Putting it all together, several tentative conclusions suggest themselves.
The government can do things to correct the distorted credit market that is throttling economic development. It can find ways to free up more land for construction while cutting red tape and bringing down the cost of housing. It can open the market to greater competition by removing import restrictions (on dairy foods, for example). But the sad fact is that three decades of welfare dependence on the part of between a fifth and a quarter of the population cannot be reversed overnight. That places the government between a rock and a hard place, as there are few short-term tools to address the chronic underfunding of the needs of the middle class without breaking the budget in ways that may not be sustainable in the current international financial crisis. Long-term changes—and a good deal of political courage—will be needed to address the economically unsustainable subcultures that teach behavioral norms that generate poverty for large swaths of the population while demanding that the general public subsidize them.
The argument that proponents of the tent-city demonstrations want to take us back to a social democratic, highly centralized economy is off the mark. To be sure, some of the ad hoc leadership expresses that political orientation, but anecdotal and journalistic evidence suggests that most demonstrators do not want to dismantle the structural changes that have made the Israeli economy so much more efficient and competitive. They seem more concerned with the question of how the distribution of investment (government and private) can be reformed within the new structures, for the good of more citizens.
To date, the “Arab Spring” analogy is misplaced. The tent cities of Israel are the product of a thriving democracy, not a demand for it as in the demonstrations in the Arab world. They are a magnificent exercise in petitioning the government for redress of grievances. At a time when some in the Israeli Knesset have been busy pushing undemocratic bills, they provide an invigorating push back.
READ MORE: http://bit.ly/1njvU2Y
Understanding Israel’s Social Unrest
Putting it all together, several tentative conclusions suggest themselves.
The government can do things to correct the distorted credit market that is throttling economic development. It can find ways to free up more land for construction while cutting red tape and bringing down the cost of housing. It can open the market to greater competition by removing import restrictions (on dairy foods, for example). But the sad fact is that three decades of welfare dependence on the part of between a fifth and a quarter of the population cannot be reversed overnight. That places the government between a rock and a hard place, as there are few short-term tools to address the chronic underfunding of the needs of the middle class without breaking the budget in ways that may not be sustainable in the current international financial crisis. Long-term changes—and a good deal of political courage—will be needed to address the economically unsustainable subcultures that teach behavioral norms that generate poverty for large swaths of the population while demanding that the general public subsidize them.
The argument that proponents of the tent-city demonstrations want to take us back to a social democratic, highly centralized economy is off the mark. To be sure, some of the ad hoc leadership expresses that political orientation, but anecdotal and journalistic evidence suggests that most demonstrators do not want to dismantle the structural changes that have made the Israeli economy so much more efficient and competitive. They seem more concerned with the question of how the distribution of investment (government and private) can be reformed within the new structures, for the good of more citizens.
To date, the “Arab Spring” analogy is misplaced. The tent cities of Israel are the product of a thriving democracy, not a demand for it as in the demonstrations in the Arab world. They are a magnificent exercise in petitioning the government for redress of grievances. At a time when some in the Israeli Knesset have been busy pushing undemocratic bills, they provide an invigorating push back.
READ MORE: http://bit.ly/1njvU2Y
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About Author
Edward Rettig