Netanyahu didn't save the economy as finance minister, and he won't save it now as the last reigning Thatcherite.
By LARRY DERFNERlarry derfner 88(photo credit: )
We seem to be the only people on Earth whom the gathering worldwide depression still hasn't shocked into realizing that our nation's economic policy has to change.
In other countries, beginning with the US and Europe, a new economic era has begun. Laissez-faire, anti-tax, anti-government capitalism is understood to have failed (it sure as hell didn't prevent this disaster, did it?), and the response has been a turn to the Left. In other countries, it's understood that government has to step in with more liberal, social democratic, Keynesian, New Deal-style policies or the economy is going to sink through the floor.
Not here, though. Here people are scared of losing their jobs, afraid to spend a nickel, their hearts go out to the factory workers who've gotten laid off, they read about how charities that keep hundreds of thousands of poor people afloat are about to go bankrupt, and what is their idea of change, of an Israeli New Deal? Bibi Netanyahu. The world's last reigning (or soon-to-be-reigning) ideological Thatcherite.
People think he saved the economy as finance minister during the recession of the first half of the decade, so they figure maybe he can do it again. Anyway, nobody else has any ideas; everybody's waiting for Bibi.
THE TRUTH, though, is that Netanyahu didn't save the economy. What saved it was the end of the intifada and the end of the depression in the world dot.com industry, which together had a choke hold on the economy when Netanyahu took over as finance minister. By the time he resigned over the disengagement 21/2 years later, the suicide bombings were all but over and the world dot.com industry, including Israel's, had come surging back.
I've never heard anybody explain how Netanyahu's selling off of a few state-owned industries, slashing of welfare and slight reduction of taxes turned the economy around from deep recession to rapid growth. As I recall, the downtown areas were empty of shoppers and the hotels empty of tourists in early 2003, and then 21/2 years later they were full again. Was it Netanyahu's cuts in child allotments that got us shopping and tourists flying? Was it his privatization of Bezeq? No, what started the recession was the intifada and the world dot.com slump, and when those ended, so did the recession. Netanyahu's luck was to be finance minister when it happened.
Another thing people seem to have forgotten about his tenure in 2003-5 is that poverty and income inequality exploded. Soup kitchens and clothing charities were opening one after another across the country. This had never happened here before; it began during Netanyahu's golden era in the Finance Ministry, when the government washed its hands of the poor.
Now those charities are buckling under the lengthening lines of unemployed, the welfare state having abdicated. Into whose hands will this social crisis be given? To whom will the poor and the future poor be looking for answers? To Bibi Netanyahu.
Unfortunately, while other world leaders' economic ideology has changed in the face of the current meltdown, Netanyahu's hasn't. He's offering the same "solution" that he offered five, 10, 15, 20 years ago: lower taxes, less government spending, privatization. The very thing that governments in the US, Britain and other countries did before the bust, and the very opposite of what they're doing now.
Israel, an ancient land indeed.
BUT THEN NETANYAHU won't be managing the economic crisis all by himself; he'll have a finance minister to carry out day-to-day policy - if one can be found. With the world's government officials grappling with how to stop the free fall, Netanyahu's lieutenants in Likud, which by rights will control the Finance Ministry, are running for the hills.
"In a little while the unemployed are going to come pouring into the streets, and no one wants to have to face them," said a Likud higher-up to Yediot Aharonot yesterday in a front-page story headlined, "No one wants to be finance minister." A Likud MK seeking a top cabinet posts explained why he didn't want finance: "Only a Shi'ite suicide bomber would take that job. Everybody knows Bibi's going to stand or fall on the economy, so who wants to get involved in that mess?" Another top Likudnik said: "Why would anyone want a job where you have to work very hard, when you're the bad guy of the Israeli economy, and when you're always getting an earful from the rest of the world?"
Our ship has hit a hurricane, and this is our crew, folks. To the poor and the soon-to-be poor: Don't expect a whole lot from the incoming government. The New Deal under Prime Minister Netanyahu looks like it's going to be a copy of the Old Deal under Finance Minister Netanyahu: Every man for himself.
At a time when much of the rest of the world is going forward, we're going backward.
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