Talk about disgrace. Finance Minister Bezalel Smotrich tabled in the Knesset a much-heralded reform only to see it shot down by a huge majority of 59-25, cemented by his own coalition partners.
The point is not the reform at issue - a pre-election attempt to impress voters by doubling, from $75 to $150, the minimum price at which a foreign-delivered package through Amazon, eBay, Alibaba, and the like gets taxed. The point is the proposal’s crushing defeat.
What, then, did Smotrich miscalculate, and what does this little farce mean about him, his appointment, and what they represent?
In itself, Smotrich’s proposal was plausible - a mercantile attempt to bolster every consumer’s potential role as an importer and thus force professional importers to cut prices.
What Smotrich forgot is that the importers and shop owners have power, especially in the Likud, to which Smotrich, as the leader of the Religious Zionist Party, does not belong. The importers thus pressured Likud’s lawmakers to oppose his reform.
Smotrich's assumptions lead to reform's rejection
Smotrich was aware of this lobby’s existence, but he was backed by Prime Minister Benjamin Netanyahu and thus assumed that Likud’s leader would tell its lawmakers to ignore Likud’s hacks. However, provoking a powerful pressure group might hand the lawmakers defeat in Likud’s primaries, a nightmare scenario they would do anything to prevent, even disobey Netanyahu.
All this was lost on the finance minister, who has now learned, the hard way, all about the gap between his ministry’s power and his following’s size. And that is where the real problem with Bezalel Smotrich lies.
A trained lawyer who became finance minister three years ago at age 42, even Smotrich’s rivals agree that he is a smart man who studies complex issues quickly, knows how to make decisions, and knows how to make things happen.
However, all the talent in the world won’t empower a senior minister who represents a minuscule population and does not even belong to the ruling party. Israel learned this lesson already in 1979, when Menachem Begin appointed as finance minister Yigael Hurvitz (1918-1994), a respected industrialist who represented a small Knesset faction of eight lawmakers named La’am.
Faced with hyperinflation, Hurvitz understood the crisis thoroughly and had clear ideas on how to solve it. However, he was in no position to strong-arm the ministers and union leaders whom his plans would have affected. Ultimately, he resigned a mere two years after taking office.
Smotrich’s weakness emerged already before this week’s vote, when he tried to deregulate the dairy industry and thus lower the prices of milk, yogurt, and cheese. In that case, he confronted the farmers’ lobby, which defeated him then, the way the importers trounced him this week.
Historical political conduct around the Finance Ministry
Unlike Netanyahu and Begin, David Ben-Gurion always kept the Finance Ministry in his party’s hands. So did the rest of Labor’s prime ministers, the only exception being Shimon Peres in 1984, when he gave the Treasury to Likud’s Yitzhak Modai, but that was because Peres headed a unity government in which Likud and Labor split the senior ministries evenly between them.
It follows that the Finance Ministry should never have been handed to the small party Smotrich heads, which polls suggest might not even be elected to the next Knesset. Still, Smotrich does not understand his situation - not economically, not politically, and least of all socially.
Smotrich's economic aloofness was laid bare this week when he attacked Bank of Israel Governor Prof. Amir Yaron.
The treasurer’s complaint was that the governor did not cut interest rates. That might have worked had Smotrich been equipped to debate Prof. Yaron, who heads one of Israel’s most professional, impartial, and prestigious agencies.
Smotrich, who doesn’t even speak English, is in no intellectual position to challenge Yaron, a renowned economist who taught and researched at Carnegie Mellon, Wharton, and the University of Chicago. Picking such a fight makes Smotrich look pathetic, but he doesn’t get it.
Being a provincial representative of a minuscule population, Smotrich fails not only to measure his own size but also to sense the feelings of the broader public, the vast majority of which are not religious ultra-Zionists.
It takes no economist to realize that if Smotrich, a self-professed economic conservative, is so interested in cutting public spending, he must start by cutting funding for ultra-Orthodox institutions. It’s a matter of basic consistency. But Smotrich, an engine and beneficiary of Israel’s sectarian politics, will never in his life help undo the sectarian politics on which he thrives.
That is why he ignores even his own voters’ fury in the face of ultra-Orthodox leaders’ redoubled hunger for budgets and draft exemptions, even after the war that they failed to join while Smotrich’s voters risked, and often paid with, their lives.
The same distance from the national consensus surfaced in Smotrich’s recent public statement that, should his daughter ask him, he would tell her not to enlist in the IDF. It’s a legitimate position, considering that Smotrich would have his daughter do Sherut Leumi (National Service) instead. The problem is not in his attitude’s morality but in its marginality.
The overwhelming majority of Jewish women in this country enlist. Moreover, the IDF’s data show that the number of observant women who enlisted soared last year to an annual 4,000, from less than 1,000 half a decade ago. Moreover, the number of female combat troops swelled tenfold since last decade, and women now comprise one-fifth of combat forces.
Smotrich, in short, is a light-year away from the Israeli consensus. The question he raises should thus be addressed not to him but to the man who appointed him: Why does a man who represents but a marginal, detached, and minuscule part of Israeli society sit on its national chest?
www.MiddleIsrael.net
The writer, a Hartman Institute fellow, is the author of Ha’Sfar Ha’Yehudi Ha’Aharon (The Last Jewish Frontier, Yediot Sefarrim 2025), a sequel to Theodor Herzl’s The Old New Land.