Washington state court temporarily blocks Albertsons' $4 billion dividend payout


Thu, November 3, 2022 

 A customer leaves an Albertsons grocery store in Riverside

(Reuters) -A state court in Washington has temporarily blocked Albertsons Companies Inc from paying a $4 billion dividend to shareholders before the grocery chain closes its proposed deal with rival Kroger Co, documents filed said on Thursday.

Kroger Co snapped up Albertsons in a $25 billion deal in last month's mega merger between the No. 1 and 2 standalone grocers to better compete against U.S. grocery industry leader Walmart Inc on prices, but it was expected to run into antitrust roadblocks.

Albertsons, which was scheduled to pay the special dividend on Nov. 7 as part of the deal, was also sued by the attorneys general of District of Columbia, California and Illinois, arguing that it would weaken its ability to compete as the antitrust reviews go on.

"By eliminating its cash-on-hand and nearly doubling its debt, Albertsons will be in a weakened competitive position relative to Kroger, thereby harming grocery consumers and workers throughout Washington," State Court Commissioner Henry Judson wrote in issuing the temporary restraining order.

Washington State Attorney General Bob Ferguson called the temporary order a "huge victory".

"Putting the brakes on this $4 billion payment is the right thing for Americans shopping at their local grocery store," he said in a statement.

A hearing on the case is scheduled for Nov. 10.

In its statement, Albertsons said on Thursday the court order was based on the "incorrect assertion" that the dividend payout would weaken its competitiveness while antitrust agencies review the proposed merger.

Albertsons called the lawsuits brought forward by the AGs "meritless," and said the company had limited debt and significant free-cash flow and was in a strong position financially.

The AGs have also raised concerns that a dividend payout would make the retailer strapped for cash, adding that it would hamper the company's ability to price competitively and maintain staffing and staff wages and benefits.

State attorneys general, including California’s, sue to block Albertsons' $4 billion payout

- An Albertsons grocery store is seen in Boise, Idaho, on Oct. 14, 2022. The attorneys general of California, Illinois and the District of Columbia are suing Albertsons in an effort to stop the grocery chain from paying a nearly $4 billion dividend to its shareholders, according to a lawsuit filed Wednesday, Nov. 2, 2022. (Sarah A. Miller/Idaho Statesman via AP, File)


DEE-ANN DURBIN
ASSOCIATED PRESS
November 3, 2022, 

The attorneys general of California, Illinois and the District of Columbia are suing Albertsons in an effort to stop the grocery chain from paying a nearly $4 billion dividend to its shareholders.

The lawsuit, filed Wednesday in U.S. District Court in Washington, D.C., asks the court to block the payment until the attorneys general have reviewed Albertsons’ proposed merger with Kroger Co.

The lawsuit is the second this week seeking to delay the dividend payment. The state of Washington's Attorney General Bob Ferguson filed a similar lawsuit in state court Tuesday.

Boise, Idaho-based Albertsons said Wednesday that both lawsuits are without merit.

Kroger announced its plan to buy Albertsons for $20 billion last month. The deal is expected to close in early 2024 if it’s approved by the Federal Trade Commission and the Department of Justice and survives any court challenges.

The merger agreement included a special dividend of up to $4 billion __ or $6.85 per share __ that Albertsons is scheduled to pay its shareholders Monday.

The Democratic attorneys general of California, Washington, Illinois and the District of Columbia, as well as the Republican attorneys general of Arizona and Idaho, sent a letter to Albertsons last week asking the company to delay the payment.

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Attorneys general say Albertsons should delay $4 billion shareholder payout


North Bay stores could be part of $25 billion Kroger–Albertsons merger

The attorneys general say the dividend __ which equals nearly one-third of Albertsons’ $11 billion market value __ would deprive the company of cash it needs to operate while regulators review the merger.

“Albertsons’ rush to secure a record-setting payday for its investors threatens District residents’ jobs and access to affordable food and groceries in neighborhoods where no alternatives exist,” D.C. Attorney General Karl Racine said in a statement.

The attorneys general also say it’s unclear if the deal will be approved, since federal and state laws forbid mergers that substantially lessen competition. Together, Albertsons and Cincinnati-based Kroger would control around 13% of the U.S. grocery market.

Albertsons said the dividend was approved by its board and should be paid whether or not regulators approve the merger. The company denied that the dividend will hamper its ability to invest in its stores. It had nearly $29 billion in assets at the end of September, including $3.4 billion in cash and cash equivalents.

“Given our financial strength and positive business outlook, we are confident that we will maintain our strong financial position as we work toward the closing of the merger,” Albertsons said in a statement.

Three attorneys general file lawsuit seeking to block Albertsons' $4 billion payout

The Albertsons logo is seen on an Albertsons grocery store in Rancho 

Wed, November 2, 2022 
By Siddharth Cavale

NEW YORK (Reuters) -The attorneys general of Washington D.C., California and Illinois filed a lawsuit on Wednesday in a federal court seeking to block grocer Albertsons' $4 billion dividend payout to shareholders before the closing of its proposed merger with rival Kroger Co.

"(The lawsuit) is seeking a temporary restraining order to stop a nearly $4 billion payout to Albertsons’ shareholders - a payout 57 times greater than the historic dividends Albertsons has provided — until a full review of their proposed merger is complete," Karl Racine, the attorney general for Washington D.C., said in a statement.

The lawsuit was filed under seal in the U.S. district court for the District of Columbia, he said.

Kroger snapped up Albertsons in a $25 billion deal last month, to better compete against U.S. grocery industry leader Walmart Inc on prices.

As part of the deal, Albertsons announced a payout of a "special cash dividend" of up to $4 billion to its shareholders, funded by $2.5 billion in cash on hand and borrowing the rest, with a payment date of Nov. 7.

But Wednesday's lawsuit alleged that the proposed dividend was in violation of federal and state antitrust laws by rendering Albertsons less able to compete effectively with other supermarkets.

The attorneys general also raised concerns that it would make the retailer strapped for cash after the payout, which they noted was equivalent to more than two years of profit for the company and also represented a third of its market value. They added that it would hamper the company's ability to price competitively and maintain staffing and staff wages and benefits.

"Albertsons' rush to secure a record-setting payday for its investors threatens District residents' jobs and access to affordable food and groceries in neighborhoods where no alternatives exist," Racine said.

An Albertsons spokesperson said the the lawsuits brought by the attorneys general were "meritless" and provided "no legal basis" for canceling or postponing the dividend.

"The special dividend ... is not contingent on our merger with Kroger and is not in any way a condition to Albertsons Cos’ or Kroger’s obligation to consummate the proposed merger. It will be paid regardless of whether the merger is completed," the spokesperson added.

