Taking Stock / What Do the Bigwigs Say?

A trip down memory lane with the sages from Labor, Likud and Kadima.

"We all remember the irresponsibility in the way pension monies were shifted to the capital market. Bibi took your pensions."

Do we all remember that? We may well not. Ehud Barak doesn't, for one. Maybe because he never knew about this in the first place. And he never knew because the facts are that the government started withdrawing from the capital market sphere 20 years ago, as part of the economic stabilization program designed to rescue Israel from financial oblivion. That was well before Benjamin Netanyahu even dreamed of becoming finance minister.

Has Barak forgotten that the crisis of 2009 isn't the first to plague the provident funds? That 13 years ago, mutual funds fell like lead weights, followed by the provident funds - all of which were already deep inside the capital market? That all happened under the stewardship of Barak's own Labor Party - and they couldn't even blame a global meltdown, because that breakdown was a purely home-grown affair.

Maybe Barak can't remember because the woes never touched him personally. He has always been snuggled up to the government udder, through noncontributory pensions (paid entirely by tax money) from the army and as former prime minister.

True, from time to time he made forays into the business world, to "make a living" as they say, though to this day nobody knows exactly who paid him tens of millions of shekels and for what. At the end of the day, it's that very free market that Barak is attacking so savagely that raised him to the 31st story of Akirov Towers in Tel Aviv.

The only difference between Barak and the other "free market" people is that he has his own private safety net: his inflated noncontributory pension.

Apparently what Netanyahu means when he says "free market" is that such a market exists when the tide is high and all the tycoons are raising billions upon billions and helping themselves to gargantuan salaries. But when crisis rears its head, the market isn't free any more and government injections of money are needed.

When you were finance minister, you said that we had to maintain fiscal discipline, that there was a fat man (the bloated public sector) whom the thin people (the public) were carrying on their overburdened backs (well, you get the picture), and that the business sector had to be left alone to do its thing.

Now that you're in the opposition and elections are looming, the budget isn't a concern and you advocate injections of money.

Mr. Netanyahu, you had plenty of opportunity to give more money to pensioners when you were finance minister, but you chose to cut old-age pensions instead of hacking at the fat man's flab. Like your predecessors, you didn't dare touch the noncontributory pensions or the powerful workers' unions at the monopolies, but you didn't hesitate to saw away at the pension rights of other people.

Increasing the deficit sounds like a terrific idea. Always. In good times or bad. Hand out the loot! Of course, there's just one niggling little problem: to expand the budget, you have to borrow from the free market, raise interest rates and suffocate the business sector that's supposed to create the jobs. But that's a technicality. What really matters is that we do what U.S. president-elect Barack Obama is doing. Every single thing that Obama is doing. Obama is "in."

Prof. Braverman surely knows that there are two main reasons the United States is in such trouble now, trouble that has reverberated around the world and is lapping at our shores. One is Alan Greenspan's policy of cheap money. The other is U.S. President George W. Bush's insanely huge budget deficits.

Braverman surely also knows that Obama has no choice. The U.S. deficit will rise to 7% and even beyond, because the government there has to channel vast sums into the financial system, to save it from the devastation wreaked by Bush.

Braverman must also know that the U.S., unlike Israel, has a mint that prints dollars. Israel doesn't have a mint that prints dollars. The dollars are used to finance the U.S.'s gargantuan deficit. If Israel's deficit reaches 7% of GDP, we will be thrown back back six years - to the brink of bankruptcy.