Having emerged from remote Arkansas and facing a sitting president, Bill Clinton cleverly turned to his opponent’s weakness: the economy.
In a prequel to the next century’s showdown between Barack Obama and John McCain, George H.W. Bush was a foreign policy expert challenged by an economic crisis. The recession of the early 1990s was mild compared with what McCain faced after the 2008 meltdown, but in both cases millions suffered, and the opposition’s task was to show that it was not responsible for the mess, and that the incumbents were.
Clinton’s aim was to shift the contest’s focus from Bush’s achievements in foreign affairs – the Cold War’s happy end and the military victory in Kuwait. That is how his famous election slogan – “It’s the economy, stupid” – came into being.
Now, in an effort to repeat that number, Bibi Netanyahu emerged in Jerusalem’s Malha Mall, grabbed an apple, held it aloft, and asked a crowd of onlookers: “Have prices gone up?”
The shoppers played their part and replied: “Yes!” And like a magician on stage, Bibi now asked: “Do you want prices to go down?” and thus drew a second “Yes!” which he now followed with his remedy: “Take down this government and we will bring prices down!”
“Take down this government and we will bring prices down!”Benjamin Netanyahu
As with Clinton and Obama in their times, this is clearly an election strategy. The problem is that the situation is entirely different. Economically this rhetoric is gibberish, politically it’s nefarious, and morally it underscores the tragedy that Bibi Netanyahu has become.THE RECESSION the elder Bush faced was economically enigmatic. To this day, its causes and scope aren’t fully clear.
Still, with unemployment approaching 8%, the economy was clearly squeaking, and with the Republicans in power for 12 years, there was reason to blame Bush, who raised taxes in violation of his election promise as well as Republican conviction. The crisis was also clearly homemade.
The same applied to McCain’s situation, even though he wasn’t personally part of the Republican administration. With stock prices having plunged 18% in one week the month before the election, and with major banks, insurers and investment houses taken over, nationalized, or altogether gone after a corrupt mortgage industry left millions of houses foreclosed and their buyers evicted – the crisis was real. It was also fully American, having been impacted by no foreign circumstance or ploy.
Now Netanyahu thinks he can convince Israeli swing voters that they, too, face a major economic crisis, one that only he can handle. So as a service to them, here are the facts, according to The Economist.
OVER THE past 12 months, the Israeli economy has grown by 9.5%, the highest rate (along with Austria) among the world’s 42 leading economies, and a good several rungs above China’s 4.8%, the United States’ 3.5%, and the Euro area’s 5.4%.
Unemployment, a negligible 3.7%, is similar to the US (3.6%) and far lower than the Euro area’s 6.8% and China’s 5.9%. The budget balance just shifted from deficit to surplus, a feat registered this year only by four other economies. And in the debt markets, where yields go down the more a borrower is financially healthy, Israel’s 10-year bond rate stood last month at 2.8%, lower than the US (3.1%), Canada (3.3%), Australia (3.7%), Singapore (3.0%) and Korea (3.7%).
The economy, in short, is not just fine, it is robust, and in fact one of the most energetic and balanced in the world. Is it perfect? It isn’t. Prices indeed are rising, as Netanyahu’s audience reported. However, a simple glance at the charts shows that this problem is not Israeli.
In the US, consumer prices rose this year through June by 8.6%, in the Euro area by 8.1%, and in Britain by 9.1%. In Israel, prices rose over that period by 4.1%, the sixth slowest pace among the world’s significant economies.
Is 4.1% inflation good? It isn’t. But did Israelis cause it? They didn’t. It’s a global problem, caused by energy and grain shortages stemming from the Russo-Ukrainian War and the pandemic’s disruption of global supply chains. This means the only player that can treat one aspect of the situation – demand – is the apolitical Bank of Israel, which indeed raised interest rates sharply. The supply side of the situation cannot be affected from Israel, and that is why its politicians can do nothing to offset it. NOW THE question arises: does Netanyahu not know all this? Well of course he knows. As the man who 19 years ago led sweeping market reforms that helped lead the Israeli economy to international stardom, he knows economics better than most politicians.
The problem is that the man who emerged in the Malha Mall was not Bibi the economist, certainly not Bibi the reformer, but Bibi the charlatan.
The moral deterioration of Israel’s longest-serving prime minister came in phases. First came the loss of moral judgment, when he accepted gifts at amounts that, whether legal or not, were ethically sickening; then came the attacks on the media for questioning his morality, and on the police for investigating him; then came the attacks on the courts for daring indict him; then came the libel that the judiciary, police, media and “the Left” conspired to unseat him; then came the delegitimizing of the Knesset’s election of someone else as prime minister; and now come the libeling of rivals and the hoodwinking of his own voters, to whom he might as well have said while holding that apple aloft a-la Hamlet:
It’s not that the economy is bad and you are stupid. It’s that I am smart and you are stupid. So stupid that I can lie to you, libel my rivals, and hammer at our hard-won Jewish state’s foundations, and you will still vote for me in droves.
The writer’s bestselling Mitzad Ha’ivelet Ha’yehudi (The Jewish March of Folly, Yediot Sefarim, 2019), is a revisionist history of the Jewish people’s political leadership. He is currently a fellow at the Hartman Institute.