NETANYAHU’S PROBLEMS AT HOME ARE NOT BECAUSE OF HIS ISSUES WITH THE US & IRAN
As in the US, income inequality
and cost-of-living are the big issues against the conservatives in Israel.
Israel’s Prime Minister Benjamin Netanyahu is in “deep dodo” at home, but it’s not about
his recent anti-Iran speech to the US Congress. Nor is it about the high-end furniture and
decorations that his wife recently ordered for their government provided home (at Israel taxpayer expense) but the
items were immediately shipped to their private villa.
No, even today
where the Prime Minister may already have lost his election for continuing as
Israel’s P.M., his problem in Israel is that the income inequality under his
conservative Likud party is today much worse than that in the US. Today there is widespread economic discontent
in a country that was originally built on the socialist ideals of the kibbutz
system.
Yes, this
nation is a high-technology powerhouse and its economy has grown rapidly, and
it was barely affected by the worldwide recession from back in 2008. But as in
the US, the spoils of that growth have gone disproportionately to Israel's own
version of the 1% of the nation’s wealthy.
As in the US, Israel’s experience also shows that this matter of extreme
inequality has a corrosive effect on the nation’s social and political life.
All one needs
to do is consider what has happened at either end of Israel’s political
spectrum. Their growth in poverty and cost-of-living
has increased on one end, while their extreme wealth has sky-rocketed on the
other.
According
to the independent Luxembourg
Income Study, the share of Israel’s population living on less than half the
country’s median income, a widely accepted definition of relative poverty, it
has more than doubled to 20.5% from 10.2% between 1992 and 2010. The share of
children in poverty has almost quadrupled, to 27.4% from 7.8%. Both of these
numbers are the worst for an advanced world nation by a very large margin.
At the other
end, as in America, there is an extreme concentration of that wealth and power
among a tiny group of people at the top.
But compared
to the US, according to the Bank of
Israel, only about 20 families control the companies that account for half
the total value of Israel’s stock market. That control is totally convoluted
and obscure, and it works through “pyramids”
of companies in which a family controls a firm that in turn controls other
firms and so on, and so on. The Bank of
Israel is clearly worried about the potential of this concentration of
financial control. And Prime Minister
Benjamin Netanyahu is part of that small group of controlling families.
In a recent
column in the New York Times by the
Noble economist, Paul Krugman, he
stated, "Israel does less to lift
people out of poverty than any other advanced country — yes, even less than the
United States." Now that is saying something. And those living in poverty are not just Israel's
oppressed Arab population and ulta-Orthodox Jews.
How this
all occurred was not due to a natural free-market process. As in the US, it was due to policy changes
made by the conservatives running the Israeli legislations over the last 3
decades.
Israel's
oligarchs have managed to gain control of businesses that were privatized in
the 1980s. That control has enabled them to have outsized influence on Israel’s
policies and politics. Netanyahu himself is a big
advocate for policies that keep them sitting pretty, and like New Jersey's
Chris Christie, the Israeli P.M. personally enjoys sitting, living and traveling extremely
well on the taxpayer's dime.
This has
all become pretty well understood within all of Israel and will explain a lot if
Bebe does lose his power in this week’s election.
Copyright G.Ater 2015
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