A Kroger spokesperson said the decision to issue a special dividend was solely Albertsons' and was independent of the merger transaction.

The case filed on Wednesday is District of Columbia office of attorney general et al v. Kroger co. Et al with the case number 1:22-cv-03357.

MONOPOLY CAPITALI$M JOKES
Kroger and Albertsons say their merger will help lower food prices for struggling consumers.

Not everyone is convinced.

Nov. 3, 2022
By Ciara Linnane

MARKETWATCH 

Kroger and Albertsons have been raising prices throughout the pandemic while also splurging on stock buybacks and dividends


Consumers may not benefit from the planned merger of grocery giants Kroger and Albertsons. 

The roughly $25 billion planned merger of Kroger and Albertsons, unveiled in October with much fanfare, promised a new entity that would “serve America with fresh, affordable food.”

The deal would create a company with nearly 5,000 stores reaching about 85 million households across the U.S. and with a share of the U.S. grocery market second only to that of Walmart Inc. WMT, -0.92%.

Food companies have enjoyed record earnings throughout the pandemic thanks to their ability to raise prices, according to a new report from Accountable.US, a liberal-leaning advocacy group. Kroger Inc. KR, -3.00% and Albertsons Cos. ACI, 1.43% have been part of that trend, even as they have generously rewarded shareholders.

“Even before this potential merger, the oligopoly of U.S. grocery giants has been needlessly nickel-and-diming working families — marking up prices over and over despite reporting huge profits,” said Liz Zelnick, spokesperson for Accountable.US.

See: Walmart is still seeing ‘strong’ demand and spending, its U.S. CEO says

As many as 42 million Americans said in January 2022 that they could not afford to buy enough food, according to the Census Bureau’s Household Pulse Survey. That was about double the number who said the same in April 2021, before pandemic-linked stimulus programs ended.

“The industry chose to enrich a small group of investors with generous handouts rather than keep prices stable on everything from bread to baby formula,” said Zelnick. “Even less competition under this proposed deal will only lead to more unfettered corporate greed at the expense of millions of consumers — and that’s why it deserves serious scrutiny from Congress.”

A review of recent earnings from Kroger and Albertsons and of comments from executives on earnings calls shows how the companies have been dealing with the current high-inflation environment.

In December 2021, for example, Kroger Chief Financial Office Gary Millerchip told analysts the following on the company’s third-quarter earnings call: “We are passing along higher costs to the customer where it makes sense to do so.”

In March 2022, Kroger posted record earnings for 2021, chalking up $1.66 billion in net income. The company spent a bigger sum — $2.2 billion — on stock buybacks and dividends that year.

In June of that year, on the company’s first-quarter earnings call, Millerchip said this, according to a FactSet transcript: “We are operating from a position of financial strength and we’ll continue to evaluate opportunities to deploy excess cash to accelerate our growth model and deliver sustainable total shareholder returns.”

In September, Kroger posted roughly $1.4 billion in net income for the first half of the year, a 130% jump over the same period a year earlier. It spent more than $1.28 billion on stock buybacks and dividends in the same period.

SOURCE: KROGER

Kroger responded to a request for comment by noting its long track record of investing to lower prices following previous mergers and acquisitions while maintaining strong financial performance. It pointed to its recent merger with Harris Teeter as an example.

“Our ability to deliver value to customers, communities and shareholders is rooted in our business model that emphasizes lowering prices to expand our customer base,” a spokesperson wrote in emailed comments.

“We intend to build on this track record following our proposed merger with Albertsons and are committed to investing $500 million to reduce prices and $1.3 billion to enhance the customer experience.”

In total, those investments would equal about half of what the company has given back to shareholders over the past 18 months.

Albertsons, which did not respond to a request for comment, has admitted to price hikes more than once since late 2021.

In its fourth-quarter 2021 earnings call, for example, CFO Sharon L. McCollam credited “retail price inflation” as contributing to strong results.

In April 2022, Albertsons posted record net income for 2021 of $1.6 billion. “Our strategy is working, and we are executing well against industry-wide pressures,” Chief Executive Vivek Sankaran said in a statement.

In July 2022, Albertsons had first-quarter net income of $484 million, up 9% from the same period the previous year. At the same time, it raised dividends by 35% to $63 million, with Sankaran praising a “strong operating and financial performance across all key metrics.”

ALBERTSONS

The issue has caught the attention of a bipartisan group of attorneys general, who are urging Albertsons to hold off on a nearly $4 billion special dividend payment until regulators complete a review of the proposed merger with Kroger.

The dividend could become a “massive improper giveaway to certain shareholders,” said Karl Racine, attorney general for the District of Columbia, in an interview on CNBC’s “Squawk Box” on Wednesday. Paying that to shareholders could weaken Albertsons’ ability to compete in a “very, very tough marketplace” should the merger fail to go through, Racine added.

On Wednesday, the attorneys general of California, Illinois and the District of Columbia sued Albertsons to stop the payout, the Associated Press reported. The lawsuit, filed Wednesday in U.S. District Court in Washington, D.C., is the second this week seeking to delay the dividend payment. The state of Washington’s Attorney General Bob Ferguson filed a similar lawsuit in state court Tuesday.

Boise, Idaho-based Albertsons said Wednesday that both lawsuits are without merit.

To be sure, Kroger and Albertsons are facing obstacles to their deal, not least of which is persuading regulators that the merger will increase competition even as it further consolidates the market.

The companies have said they are willing to sell stores to rivals to ease concerns about stifling competition.

Albertsons stock has tumbled nearly 30% since the merger was announced, implying skepticism among investors that a deal will be completed.

FACTSET, MARKETWATCH

But the companies have already been aggressive and active acquirers of smaller retailers, with at least $19.5 billion in deals since 1998, according to data crunched by the New York Times. The biggest deal was Albertsons’ $9.4 billion takeover of Safeway in 2014.

Those moves have already consolidated the sector, irking consumer advocates and drawing criticism from Sens. Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont.

“Americans don’t need another mega-grocer,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance, a nonprofit organization that advocates against corporate control, in a statement following the deal announcement.

“Kroger and Albertsons together would control nearly 20 percent of grocery sales in the U.S. That’s on par with Walmart, whose power in food retailing has done widespread damage to communities, farmers, food workers and local grocers,” Mitchell said.

The new company would also have more clout in dealing with suppliers, allowing it to strike deals that would push up costs for independent grocers, she said.

“If it’s allowed to go through, this deal would almost certainly put more rural towns and Black and Latino neighborhoods in cities at risk of becoming ‘food deserts’ as more local grocers are driven out of business,” Mitchell said in the statement.

