Compassionate Politics Died Last Week

Israel's voters face a tough choice on March 28, 2006. The dramatic events of the last six months have completely changed the political landscape. Factions were shattered, traditions were discarded. Left and right approached, and the distinction between Ashkenazi and Sephardi disappeared entirely.

The war that acting prime minister Ehud Olmert declared on illegal settlements threatens to eliminate the last distinction between Kadima and the Labor Party. Voters don't know what distinguishes Olmert's diplomatic ethos from that of Amir Peretz.

But the real story last week was in the economic sphere. It may prove to have been the last week of the sweeping "socio-economic" movement whose advent was applauded two months ago.

The numeric demonstration of the change is that Professor Avishay Braverman made fourth place in the Labor primaries, ranking him five notches above Shelly Yachimovich.

Yachimovich had been assured of the ninth position on the list, but the yawning gap between her placing and Braverman's is all the more striking given the massive press coverage the outspoken, ex-journalist received.

Swinish capitalism

Peretz's choice to add Yachimovich to the party two months ago seemed to portend a new trend. She presented a new agenda, a movement that believed exactly the opposite of the economic tenets introduced by Benjamin Netanyahu over the preceding three years. Political and economic pundits learnedly explained that Yachimovich's rise demonstrated the growing antipathy of the people to "swinish capitalism" and Thatcherism, which had taken hold of Israel.

Braverman has been touted as Peretz's choice of finance minister, if the latter wins the election. Last week the professor spelled out his economic policies in a broad-based interview with Yedioth Aharonoth. How disappointed Yachimovich's supporters must have been to learn that Braverman's economic tenets were much the same as Netanyahu's.

Braverman believes in a competitive, free market.  He supports most of Netanyahu's reforms, believes in fiscal discipline, supports the reform of the pension system, supports policies creating incentives to work, believes in globalization, opposes limits on imports and is by no means convinced that the minimum wage should be hiked and fast.

Yachimovich may enter the Knesset, she may grant interviews and she may wield influence through her parliamentary powers. But if the Labor Party is involved in designing economic policy, Braverman's will be the voice that speaks, not hers.

Back to original policies at Kadima

The story at Kadima ("Forward") is a remarkable parallel. Ehud Olmert, the finance minister and acting prime minister, keeps sniping at former finance minister Benjamin Netanyahu; he visits soup kitchens; and declares the need for a more compassionate economic policy.

But those are empty slogans. When Olmert is pressed for specifics, he takes fright and promptly vows to preserve "his and Sharon's economic policies". In other words, the policies that Netanyahu introduced.

Treasury clerks report that Olmert is sowing in the rows that Netanyahu ploughed. He has no intention of exceeding the planned budget deficit and hasn't rolled back any reforms. They feel no change in direction at the treasury.

The fact that all three big parties - Labor, Likud and Kadima - have lined up behind Netanyahu's policies may seem like a small victory for the man looking like the biggest loser in present Israeli politics. But really it is not a loss or triumph for anybody person: it is the victory of the reforms carried out in the last 20 years.

Israel's politicians do not gladly accept responsible economic policies. None like budgetary and monetary caution, or reforms that target power centers. They simply realized that in a global era of open markets, they have to behave more responsibly, and their degrees of freedom are smaller than they had previously thought.

Therefore, when a new government is established, it will probably face the same issues and challenges: how to create long-term strategies for education, welfare, and labor; and how to free up resources to help the poor, primarily the old and the disabled.

The variable that most distinguishes the three parties is how dedicated their leaders are to promoting competition by tackling the great labor unions and Big Business owners. Netanyahu proved highly diligent at the start of his career as finance minister, though he flagged by the finish; Olmert has not proved he has the qualities and now, ahead of the elections, he cannot touch the issue. And over at Labor, its leader, Amir Peretz, would have to change as dramatically as the prime minister did over the settlements: he would have to turn against the very unions that lifted him high.