IDF Chief Halutz Sold His Stock As War Began

Why is Israel Defense Forces Chief of Staff smiling? Well, on July 12, 2006, within three hours after Hezbollah attacked an Israeli patrol, killing eight soldiers and kidnapping two others, Halutz called his Tel Aviv stockbroker and instructed him to sell off almost $30,000 of stock. This quite literal fire sale enabled Halutz to escape the effects of an 8% decline in the Tel Aviv Stock Exchange over the next two days. Halutz claims that no wrong-doing was involved. He no doubt only wanted to avoid distractions from his principal duty of directing Israel's forthcoming war effort. Of course, fault finders might point out that Halutz, more than nearly anyone else that day, had inside information on the war that had just begun. Also, if I had been Halutz, and knew that Israel was about to entrust its conduct of the war to me, Prime Minister Ehud Olmert and Defense Minister Amir Peretz, I certainly would have wanted to sell my Israeli stock holdings.

As Time Magazine reports here, now that the ceasefire has at least temporarily halted the real war, the political battles have begun, and the political casualties are beginning to mount. The main losers so far appear to be, not surprisingly, Olmert, Peretz and Halutz.

That is as it should be--democracy only works if those governmental leaders who err are forced to pay a political price. One of the astonishing aspects of Israeli politics in recent years has been how figures such as former Prime Minister Shimon Peres can commit Israel to dangerous blunders such as the Oslo Accords, and yet continue to play leading roles in government. It is almost as if they are being awarded for their displays of bad judgment.

The democratic downfall of the present government, through the political process, and its replacement by a government led by politicians of the caliber of Benjamin Netanyahu, Natan Sharansky, and Effie Eitam, is not only fitting and desirable; it is necessary if Israel is to successfully face the challenges to its very existence posed by Iran, Syria, Hezbollah and Hamas.