Last Saturday night, thousands of Tel Avivians took to the streets in a repeat
of the 2011 social protests that captivated both the nation and international
media, but which garnered few tangible results.
At that time, makeshift
tent “cities” were erected throughout Tel Aviv, most prominently on the posh
Rothschild Boulevard, to protest social and economic inequality, particularly
the high cost of living which puts excessive strain on the country’s middle
Now, following the release of Finance Minister Yair Lapid’s
proposed 2013- 2014 budget – which increases deficit spending from three percent
to 4.65% (down from an initially suggested 4.9%) but nonetheless calls, among
other things, for a 1.5% across-the-board tax hike as well as a 1% increase (to
18%) on the VAT on all consumer goods – the call for “social justice” has been
To a large degree, these calls are warranted.
the Organization for Economic Cooperation and Development (OECD) have
consistently shown that income inequality in Israel is among the highest in the
developed world, and that the gap continues to widen. In 2011, for example,
Israel was named as one of only two OECD countries in which the real income of
those at the bottom of the economic ladder decreased since the mid-1980s. Israel
has also been shown to have one of the highest rates of child poverty among the
35 member countries of the OECD, with nearly a quarter of children living in
households subsisting below the official poverty line.
A 2012 report by
the Kedmi Committee, headed by then-Industry, Trade and Labor Ministry
director-general Sharon Kedmi found that Israeli consumers paid 10%-20% more for
food than their counterparts in the rest of the OECD.
In “Sharing the
Burden,” (May 7) The Jerusalem Post editorial board provided a vivid example of
the country’s inequitable distribution of wealth. Citing a recent Finance
Ministry report, the article highlighted that “four of Israel’s largest
corporations – Teva Pharmaceutical Industries, Intel Israel, Israel Chemicals
and Check Point – paid an effective tax rate of just 3.3%, while smaller
businesses paid a corporate tax of between 13% and 20%.” The ministry report
also revealed that these four companies received 70% of the NIS 5.6 billion in
tax exemptions under the law for encouraging capital investment.
previous editorial, “Where’s the Money?” (May 1), the Post’s editors argued that
this imbalance is not limited only to the private sector and that “conspicuous
waste exists among public sector fat cats.” According to that article, public
sector employees, defended “ferociously” by the Histadrut, the country’s labor
federation (which, according to the Post, “has evolved into a monopolist
oligarchy of the 13 most powerful unions”), are assured of “sweet deals” that
the average Israeli “cannot even dream about.”
As an example, the article
cited Ashdod Port’s harbor pilots, who “each earn between NIS 60,000 and NIS
77,000 a month – more than the prime minister, IDF chief of staff or Supreme
These “sweet deals” aren’t limited to the ports, and
span the entire unionized Israeli economy.
There is thus much reason for
average Israelis to be upset. In fact, Lapid conceded as much, saying his budget
negatively impacts the middle class, the key constituency which he courted and
championed during his successful election campaign.
“I think there’s
something legitimate in the anger directed toward me – we’re hurting people in
their pockets,” Lapid said at a press conference after releasing his budget.
“Yes, the middle class was hit,” he admitted.
Notably, standing next to
Lapid on the podium was Ofer Eini, chairman of the Histadrut.
In order to
yield results, however, the renewed protests must not become politicized or
descend into anarchy, as was largely the case with the Occupy Wall Street
protests that took place last year in US. Otherwise, the inherent message of the
movement becomes compromised for lack of balance, rationality and hence serious
loss of credibility.
Unfortunately, there are already signs that this is
To begin with, prior to last Saturday’s demonstration, the
organizers of the event released a statement describing Lapid’s budget as
“murderous,” and advised the government, among other things, “to stop pouring
money into isolated settlements.” Red flags were prominently flown throughout
Most importantly, the protestors’ demands must be reasonable
and specific, rather than dramatic and fantastic.
demonstrators at the rally chanted the slogan, “There’s no future with Lapid and
Bibi [Netanyahu],” which assimilates purely subjective political undertones into
that which is legitimately an objective, nation-wide and otherwise essentially
economic reform movement. If the social protests are to succeed, they must be of
the people for all the people, independent of political
Moreover, those involved must lend credence to the fact that
the socialist policies of Israel’s founders nearly bankrupted the country and
that it was not until Netanyahu implemented in the 1990s free-market policies
(inspired by Thatcherite antecedents & Reaganomics) to promote economic
competition that Israel’s monetary position improved, leading to the massive
economic expansion and innovation that has come to define the country
Furthermore, the current strength of the Histadrut is largely a
by-product of nearly five decades of centralized economic policies that resulted
in a bloated public sector, bestowing upon unions the power to leverage the
government in negotiations under the extortionion of decimating the economy
through nation-wide strikes.
There is also the need for the protests to
remain exclusively an Israeli initiative, rather than being directed, like many
of the country’s foreign-funded NGOs, by external influence. In 2011, for
example, evidence surfaced that American Democratic strategist Stanley Greenberg
played an instrumental role in initiating the protests.
In this respect,
a September 2011 Ma’ariv investigative report claimed that plans for the
demonstrations were spawned at a Tel Aviv meeting between Greenberg, Eldad
Yaniv, former bureau chief for Ehud Barak, as well as former Barak strategist
Moshe Gaon and other left-wing activists. The report alleged that Greenberg
advised the Israeli Left to shift the public discourse away from diplomatic
issues to a socioeconomic agenda in order gain the support of a majority of the
population, which ultimately would translate into electoral
Tellingly, Greenberg was hired, prior to February’s election, as
a campaign strategist by Labor leader and self-proclaimed political figurehead
of the “social justice” movement Shelly Yacimovich.
Which brings us to
the most glaring paradox of the renewed protests; namely, Yacimovich herself.
This past March, Yacimovich turned down an offer by Netanyahu to join the
coalition and become finance minister. Instead, she chose to sit in the
Opposition, while now hypocritically criticizing economic measures that she
would otherwise have had far-reaching control over (and may well have had to
Last week, Yacimovich went so far as to slam Lapid’s
proposed budget as “cruelty” and accused him of “back-stabbing the
Yet members of Yacomovich’s faction chose to direct their ire at
her, rather than at Lapid. Labor MK Erel Margalit said that “Shelly owes an
apology to the middle class in Israel. She received an opportunity to come into
the government and take care of the middle class....
When she said no,
she left the job for Lapid.”
Labor MK Isaac Herzog said that “In
retrospect, Shelly needed to seriously consider joining the government. It was a
mistake not to seriously consider Netanyahu’s offer.... She could have built a
different government, been a terrific finance minister....”
In a slip of
the tongue, Yacimovich recently offered a window into her decision: “My brothers
the workers, I don’t understand economics, as I told you
Overall, then, there remain incongruencies projected by the
renewed social activists which should be addressed by them if they aspire to
trigger the changes which the Israeli economy so desperately needs; the most
conspicuous of which is that the longstanding, socialized economic policies of
the nation, ostensibly so admired and lauded by many of the protestors (and
championed by like-minded politicians) are, in fact, largely responsible for the
contemporary economic morass plaguing our country.The writer recently
made aliya from Canada.
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