Finance Minister Benjamin Netanyahu made his first mistake in November 2003. Way back then, when the economic situation was quite unclear, Netanyahu hastened to declare a victory. "There is no doubt that we have pulled out of the recession," said the finance minister, leaving the public with their mouths agape. Already? So quickly? After all, just six months earlier, the economy was in deep crisis and unemployment was high.
Netanyahu's second mistake was in April 2004. It was then that he decided to outflank Social Affairs Minister Zevulun Orlev from the left and declared that he would raise old-age pensions. Since when does the treasury volunteer to hand out money? Is it not the social affairs minister's job to demand increased budgets and the treasury's job to say no? How did Mr. Budget Cutter suddenly become Netanyahu the Generous?
The third mistake was this week. Netanyahu related how he pulled the cart out of the mud a year and a half ago and revved up the economy's growth, but added that we must continue with the cuts and reforms. The "cart in the mud" metaphor gave the public mixed messages.
On the one hand, we are out of the mud, there is nice growth, and 70,000 Israelis joined the ranks of the employed, but on the other hand, more billions must be trimmed from all government budgets, public sector wages must be lowered, workers laid off and exemptions reduced - how does this all jive?
The public became even more confused when Netanyahu tried to become "socially concerned," granting supplements to the elderly, to the nutrition effort, to the Dovrat recommendations on the school system, to new immigrants and to minorities. Does he really think they will start to love him for a few crumbs?
Instead of declaring victory too soon, instead of competing with the other cabinet ministers over the same fake social program, Netanyahu should have continued on his original course, which was successful. He should have addressed the public this week with a completely different speech, shifted from defense to offense, and reiterated the social-economic truth that we cannot manage without.
"I am the true social champion," he should have declared, "not Ehud Olmert, not Amir Peretz and not the rest of the false prophets. My budget is the only social one. Only it can bring continued growth, only it will create new jobs, only it will prompt more and more people to go to work. This is the only way to fight poverty and want, the only way to return self-esteem to the unemployed.
"Increasing the stipends as recommended by the other ministers has never solved the poverty problem, but has made it worse. The fact is that over the past 20 years, stipends have been increased year after year, but poverty has only worsened and the social gaps have widened because people left the work force, preferring to live in poverty at the expense of the stipends.
"To boost growth to its desired level - not today's laughable 3.8 percent - but rather 7 or 8 percent, which will really be able to reduce unemployment, we have to continue trimming `the fat' (the public sector) that is riding on the shoulders of `the skinny' (the business sector). Only thus will resources be transferred to the business sector, interest rates will drop and more jobs will be created in the private sector - the only way to reduce unemployment.
"For this," Netanyahu would have added in the speech he did not make, "I must continue to cut the budget, because our public sector is still the largest in the Western world and the waste continues unchecked. So the education minister should not cry over her education budget because Israel spends more on education [per student] than any other Western country, and the health minister should not scare the people with a shortage of life-saving drugs, because the health care system and the hospitals are wasting millions with their inefficiency and departments that should be closed - and the same goes for the entire government and the public sector.
"The correct social path is therefore the continuation of the streamlining of the government and the reduction of taxes. The countries with the lowest taxation had the highest economic growth.
"Yes, we are still in the mud," Netanyahu should have said, "we are not out of it yet. That is the bitter truth. Look at the figures for the second quarter of 2004, indicating the halt of growth and the cessation of investments and consumption. Victory is not yet at hand - neither for growth nor for the reforms. True, I did manage to pull you a few feet back from the brink of the abyss, but it is still there, waiting for a stumble, and I have to pull us back a mile. So leave the false prophets seeking cheap and dangerous popularity and lend a hand to the real struggle - which will lead to faster economic growth and higher employment."
Netanyahu has proved his courage so far. Will he face the public and tell the truth?
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