How 'Churchill' Bibi Sowed the Seed for Startup Nation's Destruction

Netanyahu's capitulation to the Haredim erases years of hard work at ensuring a prosperous future for the Israeli economy. Fear has overtaken the last semblance of Bibi's principles.

David Rosenberg
Benjamin Netanyahu visiting a technology expo - in China (May 2013).Credit: Eli Ohayon
David Rosenberg

There must be not a little bit of joy in Tehran as they watch the progress of Israel's coalition talks.

Iran has spent heavily on harassing Israel by arming and funding Hamas and Hezbollah, and even more on developing a nuclear bomb that (if Netanyahu is to be believed) is designed to put the finishing touches on the project. But now the ayatollahs can sit back and watch with pleasure as Netanyahu destroys Israel from within.

In a matter of a few weeks of coalition talks, Netanyahu has laid the foundation for Israel's slow decline.

It will take a decade or so, but economic growth will begin to slow, living standards will decline, and the best and brightest Israelis will get up and leave. Israel will be left with a shrinking, unproductive, uneducated workforce burdened by high taxes, yawning inequality and a perpetually heavy military burden. Israel's brief existence as a high-tech wonder on its way to joining the elite club of the world's most prosperous and advance economies will be over.

How could Bibi do so much damage in so little time?

The answer is his complete sell-out to United Torah Judaism in the coalition terms he agreed to last week.

Taming the ultra-orthodox

Yair Lapid got an unfairly bad rap in his brief stint as finance minister. No, he didn’t turn Israel into the middle class consumer paradise he had promised. But he did put order into an out-of-control budget and left Israel in sound financial shape.

And most importantly, he also delivered on his promise of ending the era of Haredi schnorring by forcing their young to get a modicum of secular education and serve in the army, while cutting back on yeshiva funding and child allowances.

Lapid was criticized at the time for the loopholes in the draft legislation and the pain he was inflicting on poor children. But he was fighting the good fight, not just persecuting the ultra-Orthodox and the poor who didn’t vote for his Yesh Atid Party.

Israel faces a serious, one could even say life-threatening, problem. Israel’s population is aging and - in contrast to nearly everywhere else in the world - its population is becoming, on average, less educated over time.

Among Israelis age 55-64, 47% have a college education or equivalent; among 25-34-year-olds the rate is 45%.

One reason is that the wave of Russians arriving in the 1990s was unusually well-educated. The other is that undereducated Haredim and Arabs are a growing part of the population.

Just one indicator: 45% of Israel's elementary school population is Arab or Haredi, up from 37.5% 14 years earlier. Forget Startup Nation, Israel can't aspire to be a modern economy if a third of the population isn't adequately educated and thoroughly integrated into mainstream Israel.

Given the chance, Israeli Arabs aspire to a good education and career opportunities like everyone else. All Israel has to do is devote the resources to it and overcome racist attitudes.

Haredim, however, are a special problem. For most of them the idea is not to work at all, but to immerse themselves in religious studies.

The stick that the government has hit them with over the last decade by cutting child allowances, forcing them to teach secular subjects in their schools and making their young men do army service has done half the job. More Haredim work now than did for decades.

But that caused a negative corollary: the increasing number of working Haredim swelled the number of "working poor," because they are unskilled, and are taking the worst-paying jobs at the bottom of the job market.

What the government needs to do now – and Lapid was starting the process – is to ensure that the next generation of Haredim have enough of a formal education, and link to Israeli society through army service, that they can mainstream themselves.

Winnie the Bibi?

Bibi likes to see himself, so we are told, as a latter-day Winston Churchill, a man who defies the conventional wisdom and has the courage to speak out with the utmost eloquence against the threats to the free world that everyone else is desperate to ignore.

Churchill, of course, was concerned about the threats of Nazism and later communism; Bibi about radical Islam.

But comparing yourself to Churchill is a double-edged sword.

Churchill had his moment of greatness during the darkest days of World War II. But for the most part he was behind a long string of failures, such as the ill-fated Gallipoli Campaign, and Britain's return to the gold standard. He was also on the wrong side of history in his attachment to Britain's global empire. In most respects, Churchill was an unreformed Victorian well into the 20th century.

On the other hand, Churchill did have his principles and no one can accuse him of being a coward. Once upon a time, Bibi had principles, too, even if many found them distasteful, and maybe he also had courage. On economic issues, he led an unpopular but ultimately successful revolution as finance minister in the early 2000s to reverse years of Haredi sponging off the state and reform an inefficient and ineffective welfare state that was discouraging Israelis from joining the labor force.

That was then. This is now: Bibi last week agreed to undo much of his own work and that of Lapid. He consented to restoring the latest round of cuts in child allowances, defanged the law that would force young Haredi men to serve in the army and did the same with the policy of forcing Haredi schools to teach a core curriculum of math and English.

It all sounds like the usual sops Netanyahu is wont to give the ultra-Orthodox parties. But this time the policy reversal has bigger implications, because the Haredi population is growing too big to delay the work of integrating them into the workforce and society any more.

Unlike Churchill, Netanyahu has supplanted his principles with cowardice, paranoia and ego. He may give the UN and Congress mighty addresses on the threat of Iran and Israel’s determination to defend itself. But off the podium, the real Bibi hesitates to use armed force. He can’t handle anyone who has any pretensions to the job as prime minister. He makes irresponsible and racist remarks before the election out of fear he is about to lose and then cravenly reverses himself days later. He makes political enemies through double-dealing and seems oblivious to the price he pays, such as losing his former ally Avigdor Lieberman this week (who suddenly upped and quit as foreign minister, and announced his party Yisrael Beiteinu would not join the coalition).

The Haredim are Netanyahu's preferred coalition partners - not because he has any ideological affinity with them or because he believes a yeshiva education is a good thing, but because for a few-billion shekels, they will leave him alone to be prime minister and save the country from Iran or swarms of Arab voters, which, a-la-Bibi, only he can do.

Bibi has marketed himself as the only one who can lead Israel, and for the past six years Israel has bought it. We were sold a bill of goods; but thanks to Lieberman and the razor-thin Knesset majority he bequeathed Netanyahu, we can look forward to trading him in sooner rather than later.