◼ ECONOMICS Bloomberg Businessweek November 25, 2019
29● Israeliintelligenceis hiringultra-Orthodox
men,helpingbetterintegratethemintosocietyHaredimfor Hire
thecutscomingsinceAugust.That’squitea U-turn.
TheEuropeanCentralBankhasalsobecome
moredovish.It resumedbuyingbondstostimu-
lategrowththismonth.TheBankofJapanhasdone
less,butatleastit keptitsbenchmarkinterestrate
innegativeterritory,despitepressuretoraiseit.
MorganStanleyrecentlynotedthat 20 ofthe 32
centralbanksit trackshadeasedmonetarypolicy
overthepastyear.“Youdon’twanttobetagainst
theworld’slargestcentralbanks,”saysChristopher
Smart,chiefglobalstrategistofBarings,theinvest-
mentmanagementcompany.
TheU.S.,withitshugeappetiteforimports,has
remainedanengineofglobalgrowth.TheAmerican
economicexpansionisinits11thyear,a record.
Consumershavebeenbuoyedbysolidwagegrowth
andlowunemployment,saysEdwardYardeni,the
presidentandchiefinvestmentstrategistofYardeni
ResearchInc.ThepessimistictakeontheU.S.is that
businessinvestmenthasbeenweak,butYardeni
saysthenumberslookbetteroutsidetheoilpatch—
healthcare,tech,andfinanceareallhealthy.“Ido
seemanycompaniesexpandingandinvestingfor
productivity,”saysChristopherJohnson,president
ofglobalfinancialservicesatPitneyBowes.
Thegeopoliticalsituationhasalsostabilizeda
bitsincesummer.Thetradewarhasn’tintensified.
China’seconomyhasslowed,butit hasn’tcrashed.
InEurope,theriskofa chaotic,no-dealBrexithas
diminished,whilethird-quarterdatashowedthat
Germanynarrowlyavoidedwhatwouldhavebeen
itsfirstrecessioninsixyears.MorganStanley,ina
Nov. 18 report,wrotethat“tradetensionsandmon-
etarypolicyareeasingconcurrentlyforthefirst
timeinsevenquarters.”
A lotofwhat’schangedis financial.Thescariest
omeninAugustwastheplungeinU.S.long-term
bondyields.DuringthetradingdayonAug. 14 the
yieldon10-yearTreasurynotesbrieflyfellbelow
thaton2-yearnotes—areversalofthenormalstate
ofaffairs,inwhichinvestorsgetpaidmoretohold
long-termsecurities.So-calledinversionsusedto
bea sureharbingerofa recession.ButasBloomberg
Businessweekwrotethatmonth,they’renotasscary
astheyusedtobe,becauseeveninordinarytimes
the2-and10-yearyieldsareclose.Inanycase,the
yieldcurvehasrevertedtoitsnormalshape.
ThestockmarketreboundsinceAugustis both
a reflectionoftheimprovingoutlookandapartial
cause of it. Higher stock prices make households
more willing to spend and businesses more will-
ing to invest. But we’re not out of the woods yet.
Are easier monetary policy, strong consumer
spending, and a robust stock market “enough of
a reprieve to kick-start some business investment,
which has been tailing off for a year or two?” asks
Barings’s Smart. “It’s hard to see the rosy employ-
ment picture continuing for much longer while
business investment is lagging.”
In other words: Is the recent improvement
strong enough to be self-sustaining, or the last gasp
ofanexpansionthat’spastitsprime?�PeterCoyFor the past dozen years, Yossi has followed a sim-
ple routine: rise at 7 a.m., prayers and breakfast
until 8, then 14 or more hours studying sacred
Jewish texts, with breaks for meals and more
prayers. But since September, Yossi has replaced
most of his religious readings with math and pro-
grammingtextbooksasheworkstowarda com-
putersciencedegree.Hehopestoultimatelyland
a jobwithanIsraelisecurityagency—perhaps even
Mossad, the country’s equivalent to the CIA. “Of
course I have dreams,” says Yossi, 29, whose fam-
ily name has been withheld for security reasons. “I
wanted a purpose, to contribute to Israel, and this
allows me to do that, especially serving in defense.”
Yossi participates in a program called the Pardes
Project, which seeks to better integrate Haredim—
as the ultra-Orthodox are known in Hebrew—
into the economy while preserving their identity.
Under Jewish tradition, a man’s holy obligation is to
learn, and for Haredim that means studying ancient
texts to forge a closer relationship with God. The
ultra-Orthodox represent more than 10% of Israel’s
population, but roughly half the men devote their
lives to religious scholarship while their wives work
to support the family. The government has said it
wants to get 63% of working-age Haredi men into
the labor force by next year; there’s little chance
that will happen, even as economists say that with
growth slowing, Israel needs a greater contribution
from them. If all Haredi men were as productive as
other Israelis, the economy would get a boost of
more than $5 billion a year, according to the Israel
Democracy Institute. “These people are geniuses,
and they have no opportunities,” says MosheTHE BOTTOM LINE Looser monetary policy in the U.S., Europe,
and Japan has been instrumental in beating back expectations of a
more pronounced economic slowdown.“I wanted a
purpose, to
contribute to
Israel, and this
allows me to
do that”