The Consumer Price Index (CPI) sank 0.7 percent in February, following a 0.9 percent drop in January, but Israel’s media front against Prime Minister Binyamin Netanyahu has buried the report lest people realize the truth.
Netanyahu cannot take any credit for the drop in prices, but reporting good news for the consumers would destroy the myth propagated by the Israeli media establishment that the consumer is worse off than ever under Netanyahu.
The CPI has fallen 1.5 % in the past 12 months and 1.6% for the first two months of this year.
The drop in the price of crude oil was sharper than the rise in the shekel-dollar rate, accounting for a reduction in the price at the pump.
But Internet and telecom services also dropped 2.7 percent last month, another result of the revolution called “free competition” initiated in the Netanyahu administration under the aegis of then-Communications Minister Moshe Kachlon.
Netanyahu on Sunday publicly offered the Finance Ministry post to Kachlon, who left the Likud government and now heads his Kulanu party.
The name “Kulanu” is scary to tycoons.
Immediately after publication of Netanyahu’s offer to Kachlon, the banking index in on the Tel Aviv Stock exchange dropped by 1.5%. The tycoons are afraid that Kachlon as Finance Minister will cut ridiculously high fees that banks charge customers for everything but breathing.
The Globes business newspaper reported:
Kachlon is promising substantial reforms in the Israeli banking system, especially the opening of the sector to competition, as he did in the cellular market. The stock exchange is listening to him, and in view of the likelihood that he will be appointed Minister of Finance, investors are sending the banks shares…southward.
If anyone thinks he is destroying the ability for companies to profit., take a look at the Cellcom mobile phone company.
Kachlon said several years ago there is no reason that the oligarchy of mobile phone companies should earn billions of shekels a year. Cellcom’s stock was selling at more than $32, and Its shareholders enjoyed a steady 10 percent rise in the price of the stock every year along with a fat dividend of more than 12%.
That was before Kachlon acted, opened the market to free enterprise, which was followed by a 90 percent drop in cell phone rates.
Cellcom’s shares eventually sank to approximately $5, but is the company losing money?
The company reported today its earnings for 2014, and don’t shed any tears for the shareholders.
Net income increased 2.9% compared with 2013.