RMIMediacomment: Economics? Does The Media Care?
The crisis in the monetary markets made headings this past week. The pundits gone over why it came about, and how it affects Israel and Israelis. There was a consensus on a few issues.One is that nobody
understands to predict how severe the crisis is. It is not clear whether it is a briefa short-term correction or whether we are in for a long term decline which may seriously impact the world economy and Israel. The second is that the decrease impacts the pockets of nearly all Israelis. The average resident can no longer pay for to disregard the markets for all our savings are connectedconnected to them. Fifty years ago, the mindful citizen would put cost savings into a government-backed and cost-of-living-indexed cost savings account and rest well. This is today nigh impossible.We are a rich society
, and as the saying of our sages goes, one who has great deals of ownerships has lots of worries.Listening to our radio or seeing our TELEVISION sets nevertheless, one would think that absolutely nothing has altered. Economics reportage on Israels mainstream electronic media is rather poor and does not offer good service to the liable citizen. At face value, one might incorrectly view that there is broad coverage. Kol Yisraels Reshet Bet has an everyday hourly economics program at 4:05 pm, normally presented by Anat Davidov. Galatz has such a program at 7:05 pm, provided by Oded Levinson, who has a law degree. Both stations have permanent financial reporters, Ran Binyamini at Kol Yisrael and Yuna Leibson at Galatz.A similar situation is found on TV. Oded Schachar is the economics czar of TELEVISION channel 1. He is a graduate of Hebrew University, with a BA in economics and an MA in business administration. Keren Marciano is his counterpart in Channel 2. Her BA is in law, her MA is in company administration. She runs an everyday program at 7:30 pm, The Cost savings Program, which offers the typical resident with financially associated advice. Channel 10 has Matan Chodorov, who also worked as head of the channels labor union.Chodorovs expert education remains in law. Is it only by chance that the official education of mostthe majority of these stars is law, not economics or fund? Or is this a bad expert option
which seriously affects quality? One might safely state that many of the press reporters are socialist in their outlook, and this reflects itself in their reportage.The question of employment is extremely important. If any Israeli company fires workers or is on the edge of bankruptcy, these reporters will immediately chooseget the story, although generally it influences only a very little minority. Messrs.Binyamini and Chodorov went out of their method to prevent closure of Channel 10 TV. Shouldnt their job have also consisted of covering the economic reasoning of shutting down the channel? Shachars reportage is significantly colored by his socialist worldview.But maybe most bothersome is that their reportage has really little to do with the monetary markets.A simple example is the bond market.Anyone who pays attention to the news programs with the intent of comprehending how the bond market fared is naiuml; ve. At many, the reports will describe TA 25,
Israels analog of the Dow Jones Industrials index, which supplies a very partial reflection of the marketplace.
The bond market is big.
Many of our cost savings remain in the bond market, not in stocks. Why is it ignored? Is it due to the fact that the press reporters are just not sufficiently conversant with bonds? The guidelineguideline is that bonds, provided they are not junk bonds, are the more conservative investment.Why then did our bonds lose massive value at the exact same time that the stock exchange failed? An Israeli development is the Keren Hishtalmut which can be translated as education furtherance fund. The essential idea was an excellent one: any worker should have the opportunity to additionally her or his education. This is goodbenefits the company, for the state and the employee.
The government hence decided that any funds transferred in such a fund would not be taxed for revenues. Today, the fund is simply another source of incomeincome source even the finestthe very best offerhandle town. Not just are the profits exempt from tax, mostthe majority of the financial business that service these funds are willingagree to offerprovide loans at sub-prime rates utilizing them as collateral, hence even further enhancing their value.Different funds have different policies.Does the public understand this at all? Do our thorough reporters keep an eye on them or are the funds in the news just when someone in the Financing Ministry suggests taxing them? However there ares more to it. The managers of the funds are rather irresponsible in their financial reports. The consumer gets one only once a month and even then the report is 20 days outdated. Provided the volatility of the marketplaces, it becomes extremely hard for the worried owner to decide when to offer the holdings. We once pointed this out to a senior financial reporter, who was entirely unaware of it. When asked if anything would be done about it the response was evasive, and to this day absolutely nothing has changed.It is much easier to feed the customer the truths the significant monetary business giveprovide, rather than dig thorough into their operations. Many companies provide monetary management programs and even advertise them in the media. Their costs are high and their performance is absolutely nothing to be extremely happypleased with. When was the last time that Oded Shachar supplied his public with an extensive analysis of these companies? Why is it that their real charges are a clean secret? Israel radio had an ongoing ad from a reala realty business suggesting a 20 percent return on financial investmentroi in US homes. This advised us about a popular story attributed to Teacher Moshe Kaveh, the former president of Bar-Ilan University. Someone attempted to persuade him to invest the universitys endowment funds with Bernie Madoff, keeping in mind the assured 10 % yearly return.Kavehs supposed retort was that this was the very factor why one must keep away, because no one could provide such high returns on a year to year basis. Bar-Ilan University conserved a lot of cash. Has anyone investigated this genuineproperty company? Or is it sufficient that it pays for promoting to keep them immune from a major research? We are not economists nor are we trained in finances. However, the absence of professionalism of economic reporting in Israels electronic media is just another sign of the dominating attitude we knowwe understand everything much better, the customer must simply value us and not ask concerns. In reality, Israel does have extremely significant financial reporting in the written media, however in some way, this info, important for a start-up country, has actually not yet diffused into the electronic media. Sports are covered much more completely than finances! It should not take a monetary crisis to bring the marketplaces to the forefront.The authors are respectively vice chairman and chairman of Israels Media Watch( www.imw.org.il).
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