Politics: The housing crisis head scratcher

If the economy here is doing so well, why are there so many problems? And how can a government seen as weak and vulnerable be so stable?

By GIL STERN STERN HOFFMAN
July 29, 2011 16:26
Tel Aviv housing tent protesters

Tel Aviv housing tent protesters 311 (R). (photo credit: REUTERS)

Residents of one country woke up this week to headlines about teenagers gunned down by an extremist in a horrible terrorist attack that killed dozens.

Residents of another had their newspapers filled with pictures of young people not much older sleeping in tents in public thoroughfares.

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Anyone aiming to predict this summer’s headlines would have thought the latter scenario would take place in Scandinavia and the former in the Middle East. But they would have been wrong.

It is that contrast that Prime Minister Binyamin Netanyahu’s top advisers and coalition Knesset members were discussing in the Knesset corridors and cafeteria this week. They expressed relief that Israel’s summer was being marked by a socioeconomic stir and not a stormy security situation, and they attempted to explain the conundrums caused by the ongoing debate over the housing crisis.

On the one hand, the economy is stronger than ever. Israel has the highest projected economic growth this year of any country in the OECD, 5.2 percent. The record-low unemployment figure of 5.8% fell this week to an astonishing 5.7%.

Such numbers would certainly be welcomed in the United States, where economic growth is not expected to exceed 3.3%, unemployment is at 9.2%, and a frightening deadline is looming on Tuesday for dealing with the country’s astronomic debt. The numbers in much of Europe are worse or not much better.

So if the economy here is doing so well relatively, why are there so many legitimate problems raised by young people protesting all over the country? And perhaps even more perplexing, how can a government that was portrayed in the media this week as weak and vulnerable really be so unthreatened and stable?

The first answer to both those questions given by MKs and officials close to Netanyahu goes back to how this article started. The lack of an urgent security dilemma and the diplomatic deadline in late September being so far away by Middle East standards created a news vacuum that allowed problems that have been swept under the rug to hit the surface and stay there, encouraged by the media outlets that are out for Netanyahu’s head.

One opposition MK put it this way: “The fact that the economy is so strong makes what young people are going through even more infuriating. When there are wars, people understand the need to make sacrifices. But the quiet in the North and South gave people time to consider their own personal situation, the escalating prices for so many basic items and services, and the fact that there is no party in the government fighting for these things.”

Wars also have a habit of uniting a people against a common enemy and giving even the least cohesive governments a kindred sense of purpose.

By contrast, even in the most stable coalitions, domestic unrest and protests lead to infighting and finger-pointing among politicians seeking to avoid blame or ensure that their enemies will be taken down or at least harmed politically.

An adviser to Netanyahu downplayed a Dialog poll published in Haaretz this week that appeared to indicate that the protests had significantly weakened the prime minister. The poll found that Netanyahu’s approval rating fell from 51% following his altercation with US President Barack Obama two months ago, to only 32%. The adviser called the earlier number artificially high and the current one artificially low.

He said it was only natural that facing off against Israel’s enemies in a war or standing up to perceived pressure from the president of the United States in diplomatic developments makes a prime minister look strong, while attempting to find solutions for the average Joe protesting in the streets makes him look weak.

Addressing concerns that the Obama administration could decide to “kick Netanyahu when he’s down,” like some believe it did with ousted Egyptian president Hosni Mubarak, the prime minister’s advisers said polls proved that such a move by Obama would backfire.

The poll’s other interesting finding was that while Likud and Kadima had fallen by four seats each since a poll in March, the Labor Party rose during that time from six seats to 12. The poll indicated that the public already saw the party in the socioeconomic image of leadership candidates Amir Peretz, Shelly Yacimovich, Isaac Herzog, Amram Mitzna and Erel Margalit, and not in the capitalist shadow of Ehud Barak.

Barak apparently did Labor a tremendous service by splitting the party when he did and allowing it to leave the government before the protests began. MKs speculated this week about what would have happened had Labor still been in the government during the protests.

“They would have set poor Buji on fire,” an MK said, referring to former welfare and social services minister Herzog by his nickname.

Herzog pointed out this week that he had warned of the housing crisis in a book he wrote before he left the government. But that wouldn’t have helped. Netanyahu and Finance Minister Yuval Steinitz wrote about reforms to solve the crisis in the “First 100 Days Plan” they published June 28, 2009, and it didn’t help them at all.

Labor’s departure left the protesters without a party to target in their demonstrations, as hawkish demonstrations have had with right-wing parties. On the one hand, this made it harder for the protesters to harm Netanyahu politically and threaten his coalition, but on the other, it helped focus the attention solely on him.

An attempt by Netanyahu advisers and Likud ministers to refocus attention on Steinitz this week failed, because the public perceives that the real man in charge of the economy is Netanyahu, who issued a statement appointing himself “super-minister” above Steinitz when his government was formed.

The lack of a strong man in the Finance Ministry, as former prime minister Ariel Sharon had with Netanyahu as finance minister, left no one to deflect arrows away from Netanyahu.

One idea raised in the Likud this week was that the prime minister would replace Steinitz with popular, socioeconomically minded Welfare and Social Services Minister Moshe Kahlon when work begins on the next state budget in late 2012, so he could come up with a plan that would appeal to the masses ahead of the next general election.

That idea assumes the government will last that long. If the coalition makes it through current and future protests, it will be in part because party leaders in the coalition like Barak, Israel Beiteinu’s Avigdor Lieberman and Shas’s Eli Yishai have uncertain political futures and would want the current government to last as long as possible.

And also because Netanyahu would only want the next election held once the housing crisis solutions he proposed in Tuesday’s press conference were already built.

An opposition MK said it was too easy to forget that the government’s stability came with a price.

The MK said the hefty cabinet of 29 ministers bought Netanyahu political quiet and that money being used to give Barak’s Independence faction four ministries for five MKs and create an unnecessary new Homeland Security Ministry could have been used instead to lower taxes.

While the makeup of the current coalition, the realities of the political system, and the amorphous and non-specific goals of the demonstrators for “social justice” make it hard for the protesters to have an immediate political impact, opposition MKs said the protests have already had a deterrent effect on the government.

“Their lack of specific goals is important, because it prevents the government from raising any taxes on anything any time soon,” an opposition MK said. “In that regard, the protest has already been successful. Now a government that had no limits before will have to think twice.”

Opposition MKs expressed confidence that the real impact of the protests would be more long-term.

Ahead of the next election, they said, every party will have to paint itself as socioeconomic, unlike the last race, which was even more war-and-peace-focused than Israeli elections usually are, because it was conducted during Operation Cast Lead in the Gaza Strip.

The MKs said voters casting their ballots on socioeconomic issues rather than the question of what they would be willing to give the Palestinians could shift mandates from Right to Left and perhaps even significantly alter the makeup of the next Knesset.

But they also said all that could change in the likely event that the headlines ahead of the next election look a little less like Scandinavia and a lot more like the Middle East.


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