Albertsons shares are down about 18% in the last month. Kroger shares have gained about 8%, matching the S&P 500’s SPX, 0.29% gain.

 

Column: That big Albertsons-Kroger merger will enrich millionaire insiders at your expense

Michael Hiltzik
Thu, November 3, 2022 



A Ralphs supermarket in Los Angeles is part of a chain owned by Kroger, which is planning to merge with another supermarket giant, Albertsons. (Jason Armond / Los Angeles Times)

It should be obvious by now that the driving force of many corporate mergers, if not most or even all mergers, is the goal of enriching insiders. The pending merger of supermarket giants Albertsons and Kroger, however, injects that impulse with steroids.

At the heart of the $20-billion deal announced Oct. 14 is a $4-billion dividend that was scheduled to be paid Monday to Albertsons stockholders until it was temporarily blocked by a Washington state court.

Who are these stockholders? Six of them are corporate insiders, defined as holders of more than 5% of Albertsons shares each.

The special dividend...is part of Albertsons' long-term strategy for growth
Albertsons lawyer Ted Hassi

The big dog among them is the private equity firm Cerberus Capital Management, which owns nearly 30% of the shares and holds two seats on the company's board of directors. The other five are investment and real estate funds that hold a total of an additional three board seats.

The six investors control about 75% of Albertsons shares. Combined with the three current and former Albertsons executives on the board, they hold a majority of seats. In other words, they voted themselves a multibillion-dollar handout.

A state judge in Washington issued a temporary restraining order late Thursday blocking Monday's dividend payout, in response to a lawsuit by Washington state Atty. Gen. Bob Ferguson. The dividend also has been challenged in federal court by the attorneys general of California, Illinois and Washington, D.C.

The temporary restraining order issued by the Washington court after a hearing conducted via Zoom is subject to a further hearing scheduled for Nov. 10, according to Ferguson's office. That hearing will cover whether the state court should issue a permanent injunction blocking the dividend.

As of this writing, Albertsons, which is based in Boise, Idaho, hasn't filed an answer to the lawsuits in court. Late Thursday, the company said it would seek to overturn the Washington court order "as quickly as possible" and termed the lawsuits "meritless."

Regardless of how the motions to block the dividend ultimately fare, the payout deserves special scrutiny for what it says about the structure of this deal and what its effect will be on Albertsons as the merger moves toward closing next year. The message is a dark one.

We've already reported on the likelihood that the Albertsons-Kroger merger will drive prices higher at the supermarkets' cash registers.

The deal will bring together the largest and second-largest supermarket companies. In California, Kroger owns Food4Less and Ralphs; Albertsons owns Safeway, Vons and Pavilions. The two companies control 38 other retail market brands nationwide.

The merger should be a prime target for antitrust officials at the Federal Trade Commission and Department of Justice.

Before we get further into the implications of the $4-billion payout, it's proper to note that Albertsons apparently has been less than candid about how it came about. Way less than candid.

After receiving an Oct. 26 letter from the attorneys general of California, Illinois, Washington state, Idaho, Arizona and the District of Columbia asking Albertsons and Kroger to put the dividend on hold, Albertsons asserted that the payout had nothing to do with the merger.

The proposed merger of Kroger and Albertsons would create a nationwide supermarket behemoth. Will consumers see any benefits? (krogeralbertsons.com)

In a letter responding to the request, an Albertsons lawyer, Ted Hassi of the firm Debevoise & Plimpton, said "the special dividend ... is part of Albertsons' long-term strategy for growth," which was "determined well before Albertsons' discussions with Kroger began."

Is that so? The companies' own merger announcement stated explicitly that the $4-billion dividend is "part of the transaction." It also counted the dividend as part of the merger price, accounting for $6.85 per share of the $34.10 per share payable to Albertsons shareholders.

According to the merger agreement, moreover, the special dividend was voted on by the Albertsons board at the same meeting at which they approved the merger deal itself.

Hassi, the Albertsons lawyer, told the states that the dividend will be paid whether or not the merger actually takes place. That points to the main issue raised by the plaintiffs in the lawsuits, which is that a $4-billion payout to shareholders will leave Albertsons as a floundering shell of itself in financial terms.

The dividend will sap Albertsons' ability to function as an independent company, the plaintiffs assert. They have a point.

According to the company's most recent financial disclosure, Albertsons had only $3.4 billion in cash on hand, among $9.3 billion in assets, most of which was tied up in inventory.

The company will have to borrow to raise funds for the special dividend, and that borrowing won't come cheap — the company's current outstanding debt is rated as junk grade by both Moody's Investors Service and Standard & Poor's.

Nor is the size of the dividend anything like normal for Albertsons. Its most recent quarterly dividend was 12 cents per share, to be paid to shareholders Nov. 14. The company paid out only $207.4 million in shareholder dividends in fiscal 2021, the company says, and spent nothing on share buybacks, the other way that corporations reward shareholders.

The special dividend, the states assert in court, would "reduce Albertsons' ability to compete effectively with Kroger" if the merger doesn't close, leaving it spavined as a rival if it remains independent — say because regulators have blocked the merger.

The orphaned Albertsons would have less money to spend on keeping its stores maintained, much less upgraded, and less to pay in wages and employee benefits.

The dividend, in other words, is a straitjacket.

It's hard to avoid the impression that the $4-billion payout is a cynical money grab by Albertsons' insiders, who will effectively be cashing out even if the merger fails to happen. Calling it part of a "long-term strategy for growth," as Hassi did in his letter to the attorneys general, sounds like some sort of a joke.

It's not especially easy for a company to invest in growth when it has deprived itself of $4 billion in capital and pumped up its debt merely to funnel loan proceeds to shareholders. Hassi acknowledged in his response to the attorneys general that the virtue of the $4-billion dividend is that it "provides near-term liquidity to all of its shareholders."

In an annual report Hassi quoted, Albertsons said that its capital allocation strategy aimed to balance "investing for the future, strengthening our balance sheet and returns to shareholders." Payouts to shareholders were separate and distinct from investing for the future. In other words, the $4 billion is a benefit to Cerberus and its fellow investment firms.

It hobbles, rather than empowers, Albertsons' investing for the future. Whether the merger takes place or not, Albertsons customers are going to feel the consequences and they won't be pretty.

This story originally appeared in Los Angeles Times.

Mystery Whales Baffle Gold Market After Central Bank Purchases















Eddie Spence
Thu, November 3, 2022

(Bloomberg) -- A normally dry research report jolted the gold market this week, when it pointed to massive but so far unidentified sovereign buyers.

Central banks bought 399 tons of bullion in the third quarter, almost double the previous record, according to the World Gold Council. Just under a quarter went to publicly identified institutions, stoking speculation about mystery buyers.

