The Zionist Dream is Alive, But Not Very Well

When the modern state of Israel was created, the intention was to provide a national homeland for the Jews where all Jews could flourish, not just a “chosen few”.

An economy based upon a working poor who, despite working hard; are unable to provide for their family is doomed to failure. When a PhD qualified lecturer at an Israeli university earns no more than 5000 shekels in a month, with no job security to boot, one has to wonder what kind future awaits us. Why would anyone sacrifice their own future to teach our children, educate our youth and prepare them for the future?

The rampant unregulated free market economy that bankrupted the world only five years ago is alive and well in Israel today. Bibi is and always has been one of its chief advocates. The super-rich who control over 85% of the country’s wealth get together with those in power and carve out even more wealth for themselves at the expense of the general population. The government hands out billions of shekels in grants and subsidies to big business, which instead of going towards the creation of jobs and the strengthening of the Israeli economy overall, goes into the pockets of senior executives, shareholders and dare I say it, corrupt politicians and civil servants.

In Israel, the cost of living is high, far too high. The government will tell you that this is a global problem and they can do nothing about it. This is disingenuous in the extreme. Prices in Israel are excessively high and do not need to be. There is plenty the government can do. The first and most obvious thing to do is to break the power of the oligarchs and end the monopolies and cartels in Israel. Only by doing so can real competition be introduced into the economy, bringing substantial reductions in the cost of living.

In Israel we tend to rationalize so called “economic realities” and anomalies which would not be tolerated elsewhere and should not be tolerated here.

Why is it possible to buy Bamba cheaper in England than in Israel where it is made? Why does a plastic table manufactured by Ketter in Israel cost half as much in England as it does in Israel? Why is a cartel of car importers allowed to control the price of motor cars, keeping them at least 20% higher than they should be even with the high level of tax levied by the government? Why is this market closed to competition (as are many other markets) where this cartel of importers can block any attempt by new players to break into the market?

Why do I have to pay around 60 shekels for razor blades in any Israeli supermarket when I can go to a small shop in the Arab town of Tira and buy the very same product for 40 shekels? Indeed there are no shortage of examples and we all have those which irk us most. The answer to all of these questions is greed, excessive profiteering, a wholesale lack of competition and a government full of politicians who see their own personal interests as tied to those of the wealthy elite in Israel, who control these markets and who are not about to give them up.

Why do workers across the country who work hard and do a good job, helping to create wealth and success for a host of Israeli companies; not receive a decent working wage. Why do these hard working Israelis have to live on a monthly financial precipice, without the ability to provide adequately for their families? Why do over 50% of Israel workers earn less than 6000 shekels per month? Again the reason is greed and government’s reluctance or wholesale refusal to tackle the immoral practices of big business and their friends who ultimately own and control most of the Israeli economy.

The government will claim that they have been successful in creating employment, but if you look at the jobs being created the vast majority are at low and minimum wage, many without any job security or benefits. Creating jobs is all good and well, but creating a population of working poor to serve the interests of the wealthy elite is nothing short of scandalous, not to mention irresponsible and short sighted when it comes to the economic health of the nation.

In most OECD countries many workers and especially middle managers can aspire to a decent quality of life where they can provide for their families, educate their children and maybe afford the odd luxury every now and again. They are called the middle class and are the keystone to the health of a national economy. Where the middle class does well so does the country as a whole.

Not so for hard working Israelis. If you earn 6000 shekels a month how can you even hope to buy an apartment or send your children to university, not to mention, putting food on the table or god forbid a birthday party or perhaps dental treatment. Hell if you earn double that, on 12,000 shekels a month, with three kids you will still struggle to do so.

If like in many OECD countries, you take the brave decision to open your own business, just be aware that in Israel the odds are stacked against you. Where small independent businesses are seen as key engine for growth in modern economies, in Israel you are seen as a threat to the interests of big business.

Whereas the wealthy elite can borrow money easily, without personal guarantees and in reality can fail to repay without penalties; you as an ordinary citizen will have to provide personal guarantees, including your home and even perhaps your first born child as security. Rest assured if things don’t work out and you cannot repay, the banks will take everything you have and more, without so much as a by your leave. In other words, access to credit is just one more obstacle for aspiring small business owners.

