on Heftsiba’s major project in Modiin out of concern for poor Arab villagers nearby.
Almost every other large real estate developer in Israel follows Heftsiba’s model, and many borrow heavily through variable-rate instruments at Tel Aviv Stock Exchange, which make them extremely vulnerable to fluctuations of interest rate.
Bank of Israel promised to repay all customers of Heftsiba who paid through banks. The message is clear: imprudent customers can continue dealings with fraudulent companies; Israeli taxpayers will compensate them.

Hapoalim can enjoy Arab deposits undisturbed by their owners.

Lackluster consumer demand cannot offset foreign investments. The rich become richer, and the poor – poorer. Insufficient growth of consumer imports drives shekel up and threatens Israeli export capabilities.

Israeli Jews absorb the costs of electricity consumed by Israeli and Palestinian Arabs who don’t bother paying for it.

Knesset adopted a law on negative income tax: a subsidy for low wage earners. That means, Arabs who engage in black market economy.

Israeli Statistics Bureau cited unemployment in Israel at 6.9%. Unemployment declines since the start of Intifada because Israeli government barred Gaza’s workers from Israel.

The rate is suspiciously low, given the rampant unemployment in Israeli Arab and ultra-Orthodox sectors whose members engage in black market economy.

Though the added value in diamond production is significant, Israel substantially acts as a transshipment point for diamonds, including the blood diamonds from war-torn areas and gray diamonds from places like Angola where Livaev and his friend former Mossad head Danny Yatom established a micro-empire.

Lev Levaev moved his family to London, where several other Israeli tycoons reside and hide from the outrageous Israeli taxes.

Due to the cold season and using heaters, Israel is close to electricity failures. Israeli Supreme Court only reviews electricity disconnections in Gaza, but Jews can suffer freely. At the same time, Israel continues supplying electricity to Gaza.

The Heritage Foundation’s Index of Economic Freedom ranks the Jewish state a 46th country. Still better than North Korea.

Kineret is close to its lowest winter level ever, at 65% of average water capacity. Israeli continues uninterrupted water supply to Gaza.

Israelis are urged to reduce the consumption of electricity which is still freely supplied to Gaza.

for holding off the approval for thousands of housing units to be built in the areas of Jerusalem which Palestinians imagine to receive in the peace process.

Leftists protest Israeli government’s plan to relocate the illegal African migrants to Israel’s north and south borders to work in agriculture. The migrants demand Israeli minimum wages, tens of times more than their income in the places of earlier habitat, and “human rights” groups find it easier to work with their African pets in Tel Aviv.

Israel’s National Bank purchased undisclosed amounts of US dollars against shekel. The bank’s move will draw attention of international currency speculators who would dump the US dollars on Israel at a relatively favorable rate sponsored by the Bank of Israel. The bank’s resources fall incredibly short of US dollar amounts available to speculators.
The weakening of US dollar against shekel is prompted by overall weakness of US economy, the historically overvalued dollar, gradual switch to euro in international transactions, but also by the highly distorted Israeli economy. In Israel, the rich grow richer, export more, and bring more US dollars into the country. The poor grow poorer, and have insufficient demands for imported goods, and therefore for the US dollar.

Israel, Egypt agreed that Egypt will supply electricity to Gaza. Now the Israeli threat of cutting electricity supply to Gaza is moot, and Egypt got the lucrative business of monopolistic power supply to Gaza.

Past coverage: economy
15.04 Bank of Israel is satisfied with falling dollar
17.04 Fake increase in foreign investment
23.04 Bank of Israel cuts interest rate to 3.75% to stop shekel from rising
30.04 Oligarchs divest from Israel
02.05 Israeli Marxist economy: concentration progresses
02.05 Microsoft will invest $20 mil a year in Israel
11.05 Intel invests $31 mil in six Israeli start-ups
14.05 Israel the colonial economy: consumer imports rise 5 times below the average import growth
15.05 Israeli rich become richer
16.05 Modern Middle East is too risky for Leviev
24.05 Middle East conflict made real: Israel to pay a billion dollars to Gaza
24.05 Israel will trust strategic enemies
29.06 Gasoline prices rise to $1.56 per liter
29.06 Only 87 Israelis own over $30 million
02.07 Controversial anti-socialist program extended
03.07 Shas party vetoes bread price hike
05.07 Junk bond casino opens in Israel
06.07 Socialism makes bread short
02.08 Ultra-Orthodox Jews settle account with contractors
06.08 Israel marches toward socialism