Between Thatcher and de Gaulle
Even if the emergency economic plan eventually passes, the continuation of the war in the territories and the terror attacks will cause a continuing economic decline, a widening gap between rich and poor, an increase in unemployment, and the need for a new economic plan six months from now.
Benjamin Netanyahu is the first Israeli finance minister with a clear ideology. He is a disciple of the free market, does not hide behind excuses of the "I had no choice" variety, is not afraid of being compared to the Iron Lady from London, but speaks the straight truth - without blinking. He identified Israel's main problem - a bloated public sector - immediately upon taking office, and a bloated public sector brings in its wake heavy taxes and surcharges, which, in turn, cause economic slowdown, recession and unemployment.
In his speech to the Knesset Wednesday, Netanyahu explained that the large deficit is forcing the government to raise a lot of money in the capital market. As a result, interest rates are rising, with the burden falling on the ordinary citizen, whose overdraft and mortgage are getting more expensive. The solution is to lower the deficit. Netanyahu is the first finance minister to speak the truth about the subject and not to blame the governor of the Bank of Israel.
Netanyahu went on to say that the large monopolies - the Israel Electric Corporation and Mekorot - must be broken, because the public is being blackmailed every time it touches the remote or turns on the faucet. Just look at how the cost of international calls plummeted after the Bezeq monopoly was broken, he said. He also talked about investment in infrastructure, in roads and trains that will better connect the periphery with the center and save the development towns. In closing, he did not hesitate to emphasize the importance of lowering the tax burden on salaried income, which is among the highest in the world. "Nothing accelerates growth better than lowering taxes on salary," said Netanyahu, and he promised quick growth once the strike concludes and his plan is put into effect.
Opposition leader Amram Mitzna was the next to take the podium. He talked about how this economic plan is an affront to the weak, the elderly and all those who stand in line at the soup kitchens. He talked about a government that is trampling on society's weaker segments, but his words were met with total silence - until he began talking about the government's skewed priorities. When he cited the huge investments in the territories and the inflated defense budget, boldly stating that we must choose between investing in infrastructure in Israel or in bypass roads in the territories and between investing in housing allowances in Dimona or in the building of outposts in Hebron, because "It's impossible to have it both ways. It's either-or" - that was the moment when he shifted the economic debate to its rightful place on the political-diplomatic plane.
But when Mitzna went on to say that without a peace initiative and without a return to the negotiating table there will be no resurgence of investment and tourism, and consequently no growth in the economy, it prompted a great outcry from the Likud MKs, because the truth hurts.
This is the Achilles' heel of Netanyahu's plan. Its principles may be economically sound, but it will not bring about the hoped-for economic growth. It will not move the economy forward rapidly, as Netanyahu wants, because he wants "to have it both ways." He opposes a Palestinian state, wants to continue the occupation, to settle every corner of the land, and to maintain a large army - and at the same time to become a magnet for investors from all over the world. All of this together is not possible.
Even if his plan eventually passes, the continuation of the war in the territories and the terror attacks will cause a continuing economic decline, a widening gap between rich and poor, an increase in unemployment, and the need for a new economic plan six months from now - one that is even tougher and calls for deeper cuts that will affect the weaker sectors and the workers. So, as it turns out, those who voted for Sharon and Netanyahu will pay the price of the war policy.
This is precisely how Netanyahu shattered the Oslo Accords in 1996 when he was prime minister. He opened the Western Wall Tunnel, destroyed relations with PA Chairman Yasser Arafat, brought back the intifada, and plunged the economy into a three-year recession. Now he and Sharon are repeating the same exact mistake. Where is the leader who can combine the virtues of Mrs. Thatcher, who saved the British economy 20 years ago, and de Gaulle? That's the type of leader we need today.