Last Thursday, Ehud Olmert had an accident. In a moment of distraction, he adopted the recommendations of the Analysys consultancy and announced plans to slash the inter-network rates charged by the cellular companies, thereby aligning himself with the small consumer and against the cell phone operators. But not three days passed before he returned to his low populist stance with the moguls, to make up for last week's aberration.
One could have burst out laughing when Olmert presented his "Alternative plan for economic policies" to every media outlet going, declaring his concern for the poor and asserting that the gaps in society ought to be bridged and that Israel should become as one people united, with no "rich" or "poor." Yes, the very same man who has spent his whole life hob-nobbing with the very richest in the land, with a cigar forever in his mouth, is to lead the social revolution, singing the "Internationale."
Actually he wouldn't be the first. David Klein became concerned about society several months ago as part of his strategy to win another term of office. The finance minister himself also did when he proposed increasing pensions. Prime Minister Ariel Sharon talks of a socially caring budget, while Danny Naveh attacks every anti-social ploy by the treasury that touches on the basket of health services. So Olmert just joined the current fad that has been gaining momentum, as the danger of early elections grows.
Apparently, the government ministers' restraint over the past year and a half could not stand the day of reckoning. Fearing a financial crisis and the inability to raise funds overseas, the cabinet agreed 18 months ago to cutbacks and reforms. But now, with the economy recovering, they are no longer prepared to let market forces work, or to push for competition or reforms; they want to prove that if it weren't for them, nothing would happen, that they are the ones building, doing, setting up, employing.
Thus, Olmert calls on the government to "cultivate the economy's comparative advantages," when the "cultivating" means increasing the budget for the Industry Ministry, for encouraging investments, for manufacturing, for exports, for R&D, for subsidizing wages - so that manufacturers will love him.
Olmert and the Industry Ministry's economists don't hesitate to determine that "cutbacks of NIS 6-7 billion are completely unnecessary and could actually cause a slowdown in the economy and increasing unemployment." Hence magically the problem of our bloated public sector - the largest in the Western world - is solved. It no longer needs cutbacks, but quite the opposite, because according to Olmert's wonder prescription, he would grant a further NIS 6.4 billion for them to squander. Now who wouldn't like him for that?
How can these new extravagances be reconciled with the government's decision in 2003 to limit the growth in public spending to only 1 percent per annum? They can't. But according to the rules of the "new economy" Olmert has come up with, the more the government manages and spends, the more the economy will grow. Up to now this viewpoint was expounded only by Karl Marx and Amir Peretz. Let them make way for their new counter-revolutionary buddy, let's hear it for Ehud Olmert.
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