Fare play

Psychology of fear and populist sentiment are factors affecting Israel's current economic turmoil.

By JERUSALEM POST STAFF
Wall street shouting 224.88 (photo credit: AP)
Wall street shouting 224.88
(photo credit: AP)
Two factors affecting Israel's current economic turmoil are incontrovertible. One is the psychology of fear; the other, with elections around the corner, is populist sentiment. Hence the key elements in the various proposed financial rescue plans being bandied about are the effort to stem panic, and to be perceived as looking out for the needs of ordinary citizens. With this in mind, the seemingly inconsequential decision to hike bus fares testifies loudly to the imperviousness of our officialdom to the environment in which it operates. Bus fares were raised less than six months ago. Next month they'll go up by 8 percent more. What renders this increase particularly insensitive is the fact that gasoline prices here were just lowered by 9%, in itself an inadequate reduction considering plummeting oil costs in recent months, from which Israeli consumers are benefitting too little too late. Moreover, to pick precisely this juncture to add to the burden of those who least can afford it seems thoughtless, even if cogent arguments can be produced for the move - though none were divulged. Now isn't the time to hit commuters and working people with a fare hike, whatever the strict bookkeeping rationale. Treasury higher-ups - who most likely don't themselves ride the buses - would do well to remember that many of those who use public transportation do so out of a lack of choice. They include segments of society without the wherewithal to purchase and maintain their own vehicles. They are, furthermore, the first victims of economic downturns. ISRAELIS WERE told last week that the country has been in a recession for about a year - even though our policy-makers assured us until very recently that we were doing marvelously well and were practically untouched by the global financial downturn. Yet now that confidence locally has nosedived and our vulnerabilities have been exposed, it is high time Finance Ministry decision-makers begin to gear their strategy to the reality of recession. And that primarily means not punishing those already in distress. Now more than ever, public transport needs to be encouraged rather than penalized. We all know that bus passengers in this country get a raw deal and substandard service as compared to the rest of the western world. Charging them more for inferior service, especially when bus cooperatives' expenses are diminished, makes no sense - besides the hardheartedness it betrays. BUT THIS is just one revealing sign of an overall attitude. What makes it so incongruous is that the disregard for the needier socioeconomic strata is demonstrated by the very Treasury which goes to inordinate lengths to claim that its proposed safety net for pensions should only apply to the lowest-income near-retirees. They, parenthetically, require it least, since most of them belong to the largely inactive "veteran" funds, immune to recent upheavals. On the one hand, the Treasury poses as defender of the disadvantaged, while on the other, it evinces callousness to this very segment of the population. The fact is that middle-class savers deserve their pensions no less than working-class ones. Besides, the problem is that it's mostly alarmed members of the middle-class who have been redeeming their pension, provident and mutual funds and thereby triggering the free-fall of the corporate bonds which are these funds' mainstay holdings. Hence, to safeguard all non-speculative investments, the chief prerequisite is the restoration of investor confidence. At this point the particulars of the various economic rescue plans offered are less important than agreeing on something and signaling to the anxious markets that concrete measures will be taken to boost markets and thereby morale. The less time Treasury staffers spend in fending off nuanced variations on their theme and competing plans from various political quarters, the better off we will all be. Above all, the key concern must be not to talk about infusing capital into the troubled markets at some point in the unspecified future, but actually to do so - the sooner the better. Whether we're talking markets or buses, psychological insight and empathy need to be taken into account by Israel's politicians and civil servants. Because just now, mood and mind-set matter a great deal.