Until yesterday I had never heard of the Wertheimer family, or Warren Buffet for that matter. I glance at the business headlines, but I don't follow the financial news like I do the political situation.
So most of my information about the big deal that was announced yesterday and the background came from the media - the web articles and an interview I heard with Stef Wertheimer last evening.
The news that Warren Buffet's first aquisition outside of the United States was in Israel was met with unqualified glee, but there was also a thinly veiled feeling of astonishment at which company he bought. A metalworks company and not a hi-tech one? One located in the Galilee and not in the Israeli equivalent of Silicon Valley - the Tel-Aviv coastal region? The media people were then quick to say that Buffet will be coming to Israel in September and "will probably buy more companies". Who are they consoling with this information?
The media repeated the information that Stef Wertheimer is now the richest man in Israel - to the point where I was embarrassed. He was interviewed on television (which was broadcast on IDF radio) and was asked more than once how it felt to be the richest man in Israel, and he brushed this off and spoke about what is his real dream - building up the Galilee and turning it into an extremely desirable place to live. He spoke about investing the profits from this deal into attracting more businesses to the Galilee, and how Buffet bought his company because of the work ethic of the employees and that he would definitely not sell out and take the business to other locations for cheaper workers.
To my American ears it sounded as if Stef Wertheimer is the epitome of a conservative businessman - building companies and using them to help people by providing jobs and better education. When I went on to the web and read some articles, this impression proved correct. Bradley Burston in Haaretz has an excellent analysis here, and the Jerusalem Post also has background here.
The family has stated clearly that the profits from the sale will be put back into businesses in the Galilee and educational philanthropy (training people for higher paying jobs), but a big question is what the government will do with the windfall of tax revenues.
When Bibi Netanyahu was finance minister there was a clear policy laid out. Government spending was cut, income taxes were cut, and so was the VAT (value added tax). Unemployment also gradually fell.
There is no clear cut policy now, but it is clear from the election results that the Israeli people want more money to be given to the weaker portions of Israeli society. The question is how to do that - and Olmert has been closed-mouthed, mainly because he doesn't want to favor one group over the other. Now he and the new finance minister will have to make some sort of decision - and the expectations have just risen.
Will they renounce the price hike on subsidized bread? Will they give more money to the pensioners? Will they advance the rise in the minimum wage? Will they increase child allowances?
Or will they follow a more conservative policy, like Netanyahu and decrease the VAT (which he lowered from 18% to 16.5% - and you Americans complain about YOUR sales tax!!). They could also just use the money to lower the government's overall debt.
It will be interesting to see which way the government goes on this.