Of Bread and Hypocrisy

The hypocrisy prize goes, as usual, to Social Affairs Minister Zevulun Orlev. Just two weeks ago, he supported a hike in the price of flour, but now that the price of bread is rising, he rolls his eyes heavenward.

The hypocrisy prize goes, as usual, to Social Affairs Minister Zevulun Orlev. Just two weeks ago, he supported a hike in the price of flour, but now that the price of bread is rising, he rolls his eyes heavenward.

"The only ones who will suffer from these increases are the weak," he laments.

This is the same Orlev who opposed any diplomatic negotiations, any territorial concessions, any harm to isolated settlements, and even threatened to leave the government in the wake of Prime Minister Ariel Sharon's plan to evacuate the Gaza Strip. He refuses to understand the direct relationship between the diplomatic situation and the economic situation, between the billions invested in the settlements and the poverty and need.

When the Oslo process began, color returned to the economy's cheeks. Growth climbed to an annual rate of 7 percent and the economic situation of all sectors of the population improved marvelously. Unemployment fell from 11.2 percent in 1992 to 6.6 percent in 1996, while Israel absorbed hundreds of thousands of immigrants and foreign workers. This means that the problem of poverty can be solved, but for this we need the peace process and territorial concessions.

The social affairs minister, however, thinks that land is more important than people - and then sheds crocodile tears over the harm to the weak caused by the rise in the price of bread.

Finance Minister Benjamin Netanyahu is contending for the populism crown and has become a defender of the poor. When he saw that his rival, Industry Minister Ehud Olmert, was in trouble, he hastened to pour oil on Olmert's fire. "This is not the right time to raise the price of basic commodities such as brown bread," he said.

So when is the right time? What does he think a manufacturer should do when the cost of his raw materials goes up? Should he lose money and close down? Perhaps Netanyahu should return the bread subsidies, which were canceled in 1990, and bring back the days when cheap bread was fed to cows and exported to the territories and to Jordan?

Olmert also wanted to resolve the matter. He disseminated a "study" showing that the weaker sectors consume mainly sliced bread, which prompted him to raise the price of unsliced bread by 26 percent, while the price of sliced bread was raised by only 9 percent. How considerate of him.

MK Dalia Itzik (Labor) explained that the truth was just the opposite, that the poor actually buy more unsliced bread - which is why she, during her tenure in Olmert's current post, raised only the price of sliced bread.

This grotesque debate between Itzik and Olmert over "what the poor eat" illustrates the paternalism characteristic of politicians. They want to rule over the citizenry, to determine what they will eat, to decide prices and profits, while at the same time striving to be the saviors of the weak.

In order to get out of his bind, Olmert tried to put the ball into Netanyahu's court by announcing that he was in favor of canceling the value-added tax on bread. All the politicians love this populist idea. Before the VAT on bread is canceled, however, perhaps the same should be done for life-saving drugs? They are certainly more important. And what about water? After all, without water, there is no life. And what about computers and vocational training? Education, after all, is the key to a better future. In other words, anyone who sees bread as the front lines of the war against poverty is fooling himself and running away from reality.

It is also worth examining how the Industry and Trade Ministry arrived at such steep price hikes. Maybe someone there was too impressed by the figures presented by the bakeries. After all, if flour prices rose by 13.5 percent, why should bread go up by 14.2 percent? Wages and prices in general have fallen in the past year. And since when do the manufacturers get everything they ask for? Well, excuse me, from Olmert and ministry director-general Ra'anan Dinur they do get everything.

The correct solution to the problem is to lift the price controls on bread. There are enough bakeries in Israel, so there is a good chance that the competition that would develop would produce more bread at lower prices. The fact is that the Consumer Price Index fell last year due to greater competition, and one could hazard a guess that if, for example, the prices of shoes and clothing were supervised, they would not have dropped by 4 percent in 2003.

The lifting of price controls would prevent the annual fuss over the price of bread, which dwarfs and distorts the problem of poverty in Israeli society.