Israel's Economy a La Eini

Histadrut labor federation chief is convinced that he is better capable of managing the matters of the economy and society than those elected to the Knesset and the government.

Whoever lies with dogs should not be surprised if he wakes up with fleas. It is not that bad; but whoever goes to bed with snakes, should not be surprised if he wakes up with a painful bite. This is the lesson learned this week by Yuval Steinitz, who was bit once more by the Ofer Eini and Shraga Brosh pair.

Ofer Eini
Amos Biderman

During the past two years Steinitz nurtured them and showered them with praise. He placed them in the decision-making circle (the "Round Table" ) and gave them veto power on the government's economic decisions. But after the two used him for their needs and made significant gains, they discovered that Steinitz ceased to meet their whims; thus they decided to destroy him. Just so everyone would know who is really running the economy: the head of the Histadrut labor federation and the president of the Manufacturers' Association - not the Finance Minister.

At the press conference held by the two at the begining of the week, they presented themselves as great protectors of society. Eini said that the price of water, fuel and bread should be lowered and that the minimum wage must be raised. "The exploitation of the public must cease ... make this country a little more social," he cried out.

His Sancho Panza, Brosh, became an angry social warrior. He too favors lowering prices, cutting taxes, raising the minimum wage (like the masses in Egypt ). This lovely couple is always in favor of the good things: in favor of increasing subsidies, in favor of greater grants, in favor of bigger budgets. But where will the money for this come from? That does not really interest them. That, they leave to Steinitz. They are responsible only for the populist expenditures.

This week the Round Table that Steinitz established two years ago broke apart. In place of Steinitz they brought in Shlomo Buhbut, chairman of the Union of Local Authorities. Buhbut too spoke at the press conference about a bad government that is causing terrible poverty and rising prices. The fact that the consumer price index increased last year only by 2.7 percent when real wages increased by 2 percent, at a time when the economy is rising fast and unemployment is dropping, does not seem to be making an impression on the three. They do not care about the facts.

Buhbut is fighting to break up the water corporations and restore the handling of the matter to the local authorities; in other words, to the control of Buhbut and his friends. Buhbut has been spreading for some time now the slogan that the reason for the rising cost of water is the establishment of the water corporations. This is simply untrue. The reason for the rise in costs is the government decision to cease subsidizing water, because it is a product in short supply. The price went up because desalination plants began operating, and they are producing more expensive water than the water being drawn from the Kinneret.

Another reason for the rising cost of water is the fact that 50 water corporations were established instead of 12. This happened because every mayor wanted his "own" corporation, without partnership with nearby cities. And there is another reason for the high prices: The water corporations were required to invest large sums in handling sewage and replacing leaking pipes - important work which the mayors neglected for years.

The local authorities also lied to the public when they charged them too high prices for water, and used the NIS 500 million per year for other purposes, such as shows at the park and building extravagant squares in order to appeal to the residents.

Eini is now behaving like a thug: He is trying to strike the economy for reasons that have nothing to do with labor relations. He is doing it because he lost his influence over Benjamin Netanyahu. After all, before Labor left the government, it was he who kept it in the coalition.

Eini is convinced (and so is Brosh ) that they are better capable of managing the matters of the economy and society than those elected to the Knesset and the government. They are also convinced that they are allowed to milk the state treasury for their purposes. The problem is that there is no "responsible adult" facing up to their blatant assault, shouting: "Idiots, get off the roof." Bank of Israel Governor Stanley Fischer says nothing, the prime minister is looking for compromises and the finance minister does not want to be the "evil treasurer."

Therefore it is not surprising that they bite Steinitz and press Netanyahu. They are convinced that this time too, Netanyahu will not stand up to the pressure and they will once more reap the fruit of populism.