The Bottom Line / More eclairs, anyone?
Next year, pay in the public sector will rise by 5.5 percent, more than the 2.3 percent in the private sector. This is the exact opposite of what is needed. Instead of encouraging the thin man, we are actually spurring on the fat one.
Netanyahu's fat man (the public sector metaphor) has suffered a terrible catastrophe. Having undergone a strict diet that included delays in building the separation fence, pressuring government ministries, low inflation and a weak dollar, he discovered to his horror that instead of losing a couple of kilograms, according to plan, he actually dropped three kilos.
What to do? True, he now looks like a mountain who's lost some weight, although even after shedding three kilos, he's still a large man by any measure. But the point is, this was not according to the plan.
So Netanyahu came up with a solution: Find the nearest restaurant, order a bumper calorific meal with chips - don't forget the strawberries with whipped cream for dessert - and get that missing kilo back on the fat man, as quickly as possible. This is how, in his opinion, someone overweight, someone who needs a strict diet, ought to behave. Instead of rejoicing in front of the mirror because of the extra kilo - NIS 1.2 billion - he managed to shed, he has to hurry and eat clotted cream.
So this is what Netanyahu did, ruining the diet of the fat man, when he brought forward the payments of convalescence pay and Jubilee grants from 2005 to December 2004 (as part of the pay deal with the Histadrut) instead of finishing this year with an even lower deficit than planned, and continuing to fight with the unions over real pay cuts.
From the macroeconomic view, there is no difference between state expenditure in December 2004 and that in 2005. It's simply a dubious accounting maneuver that lowers the budget's credibility. In any case, this expenditure has a detrimental effect on the economy; the larger the debt, the higher the interest rate, and the greater the pressure to raise prices.
Moreover, when you are on a diet, the trick is to drop the fat and build up the muscles. So if Netanyahu had taken that NIS 1.2 billion to push investment in infrastructure, in roads, in solving the perennial gridlock at Pi Glilot, in encouraging new jobs, in implementing the Wisconsin Plan, in retraining, in improving education - then we could have understood that this investment was to build up the muscles of the economy and our future growth. But instead all NIS 1.2 billion is going on fattening up the fat of the fat man, who is already finding it too difficult to stand. Raising wages in the public sector creates no extra employment, not now, not ever.
Nor can Netanyahu continue to boast of cutting wages in the public sector "for the first time in the history of the state," because the cut was only temporary. It has also proved that the public sector knows how to look after its own, and to get back what was once taken away - as opposed to the private sector, where it is not returned.
Next year, pay in the public sector will rise by 5.5 percent, more than the 2.3 percent in the private sector. This is the exact opposite of what is needed. Instead of encouraging the thin man, we are actually spurring on the fat one, who's also getting his cake with ice cream, and a fat pay rise too.
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