First Woman to Head Bank of Israel Targets Economic Inequality

Karnit Flug Could Bolster Israel's Minorities

Haaretz

By Ben Sales

Published November 06, 2013.
  • Print
  • Share Share
  • Single Page

(page 2 of 2)

After a lengthy selection process in which Flug was passed over multiple times, Israeli Prime Minister Benjamin Netanyahu appointed her to the bank’s top post in October.

Flug has served on government committees on the defense budget, market competitiveness and the National Insurance Institute. She also served on the Trajtenberg Committee, which was tasked with formulating a response to widespread protests in 2011 over the rising cost of living.

The protests were partly a reaction to nearly a decade of privatization and cuts in public benefits. Founded on socialist values, Israel in its early years had a strong safety net and lionized the collectivist ideals of the kibbutz movement. But in the mid-1980s, Israel began to embrace free-market policies and privatize key state-owned companies. The outbreak of the second intifada by the Palestinians led to an economic crisis that prompted the government to cut entitlement spending.

The 2011 demonstrations called on the government to restore the safety net. In its report, the Trajtenberg Committee recommended various measures, including raising the capital gains tax, increasing government aid for housing and free early childhood education.

In her presentation at the Taub Center, Flug recommended against direct government transfer payments to poor citizens, but she is in favor of Israel’s negative income tax, which provides a tax credit to low wage earners. Flug believes the measure incentivizes work.

As governor, Flug’s ability to implement such policies is limited. Like the U.S. Federal Reserve Bank, the Bank of Israel’s function is to set the country’s monetary policy. Taxes, subsidies and incentives for job creation are determined by the Israeli government.

But Flug could still have an impact. Jack Habib, director of the Myers-JDC-Brookdale Institute, a think tank that researches poverty in Israel, said Flug could advocate for reforms that bolster Israel’s minorities.

“There’s a lot more attention paid to social issues, social inequality, poverty and disadvantaged groups,” Habib said. The Bank of Israel plays “an important role in putting these issues on the agenda of the government.”


The Jewish Daily Forward welcomes reader comments in order to promote thoughtful discussion on issues of importance to the Jewish community. In the interest of maintaining a civil forum, The Jewish Daily Forwardrequires that all commenters be appropriately respectful toward our writers, other commenters and the subjects of the articles. Vigorous debate and reasoned critique are welcome; name-calling and personal invective are not. While we generally do not seek to edit or actively moderate comments, our spam filter prevents most links and certain key words from being posted and The Jewish Daily Forward reserves the right to remove comments for any reason.





Find us on Facebook!
  • It's really, really, really hard to get kicked out of Hebrew school these days.
  • "If Netanyahu re-opens the settlement floodgates, he will recklessly bolster the argument of Hamas that the only language Israel understands is violence."
  • Would an ultra-Orthodox leader do a better job of running the Met Council?
  • So, who won the war — Israel or Hamas?
  • 300 Holocaust survivors spoke out against Israel. Did they play right into Hitler's hands?
  • Ari Folman's new movie 'The Congress' is a brilliant spectacle, an exhilarating visual extravaganza and a slapdash thought experiment. It's also unlike anything Forward critic Ezra Glinter has ever seen. http://jd.fo/d4unE
  • The eggplant is beloved in Israel. So why do Americans keep giving it a bad rap? With this new recipe, Vered Guttman sets out to defend the honor of her favorite vegetable.
  • “KlezKamp has always been a crazy quilt of gay and straight, religious and nonreligious, Jewish and gentile.” Why is the klezmer festival shutting down now?
  • “You can plagiarize the Bible, can’t you?” Jill Sobule says when asked how she went about writing the lyrics for a new 'Yentl' adaptation. “A couple of the songs I completely stole." Share this with the theater-lovers in your life!
  • Will Americans who served in the Israeli army during the Gaza operation face war crimes charges when they get back home?
  • Talk about a fashion faux pas. What was Zara thinking with the concentration camp look?
  • “The Black community was resistant to the Jewish community coming into the neighborhood — at first.” Watch this video about how a group of gardeners is rebuilding trust between African-Americans and Jews in Detroit.
  • "I am a Jewish woman married to a non-Jewish man who was raised Catholic, but now considers himself a “common-law Jew.” We are raising our two young children as Jews. My husband's parents are still semi-practicing Catholics. When we go over to either of their homes, they bow their heads, often hold hands, and say grace before meals. This is an especially awkward time for me, as I'm uncomfortable participating in a non-Jewish religious ritual, but don't want his family to think I'm ungrateful. It's becoming especially vexing to me now that my oldest son is 7. What's the best way to handle this situation?" http://jd.fo/b4ucX What would you do?
  • Maybe he was trying to give her a "schtickle of fluoride"...
  • It's all fun, fun, fun, until her dad takes the T-Bird away for Shabbos.
  • from-cache

Would you like to receive updates about new stories?




















We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.