Tuesday, January 6, 2009

Recession Comes To Israel, So We Go To Lunch

NOTE: I started writing this in early December and kept getting distracted. So today, Jan 6, with all the company gone, I'm going to try to push this and an observation about the elections out the electronic door.

6 January 2009
Tel Aviv

The Global Recession has made its way to Israel. It took a while to get here since Israeli banks managed to avoid the subprime mess by taking the unique position that loans should only be made to people who have the means to repay them. The Tel Aviv stock exchange held its value far longer than just about any other exchange on the planet. But, despite the efforts of some old line socialists, the business cycle has not been repealed and the downturn that swept through Europe has landed on these shores. The layoffs here are in the tens of thousands, as opposed to the US' hundreds of thousands, but given that the country only has 7 1/2 million people, that's a lot. Also, the cutbacks have included the high tech companies which is bad news. More bad news that hits your correspondent close to home is that more restaurants are closing than opening and others have cut back their hours. Also, from today's chat with a professional guide, tourism is falling off. Recent uptrends in tourist-related industries as well as the housing bubble have been driven by Europeans with lots of euros to burn. As you can imagine, this source of revenue is drying up.

Added to this is the daily bad news coming out of the collapse of Bernie Madoff's ponzi scheme. Israeli institutions receive substantial funding from US charities and individuals:the same charities and individuals whose endowments have disappeared in Madoff's black hole. Facing a cutback in social programs and educational grants at the same time as the country falls into the recession is a double hit that poor people and students can ill afford.

On the optimistic side (Ben Gurion famously said that to be a Zionist you have to be an optimist), this is a not the "perfect storm" that plagues the US economy. The financial system here is in no danger of collapse. Nothing comparable to the potential impact of a GM or Citigroup bankruptcy is looming. This is more like a "normal" down cycle. No one knows how deep this can go or for how long. Israel's economy is tied to trade with the US and EU so a recovery there will give a boost to a recovery here. Meanwhile, the government has been taking steps to shore up the social safety net.

Good food and drink with friends may not cure all that ails you but, afterwards, you either feel better or you just don't care (which is almost as good). I share this way of dealing with life's vicissitudes with many if not most of you Usual Suspects. Back in the day when I plied my trade as a Manhattan-based attorney, in the event of some transportation meltdown caused by bad timing, bad weather or some other natural or man made disaster, my personal disaster plan was to find a really good restaurant with a decent wine list (and/or draft beers) and dig in until the disaster abated. Feeling much better about life, I would eventually get a car service, cab or train to take me home with no hassle. There I would sleep it off until the next round of hunting and gathering. This is also a good way to deal with a world-wide recession. Using your credit card helps get the international financial system going again (and is good for my Visa stock).

Not long before we returned to Israel we were providing a car, driver and comic relief to our friend JoAnne who was moving her law office, home and self from New York to Jerusalem  While trying to drive from Manhattan to Forest Hills via the Midtown Tunnel we got stuck in a classic New York holiday season evening rush hour traffic jam from hell. In a traffic-jam-from-hell a 20 minute drive can take 2 to 3 hours. As we sat in a barely moving car, I discovered that JoAnne and I use the same Manhattan Disaster Plan. For those of you who still need to get in and out of mid-town Manhattan, try Soho (glatt kosher nouveau meat) in the lobby of the Sony Building. Other recommendations are Le Marais and Prime Grill. These are places best frequented  in the company of a partner or senior executive who can charge it to the firm.

JoAnne has made Aliyah and now resides in an apartment in the German Colony neighborhood of Jerusalem. She is currently learning Hebrew, teaching her grandchildren how to paint, practicing law and becoming a Jerusalemite. Her home turf is a totally lovely apartment on Emek Refaim, the main drag in one of Jerusalem's "hot" neighborhoods, which she is decorating in a spare Israeli style. Less clutter is more.

While we had not tightly scheduled this year's sojourn, high on our list of "must do's" is making the rounds with Mauricio and playing with JoAnne. So, when Mauricio invited us to join him on his rounds in Jerusalem, we jumped at the chance for a two-fer. The day was going really well. Mauricio's main goal was to collect checks from a few customers in the Old City. On our way in we stopped to take the two-bit tour of Jo Anne's apartment and invite her out to lunch. Jo Anne was happy to go with us to the Old City since she needed to buy an appropriate religious icon for a sick Christian friend. An item we, being rockabilly fans of a certain age, quickly started referring to as The Plastic Jesus. As we drove into the Jewish Quarter the heavens opened up, the sun shone down and, miracle of miracles, Mauricio found a legal parking space near the Zion Gate. Who says G-d doesn't smile on her Jews? I interrupted Liz and Jo Anne, who were deep into the economic implications of the Plastic Jesus market to make them just focus on where we were standing. Being inside the walls can work its magic, even on some type-A lawyers from NYC.

Mauricio led us on a tour of his clients' locations and, to make the day even better, collected some checks (nothing helps get you through the recession better than getting paid) and took us to the Quarter Cafe (owned by a client) where he took over the espresso machine and produced four cups of Cafe Mauricio. The Quarter Cafe is at the Old City's highest point before you start walking down into the Kotel Plaza. You sit and drink your coffee at eye level with the Al Aqsa Mosque and look out over the hills west of the Old City. Nice view on a sunny day.

Mauricio successfully completed his business. Jo Anne was not as successful as the merchant refused to come down on what we all thought was a ridiculously high price for a Plastic Jesus (maybe the recession hasn't yet hit the Old City schlock shops). So we got back in the car and headed to La Guta, a highly regarded French/Oriental bistro in the center of the new city.It's expensive for dinner but has a businessman's lunch we wanted to try. And, of course, Mauricio knows the owner. The day was still going great as, after fighting our way through the obligatory traffic-jam-from-hell, a daily feature of central Jerusalem, we found a second lawful parking space. Those of you who have to drive in and out of major cities know that finding two lawful spaces in the space of an hour or two makes you feel invulnerable to all evil. But then our luck ran out.

We got to La Guta and it was closed. Not for good but the owner told us that there is just not enough business to justify opening before dinner during the week. Mind you, this is central, west Jerusalem on a sunny day in a month when the locals are gearing up for more chagim and the tourists should start coming in. We went to a second place, this time a fish joint, and it was also closed. The third place we tried, Eldad Vezehoo (French/Moroccan grill), was open. The conversation tended toward the Hebrew as JoAnne is trying hard to learn by speaking (which is actually a challenge when you live on Emek Refaim where you can go through much of your day hearing only English) and Mauricio was just as happy to give her a workout. As usual, once Mauricio and I can see each other's hands we are able to communicate.

So there you have it. The recession has clearly hit daily life here. Fortunately, my way of dealing with adversity seems to work as well in Israel as in the US, so I expect we'll be fine. And I'll report on La Guta when we circle back and try it for dinner.

No comments: