One of the Israeli media’s favorite government slams these days is “the tent-housing protests are proof that Israel’s middle class is disappearing.” For those of your not in Israel, the “tent” protests are the number one news item, as the media does all it can to pump up the story against the government.
I heard an interview on IDF Radio (Galei Tzahal) the other day, where foreign press reporters were being asked why the tent story wasn’t huge news around the globe.
So I started looking, where is Israel’s middle class?
Many of them have run away this summer — over 2.83 million people have arrived or departed through Israel’s Ben-Gurion airport…and today (Thursday) is expected to be the most conjested of the entire summer — 61,190 people on 373 flights. (ynet)
Maybe the middle class is swamping the malls of Israel, which are full to capacity of wall to wall buyers and spendors.
Perhaps they are filling the cafe’s of Tel Aviv, which are bustling with customers throughout the day.
So who has time for the “tent” protests? Don’t these people work at all? If they are the “middle class”, why aren’t they working?
Yet the real problem is lurking just around the corner.
If the housing market bubble tanks as quickly as the tent protestors are demanding, we may find ourselves with a sub-prime catastrophe on the level of the United States. Too many “middle class” Israelis have all jumped on the band-wagon over the past decade, purchasing second and third apartments — all financed via mortgages for the sake of investment. After all, “how could it go wrong” — rental prices cover the high mortgage (since rental will “always” rise) and in the worst case, the apartment could be sold…
Well, the “worst case” could be a huge drop in the housing market, causing all those investment apartments to lose value, lose their rental value, and the middle class investors will find themselves with high mortgage payments and no way to cover them. As they start defaulting on mortgages, the banks won’t even be able to recoup their loss by selling the real estate, since its value has also plummeted.
Banks will start losing money at a phenomenal rate, and that affects the more solid investments of the middle class…our pensions.
So where is the middle class? On vacation, eating out, or working. The one place you won’t find them is at the tent protests.
Those are staffed by the New Israel Fund and political hacks trying to bring down the government…
Don’t believe me? Check out who is hiding in the tents…(sorry, for now the video is only in Hebrew)
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