Middle Israel: The Baiga years

Baiga's distinction is neither as an economist nor as a thinker, but as a public servant.

amotz asa el 88 (photo credit: )
amotz asa el 88
(photo credit: )
Having been in later years raised across the street from the handsome Arab villa where Avraham "Beiga" Shochat got married, I once asked David Rubinger to dig for photos from that event. The high priest of Israeli photo-journalism - who until today lives down that street - did not disappoint. A few mouse clicks through his rich, bottomless and orderly archive, he moved his head away from the flat screen in his study and said "Look!!" grinning with professional satisfaction as I studied the unmistakable figure of David Ben-Gurion emerging from a bulky, black Buick as he arrived for the wedding. A small band of curious kids from the neighborhood was also in the frame, watching the Old Man from what today is the apartment building on the corner of Eli Cohen and Bustanai streets, but which then was yet another barren Jerusalem field of raw limestones and wild thistles. Burying our noses deep in the black-and-white photo, the two of us tried, in vain, to spot among those children the image of future finance minister Binyamin Netanyahu, whose family lived at the time a stone's throw from that villa of pink stones and pointed arches where then-finance minister Levi Eshkol resided. None of those at hand that day could know that both the kid who habitually played in that field, and the slender, beaming, 23-year-old paratrooper-turned-engineering student who arrived there that day to marry Eshkol's daughter, Tama, would themselves one day become finance ministers. Last week, as I watched Baiga announce his retirement from politics, I recalled the photos from his wedding, where there is no trace of his latter-day, trademark chubbiness, but - as the simple, open-collar white shirt he wore that day attests - there are all his affability and modesty that the business press so much adored, and will now so much miss. Looking back at the years I spent covering Baiga as this newspaper's business editor, I felt we were gradually waving good-bye not only to one good man's impressive career, but to an entire era. But what was that era about? DEFINING THE Baiga era is particularly difficult because as finance minister - clearly the position for which he will be best remembered - he was not, for better or for worse, a revolutionary. Crediting him now, as some are, with the energetic growth that characterized much of the '90s, is wrong. Yes, he understood that the decade's mass immigration should be housed and employed by the markets even when others - including at times his patron Yitzhak Rabin - thought the government must itself build thousands of apartments and manufacture public-works jobs for the newcomers. Yet in that he merely continued in the footsteps of his predecessor, Yitzhak Moda'i. As a reformer Shochat was a lot better than the alternatives offered by orthodox socialists like Amir Peretz and Shlomo Ben-Ami. Shochat was the first to hammer at the banking industry's excessive presence in the micro-economy, when he endorsed the Brodett Reform that detached them from most of their non-banking assets, a long-overdue weight-loss program now further developed with Netanyahu's eviction of the banks from the capital markets. And yes, Shochat sold several state assets, most notably Israel Chemicals and United Mizrahi Bank, and he trimmed state funding for the Histadrut's pension funds, thus arguably sowing Netanyahu's much more massive pension reform. Still, Shochat presided over a massive deficit expansion that included sharp raises in public-sector wages and infrastructure investments that the economy could not sustain, due to his reluctance to get down to the business of cutting taxes and social benefits. Consequently, even after he and Yitzhak Rabin froze all settlement construction, they led the current account from a surplus of $200 million to a deficit of well over $5 billion. Economists may in the future conclude that the immigration waves that arrived here throughout his years as treasurer demanded economic growth rather than structural reform, and that Shochat was therefore the right man at the right time in the right place. It will certainly be said to his credit that eventually he conceded he had overheated the economy and pressured the shekel, thus compelling the Bank of Israel to call him to task by sharply raising interest rates. When he returned to the Treasury during Ehud Barak's premiership a reconstructed Shochat displayed a kind of budgetary discipline some had assumed he did not appreciate and at any rate could not deliver. This, along with his subsequent support for most of the Netanyahu reforms, including the slashing of child allowances for large families, may eventually make historians portray Shochat as a local version of Britain's New Labor. Yet in that Shochat was neither an innovator nor a Last Mohican. The quest to balance social justice with economic sobriety had already been introduced on the Left by his father-in-law, who deliberately caused a recession in 1965 in order to cool down an overheated economy, and is now also harbored by his successor from the Right, Ehud Olmert. Baiga's distinction is therefore neither as an economist (which, as a civil engineer, he never purported to be) nor as a thinker, but as a public servant. BAIGA ENTERED national politics at the absurdly advanced age of 52. Absurd, that is, in terms of the current norms, whereby lawmakers are freshly ordained hacks whose CVs boil down to having recently headed a student organization with a fictitious membership and having then proceeded to carry some minister's briefcase. Baiga actually also started off as a student leader, in the Technion, but upon graduating he went south and dedicated himself to the creation of a new city. As the founding mayor of Arad his name became synonymous with impeccable planning, sound management, and clean government, winning him such repeated landslides during his decades there that his municipal prestige and imprint became second only to Teddy Kollek's. When he finally proceeded from that part of his career to the legislature, he was an experienced, accomplished and mature man, whose distance from corruption did not need to be assumed, because it had been demonstrated. Unwittingly, Shochat was a rare local version of the kind of lawmaker who is so common in Britain and America, the one whose career begins not with sucking up to other leaders, but with serving a constituency. Moreover, his very decision to proceed to national politics did not reflect a personal thirst for power and fame, but the fulfillment of the wish of Yitzhak Rabin, who appreciated no-nonsense technocrats who could get things done. For Baiga, heeding Rabin's request was a variation on the theme that led him to Arad, a value once known here as shlihut, or mission, a concept that to most of today's self-important but under-accomplished politicians is about as close as Venus. Now Baiga is leaving. The unassuming, good-humored man whom the business press often debated, but always admired, is leaving a universe where aspiring politicians would faint at the thought of getting married in a simple, open-collar white shirt, where political weddings are extravaganzas involving thousands of dollars, invitees, and photo opportunities, and where a clean-handed city builder's seat in the legislature is being inherited by a convicted briber.