While most central banks inform the International Monetary Fund when they buy gold to supplement their foreign exchange coffers, others are more secretive. Few have the capacity to undertake the third-quarter buying spree, enough to soften the blow from investors selling bullion as the Federal Reserve hiked interest rates.

“With that weight of selling, I was a bit surprised gold wasn’t weaker,” said Ross Norman, chief executive officer of Metals Daily, an information portal focusing on precious metals. “But I suppose now we have our answer.”

The WGC, a lobby group for the mining industry, uses data from consultancy Metals Focus Ltd. to produce its estimates. It in turn relies on a combination of public data, trade statistics and field research to provide figures for demand from different sectors of the gold market.

While it’s difficult to identify the gold market whales, only some central banks have the capacity for such purchases:

China

The world’s No. 2 economy rarely discloses how much gold its central bank is buying. In 2015, the People’s Bank of China revealed a nearly 600-ton jump in its bullion reserves, shocking market watchers after six years of silence.

The country hasn’t reported any change in its gold hoard since 2019, fueling speculation it may have been buying under the radar.

Trade data show the country has been taking in vast amounts of bullion. China has imported 902 tons of gold so far this year, already surpassing last year’s total. That’s on top of the more than 300 tons the country’s mines typically produce each year.

And while domestic demand has been strong, with citizens buying some 601 tons through the third quarter, it’s on track to fall short of 2021 levels. Earlier in the year, Covid-19 lockdowns hampered purchases of jewelry and bullion in one of the world’s top consumers.

For China, the need to find an alternative to dollars, which dominate its reserves, has rarely been stronger. Tensions with the US are high following measures taken against its semiconductor firms, while Russia’s invasion of Ukraine has demonstrated Washington’s willingness to sanction central bank reserves.

Russia

Russia is the world’s second-biggest gold mining nation, typically producing more than 300 tons a year. Before February 2022, it exported metal to trade centers like London and New York, but also to nations in Asia.

Since the invasion of Ukraine, Russia’s gold has no longer been welcome in the West, while China and India have been reluctant to import huge quantities. That raises the possibility the central bank could step in to buy those supplies, but Russia’s overall foreign exchange reserves, including gold, have declined this year.

Russia’s reserves of dollars and euros were frozen by sanctions, making it less attractive for the central bank to add to them. Moreover, it doesn’t break out its holdings of gold separately.

The nation has been a massive buyer of gold in the past, spending six years accumulating bullion before stopping at the onset of the pandemic. Russia said in February, after the invasion of Ukraine, that it was ready to buy gold at a certain price, but Deputy Governor Alexei Zabotkin said last month that purchases were no longer practical as they would push up money supply and inflation.

Oil Exporters

Few nations have done better out of this year’s energy crisis than Gulf oil exporters. Saudi Arabia, the United Arab Emirates and Kuwait have all reaped a windfall, and some have been plowing cash into foreign assets through sovereign wealth funds.

They may have looked to gold to diversify. Saudi Arabia has the biggest gold hoard in the Arab world, but hasn’t reported a change in its holdings since 2010. Back then a “difference in accounting” led to its reserves doubling to 323 tons.

India

India’s central bank has made large gold purchases before, buying 200 tons from the International Monetary Fund in 2009. Since then it’s tended to buy more gradually, while providing timely updates to the market.

It may have shied away from splashing out on gold this year, given the pressure on its currency. That’s been exacerbated by strong imports of precious metals for its consumer sector in recent months.

Here's what's driving the gap between the richest and poorest Americans


Tanya Kaushal
·Writer
Wed, November 2, 2022

Economic inequality between the richest and poorest Americans continues to widen, exacerbated by pandemic stimulus and corporate inflation, according to new research and expert commentary.

So what's driving this ever-growing gap? Much of it has to do legislative policies and demographic dynamics that has led to super wealthy Americans avoiding taxation in certain U.S. state while non-white household income remains largely stagnant.

According to data from the Federal Reserve, household wealth among the top 1% of Americans grew from $17.08 trillion in Q3 2010 to $35.3 trillion in Q3 2020, and currently sits at $42.13 trillion. (Wealth is defined as the value of all assets of worth owned by a person or entity, while income is the money that the person or entity received in exchange for labor or products, according to Investopedia.)

On the bottom end, however, "modest gains have been largely temporary," Sarah Anderson, the global economy project director at the Institute for Policy Studies and co-editor of Inequality.org, told Yahoo Finance. She noted that the bottom 50% of households, which is nearly half of the U.S. population, owns only 2% of the nation's wealth, as of 2019.

For the top 0.1% of earners (the multi-millionaires and billionaires), both household income and earnings have soared over the past decade as part of an ongoing trend. As of 2018, the concentration of income among the top earners is almost equal to levels seen just prior to the Great Depression in the 1930s. The U.S. also saw similarly high levels of income concentration ahead of the financial crisis in 2008.

“At the top end, U.S. billionaires have enjoyed explosive growth in their combined wealth, in part driven by taxpayer-funded stimulus spending and record corporate profits in 2021," Anderson said.

Companies that suffered major corporate losses during the height of the pandemic recovered mightily in 2021 with corporate profits growing by 22.6% that year, according to the Bureau of Economic Analysis (BEA). Meanwhile, compensation for the chief executives of large U.S. corporations boomed in the past decade while worker wages remained flat, according to Inequality.org. In 1980, the ratio between CEO pay and worker pay was around 42 to 1. Last year, it was 324 to 1, Anderson said.

“The CEO pay system also exacerbates income inequality by incentivizing top executives to spend company resources on stock buybacks, which artificially inflate the value of their stock-based pay while siphoning funds that could be going towards worker pay or other long-term investments,” she said.

'Billionaire enabler states'

Many of the richest Americans live in what have been categorized as “billionaire enabler states,” according to a recent report by the Institute for Policy Studies (IPS), which has allowed them to retain much of their wealth.

These 13 states — which include Texas, Florida, Nevada, Illinois, and Ohio — “enable” wealth to be easily hidden through the state taxation system as taxes are cut for the richest households, the report said, reiterating the findings of the Pandora Papers that the U.S. is a "global tax haven."

The report highlighted three key indicators of states that help the ultra-rich shield their wealth: low or no taxes, secrecy, and trust longevity.

“The same states that morph their trust laws to help billionaires are often the same states that have the most regressive tax systems that overtax working people,” said Chuck Collins, the author of the report and director of inequality and the common good at IPS.

States with weak inheritance or estate taxes tend to also be the top enabler states that allow Domestic Asset Protection Trusts — trusts that protect trust assets from the settlor's creditors.

"There is a significant correlation between regressive state taxation systems, which hurt the poorest residents, and trust-subservient state laws," the IPS report stated.

