How're Things Two Years After the Protest? Much Worse

The good news is that the Israeli public is waking up to truths, that may be bitter, but may help improve the future.

Most of the hundreds of thousands of people who took to the streets to protest the cost of living a couple of years ago are now doing much worse. That's the bottom line.

Housing prices have risen. So have taxes. Meanwhile pay has eroded, the labor market is crueler than ever, and the quality of public service has not improved. If the public had a reason to be angry in mid-2013, now, two years later, its reasons are even better.

Clearly in the short run, things grew even worse because of the protest itself. When it broke out in the summer of 2011, we warned that urging the government to spend more than it could afford would boomerang.

As the budget deficit began climbing to 5% of GDP, threatening Israel's financial stability, the government began wielding its ax. It hacked at everybody's standard of living, including that of people who had not received a piece of the increased post-protest budget.

The upshot is that, in the short run, powerful people leveraged the protest at the expense of everyone else.

In other words, the gap between the powerful, connected people living off the fat of the land at the expense of everyone else, and everyone else, has widened.
Yet I dare claim that the 2011 protest will go down in memory as one of the most important in Israeli society. That it was a turning point in the nation's path. That the 2011 protest has changed and is changing the Israeli narrative and the public's awareness.

Here are some of the changes the Israeli public awareness has been undergoing.

1. The smokescreens of security and political issues are dispersing. Until a few years ago politicians and decision-makers could hide behind ceaseless natter on security. In fact they were judged by their rhetoric on peace, security and the territories. But that's changing. The prime minister and the political echelon may want to drag the discourse back to Iran, Egypt and Syria and avoid handling economic and social issues, but they are less and less able to do so.

I have long argued in this column that the defense budget has only a tenuous connection with the real threats Israel faces, and that Israel's defense establishment has become like any other large system – its main goal is its own perpetuation, with ever-bigger budgets, power and ever-better working conditions. Four months ago we reported that 60% of career soldiers retire with pensions worth between $1 million to $2 million, five to 10 times rthe norm in the private sector.

Israelis have begun to understand that the defense establishment is lowering their standard and quality of living, because it's so big and strong, not because it needs to be so big and strong. Off-record even officers admit that the budget bloat has caused other forms of flab, and that cutbacks will result in a stronger army over time.

The next stage in the public's perception will be that a sacred cow must die: army pensions need to be cut back.

2. The public is starting to distinguish between businessmen who create value and businessmen who take over existing systems and milk them dry, who benefit society not at all, and themselves very much.

It's getting harder to frighten people. Day by day the public is learning that the real cause of anti-business sentiment isn't themselves: if anything Israelis admire entrepreneurs and achievers. It's the value-suckers, who want to set up a smokescreen behind which they can conceal the methods they have used to get rich.

3. The public is starting to understand that there is only a tenuous connection between Israel's powerful trade unions and the values of traditional trade unionism, social solidarity and social justice.

The public is learning that Israel's most effective trade unions are ones at places where they can roll inefficiency and corruption onto the taxpayer or consumer, not, perish the thought, onto the company owner.

4. The next stage in this revolution of awareness will be a lively public debate on the job market. It must move from the twisted Israeli model – protecting certain groups of workers at the expense of everyone else – to the model of protection for all workers, that is, to something along the lines of the northern European model of responsible trade unions that are committed to the principles of competition, efficiency, integrity and which have a genuine service orientation.

5. The public is starting to understand that the most appropriate description for the narrative of Israel as the Startup Nation – "the most successful economy in the world, thanks to high tech, Nobel Prize winners, Jewish genius and the power of the Israel Defense Forces" – is, to quote the George and Ira Gershwin classic, “It ain’t necessarily so.”

The Startup Nation is responsible for maybe 10%, maybe 15%, of the job market. It will never lift the economy by itself.

Israel has more wheeler-dealers - in real estate and finance, in the public sector and in local authorities - and more paper-pushers than it has technology workers.

The Israeli public is starting to realize that Israel’s economy has worse problems than employment among ultra-Orthodox Jews or Arabs. It's getting harder for the people in power to blame inequality and poor services, and the high cost of living and low salaries, on the shoulders of these two, Arabs and Haredim. They claim these two don't want to work but it isn't so: the public is learning that the participation rate of Arab men and Haredi women in the job market is nearing the norm for the general population.

6. The public is starting to understand that there is no such animal as “news” and that what the paper says "ain't necessarily so" either.

Every newspaper has a publisher, who has “friends,” and an ecosystem in which the editors and writers live. It is starting to learn that "strong pressure groups" are those which invest the most resources to pressure and confuse the press.

It is starting to understand that an authentic press is a public service but that the press is, for the most part, controlled by economic forces most of which the public does not even know (even if it did know the identity of these economic forces, the public would find it very difficult to monitor them).

The public is starting to understand that the idea of an objective press is a joke because all information, every word and every analysis that go into a newspaper are based on the owner’s or editors’ priorities and set of values and beliefs. Some have an open agenda. Some have hidden ones.

7. The public is starting to understand that, if it continues to wait for a leader who is a miracle worker, for a prime minister with a vision, it will be endangering both itself and the members of the younger generation.

It is starting to understand that we all tend to assume that was what, will be. But it may not. There may be nasty surprises lurking in the future.
 

Nir Kafri