Importantly, I should point out that the High tech sector differs in many ways and is highlighted by the government as a huge success. It is indeed a he success we can be proud of, creating a great deal of wealth, but far fewer jobs than you would think. Unfortunately the government abuses the success of this one sector to create a fog over the true state of the Israeli economy. Strip out High Tech and Defence and you will see the true state of the economy for the vast majority of Israelis.

In modern day Israel, there is little or no relation between earnings and the cost of living. Reports suggest that earnings in Israel have not risen in the past ten years. I do not have to tell you the same has not applied to the cost of goods and services. What has risen however in addition and in fact in excess of the cost of living; beyond all proportion are the salaries of senior executives and the wealth of the oligarchs, those few who along with their partners in government are responsible for the low income, high cost of living economy in which most of us struggle to survive.

So what to do? Well it’s pretty obvious really. Everyone knows what needs to be done…

Open up the economy to imports. Encourage and allow more competition. End the monopolies, the power of the oligarchs and the concentration of wealth. In addition to the wealthy elite it is also imperative to break the power of the unions in key industries such as the ports, the utilities, where the very organisations that would claim to protect the rights of workers and in fact only serve their own narrow interests with scandalously high salary levels for themselves along with obscenely bloated terms and conditions, where thy have no qualms about holding the nation to ransom at huge cost to us all.

The banking system must be drastically overhauled. Apparently the five large banks in Israel control 95% of customers in the country. These same banks are owned by the very same wealthy elite responsible for so much of the economic ills plaguing the country. There must be greater access to credit for ordinary people and would be entrepreneurs in the non High Tech economy, with less draconian terms for those caught in a debt trap. Large companies should be forced to pay invoices within 30 days with harsh penalties for those who fail to do so. Today in Israel small companies and sole traders often fail due to late payment rather than a lack of work or custom.

Opening up the economy to cheap imports will inevitably bring about the loss of some jobs in Israeli manufacturing. However these jobs which in effect are subsidized by the wider population are not sustainable in the long term. Competition will not only reduce prices overall and bring down the cost of living, it will create new jobs, as new companies emerge to take advantage of new opportunities and the lack of competition in the market. Those who lose their jobs as a result of opening up the economy can be compensated and retrained.

The government should insist that any company receiving government grants or subsidies provide realistic working terms and conditions for their workers. It should deliver real incentives to create jobs in the periphery.

These are just a few of the many options the government has to address the very real problems in the Israeli economy. It has many additional options. The government must come to understand that it is there to represent the majority. It must break the control of the wealthy elite. It must realise that a working poor and an ever shrinking middle class is in nobody’s interest and seriously harms the economic interests of the country.

Today, far too many smart and talented young people who serve in the IDF and care deeply, find it hard to see a viable financial future in their home country and are looking at opportunities abroad. Let’s face it, if you aspire to be a university lecturer, would you prefer to teach at Ben Gurion University on subsistence level earnings or go to the US or Europe and be appropriately valued and rewarded for your knowledge and experience? Many who would prefer not to leave find themselves in the uncomfortable position of having to choose between their home country and their ability to build a stable financial future. For Israel this is a ticking bomb.

The Zionist dream is alive, but not well!

There are fundamental issues which must be addressed post haste. We are not talking about the security and diplomatic issues which are indeed pressing and must be addressed but where the variety of opinion in the country demands open and vigorous debate. For too long these issues have been used as an excuse and a cover for economic mal practice and neglect. The government can an will always turn to security in an attempt to avoid critical economic and social issues.

When it comes however to the economy and the cost of living, the current system adversely affects the vast majority of the population. This same system benefits a small elite who fiercely defend their interests from their positions of power and privilege, and will do so with little or no consideration for the welfare of the wider nation and its people.

In their greed and indifference, what they fail to understand is that such a situation is unsustainable and will ultimately harm their wealth and long term interests. The government on the other hand, should be able to grasp what is best for the nation as a whole and politicians should find the courage to do what must be done to safeguard the economic future of our country and our children before it is too late.

A nation at work earning a living wage, with a flourishing and growing middle class will deliver a far more stable and sustainable economic future than a nation run solely for the convenience and the perpetuation of a wealthy elite.