Gender and race

Unsurprisingly, gender and race seem to play a role in wealth inequality.

“When you compare Black, Native, Hispanic women with white men, you see the intersection of race and sex," Childers said. "While white women have earnings that are 79% of white men’s earnings, Black women’s earnings are just 63% of white men’s earnings, and Native and Hispanic women’s earnings are an even smaller percentage of white men’s earnings."

Since the 1990s, racial wealth inequality has doubled. As of 2017, 15% of the top earners are white families as one in seven white families are now millionaires, according to The Washington Post.

“Sadly, inflation is only making things worse for the majority of people," The Debt Collective, a union working towards eliminating debt, told Yahoo Finance in a statement. "When costs rise, wages stay low, and the financial sector is under-regulated, people have no choice but to borrow to make ends meet — particularly people who lack intergenerational wealth and who face pay discrimination on that job (i.e. Black and Brown people and women).

"To address inequality," they added, "we need to raise the minimum wage, raise taxes on corporations and the rich, and cancel debts for the working and middle classes."

Union benefits

Union membership rates also have an effect on wealth and income inequality, according to Chandra Childers, a senior policy and economic analyst at the Economic Policy Institute (EPI).

"Unionized workers have higher earnings than non-union workers, and the states with lower earnings tend to be right-to-work states," Childers told Yahoo Finance. (Right-to-work states mean an employer cannot require their employee to join a labor union as a condition of employment.)

Equipped with a surgical glove, a face mask and a long stick, a jobless man named Paul panhandles at an intersection in Falls Church, Virginia, April 3, 2020. REUTERS/Kevin Lamarque

Unions also help reduce racial wealth gaps and unemployment by creating job security, according to a report by the liberal think tank Center for American Progress (CAP).

Workers are less likely to receive fair compensation when union membership declines, regardless of whether they are union members or not. In 2020, only 10% of the workforce was represented by unions.

At its peak in the 1940s and 1950s, the inequality ratio between union workers and the top 10% of earners was nearly 1:1 whereas in 2019 it was 1:4.

"As union strength steadily declined — particularly after 1979 — income inequality got worse, and it is now at its worst point since the Great Depression," EPI stated in a report. "Deunionization depressed the wages of middle-wage earners but had little impact on high-wage earners and therefore greatly increased wage inequality between these two groups."

—

Tanya is a data reporter at Yahoo Finance. Follow her on Twitter.

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EXPLAINER: Where will Hawaii's biggest volcano erupt from?

AUDREY McAVOY
Wed, November 2, 2022 

HONOLULU (AP) — The ground is shaking and swelling at Mauna Loa, the largest active volcano in the world, indicating that it could erupt. Scientists say they don't expect that to happen right away but officials on the Big Island of Hawaii are telling residents to be prepared in case it does erupt soon. Here's are some things to know about the volcano.

WHERE IS MAUNA LOA?

Mauna Loa is one of five volcanoes that together make up the Big Island of Hawaii, which is the southernmost island in the Hawaiian archipelago. It's not the tallest (that title goes to Mauna Kea) but it's the largest and makes up about half of the island's land mass.

It sits immediately north of Kilauea volcano, which is currently erupting from its summit crater. Kilauea is well-known for a 2018 eruption that destroyed 700 homes and sent rivers of lava spreading across farms and into the ocean.


Mauna Loa last erupted 38 years ago. In written history, dating to 1843, it's erupted 33 times.

The Big Island is mostly rural and is home to cattle ranches, coffee farms and beach resorts. It's about 200 miles (320 kilometers) south of Hawaii's most populous island, Oahu, where the state capital Honolulu and beach resort Waikiki are both located.

WILL MAUNA LOA ERUPT LIKE KILAUEA?

Mauna Loa's eruptions differ from Kilauea's in part because it is taller. It's greater height gives it steeper slopes, which allow lava to rush down its hillsides faster than Kilauea's.

It's enormous size may allow it to store more magma, leading to larger lava flows when an eruption occurs.

Frank Trusdell, research geologist at the Hawaiian Volcano Observatory, which is part of the U.S. Geological Survey, said data indicates that Mauna Loa has a much larger magma reservoir than Kilauea, which may allow it to hold more lava and rest longer between eruptions than Kilauea.

WHERE WILL MAUNA LOA ERUPT FROM?

Scientists won't know until the eruption begins. Each eruption since 1843 started at the summit. Half the time, the volcano later also began erupting from vents at lower elevations. The other half of the time it only erupted in the summit caldera.

Scientists can't tell far in advance when and where Mauna Loa will open new vents and erupt.

Vents generally form along the volcano's rift zone. That's where the mountain is splitting apart, the rock is cracked and relatively weak and it's easier for magma to emerge.

An eruption from vents on the southwest rift zone could hit residential communities, coffee farms or coastal villages on the west side of the island. Lava could reach homes in just hours or days.

The west side's most populous town would be protected from any Mauna Loa eruption by the presence of another active volcano. The broad flanks of that volcano, Hualalai, sit between Mauna Loa's southwest rift zone and Kailua-Kona and would block any lava heading toward the coastal community.

An eruption from the northeast rift zone could send lava toward the county seat of Hilo or other towns in East Hawaii. It could take lava weeks or months to reach populated areas on this side of the mountain.

Scott Rowland, a geologist at the University of Hawaii at Manoa, said there's no pattern when it comes to where an eruption will occur.

“Just because the last one was on the northeast rift zone does not mean the next one will be down the southwest rift zone,” he said.

WILL MAUNA LOA EXPLODE LIKE MOUNT ST. HELENS?

Fifty-seven people died when Washington state's Mount St. Helens erupted in 1980 and blasted more than 1,300 feet (400 meters) off the top of the mountain. Steam, rocks and volcanic gas burst upward and outward. A plume of volcanic ash rose over 80,000 feet (24,384 meters) and rained down as far as 250 miles (400 kilometers) away.

Hawaii volcanoes like Mauna Loa tend not to have explosion eruptions like this.

That's because their magma is hotter, drier and more fluid, said Hannah Dietterich, a research geophysicist at the U.S. Geological Survey's Alaska Volcano Observatory.

The magma in Mount St. Helens tends to be stickier and traps more gas, making it much more likely to explode when it rises.

The gas in the magma of Hawaii’s volcanoes tends to escape, and so lava flows down the side of their mountains when they erupt.

Hawaii's volcanoes are called shield volcanoes because successive lava flows over hundreds of thousands of years build broad mountains that resemble the shape of a warrior's shield.

Shield volcanos are also found in California and Idaho as well as Iceland and the Galapagos Islands. Alaska's Wrangell-St. Elias National Park has eight shield volcanoes including Mount Wrangell.

