Everybody Says They Want Regulatory Certainty

But do consumers and business moguls agree on what that actually means?

Gila Kaplan

More and more Israelis these days seem to be circulating among us, demanding regulatory certainty. They don’t want the air-conditioning turned up, a cold dish of ice cream or a frosty mug of beer. Just give them regulatory certainty and they’ll leave you alone.

And really, it’s hard not to identify with this simple demand. What else can a person need? A large automobile, a beautiful house, with a beautiful wife, and regulatory certainty. Give them all that, and they’ll be set.

The demand is a reasonable one. Our world is chock-full of uncertainty. We barely control anything — not the weather, not gas prices, not the nuclear deal with Iran and not global economic growth. So there’s no point trying to change them. But the regulator? We can certainly control him. After all, he’s just a public servant charged with overseeing a specific area — health, labor laws, import licenses, banking, broadcast frequencies, natural-gas exploration concessions, government-supervised prices, kashrut, environment protection — and you can talk with him. He gives and he takes, according to his will.

His job may be to supervise his area and look after the public interest, but who said he knows what this interest is? After all, he’s only a civil servant.

So where does this sudden yearning for regulatory certainly come from? Presumably, from the many events that have shaken the confidence of players in the business world in the status quo. People who, thanks to warm and fuzzy regulation, accumulated capital, assets and power, as well as control of their business and their future, suddenly fear that a handful of bastards are trying to change the rules. Things always change here and there, but these guys are on a real tear, turning everything upside down and then circling around back to the starting point after draft agreements have already been reached.

How can anyone operate in these condition, how can you plan, invest, make any progress? It’s easy to identify with the yearning for a regulatory cease-fire. You don’t need to be a multinational corporation to want certainty, stability, order, any fixed point, in today’s frenetic, digital, ADHD world.

The regular guy in the street has that same need for regulatory certainty. What does the ordinary citizen want, after all? He wants exactly what the corporation wants —a large automobile, a beautiful house, with a beautiful wife, and regulatory certainty. Give a man regulatory certainty in the government and state agencies: fair and efficient service, reasonable waiting times for doctor’s appointment — days or weeks, not months — a business license within one week and not two years, a classroom for his child without 40 noisy classmates, a police that addresses your complaint immediately and doesn’t give you the brush-off. All these demand regulatory certainty.

And what does this guy want from big business? He wants good products and services at fair prices. He doesn’t want to be robbed, fleeced or bullied. He doesn’t want to have to closely examine his utility, bank and insurance statements in order to make sure he isn’t being screwed over.

Most Israelis don’t have job security — most of us could be fired tomorrow — much less retirement security. Most Israeli workers today do not know for sure that their pensions will allow them to maintain their present standard of living. High management fees, investments that don’t pan out, failure to put enough away each month and changes in the market all add up to an absence of retirement security.

And we haven’t even discussed raising children. Anyone who enters the world of parenthood immediately enters a world of uncertainty. Not only because of the question of how the child will turn out but rather how will we provide for his needs, help him acquire an education or an apartment. But these are the uncertainties of people who don’t have it made, are not organized, the people on whose behalf there is public pressure to advance a host of issues like bolstering public medicine, promoting competition in the food industry and in the banking system and government intervention in home prices, which have been on the rise for eight years.

The average person who is not a bank CEO, career army officer or natural-gas tycoon; an employee of Israel Electric Corporation, the ports or any public authority, or a senior executive in the medical establishment enjoys zero regulatory certainty. Give it to them! They need it, no less than people with six-figure monthly salaries. It would not be an exaggeration to assume that the public overwhelmingly supports regulatory certainty. It is perhaps the least controversial issue among the Israeli public. What’s bad about a little certainty in a changing world — there is a consensus between the citizen and the state, the consumer and the corporation and between first-class citizens and seventh-class citizens. There is no reason to argue. Really, there isn’t.

Except that there is perhaps one small matter that should be considered: Are the two sides talking about exactly the same regulatory certainty? Is the certainty that the banker seeks the same certainty her customer seeks? Are the gas companies demanding the same certainty as the general public? What about the medical establishment on one hand and patients on the other? Is the certainty that the huge companies want about taxation the same certainty that serves the small businesses that pay higher taxes than they do?

In recent years there has been a series of struggles in which both sides want certainty. However, it is not the same certainty. Some want to continue the status quo in which they earn handsomely and control financial sources, natural resources and tax shelters. The others want to survive, to earn a decent living, to know that they have some measure of security. They want to know that if they study and work hard they will get ahead in life and will be able to buy an apartment. They want to know that if they need a medical specialist they will get an appointment quickly without needing connections. And if the pie is big then they will be left a morsel and not be ignored.

Only the government and regulators can provide this certainty to both sides, but it does not happen much. There is currently a reality of a tug-of-war in very many areas, and it will remain thus because anyone who wants regulatory certainty means to say that he basically wants to be left alone and not be touched. Let them go to someone else.

P.S.

It wouldn’t be a wild guess to predict that a lack of regulatory certainty will remain with us for years to come. Here are some of the reasons:

1. Israel is a country that started a dramatic process 30 years ago, and there are many areas that have not been fully organized.

2. In this transition from a socialist economy to a capitalist economy, side effects arose such as a growth in inequality and poverty that require fixing and compensation.

3. New situations require a new arrangement, be it a positive situation like discovering gas or technological developments, or a less positive situation like a global financial crisis that created distortions such as outlandish incentives to financial managers that cause them to take wild risks.

4. Governments and ministers are replaced here at a rapid clip, and the political system is such that rare are the cases in which a minister completes two consecutive terms — the time needed to enact genuine, fundamental and above all irreversible change.

5. The changes that occurred in Israeli society, its heterogeneity and the gaps create constant disquiet and demand for fixing the situation.