Forget Hezbollah, Hamas, Abbas and Iran: The primary driver in Israel's upcoming elections is the country's high cost of living. Recent polls have consistently shown that domestic policy and economics, rather than security and Palestinian peacemaking, are what most Israelis will be thinking about when they cast their votes on March 17.
With Israeli Prime Minister Benjamin Netanyahu's bedrock issue, national security, no longer the focus of many voters, the center-left Zionist Camp political alliance smells blood. The bloc, led by opposition Labor leader Isaac Herzog and Tzipi Livni, is campaigning hard to persuade stressed-out Israelis that the era of sky-high rents, stagnant salaries and limited job opportunities will end once Netanyahu is sent packing.
Beyond this populist blather posing as political discourse, it's the staleness of the Zionist Camp's ideas on how to fix Israel that voters should be wary of.
For example, outraged members of the Zionist Camp recently lashed out when it was revealed that the Netanyahu government has pumped one-third of the country's funding for subsidized housing into settlements: Thirty-five percent of the funds are thus earmarked for less than 5 percent of Israel's population, while engaging in a campaign of diplomatic suicide.
A simplistic answer
Blame Israel's economic troubles on the settlements. It's an old leftist canard that delegitimizes the very real trials and tribulations of more than 400,000 Jewish men, women and children - Israelis who happen to be living over the Green Line.
In addition, the Zionist Camp believes that the current government's policies on West Bank settlement activity have unleashed a potent anti-Israel boycott, divestment, and sanctions movement that is growing stronger by the day. If Netanyahu is re-elected, we are warned, Israel will inevitably find itself in economic and political isolation.
In fact, it's the Israeli left's socialist and statist heritage that bred an inefficient economic system that is only now beginning to reform.
Hertzog and Livni would carry the mantle Herzl and Ben-Gurion. Hilik Bar, the secretary general of the Israeli Labor Party, recently wrote: "The Labor Party, which together with Hatnuah is running as the Zionist Camp, founded and built the State of Israel."�� �It is worth noting, then, that Israel's Zionist founders blamed the First World War on the failures of capitalism and embraced fashionable socialist and communist ideas.
After Israel's independence in 1948, Socialist Zionism established a highly centralized economic system dominated by political cronyism. While the statist policies of Israel's successive labor governments failed to create a socialist paradise, they did succeed in building monolithic, unresponsive bureaucratic institutions that held back the country's economic growth for decades. Israelis learned to live in a perpetual state of impoverishment.
However, Labor economic policies do much more than merely restrict competition and stifle productivity. In a recent piece published by the Jerusalem Post, Jerusalem Institute for Market Studies Director Corinne Sauer noted that a series of studies drew one conclusion: countries that are considered anti-business are also the most corrupt.
The grim economic landscape began to be overhauled in 2003, when Netanyahu was appointed as Israel's finance minister. Netanyahu initiated a series of pro-market economic reforms from which Israelis only now are beginning to benefit.
Don't look now, but Israel's economy is actually showing signs of robust growth. Exports to Europe are on the rise, with nearly 10 percent growth in the past year alone; Israel's high-tech industry is recording a banner year, with a number of Israeli companies going public, and a record amount is being invested in Israeli companies.
But surely, these successes are few and far between. Certainly, ordinary Israelis are worse off today, no?
Truth is, Israel has enjoyed virtually uninterrupted growth for more than a decade. The worldwide Great Recession has largely bypassed the Start Up Nation. While debt crises and bank bailouts hobble European economies, Israel has not only persevered - it has prospered. And while the cost of living has undeniably increased, household income has also grown, since the percentage of homes with two wage earners has risen from just 30 percent a decade ago to 44 percent today. Wagegrowth has been slow, but it has grown faster than in Europe.
For these positive trends to continue, Israel needs to improve its labor productivity to ensure sustained and higher levels of economic growth.
Does the Zionist Camp's platform encourage a climate of freedom, competition and entrepreneurship critical to helping Israel realize its full economic potential?
According to Bar, Israel's ongoing challenge of developing an economy in which the country's wealth stimulates domestic innovation and prosperity can best be addressed by not "pumping your taxes into wealthy settlements in the West Bank while ordinary Israelis are suffering."
Oh Labor, there you go again...
