Let them eat cake

In spite of a gloomy global economy, this government is intent on slashing the national budget.

By
April 10, 2013 21:40
4 minute read.
Netanyahu and Lapid post-election broadcast

Netanyahu and Lapid post-election broadcast 370. (photo credit: Screen shot)

It is only fitting that Margaret Thatcher, who was a great leader in many, many ways, is being remembered this week, as the new Netanyahu- Lapid-Bennett government contemplates what will likely be the most Thatcherite budget in Israeli history.

In spite of a gloomy global economy, this government is intent on slashing the national budget. It wants to continue Netanyahu’s implementation of the long-disproven “trickle-down” economics of Thatcher and Reagan, with austerity measures that effectively transfer wealth from the poor and middle class to the very rich.

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It is bitterly ironic that the finance minister, Yair Lapid, who rode to 19 mandates on the back of his promises to the middle class, will take the wrecking ball to the last vestiges of state assistance... to the middle class.

Lapid’s voters found out just last week how out of touch their new finance minister is. Lapid’s vignette about the “middle-income” Cohen family betrayed a staggering disconnect with the day-to-day reality of ordinary Israelis. Lapid told a story of one Riki Cohen and her husband, who earn NIS 20,000 per month, travel abroad every two years, and own an apartment in Hadera – but cannot afford to buy a new apartment for one of their children.

Lapid’s characterization of the Cohens as middleincome is only slightly less fantastical than the musings of Mitt Romney, who last year was pilloried for claiming that “middle class” in the US meant $250,000 a year, when it was really $50,000. Lapid, similarly, has been lambasted for imagining that a combined income of NIS 20,000 per month is middle income.

If only. While it’s true that NIS 20,000 is no king’s ransom, the median salary is actually NIS 7,200 NIS per person – before tax. Middle class is defined as those earning NIS 6,750 to NIS 11,250.

I do not mean to belittle the financial concerns of those who are doing a little better than average. But we need to be realistic. The middle class in this country would love to be worried about buying an apartment for their children. Instead, they worry about paying the rent this month while housing prices skyrocket, and they worry about putting food on the table as the cost of basic foods rises precipitously.

Middle class Israelis are worried about a collapsing health care system and hospitals so overcrowded we had to invent the term “hallway hospitalization.”

Middle class Israelis are dealing with the creeping privatization of our economy and the steady dismantling of the Israeli welfare state, even as their taxes are rising to subsidize the capital gains of our richest citizens and our largest corporations pay tax rates as low as 0.3 percent. All this when the average Israeli salary is only about $2,000 a month.

Israelis are rightly outraged that their finance minister believes NIS 20,000 a month is middle class.

Only a finance minister who harbors such illusions could contemplate enacting the harsh policies of the 1980s and gutting the national budget, as he is widely expected to do.

Margaret Thatcher famously said, “There is no such thing as society. There are individual men and women, and there are families.” She continued: “People must look to themselves first. It’s our duty to look after ourselves and then also to look after our neighbor.”

This is the radical neo-liberal vision that Netanyahu embraced and for which Lapid is now head cheerleader: look after “me first,” and afterwards perhaps we can look after our neighbor. In other words, a vision of not just exercising fiscal responsibility, but of demolishing what remains of the welfare state.

Where does “looking after ourselves” end? At what point do we say that we have enough and can turn our attention to our neighbors? This is not about the NIS 20,000 per month family, but about the true beneficiaries of the Netanyahu vision; how much should a tycoon or a large corporation earn before paying a fair tax rate? And at what point will they tell us that the National Health Insurance scheme is next on the chopping block? This is the surreal debate occurring during the week of Yom Hashoah, as Holocaust survivors in this country are so destitute that they are going without food and medicine. Many cannot afford heating in the winter. While we have this debate over who is “middle class,” Holocaust survivors – for whom we stood silent and wept this week as the sirens wailed on Yom Hashoah – are suffering in abject poverty.

And Lapid by all accounts is preparing to gut their social services even further.

Interestingly, there is one name that we aren’t hearing in the lead-up to the coming slash-and-burn budget, and that is Binyamin Netanyahu’s. Despite all the hype over the electoral success of Yair Lapid, the prime minister still managed to manoeuvre Lapid into the Finance Ministry, where Lapid alone will bear the brunt of the public’s disapproval over the coming austerity measures.

Netanyahu, who more than anyone else is responsible for the Thatcherization of Israel’s economy, now has “Thatcher with hair gel” to finish the job for him.

The writer is deputy speaker of the Knesset and outgoing secretary-general of the Labor Party.


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