The Finance Minister's New Contract With Riki

Yair Lapid cannot help Riki Cohen without Israel becoming Greece at the same time. If he wants to be good and benevolent and immediately improve her situation, he cannot carry out the difficult budget cuts and tax hikes needed to cover the deficit.

There’s obviously something about Yesh Atid chairman Yair Lapid that drives the public crazy, especially the people who didn’t vote for him. He awakens emotions in them like tsunami waves, threatening to drown everything.

Now the Internet is seething with reactions to his comment about the fictional, “middle class” Mrs. Riki Cohen of Hadera, who together with her husband makes NIS 20,000 a month. It’s as if Lapid had already cut, sawed and buried the people of Israel − when all he really did was publish a declarative post on Facebook.
Like any decent journalist, Lapid knows that in order to capture the headlines and make waves, he can’t just talk about the “middle class” in general − he must personify the story. That’s why he wrote about Riki Cohen of Hadera, who obviously is no more than a symbol.

In and of itself, there’s nothing especially innovative about that. For years the press has used “Mrs. Cohen from Hadera” to describe the simple citizen who is powerless in the face of the banks, the stock exchange, the monopolies and the cartels.

But Lapid took this one step further by giving her a first name: Riki.

Still, if we ignore the journalistic ploy for a moment and examine the essence of his post, we’ll discover that Lapid is actually offering a new social contract: “the working man in the center.” This man is the most important person of all, the one who must be aided, the one who must be carried − because he is the one carrying the state on his back.

“The working man” pays his taxes on time and waits patiently in lines. He is law-abiding and has no inside knowledge about agricultural lands about to be declared fit for building. He is angry about the segments of society that don’t work and that he is forced to spend his tax money to feed them. He is mad that it’s the ultra-Orthodox who are eligible for subsidized housing but not him. He is livid that they don’t serve in the Israel Defense Forces. And he is raving mad about people who evade taxes, about those who don’t even have an income tax file but pull up next to him at the traffic light driving a brand new BMW.

“Our duty,” Lapid says, “is to aid Mrs. Cohen, since the state exists thanks to her.” But in the second half of his post he promises that on his shift Israel won’t become like Greece or Cyprus, and that in order to prevent that from happening he will make tough decisions to eliminate the NIS 30 billion deficit he inherited.

This is a serious contradiction. Lapid cannot help Riki Cohen without Israel becoming Greece at the same time. In the short term, it simply isn’t possible. If he wants to be good and benevolent and immediately improve Riki Cohen’s situation, he cannot carry out the difficult budget cuts and tax hikes needed to cover the deficit.

We’re all aware there is never a second chance to create a first impression. And Lapid’s opportunity is right now. Only now. He must set aside his promises to Riki Cohen and first make all the cuts necessary to keep Israel from exceeding a 3 percent deficit this year. A larger deficit will lead to a loss of faith, a rise in interest rates, a fall in Israel’s credit rating, less growth and more unemployment. And Riki Cohen will eventually pay the price.

But there’s also a way to help Riki without harming the economy: reforms. Lapid has a one-time opportunity to bring about radical structural changes in the economy − to bring more Haredi men and Arab women into the job market; raise the retirement age for women; reinstate the welfare-to-work Wisconsin Plan; increase the competitiveness of the market by lowering customs rates; fight centralization; allow competition in the ports, electricity company and airports; sign an open skies agreement; fight tax evasion; and lessen the suffocating bureaucracy.

If Lapid does all this without regard for his popularity, he will usher in growth and success, and lower the cost of living within a year. When that happens, Riki Cohen will publish a two-word post on Facebook that reads: “Thank you.”