Prices in Israel need an urgent rethink - opinion

Tel Aviv has become the most expensive city in the world to live in.

Supermarket shoppers and workers without masks in Tel Aviv. (photo credit: AVSHALOM SASSONI) (photo credit: AVSHALOM SASSONI)
Supermarket shoppers and workers without masks in Tel Aviv. (photo credit: AVSHALOM SASSONI)
(photo credit: AVSHALOM SASSONI)

This opinion piece is not intended to break the news to an unknowing public that prices in Israel are way too high – that news is already out.

Rather, the focus will be on the immense amount of dysfunction this causes and the desperate need to address this problem seriously.

Will the contemporary military solution of “mowing the lawn” play a role here?

“Mowing the lawn” describes a strategy of periodic intense military engagement with our enemies. As happens every few years, Hamas gets too big for its boots. To throw everything at Hamas would require too much on the part of Israel, so in the interest of expediency, instead of obliterating Hamas, it can simply be cut down to size, or, put differently, the “lawn can be mowed.” But like a lawn, Hamas will grow again after it has been cut down. Not a problem – just mow the lawn again.

Mowing the lawn has thus become a metaphor for not really dealing with a problem fundamentally, but for keeping it at a manageable level.

Consumers at a supermarket, illustration (credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Consumers at a supermarket, illustration (credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

Far be it from me to opine on military matters, which are best left to the experts, but this policy is clearly about medium-term expediency, not about a long-term strategy for dealing with an intractable conflict.

In the military arena, the strategy of non-strategy can be considered acceptable. There is a good excuse when it comes to issues of defense. Who has the temerity to be bold and throw everything at Hamas, when every Israeli life lost is so precious to us? Better perhaps to deal with the threat on an impromptu basis, making what are effectively minor adjustments to the enemy’s ecosystem, bringing a period of quiet, until the troubles resurface.

But there is another threat to Israel, which, while less graphic, may in fact be even more existential in nature – a death by a thousand cuts, where mowing the lawn has also been the only strategy in town, but in this case, there is absolutely no excuse.

ON DECEMBER 1, The Economist Intelligence Unit (EIU) revealed that Tel Aviv had become the most expensive city in the world to live in. Prices in Israel are now not just high – they are the highest in the world.

Commentators have attempted to mitigate the blow of this horrific news by focusing on the underlying causes of this phenomenon, as though this lessens the blow to the average Tel Avivian. The rise, say some, is attributable to the increase in grocery and transportation costs. Is that really expected to bring solace to beleaguered consumers in Tel Aviv?

Other learned opinions focus on the fact that COVID has disrupted supply chains, leading to higher prices. But rumor has it that COVID is a global phenomenon and has even reared its head outside of Tel Aviv, in many of those other cities, in fact, that Tel Aviv overtook, in the race to take the No. 1 slot as most expensive city in the world. So why should the effect of compromised supply chains be felt more acutely in Tel Aviv?

Others blame the strength of the shekel, which inflates the Tel Aviv prices when the EIU index translates them into dollar equivalents. But wait – that same shekel strength should result in lower prices for imported goods.

Ha’aretz referred to Tel Aviv taking the No. 1 spot on the list as a dubious distinction. It is in fact a mark of absolute shame.

The citizens of Israel deserve far better. Citizens of Israel are under attack on many levels. We must contend with the ever-present military threat from hostile countries, as well as the constant menace of terrorism.

Additionally, there are continuous ideological attacks on Israeli morale. On December 2, The Jerusalem Post reported that “129 nations ignore Jewish ties to the Temple Mount.” Israel not only faces constant physical assault, but relentless ideological assault, too.

We lumber from crisis to crisis, and our stress levels steadily climb. The best we seem able to do is mow the lawn on the military and ideological fronts; but after mowing the lawn, we need to rest and regain our strength, ready for the next round.

We therefore need to do absolutely everything possible to minimize the stress we are imposing on ourselves, and to introduce calm, nurturing and a sense of well-being into the life of the typical Israeli. Normality is quite a rare commodity. We need a better version of normal between the many crises we face.

In between crises, we must internalize the message that when we fight, we are fighting to defend our gradually emerging utopia, which is getting better and better. Otherwise, what is the point?

And this is why a high cost of living is toxic. It is endemic, manifests everywhere, and has untold knock-on effects. It is a monster.

It is not only in the grocery store, when one realizes that one has just spent $50 dollars on a few measly items. (Two liters of ice cream from an ice cream parlor cost around NIS 160 / $50.)

The high cost of living follows you home from the shops, and is present when well-meaning housewives who did their best to shop sensibly come home to face the despair and/or fury of a hardworking husband trying to make ends meet. It takes a while for the stormy atmosphere in that home to dissipate, in the meantime causing lots of collateral damage to all members of the household.