Volcanoes like Mount St. Helens are called composite or stratovolcanoes. Their steep, conical slopes are built by the eruption of viscous lava flows and rock, ash and gas. Japan's Mount Fuji is another example of a composite volcano.

HOW DO SCIENTISTS MONITOR MAUNA LOA?

The Hawaiian Volcano Observatory has more than 60 GPS stations on Mauna Loa taking measurements to estimate the location and the amount of magma accumulating beneath the surface.

Scientists use tiltmeters to track long-term changes in the tilting of the ground, helping them identify when the ground is swelling or deflating. A rapid change in tilt can indicate when an eruption will occur.

There's also a thermal webcam at Mauna Loa's summit that will identify the presence of heat. And satellite radar can keep track of ground swelling and deflation.

___

Associated Press Writer Mark Thiessen contributed to this report from Anchorage, Alaska.

Residents of Pahala, Hawaii, a rural town of about 1,400 on the south side of the Big Island, listen a report about the recent activity on Mauna Loa at the local gymnasium on Thursday, Oct. 27, 2022. The ground is shaking and swelling at Mauna Loa, the largest active volcano in the world, indicating that it could erupt. Scientists say they don't expect that to happen right away but officials on the Big Island of Hawaii are telling residents to be prepared. (AP Photo/Megan Moseley)More

Lawbreaker to Israeli kingmaker? Far-right Ben-Gvir surges in vote


Israeli far-right lawmaker Itamar Ben-Gvir holds a news conference ahead of Israel's election, in Jerusalem

Wed, November 2, 2022
By Dan Williams

JERUSALEM (Reuters) - Israeli far-right politician Itamar Ben-Gvir, who for years was seen as too much of a firebrand for mainstream politics, swept up votes in Tuesday's election and may now play kingmaker in Benjamin Netanyahu's stunning political comeback.

With a preliminary tally giving Ben-Gvir's Religious Zionism party third place, the ultranationlist is set for a central role in shaping a new government led by Netanyahu, whose terms in top office spanned a quarter-century and ended some 18 months ago.

It marks a dramatic transformation for Ben-Gvir, who was convicted in 2007 of racist incitement against Arabs and support for Kach, a group on the Israeli and U.S. terror blacklists.

That background once locked him out of Israeli politics but his success at the ballot box reflects a hawkish swing among the electorate after his own image makeover, prompting Netanyahu to say he was ready to deal with a man he previously spurned.

"I promise those who didn't vote for me, from parties far away on the spectrum, that we are brothers," 46-year-old Ben-Gvir said in a victory speech that was punctuated by chants from the audience of his slogan: "Death to Terrorists!"

In government, however, Ben-Gvir - who wants to be police minister - would further envenom Israel's standoff with the Palestinians and strain Jewish-Arab relations inside Israel.

His presence could also test Israel's bedrock ties with the United States and the American Jewish community, who tend to be more left-leaning.

"Look at Ben Gvir's history, his actions, his statements. This is not someone we want to see as part of the government," conservative Israel Hayom newspaper quoted an unnamed official in U.S. President Joe Biden's administration as saying in an article published on Sept. 29.

The U.S. State Department did not respond to a Reuters query, sent before the election, on whether it was concerned that Ben-Gvir might have a role in the next Israeli coalition.

Netanyahu has brushed off the prospect of such blowback from Washington, telling Israel's Channel 14 TV on Oct. 26: "So let them voice their opinion. It has no sway over me."

Burly and bespectacled, Ben-Gvir has for decades engaged in raging arguments with Arabs and liberals on curbsides or in the Knesset. He has now lowered the volume. The yellow trappings of Israeli supremacist groups was banished from his campaign, replaced by the national colours, blue and white.

He says he no longer advocates expulsion of all Palestinians - just of those he deems traitors or terrorists. That, he adds, should include Jews disloyal to the country. He also champions capital punishment and looser open-fire regulations for troops.

A settler on the West Bank which Israel captured and occupied in 1967, Ben-Gvir wants the Palestinian Authority, which has governed parts of the territory under interim peace deals, dismantled. That would place West Bank Palestinians back under full Israeli control.

He used to heckle Gay Pride parades as "abominations". Now he says he would accept it if one of his six children were gay. He insists, however, that marriages in Israel should be kept subordinate to orthodox religion strictures.

Ben-Gvir did not serve in the military at age 18 - normally a major electoral impediment. He says he was denied the draft for political reasons. His parliamentary list includes a retired army general, and he has made headlines in Israel by brandishing a pistol during confrontations with Palestinians.

The Anti-Defamation League, a New York-based advocacy group, said before the election about Ben-Gvir's prospective coalition role: "We believe such a development would be corrosive to Israel's founding principles, and its standing among its strongest supporters."

As Israel's far right parties celebrate, Palestinians shrug

 Israeli far-right lawmaker and the head of "Jewish Power" party, Itamar Ben-Gvir, gestures after first exit poll results for the Israeli Parliamentary election at his party's headquarters in Jerusalem, Wednesday, Nov. 2, 2022. News of the apparent comeback of former Prime Minister Benjamin Netanyahu and the dramatic rise of his far-right and ultra-Orthodox allies has elicited little more than a shrug among many Palestinians. 

(AP Photo/Oren Ziv, File)

ISABEL DEBRE
Thu, November 3, 2022


RAMALLAH, West Bank (AP) — The apparent comeback of former Prime Minister Benjamin Netanyahu and the dramatic rise of his far-right and ultra-Orthodox allies in Israel's general election this week have prompted little more than shrugs from many Palestinians.

“It's all the same to me,” Said Issawiy, a vendor hawking nectarines in the main al-Manara Square of Ramallah, said of Netanyahu replacing centrist Yair Lapid and poised to head the most right-wing government in Israel's history.

Over the past month, Issawiy had struggled to get to work in Ramallah from his home in the city of Nablus after the Israeli army blocked several roads in response to a wave of violence in the northern West Bank. “I'm just trying to eat and work and bring something back to my kids," he said.

Some view the likely victory for Netanyahu and his openly anti-Palestinian allies, including ultranationalist lawmaker Itamar Ben-Gvir who wants to end Palestinian autonomy in parts of the occupied West Bank, as a new blow to the Palestinian national project.

The sharp rightward shift of Israel’s political establishment pushes long-dormant peace negotiations even further out of reach and deepens the challenges facing 87-year-old President Mahmoud Abbas, whose autocratic Palestinian Authority already seemed to many Palestinians as little more than an arm of the Israeli security forces.

