The Bottom Line / If Only

Such dreadful news about the economy was the last thing Amir Peretz's campaign team wanted to hear.

Such dreadful news about the economy was the last thing Amir Peretz's campaign team wanted to hear. They could have handled moderate growth and slight economic improvements; but growth of such high levels, and impressively high rises in standards of living and a dramatic drop in unemployment - now that's really going too far. Maybe those number-crunchers at the Central Bureau of Statistics are stooges of Benjamin Netanyahu and the evil rich.

Peretz denies any link between Netanyahu's policies and the achievements: "The reasons for growth are only the disengagement and high-tech," he says.

But the problem is that we've been here before, back in 2003, and some of us will even remember the ideological argument that Netanyahu and Peretz had.

Netanyahu presented his plan for getting the economy out of its hole, for escaping negative growth and the fleeing of investment. This program included cutbacks in the state budget, cutbacks in welfare payments, cutting pay in the public sector, slashing taxes significantly, and implementing a slew of reforms and privatizations.

And let there be no mistake. The argument was not about the poor and income gaps. Back then, when the economy was in deep crisis, no one dared to utter a word about spending on the poor - the numbers of which were high and alarming. No one talked about helping the weak, the single parents, the old and the jobless, because the coffers were empty, or to be more precise, there was a vast budget deficit of 6 percent of GDP. The argument was simply about moving the economy from collapse to growth, from firings to reducing unemployment - the most serious ills of society.

Peretz then predicted that Netanyahu would eventually lead the economy to ruin, bringing it to a recession far deeper than before, and that unemployment would shoot up to 13 percent of the workforce - a real social disaster. He proposed an alternative plan, the complete opposite of Netanyahu's - raising NIS 5.5 billion from the public through raising income tax, increasing National Insurance Institute contributions, and imposing a compulsory loan on all Israeli citizens. He also opposed the reforms and the privatizations that Netanyahu proposed.

Peretz remained loyal to the old Bolshevism - moving the means and money from the downtrodden public to the fat state, which knows far better how to use our money, just as they did in the old USSR.

The plan that was chosen was obviously Netanyahu's, and the excellent results were published for all to see this week. So if Peretz really was to do some serious introspection, he would respond thus: "I was completely surprised. I did not believe that Netanyahu's steps would bring us such high growth of 5.2 percent; I didn't believe that some 200,000 Israelis would join the labor force [only 70,000 of which found part-time work]; I didn't believe that the standard of living would rise by 3.3 percent! I didn't envisage such a dramatic drop in interest rate (which helps mortgage-holders and those with overdrafts). I didn't understand that productivity would rise, that wages would recover, that foreign investment would reach an all-time high of $9.4 billion! I also didn't believe that despite the significant cut in taxes on all levels of the public, revenues from taxes would actually increase (because of the fast growth), leading to such a surplus in government funds that one could - and should immediately - implement a comprehensive plan to reduce poverty and the gaps in society.

"True," Peretz would continue, "Netanyahu had a tail wind. Ariel Sharon gave him the disengagement, which brought us back into the family of nations, and the high-tech sector recovered and contributed greatly to exports. But clearly Netanyahu's policies, which were the antithesis of mine, succeeded superbly. And just as clearly, had my suggestions been implemented, the results would have been the reverse - that is, catastrophic.

"Therefore," Peretz would admit, "I plan to finally bury the old and misguided school of socialism and to explain to my merry band of bad advisors that the era of Marxism-Bolshevism is over. The public is no fool. It simply doesn't want to live in the paradise of North Korea."