The rotten fruits of Ramon
The prime minister wants Haim Ramon at his side. He values his savvy, his originality and his political expertise. This is why he was pleased when the court did not convict Ramon of moral turpitude, thus enabling his return to the cabinet.
Meanwhile, however, the post of justice minister has been taken and investigations against Abraham Hirchson are continuing, so naturally Ramon is seen as candidate for finance minister, should Hirchson be forced to resign. Ehud Olmert refuses to speak of this possibility publicly, as Hirchson is an old ally of his, but his associates say Ramon is a natural candidate for finance minister.
Olmert himself has said: "Haim Ramon is qualified for any position." But is this enough to be finance minister?
On the eve of 2000, Ehud Barak submitted the budget for the cabinet's approval. Ramon slammed the budget furiously, calling it gray and lacking vision and hope.
He said that to end the recession, the government must increase its expenses by many billions and set the deficit at 5% of the GDP, otherwise there would be no "economic growth."
He also warned Barak that if he bought the treasury line about growth following the budget cut, it would bring about his political downfall. The government must do the opposite to achieve growth: Increase its expenses. So spoke Ramon!
Ramon, whose self-confidence was sky-high, went on to say that if the deficit remained 2.5% of the GDP, as Barak decided at the time, there was no chance of a 3% growth in 2000. If that were to happen, he said, he would eat his hat.
But Abraham Shochat was unfazed. He increased neither the expenses nor the deficit, and we had a record growth of 7.7% in 2000.
Ramon forgot to eat his hat. He was convinced then as he is today that he knows better than everyone else.
In 2000, when it transpired that the accelerated growth had created a budget surplus of NIS 14 billion, Ramon again hastened to suggest ways of wasting that money.
Fortunately for us, his proposals were rejected. When a real need arose, financing the withdrawal from Lebanon and building the security fence along the northern border, there was money in the till. In the second intifada (at the end of 2000) the budget surplus helped Israel to deal with the crisis years more easily.
In 2003, Benjamin Netanyahu carried out his economic plan, which consisted of cutting the "fat" (the public sector) and reducing taxes of all kinds.
The result was quick: a fast growth of 5%, reduced unemployment, thousands joining the labor force and the decline of the poverty rate.
Once again it was proved, to Ramon's chagrin, that budget cuts lead to growth.
But Ramon doesn't want to grasp that the more the government spends, the more taxes and resources it draws from the private sector, damaging the engine of growth.
Even today, the public expenditure (46% of the GDP) is too high compared to the average in Europe, the United States and Japan.
In addition, Ramon hates the budgets division. He vilifies the division's economists, despises them and says they have a conservative Thatcheristic ideology.
Ramon says that they cause damage and do not let the ministers rule, therefore their locks must be shorn.
He doesn't care that these are professionals, economists with multiple academic degrees who have no political considerations. They are not running for the next Knesset.
If it were up to Ramon, he would cut down the budgets division and hand control over to the ministers and directors-general of the ministries to do with the money as they saw fit.
This would have dragged us abruptly 25 years back, to the years when budget excesses were routine and the money was directed to exhibitionist political displays and appointing cronies, at the expense of investing in infrastructure.
In those years, the economy was mired in a deep pit of destructive hyper-inflation, loss of foreign currency reserves and a series of severe crises.
Since Ramon is a talented man of power and position, he could implement his plans and destroy the budgets division. But in a year or two, Ramon will move on, and we will remain here for many years, eating the rotten fruit of his labors.
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