It is no coincidence that Rothschild Boulevard, one of the country’s busiest and
poshest streets, has become the epicenter of its greatest social
uprising. Rothschild was one of the first roads built in Israel. This
boulevard was originally called Rehov Ha’am (Street of the People).
its earliest days, it connected one of Tel Aviv’s poorest neighborhoods, Neveh
Tzedek (now one of its most prosperous) to Habima (the theater). It was also the
road where, 63 years ago, the country’s declaration of independence was
In short, the boulevard that once served to connect all walks of
Israeli life is once again serving as a locus. Indeed, it is not only the
country’s economy, but also its democracy that is at stake.
Like it did
nearly 40 years ago, Rothschild Boulevard has brought together a mix of faces
and lifestyles. Walking past the tents, one hears the revelry of a drum circle
while seeing an MK defending his positions against adolescents. Here, one can
observe a desire for mass revolution on the one hand, and specific policy
reforms on the other. Rothschild is only the spark, not the flame, of what is
now taking place all over the country.
What is taking place is a
frustration that bridges gender, generation and class. This is a frustration
with a government and bureaucracy averse to reform. However, the mosaic of
expectations and discourse, whether regarding doctors’ rights, the cost of
living, cottage cheese or education, threatens to muddle the opportunity for
bringing real change. A more precise civilpolitical discourse is
This conversation begins with humility and leads to inclusive
insights. The protesters should not forget that the economy has undergone
tremendous positive changes. Though we hear from many on the fringe of a desire
to return to the paternalistic state of yesteryear, reckless demonetization of the
economy alienates the producers of wealth and disregards the fact that the
majority of these also have an interest in reforms.
The government and
international investors need to understand that this protest is not about
challenging the fundamental economic structure. What is being looked at
critically, and what has galvanized Israelis, are the factors that have stunted
the flow of wealth to the country’s lower ranks, and have driven up the cost of
living. As housing shortages get worse, the government continues to burden the
average taxpayer through onerous revenue taxes, and the standard of living has
risen while wages lag far behind.
Those 300,000 who gathered in the Tel
Aviv streets last month all agree that the country’s oligarchs have enriched
themselves at the expense of middle Israel for far too long. These protests are
an expression of frustration with a democracy that is increasingly unaccountable
to its citizens. Viewed in this light, what is taking place around the
country is a repudiation not only of Israel’s economic situation, but also of
Returning to Rothschild Boulevard, the squatters with
hands to the sky are shouting for more than just lower housing prices; it is an
authentic expression of protest. With the spark lit, how can it go forward?
There is no voice to unify those in the middle, no ideal to inspire them, and no
sacred symbols around which to rally. Similar to what occurred in
political discourse in the late 1990s, the fringes of the political spectrum are
driving economic discourse.
The country-wide anger at the government has
been growing for decades, as policymakers and constituents have drifted apart.
Bridging this gap will require much more than Prime Minister Binyamin Netanyahu
and his administration have been willing to offer. But no one can put all the
blame on these elected officials, as they only mirror the weaknesses of their
constituents. Only with greater clarity among citizens will the
government undertake the necessary reforms.
A national protest with
ambiguous demands and scattered leadership does not equal a platform for change.
With this in mind, here are five popular proposals that could be championed, and
that Netanyahu might be willing to support:
– That around 20 families
in Israel control nearly 25 percent of publicly listed firms increases
opportunities for cartel- like behavior, including price fixing and
underbidding. The Antitrust Authority should be better equipped to investigate
these families in order to ensure that the Israeli consumer does not pay the
cost of a highly concentrated economy.
Reduce market concentration
Credit in Israel is not allocated to those able to use it most efficiently.
Holding companies, by controlling both finance companies (lenders) and
corporations (borrowers), are able to allocate credit for their own
benefit. This type of “cross-ownership” also makes it more difficult for
small and mediumsized enterprises to get credit. Regulations to reduce the
control that holding groups have on both lenders and borrowers would introduce
greater competition into the country’s banking system – a key driver of economic
growth.Create a consumer protection agency
– An agency with a mandate to
investigate business malpractice is important for prosperity. Consumers
deserve transparent information regarding business practices, and an address to
which they can file complaints.Lower regressive taxation
– The reduction
in direct taxes, which has helped individuals and corporations retain wealth,
has also been accompanied by a rise in indirect taxes that put a
disproportionate burden on those with lower incomes. Indeed, in 2008-09,
indirect taxes accounted for 33.5% of all tax revenue, the highest among OECD
countries. Reducing value added tax (VAT) by a couple of percentage points would
lift some of this burden. So, too, would removing the burdensome taxes
levied on automobiles.Invest in transportation
– One reason that
demand-side pressures are driving up housing prices is that the job market is
disproportionately located around Tel Aviv. According to Globes, fewer
than 6% of hitech jobs created over the past three months are in the North or
South. Though young couples, for instance, are not averse to moving to the
periphery, the transportation system is ill-equipped to serve working
populations. The construction of a national highway system would reduce some of
the demand-side pressures on housing.
Rothschild Boulevard began as a
middle road from south Tel Aviv to north Tel Aviv, from the flea market to the
theater; today it has assumed its former role, connecting all strata of society.
It is our deepest hope that the national fervor that managed to create a storm
on Rothschild Boulevard can produce the same sort of leaders who, generations
ago, had the courage and clarity to demand national independence.The
writer is co-founder of the JNI (Jewish National Initiative).