So you want to become socialist?
Meet the Israel Electric Company. The Israel Electric Company is our national utility - nearly everyone gets their electricity from Israel Electric. It's a 'government company,' which means that the government is the largest shareholder in it. In the case of the Electric Company, the government owns 99.85%.
Israel Electric has two distinguishing factors: First, its employees are among the highest paid in the country, with an average monthly salary of NIS 24,025, or a bit more than $6,000 per month (not counting benefits) at today's exchange rate. Second, in addition to its relatively high salaries, Israel Electric gives another huge benefit: free electricity. No, not 1,000 kilowatt hours per month free or something like that, but totally free, unlimited electricity. So no gas or oil in those people's houses. All 12,489 of them.
And there's a third distinguishing factor: They're going broke (link in Hebrew). With an existing debt of NIS 65 billion, it seems that Israel Electric has negative cash flow of NIS 1.4 billion, and is demanding that the government - which has allowed Israel Electric to raise its rates by 30% this year - kick in NIS 1-1.5 billion to 'fix' its balance sheet. And no, they're not willing to give up anything in return. Not even the free electricity for all 12,489 employees or any part of it. So the Finance Ministry is refusing to bail them out.
Back in the 1940's, George Orwell wrote a book called Animal Farm, in which the animals did fine being equal until some decided they wanted to be more equal than the others. That's when things fell apart.
Here in Israel, some animals have been more equal than the others for a long time, and that's why many of us have been fighting to get rid of the vestiges of socialism. Israel Electric Company is now an anomaly in our economy. Most of the other government companies were privatized, at least to some extent, a long time ago.
But by 2016, there may be lots of Israel Electric Company's in the US economy, with thousands of employees who believe that they are more equal than everyone else. And then you can pay tax rates like ours too - we are consistently the last, or one of the last, countries to reach Tax Freedom Day each year.
What could go wrong?
Labels: Israel Electric Corporation, socialism, Tax Freedom Day
posted by Carl in Jerusalem @ 10:23 PM
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