“If you want to use the metaphor of a ‘nail in the coffin of the Palestinian Authority,’ that was done earlier,” said Ghassan Khatib, a former Palestinian peace negotiator and Cabinet minister. “This election is another step in that same direction.”

During his 12 years in power, before being voted out in 2021, Netanyahu showed scant interest in engaging with the Palestinians. Under his leadership, Israel vastly expanded its population of West Bank settlers — now some 500,000 — and retroactively legalized settler outposts built on private Palestinian land. The measures have entrenched Israel's occupation, now in its 56th year since Israel captured the territory during the 1967 Mideast war.

Palestinians see successive Israeli governments as seeking to solidify a bleak status quo in the West Bank: Palestinian enclaves divided by growing Israeli settlements and surrounded by Israeli forces.

“We had no illusion that this next government would be a partner for peace,” said Ahmad Majdalani, a minister in the Palestinian Authority. "It’s the opposite, we see a campaign of incitement that began more than 15 years ago as Israel drifted toward extremism.”

The Gaza Strip’s militant Hamas rulers said the election outcome would “not change the nature of the conflict.”

But for the first time, surging support for Israel’s far right has made the Jewish supremacist party of Ben-Gvir the third-largest in the Israeli parliament.

Ben-Gvir and his allies hope to grant immunity to Israeli soldiers who shoot at Palestinians, deport rival lawmakers and impose the death penalty on Palestinians convicted of attacks on Jews. Ben-Gvir is the disciple of a racist rabbi, Meir Kahane, who was banned from parliament and whose Kach party was branded a terrorist group by the United States before he was assassinated in New York in 1990.

On the campaign trail, Ben-Gvir grabbed headlines for his anti-Palestinian speeches and stunts — recently brandishing a pistol and encouraging police to open fire on Palestinian stone-throwers in a tense Jerusalem neighborhood.

Some Palestinians have found reason for optimism. After Tuesday’s elections, they say, Israel will no longer present to the world the telegenic face of Lapid. A win for extremism in Israel, some say, could bolster the moral case for efforts to isolate Israel, vindicating activism outside the moribund peace process.

“It will lead to some international pressure,” said Mahmoud Nawajaa, an activist with the Boycott, Divestment and Sanctions movement, or BDS, which calls for an economic boycott of Israel as happened to apartheid-era South Africa in the 1980s.

“Netanyahu is more honest and clear about his intentions to expand settlements. The others didn’t say it, even if it was happening,” Nawajaa added.

Lapid and his predecessor, Naftali Bennett, a former settler leader who rebranded himself as a national unifier, had presided over a wobbly coalition of right-wing, centrist and dovish left-wing parties, including the first Arab party to ever join a government.

Foreign leaders who shunned the divisive Netanyahu embraced what appeared to be a less ideological government. Bennett became the first Israeli leader to visit the United Arab Emirates after the countries normalized ties — an honor repeatedly denied to Netanyahu. President Joe Biden, who had a rocky relationship with Netanyahu, basked in Lapid’s warm welcome during his visit to Israel last summer.

But even as Lapid voiced support for the two-state solution during his address to the U.N. General Assembly in September, Palestinians saw no sign he could turn words into action. They watched Israel approve thousands of new settler homes on lands they want for a future state.

Israeli military raids in the West Bank have also surged after a series of Palestinian attacks in the spring killed 19 people in Israel. More than 130 Palestinians have been killed, making 2022 the deadliest since the U.N. started tracking fatalities in 2005. The Israeli army says most of the Palestinians killed have been militants. But stone-throwing youths protesting the incursions and others not involved in confrontations have also been killed.

Even as final ballots were still being counted from the election, violence flared up with four Palestinians killed in separate incidents on Thursday.

“In terms of violence, the Lapid government has outdone itself,” said Nour Odeh, a Palestinian political analyst and former PA spokeswoman. “As far as new settlements and de facto annexation, Lapid is Netanyahu.”

Many young Palestinians have given up on the two-state solution and grown disillusioned with the aging Palestinian leadership, which they see as a vehicle for corruption and collaboration with Israel. Hamas and Fatah, the Palestinian party that controls the West Bank, have remained bitterly divided for 15 years.

A mere 37% of Palestinians support the two-state solution, according to the most recent report from Palestinian pollster Khalil Shikaki. In Israel the figures are roughly the same — 32% of Jewish Israelis support the idea, according to the Israel Democracy Institute.

“There is no horizon for a political track with the Israelis,” Odeh said. “We need to look inward ... to re-legitimize our institutions through elections, and stand together on a united political platform.”

But on the crowded, chaotic streets of Ramallah on Wednesday, there was only misery and anger over the daily humiliations of the occupation.

“I hate this place," said Lynn Anwar Hafi, a 19-year-old majoring in literature at a local university. “It’s like the occupation lives inside me. I can’t think what I want to. I can’t go where I want to. I won’t be free until I leave.”

Analysis-As Netanyahu returns, concerns grow over far-right ally

 Supporters of Former Israeli Prime Minister Benjamin Netanyahu attend a local campaign event in the run up to Israel's elections

Thu, November 3, 2022 
By James Mackenzie

JERUSALEM (Reuters) - Triumphant in this week's election, Benjamin Netanyahu faces a new test forming a government with an ultranationalist party whose sudden rise has many at home and allies abroad alarmed at the potential implications for Israeli democracy.

Israel's longest-serving prime minister and dominant political figure, Netanyahu, 73, is on course for a comeback a little over a year after losing an election to an unlikely coalition of right-wing, liberal and Arab parties in 2021.

This time however he has had to share the limelight with far-right leader Itamar Ben-Gvir, 46, who appears likely to take a senior role in government after the Religious Zionism bloc he co-heads became the third-largest in parliament with 14 seats.

Whereas religious parties have featured regularly in previous rightist coalitions, Religious Zionism is on course to exercise unprecedented influence, said Assaf Shapira, director of Political Reform at the Israel Democracy Institute.

"This party is a huge success, no religious party in Israel has ever achieved such a number," he said.

Supported by many outside the normal base of religious voters, the rise of Ben-Gvir, a fiery provocateur who until recently was calling for Palestinians to be expelled, reflected widespread fears over security among many Israelis.

That was especially the case following the violence that erupted in some mixed Arab and Jewish cities last year, causing a profound shock to many residents.

"People have woken up and seen that what's going on in the country cannot be ignored," said 29 year-old teacher Moria Sebbag. "Let's hope security will be restored, that's what's important to me right now."

Ben-Gvir has said he wants to become police minister but it is still unclear what Netanyahu, on trial on corruption charges which he denies, will do once he is back or what positions Ben-Gvir and his partner Bezalel Smotrich may be offered.

