Israel''s current discussion is providing its lessons in the politics of economics and the economics of politics.

 
Political economy is the name of the game.
 
It is not really a discussion we are having. It''s more like simultanteous complaints, expressed as close to the top of one''s voice as appropriate to the short and pithy sentences designed for radio or television.
 
They come in response to proposed cuts in government spending, and increases in taxes, which themselves come from the need to present a budget to the government and then the Knesset, and several years'' spending in excess that is said to require lesser outlays and more income.
 
What the noise reflects is the multiplicity of interests touched by government spending and taxation.
 
Their number is apparent in the physical size of  budget documents, stretching for some distance along a shelf and weighing several kilos.
 
The details of the budget are great in number and complexity. Few can claim knowledge of it all, and how its various parts interact with one another.
 
No less complex is the nature of Israeli society.
 
Neither Israel''s budget nor society are unique in these respects. Details of economics and politics vary from one place to another, but all modern states display many separate interests in their societies, to be served and taxed by numerous separate yet intertwined government decisions.
 
It has been popular to emphasize Israel''s "middle class." Yair Lapid campaigned to win the support of the middle class, and now its self-assigned representatives are calling him a traitor for increasing their taxes and cutting their services.
 
Actually, there is no such thing as a "middle class." It''s an artificial construct, meant to represent the broad center of society. The people claiming middle class affiliation differ greatly in their needs, desires, beliefs, education, family responsibilities, geographical location, occupation, status within their occupation, political affiliation or tendency, the intensity of their politics, and numerous other things that affect how much money they have in the bank, how much property they may own, their unpaid bills, ongoing income, how certain is their income to continue at present or other levels, and how all of these features affect what they think about the various elements in the budget proposal.
 
Alongside these variations from person to person within the "middle class" as well as in social strata below or above that artificial construct is the variety of details under the headings of government spending and taxation.
 
We are seeing a great festival of media personalities and political activists. It is easy to find yet another Israeli with a provocative story, due to an expected increase in a tax or a cut in a budget item that might affect  family or business. The media is playing time and again the earlier promises of now Finance Minister Lapid to protect the interests of the middle class, against the claims of disappointment by individuals who voted for his political party.
 
"Might affect" family or business is important. Nothing is certain in the complexities where economics meets society. Many factors interact, and belie simplistic efforts to claim that element X will produce the suffering or enrichment of Y.
 
It is not only individuals who feel their economic condition is threatened by Lapid''s budget who are expressing themselves. Professional economists and other commentators are claiming greater wisdom than the Finance Minister, and identifying one or other item in the government budget that could be maneuvered for different results than those which they see flowing from what Lapid is proposing.
 
Commentators agree that the social protests in the summer of 2011 mobilized a large number of young professionals who thought of themselves as middle class and had trouble obtaining all the housing, other goods, and services that they wanted. Those well educated but not entirely satisfied Israelis provided the bulwark of Lapid''s supporters in the election that occurred in January of this year.
 
Some of those same activists who led the demonstrations of 2011, and tried without great success to repeat them in the summer of 2012, are unlimbering their efforts with an eye to this season. Their themes are the failure or duplicity of Yair Lapid, and the need to show in the streets who should be served by the government budget. The campaign is said to begin this weekend. A Thursday night vigil outside Lapid''s home fizzled, with protesters counted in the tens rather than in the hundreds or thousands. There will be another test of activists'' capacity Saturday evening.
 
Lapid''s career in the media is serving him well. He admits that he had to make financial demands of his constituents, defends his overall actions as essential for the nation''s economic well being, and explains how he is complying with his promises. He is making demands of the middle class, but he has detailed the demands he is making of other sectors as well. He has focused especially on the burdens his budget will mean for the Haredim and well-to-do Israelis, two sectors that have in the past been favored by governments at the expense of the middle class. Given the needs for economic reforms, Lapid is saying that he is actually improving the situation of the middle class by reducing the share of the overall burden it will have to bear.
 
Prominent in the politics of Lapid''s budget are the organized groups on the inside and outside of his alliances. He has chosen to link himself with Naftali Bennet of Jewish Home, and Ofer Eini, head of the Labor Federation (Histadrut). Lapid''s alliance with Bennet shows itself in avoiding settlements in the West Bank as targets for severe cuts, and his alliance with Eini appears in postponing reforms in several economic sectors whose workers have used their power within the Labor Federation to acquire abnormally good deals in terms of salaries and working conditions, as well as nepotism in their control of hiring new workers.
 
Prominent on the outside of Lapid''s alliances are the ultra-Orthodox. His budget shows both how he is saving money at their expense, and using the leverage of the budget to prod ultra-Orthodox men out of a lifetime of learning and into the workforce.
 
For their part, some ultra-Orthodox leaders are responding in ways that suggest a recognition of their current political weakness, and the public''s fatigue in supporting them. Heads of the Sephardi ultra-Orthodox party (SHAS) are claiming that their opposition to the budget is not a narrow concern to protect their religious constituency, but to defend of Israel''s poor. They are sounding more socialistic than the Labor Party, and--in claiming the umbrella of Labor Party slogans for Haredim who do not work--providing good material for Israel''s cynics. 
 
Ashkenazi ultra-Orthodox are more explicit in asserting that Lapid is anti-Semitic in attacking the population which they claim to be the heart of Judaism, guardians of the faith, more important in defending the country than the IDF via their capacity to assure the support of the Almighty, and the best representatives of what has been Judaism for 3,000 years.
 
They, too, provide good material for Jewish cynics. Much of their culture and practices are not ancient, but trace themselves to the Middle Ages. Some is new and increasingly assertive, as in their recently escalated insistence on the separation of women  to the back of the bus, the other sidewalk, and not present at all in the case of some public activities. 
 
The weight of the Haredim in the discussions toward the finalizing of this year''s budget will depend not only in what they say, but how they manage to threaten the political future of the prime minister and other aspirants to influence. Their current weakness in not being in the coalition is apparent in Lapid''s budget. However, they may be in the next coalition, or the one after that, and again be in a position to reward or punish their friends or opponents. Also on tap are the demonstrations they will mount in the coming days, and their capacity--against the capacity of the police to frustrate them--to tie up key intersections.
 
Lapid''s rhetoric is impressive, as is the rhetoric of some critics. However, it is necessary to take it all with that overused grain of salt. There are so many features of the economy and government, as well as no shortage of outside elements capable of affecting them, which beg any degree of certainty as to what will happen as a result of any particular change in spending or taxation. Experts quarrel about the certainty of X change producing Y results for one or another economic or social sector. However, the honest among them admit that each relationship between X and Y depends in large or small measure on a host of other elements likely to influence economic indicators and individual behavior. Moreover, events in Europe, America, China or the restive countries of Iran, North Korea, Syria or Egypt may impact on Israel''s exports or outlays for security in magnitudes to make all the current budget rhetoric suitable for nothing more than media archives. 


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