Analysis / A Pinch of Salt to Bibi's Sweet Vision

There is no CEO today who does not have a "vision," because, as the Book of Proverbs teaches, "Where there is no vision, the people perish."

Netanyahu, who fancies himself as the CEO of Israel's economy (with a GDP of $120 billion), convened a special press conference yesterday to mark the second anniversary of his economic plan and to present his vision for the coming years: "within 10 years to rise to the top-10 list of nations in terms of standard of living and GDP ... to outdo the average for Western Europe." See story, Page 3.

An attractive and newsworthy vision.

The only problem is we have heard it before, several months after Netanyahu became prime minister in 1996. At the time he said, "Within a year we will achieve a growth rate of 6 percent or more; within 10 years Israel will rank among the world's five richest countries in terms of GDP."

But instead of 6 percent Netanyahu achieved 3 percent; instead of prosperity, unemployment grew; instead of fifth place, we slid to 25th. Even countries like Greece and Spain, which were always behind us, flew right past, not to mention Ireland and Singapore. Therefore, when Netanyahu presents such a sweet vision, it is worth adding a pinch of salt. After all, the nations of the world won't halt in their tracks while we catch up.

Netanyahu should be commended, however, for admitting a "major mistake." When he was prime minister, he said, "I did not cut taxes, and did not rein in government spending."

Might Netanyahu rise in 10 years and say, "I made a major mistake when I opposed the disengagement plan"? Because clearly the security calm of the past year, and the hope of disengagement, played a significant role in the growth that Netanyahu takes such pride in.

Unlike the minister, his fierce opponents, the champions of the social issues, have not admitted to their mistake. Two years ago, when Netanyahu presented his plan for saving the economy, they said that not only would the free market plan not save the economy, it would plunge it into an even deeper abyss. Budget cutbacks would cause a great recession. Wages would go down, unemployment would rise, an economic crisis would ensue.

But the figures prove otherwise. Growth is up to 4 percent, average wages rose by 2.7 percent, and unemployment dropped from 11 percent to 10 percent.

The free market has proved itself. Reducing government spending and the deficit is the way to go. Reducing taxes is right - leaving the public a larger portion of its income, which it knows better how to spend. Privatizing government companies makes the economy more efficient. Increasing competition is good for the consumer. One hundred thousand Israelis reentered the work force between mid-2003 and mid-2004, in trade, services, tourism, construction and agriculture. True, some of these jobs are part-time, but this is a necessary phase in the transition to full employment.

For a generation, the government invested in the territories ignoring the periphery and education, professional training and infrastructure.

At the same time it increased allocations of all types, yet gaps between the rich and poor grew, because more people dropped out of the workforce to live a life of poverty from allocations.

The shift from welfare to work, which began with Silvan Shalom and carried on more forcefully under Netanyahu shows that the only answer to poverty and income disparities is increasing the number of people working. When two members of a household work, poverty virtually disappears.