With the conflict with the Palestinians surging anew and touching off Jewish-Arab tensions within Israel, Ben-Gvir on Thursday tweeted: "The time has come to impose order here. The time has come for there to be a landlord." Fears have risen both in Israel and abroad that some measures talked about by the far-right - such as expelling anyone deemed "disloyal" or imposing greater constraints on the courts as Smotrich has proposed - could alter the character of Israel's democracy if they are ever implemented.

"I do think it's a shift in democratic norms," said David Makovsky, a fellow at the Washington Institute for Near East Policy. "I don't think it means it's not a democracy but it is a shift for a country that has always prided itself on the independence of its judiciary."

'TOLERANCE AND RESPECT FOR ALL'

Part of the balancing act facing Netanyahu will be ensuring that such concerns do not cause problems with allies, including the United States, where there has been little sign of enthusiasm for his new partner.

Asked about concern over dealing with Ben-Gvir, who was convicted in 2007 of racist incitement and support for Kach, a group on the Israeli and U.S. terror blacklists, a State Department spokesman declined to comment on "hypotheticals."

He said the administration hoped "all Israeli government officials will continue to share the values of an open, democratic society, including tolerance and respect for all in civil society, particularly for minority groups."

Much may also depend on the result of next week's congressional elections in the United States where Republican candidates with whom Netanyahu has long felt more comfortable may make gains at the expense of President Joe Biden's Democratic Party allies.

Some of Netanyahu's longstanding priorities are expected to continue, notably his unyielding stance against Iran and his determination that Tehran should not acquire a nuclear weapon.

He is also expected to try to continue to build on the historic achievement of his last period in office, the Abraham Accords with the United Arab Emirates and Bahrain, a potential precursor to a wider normalization with the Arab world.

Yet there is no sign of progress on the Palestinian conflict after Yair Lapid, now the caretaker prime minister, briefly revived talk of a two-state solution this year; Palestinian reaction to Netanyahu's win has been almost uniformly hostile.

Contrary to his hawkish image, Netanyahu has often taken a more flexible and pragmatic approach than some of his predecessors. But there have been fears his legal problems may push him to make concessions to the far-right in return for their support in clipping the wings of the courts.

"Netanyahu now has a personal interest in limiting the power of law authorities and the Supreme Court because of his trial," Shapira said.

Even while the campaign was under way, Smotrich proposed a set of legal changes that would cut into judicial authority and increase government control over the judiciary while potentially helping Netanyahu in his legal battles.

Lapid joined a chorus of critics denouncing the proposed changes as an attack on the rule of law and Netanyahu has been at pains to project a statesman-like image to allay fears of an anti-democratic revolution.

In a speech to supporters, Netanyahu said he would be avoiding "unnecessary adventures" and Ben-Gvir himself, who only a few days ago was brandishing a gun at Palestinian demonstrators in occupied East Jerusalem, has promised that "we represent everyone."

(Additional reporting by Emily Rose and Henriette Chacar and Matt Spetalnick in Washington; Editing by Howard Goller)

Israel election: Netanyahu on ‘verge of big victory’ as ultra-nationalist party breaks through

Emily Atkinson
Wed, November 2, 2022 

(AFP via Getty Images)

Former Israeli prime minister Benjamin Netanyahu looks poised for a dramatic return to power, according to the latest exit polls, as results also pointed to Itamar Ben-Gvir’s far-right Religious Zionist party becoming the third largest in Israel’s parliament.

With around 85 per cent of the vote counted, Mr Netanyahu’s Likud party, with the help of right-wing allies including Mr Ben-Gvir looks set to secure a small majority in the 120-seat Knesset.

“We are on the verge of a very big victory,” Netanyahu, 73, told supporters at a gathering in Jerusalem on Wednesday. “I will establish a nationalist government that will see to all Israeli citizens without any exceptions.”

His longtime rival, incumbent prime minister Yair Lapid of the centrist Yesh Atid party, was predicted to win 24 seats, with his camp at 54 seats overall. The Religious Zionist party is on course to get 14 seats.

Final results are expected on Friday.

The hundreds of thousands of remaining ballots — mostly from those who voted away from their regular place of residency — have to be cross-checked for accuracy, a more time-consuming effort. They could lend a boost to Netanyahu’s opponents, reducing the size of any potential majority.

With Netanyahu and his allies projected to win more than the 61-seat majority needed to form a government, the country’s protracted political crisis may be headed toward a conclusion, though Israel remains as divided as ever as illustrated by the rise of Mr Gvir and his once-fringe party.

He was a former member of Kach, a group placed on Israeli and US terrorist watchlists.

Mr Ben Gvir is a disciple of Meir Kahane, founder of the Kach party and the Jewish Defence League (JDL). Like Mr Kahane, who was assassinated in New York in 1990 and considered a pariah, the Religious Zionist leader has espoused extreme views against those he considers disloyal to the Israeli state.

Should Mr Netanyahu fall short of a parliamentary majority, Mr Ben Gvir’s party would likely fall first in line as coalition kingmaker and seed one of the most right-wing governments in Israeli history.

At an all-male campaign gathering in Jerusalem, men wearing Jewish skullcaps and waving Israeli flags danced in celebration of the election. At the celebration, Mr Ben-Gvir’s supporters chanted “death to terrorists”.

The Religious Zinonist leader has fast become one of Israel‘s most popular politicians thanks to his frequent media appearances and calls for a harder line against Palestinians. Young ultra-Orthodox men are among his strongest supporters.

Ben-Gvir lives in the hardline West Bank settlement of Kiryat Arba and is a strong proponent of settlement construction. He has described Arab colleagues in parliament as “terrorists,” called for deporting those who are “disloyal” and recently brandished a handgun in a tense Palestinian neighborhood of Jerusalem as he called on police to shoot Palestinian stone-throwers.

“We want to make a total separation between those who are loyal to the state of Israel — and we don’t have any problem with them — and those who undermine our dear country,” he said.

Muhammad Shtayyeh, the Palestinian prime minister, described rise of Israel‘s far right as “a natural result of the growing manifestations of extremism and racism in Israeli society”.

A Palestinian man reads the headlines of a local newspaper in the occupied-West Bank city of Hebron (AFP via Getty Images)

Israelis voted in the country’s fifth election in less than four years, hoping to break the political deadlock which has paralysed the country.

Mr Netanyahu was Israel‘s longest-serving prime minister, governing for 12 consecutive years before he was ousted last year by Mr Lapid, who went on to lead an unlikely patchwork of centrist and Arab parties, which disagreed on most issues, from Israeli occupation to LGBT+ rights.

Mr Lapid, addressing supporters early Wednesday, insisted that the race was not yet over. “Until the last envelope is counted, nothing is over and nothing is final,” he said.