Pro-market reforms weren't defeated on March 28 Originally published in Wed 26 Apr 2006 in The Jerusalem Post Commentators and pundits claim that the Likud’s election defeat signifies a rejection of Binyamin Netanyahu’s pro-market reforms and the embrace of the socialist policies of Amir Peretz’s Labor Party. Nothing of the sort. While the formation of a Kadima-Labor coalition will most probably result in the adoption of some of Labor’s disastrous economic policies, the predominant reason for the election results has been, as usual, a concern with the Arab-Israeli conflict and much less with economic issues. The chief reasons for the Likud’s failure were the desertion to Kadima of many of its MKs, other top-echelon Likud politicians (like local authority heads), and many party operatives. Add to this the relentless media campaign against Netanyahu, the public’s disgust over the Uzi Cohen-style shenanigans of the Likud Central Committee members, the unceasing efforts by Silvan Shalom, Danny Naveh and Limor Livnat to undercut Netanyahu’s leadership, and the undermining of Likud from within by the many moles Kadima left in the Likud – and you must conclude that the fact that Netanyahu managed to keep Likud from breaking apart, and that he even managed to win 19 seats, is a political miracle. Had Labor’s socialist vision really appealed to the electorate why did Labor lose over a third of its initial gains in the polls? Why has this precipitous decline correlated with the public’s growing awareness of what Peretz, Avishay Braverman and Shelly Yacimovich apparently stand for? Apparently, because while Yacimovich did not mince words about her radical socialist views, Braverman kept talking from both sides of his mouth, while Peretz zigzagged between his radical impulses and the restraints put upon him by his election advisers, revealing all the while that he remained the same muddle-headed populist, head of a federation of rapacious public monopoly unions. THE CLAIM that the recent election was a referendum about economic policy appears even more preposterous when it is considered that throughout the campaign no one (surprisingly not even the Likud, that stood to gain so much from Netanyahu’s universally acknowledged achievements as finance minister) seriously debated the likely consequences of following one policy or another. No one bothered to examine what impact the different alternatives might have on economic growth, what they might cost, and how these costs are to be financed by a sluggish, overtaxed Israeli economy. Above all, no one asked whether a return to the 60 years of socialist cum welfarist policies, that made Israel economically lame, can really help the poor. The past squandering of many billions on similar policies (transfer payments already consume almost a half of Israel’s $70 billion annual budget) has resulted, according to the welfare lobby itself, in a growing number of the poor and in a widening of the income gap. The pre-election economic “debate” consisted of the rehashing of worn-out slogans, distortions and outright lies, mostly designed to cast Netanyahu as the enemy of the poor and the champion of the rich. Netanyahu’s enemies are determined to end his political career mostly because they consider him an obstacle to the putative “peace process” and to the unconditional establishment of a Palestinian state (their holy grail). But they also want to destroy him because he is the only real threat to the cabal of oligarchs and bureaucrats who strangle the Israeli economy, despoiling the low-paid Israeli worker by shortchanging him on his savings and extorting high monopoly rents on everything he consumes. A leftist media, claiming to care for the poor, but actually a part of the exploitative monopolistic system, mounted “hate Netanyahu” campaigns during his election contests with Shimon Peres and with Ehud Barak. This time too it constantly defamed Netanyahu and covered up the many serious questions raised about Olmert’s Kadima and Amir Peretz’s Labor. The few voices of journalists with integrity like Haaretz’s Ari Shavit and Guy Rolnik (editor of The Marker), or Yoav Yitzhak were drowned out or ignored because they dared speak the truth. While politically critical of Netanyahu, they also stressed his historic achievements and his courage in taking great political risks to break the bank duopoly. They also warned against what they thought was a great danger to Israel should Kadima form a government under Ehud Olmert, the great friend of Israel’s oligarchs. So yes, a Kadima Labor coalition might indeed halt vital economic reforms and even set the Israeli economy back. The election results were also a setback for the Zionist dream of a society of self-respecting productive citizens, free from corrupting dependence on government handouts and favoritism. In 1919 Nahum Vilbush, the father of industry in the new Zionist enterprise, wrote: “The new [Zionist and socialist] pioneers were repelled by the system of distributive alms prevalent in the old ultra-Orthodox community that spawned lack of productivity, poverty and low morale… but they did not fight this system by making economic changes that would make them productive. They were therefore forced to live on hand-outs too… instead of tackling the economic challenge of making their work productive, their leaders were engaged in sectarian fights and in Utopian experiments knowing in their hearts that accepting constant “aid” was just like receiving alms… but they were too busy with ideological and political questions and there was not among them one who could tackle economic problems, not one expert or guiding spirit…” Are Israelis doomed to repeat their costly history?