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The headlines about whether or not the chief of staff said or didn't say "We won"; and if he did say it, whether he meant it or was just being sarcastic, are symptomatic of the banality of public discourse in this country. Some of the most important issues are being reduced to media spin. He said; he didn't say; he meant; he didn't mean. Was the defense minister personally ticked off, or were his associates ticked off on his behalf?

Rating is everything, even in the most critical matters. The main thing is to pander to the lowest level of public taste and push for the highest level of thrills and chills. As Benny Begin once put it, for an Israeli politician, tactics means how to get interviewed on a TV news program at 5 P.M., and strategic thinking means how to swing another interview that same evening on the news roundup at 9 P.M.

This business of "Who won?" doesn't really matter. The important thing is that negotiations are under way. Maybe we'll get somewhere and maybe we won't. What should matter is who will win the battle over the character of the state. Fifty years ago, Ben-Gurion had visions of Israel becoming a "light unto the nations." Meanwhile we're closer to being a Third World country, judging by the yawning gap between rich and poor, the erosion of the middle class, the corruption in government and the low educational standards.

The data on the poor performance of Israeli schoolchildren in reading comprehension, science and math is proof that the exceptionalness of this country is slipping through our fingers. One sees it in the pidgin Hebrew spoken by Knesset members, not to mention the incoherent stammering of our high school graduates, with their culture of laziness and mindless partying, and the embrace of trashy entertainment, while serious theaters are being forced to close their doors.

Overall, the situation is even sadder than it looks from the facts and figures. But the problem is not just budgetary. Israel spends money on education like a First World country, but it runs the educational system like a Third World one.

Minister of Education Limor Livnat blames her predecessors, of course - and not without some justification: The last educational reforms in this country were introduced 30 years ago. But what has she done for Israel, apart from instilling right-wing nationalist values in the schools, at the behest of Ariel Sharon? He doesn't care about education; what he wants is an assembly line that churns out nationalist voters.

This neglect of the schools is nothing short of catastrophic, says Prof. Avishay Braverman. In Israel, everything works on the quickie system. When a person becomes a minister, the thing that preoccupies him most is what his next job will be. In any case, ministerial appointments in this country are guided by cynical political considerations. The Third World is a mass of poverty and ignorance, says Braverman, but at least the ministers are educated people, graduates of prestigious universities. Our elite operates by herd mentality. There is no long-term thinking. We don't behave like an advanced culture. Our leaders are not serious people. It's all spin; it's all intrigue. So says Braverman.

Speakers at the Caesarea Conference went on and on about the slap-dash character of government in this country, and how everything begins and ends with lousy management. Eli Hurwitz, the chairman of Teva Pharmaceuticals, lamented the lack of transparency in decision-making and the fact that even ministers have no idea what they are voting for. Only three people really know what the state budget is, so that cabinet ministers, and, it goes without saying, ordinary Knesset members, are clueless when they cast their votes.

Apart from Prime Minister Ariel Sharon and settler leader Ze'ev Hever, is there anyone who really knows how much money has been poured into the settlements since 1967? Imagine what a quarter, or even an eighth, of that sum could do for education. Things must be really bad if a calm, level-headed guy like State Comptroller Eliezer Goldberg warns that this country is turning into a banana republic.

The question of whether we won the intifada is trivial compared to the battle over the future character of the state. Israeli author S. Yizhar once said that the "espresso generation" marked the end of a state founded on values. With the middle class, the backbone of an enlightened country, worn down and crushed by an unreasonably heavy tax burden; with our tolerance of parasitism and government corruption; with young people who care little about scholastic achievement and are growing up lazy and convinced that the world owes them something, we are losing our bid to become a light unto the gentiles - and we are losing it big time.