Protecting Trajtenberg

This paper, along with leading economists, including Stanley Fischer, has come out strongly in favor of the Trajtenberg recommendations.

By
October 5, 2011 05:48
3 minute read.
Interior Minister Eli Yishai.

Eli Yishai 311. (photo credit: Marc Israel Sellem)

 
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It’s only natural that politicians will gauge their parliamentary activities in accordance with the way they understand the electoral winds to be blowing.

But, sometimes kowtowing to perceived public opinion is so crude that it crosses the line that separates political savvy from cheap, irresponsible populism.

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A case in point was the fiasco that took place in the cabinet Monday over the vote on the Trajtenberg Committee recommendations.

This paper, along with many leading economists, including Bank of Israel Governor Stanley Fischer, has come out strongly in favor of the Trajtenberg recommendations.

Real solutions are provided for a host of ills afflicting our economy – from income-tax reforms benefiting the cash-strapped middle-class; to longer school days and state funding of pre-schools that will enable mothers to leave the house and work; to higher corporate taxes and National Insurance payments provided by employers; to wide-ranging reforms in the construction and housing market; to a lowering of tariffs and more stringent anti-trust laws that will facilitate more competitive markets leading to lower consumer prices.

Prime Minister Binyamin Netanyahu, riding the groundswell of grassroots support for socioeconomic change, was rightly eager to hold a vote in favor of the Trajtenberg recommendations in the cabinet as quickly as possible.

Final passage of the recommendations in the Knesset is a long and grueling process. Initially, a first reading is voted on in the plenum. Next, the relevant Knesset committees take apart the recommendations and discuss them individually. Finally, the Knesset votes again in a second and third reading.



The quicker the Trajtenberg recommendations can be passed in the cabinet, the better. Unfortunately, narrow political interests and pointless wrangling forced Netanyahu to delay the cabinet vote, further pushing off much-needed economic reforms.

Apparently concerned by Aryeh Deri’s imminent return to politics, Shas leader Eli Yishai attempted to turn the cabinet vote into an opportunity to present his party as the champion of the poor.

“Our opposition is a matter of principle,” announced Yishai. “The weakest sectors have been left behind.... We will continue to oppose this report until its flaws are fixed.”

By rejecting the Trajtenberg recommendations, Yishai no doubt sensed he would be appealing to the tens of thousands of disgruntled Israelis who are understandably fed up with such socioeconomic ills as the widening gap between the rich and the poor – one of the biggest in the Western world – and the exorbitant cost of basics, such as housing and food.

But delaying the passage of the Trajtenberg recommendations only exacerbates the situation.

And with all due respect to Shas and its claim to be the defender of the poor, this summer’s socioeconomic protests were first and foremost a revolt of the middle class against their inability – despite working hard and earning relatively well, to make ends meet.

In addition to Shas’s Yishai, several Likud rebels also jumped on the populist bandwagon, such as Netanyahu’s perennial rival Vice Premier, and Regional Development Minister Silvan Shalom and Welfare and Social Services Minister Moshe Kahlon.

Meanwhile, Israel Beiteinu’s ministers seemed motivated, at least in part, by a desire to show Netanyahu – and Israel Beiteinu’s constituents – that they were not, as Tourism Minister Stas Meseznikov put it, “pawns” in the hands of Netanyahu. And Defense Minister Ehud Barak is battling against the cuts in the security budget proposed by the Trajtenberg Committee.

None of the ministers offered criticism with real substance that justified a delay in passing the Trajtenberg recommendations.

Like the leaders of this summer’s socioeconomic protests, such as Dafni Leef, who is credited with beginning the tent-camp protests, and National Student Association Chairman Itzik Shmuli, the ministers who voiced their unschooled opposition to Trajtenberg seemed to be less concerned with articulating realistic economic reforms and more interested in tapping into the populist energies of an Israeli society yearning for a fairer more efficient socioeconomic climate.

Sadly, the successful passage of the Trajtenberg recommendations – which would go a long way towards righting many of the wrongs in our economy – can no longer be taken for granted if the sort of petty bickering that went on in the cabinet Monday is indicative of future discussions in the cabinet and in the Knesset.

In their zeal to appeal to what they believe to be popular opinion, our lawmakers are performing a real disservice to the same public they claim to represent.

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