The high cost of living rears its ugly head, as people sit in their offices at work, demotivated, realizing that their average salary will need to be saved for 20 years with none of their salary to be spent on food (what’s the point – it’s so expensive anyway) if they are to be able to afford to buy average accommodation.

The high cost of living is chuckling in the corner, when the recently arrived oleh who happens to receive no parental support (yes, such olim do exist) looks aghast at the economic realities they have idealistically wandered into.

The high cost of living monster is in the room when the entrepreneurial young couple who were going to start a business which relies on them having a vehicle is not actually viable because the vehicle costs double what it should (tax is 102% of the car’s price).

We can talk about the shock to tourists as they hear what a taxi will cost from Ben-Gurion Airport to Jerusalem (NIS 300 shekels/$97), and compare it to the cost of a 45-minute ride in other countries.

We could ponder why rich Israelis are asked to pay the highest prices in the world for new Teslas. We could bemoan the fact that middle-class Israelis are paying three times more for their Tel Aviv restaurant meal than the equivalent meal would cost in Berlin. We could feel the pain of the budget-conscious, low-income Israeli, buying bananas, wondering why life is so tough (protection of domestic banana growers).

We could switch our attention to the general state of passive-aggressive hypervigilance which Israeli shopkeepers and shoppers have both adopted toward each other, as a result of this absurd situation. We could ask why there is a tosefet (additional charge) of NIS 3 (one entire US dollar) if you want soya milk instead of regular milk in the coffee you ordered.

But let’s not – it’s all too depressing.

Humans do not like to be depressed, and so we have become hardened. We do not even realize that NIS 3 is a preposterous amount to be asked to pay for a splash of soya milk, thus creating a third way of dealing with the crisis. If I do not want to feel like a freier (sucker) or an angry person, why not simply deaden myself to this reality?

Willingness to make sacrifices, for meaningful ideals we believe in, is an admirable virtue, displayed by Israelis since the state’s inception. But accepting the high cost of living is not a meaningful ideal. Let’s save our strength and willingness to make sacrifices for where it matters. Let’s not have people slowly cash in any idealism that still remains.

Should we bury our heads in the sand? There is not much sand left to bury our heads in. We are now knowledgeable. We know that Wissotzky Tea made in Israel costs less in Golders Green, and Tnuva cheese made in Israel costs less in Brooklyn. We are aware that grapes cost less in countries that produce no grapes.

Should we be resigned freiers, or should we be angry, or deadened? No option sounds very attractive from a mental health viewpoint.

FINANCE MINISTER Avigdor Liberman recently announced that the price of soft cheese will be cut, as various tariffs will be removed. Effectively, this means that the price of soft cheese will be halved. It was announced at the same time, to somewhat less fanfare, that the price of hard cheese would be increasing. The message to lovers of hard cheese on this occasion was: hard cheese to you.

What does that have to do with the price of cheese?

This has everything to do with the price of everything. If removal of tariffs pertaining to soft cheese can be cut, with the instant effect of halving the price to the consumer, the more perceptive among us will realize that if tariffs were cut on everything, then everything might be half price.

How amazing would that be for Israeli morale?! How positive would it be for aliyah, if the message changed from “I am prepared to make sacrifices because it is meaningful to live in the Jewish state” to “I believe in this project, and daily life is a pleasure.”

Dear Avigdor, well done for noticing this issue and making some inroads! So far, so good. But let’s not mow the lawn on prices. Let’s throw everything at this problem. Soft cheese, hard cheese, cars, electronics, the lot.

Yes, some people in various bureaucratic roles may find that their offices do not exist anymore. Yes, some oligopolies will suffer. Yes, some vested interests that have been feeding on this system for too long may need to have their snouts removed from the trough that has fed them.

Let’s be bold. The Torah gives a blueprint for a grand economic rethink. In ancient times every 50 years, there would be a jubilee year. Jewish slaves, (freiers, angry ones and deadened ones) who had long since forgotten the meaning of freedom were emancipated.

But what will happen – one may have asked in ancient times – to the employees in the government department that deals with long-term slaves? It didn’t matter.

No questions were asked about what will be with the status quo. There was no whataboutery. There was simply a radical reset. No need to ask whose fault this was, and no lengthy investigations into systemic faults. No Trajtenberg committees, and no nostalgia for outdated socialist structures.

Let’s declare a jubilee. Let’s take a knife to this appalling dystopia we have created. There may be some short-term fallout and collateral damage for bureaucrats who work in the Ministry of Perpetuation of Silly Prices, but let’s emancipate ourselves from this awful high cost of living slavery we have created for ourselves.

Let’s save any sacrificing we need to do for more noble projects.

The writer is an ex-banker and fund manager.