In an interview with a popular local radio show last week, Transportation Minister Miri Regev tried to inject a new idea into the public discourse by saying that in the time of COVID-19, “Israel needs a New Deal.” The interviewers were too busy with politics and failed to clarify what she meant. It is unclear whether the idea is the minister’s own brainchild or whether she was inspired by her boss, Bibi Netanyahu. What is clear, however, is that her message was weak and obscure. At the same time, Bibi’s “dropping money from a helicopter” plan was criticized as “political money” after it became clear that the Finance Ministry’s budget commissioner, Shaul Meridor, opposed it. Critics argued that as the graph of the infected rises, and social protest intensifies, Bibi acts against all economic logic and out of pure political interest to salvage his eroding popularity.
Yet Bibi’s decision to “distribute money to everyone” is not a form of shooting from the hip, but a 180-degree change from the policy he has pursued since his 2003 stint as finance minister. At that time Netanyahu decided to cut benefits, lower corporate taxes, and pursue a narrow fiscal policy so that the budget deficit would not exceed 3 percent. He warmly embraced the neo-liberal approach, and the Israeli economy became a favorite of foreign investors. Netanyahu created a modern capitalist economy, shifted the reins to the business sector, and made the minimum wage into a permanent ceiling for 50 percent of workers. At the same time, he decimated education, health and welfare budgets, creating social disparities among the worst in OECD countries. But then COVID-19 of 2020 arrived, interrupting the Israeli capitalist paradise in one fell swoop.
It took Netanyahu several months to understand the magnitude of this health and economic crisis. Initially, he believed that a complete and short-term closure would be a panacea that could in retrospect save the government billions. The early April program of grants and loans for the self-employed was intended as a bridge towards a speedy recovery. “We have beaten the coronavirus,” Netanyahu declared. The COVID-19 hospital wards were shuttered, the economy reopened, Israelis returned to their routine of celebrations, and Bibi returned to his politics: pushing the boundaries with Gantz, attacking the justice system, obtaining tax breaks for his family and conducting plenty of public relations. Yet the coronavirus raised its head again, hundreds of thousands of workers did not return to work and did not recover, and Netanyahu was forced to admit his mistake. In the meantime, the public lost its patience and trust in the government, and from here the path to the outbreak of mass demonstrations was short.
Now that Netanyahu is changing direction, it seems that everyone – his coalition partners in Blue and White, the Knesset opposition, and finance ministry officials – remain fixed in the views espoused thus far by him, and that a wall to wall political consensus has been reached. Netanyahu has begun to understand that the pandemic cannot be defeated in one act, and that an economic plan based on lifting fiscal restraints is required. In this he is not alone. He has received the approval of Stanley Fischer and of economics Professor Naomi Feldman, who served on President Trump’s advisory team and was able to reassure finance ministry officials by saying, “We are not Venezuela.” Indeed, do not worry, Israel is not insolvent. It does not rely on oil but on advanced knowledge and technology, and it belongs to the exclusive club that receives long-term loans at zero interest rates. The fiscal largesse that was prohibited before COVID-19 is now allowed to the fullest extent. As the professor explained, “Everything we have should be thrown into the economy now” (The Marker 22.7.20).
Despite this, the protesters’ cry is heard clearly throughout the country. Young people have joined the old guard, and together they are shaking the foundations of the prime minister’s house on Balfour Street. While Bibi is experiencing an unprecedented public outcry against him, both inside and outside his own party, the message “anyone but Bibi” does not meet public expectations for change. Business owner representatives meet with him on Fridays to extort money from him and demonstrate against him on Saturdays, because all they want is money. Those self-employed people who are shouting today in the streets employ thousands of exposed, weak, non-unionized workers, who earn minimum wage and have no pension, whose voices are not heard, and who must make do with unemployment compensation. As for the young people protesting on Balfour Street, they have no one to turn to, they are not affiliated with the Likud central committee, they own no businesses, get no unemployment benefits and were thrown onto the streets. Bibi is the address for their frustration, but they have no clear demands, having never taken interest in politics, which seemed irrelevant to their lives until the virus arrived.
The demand for Bibi to resign was correct for the pre-COVID 19 period. Today, it no longer meets the needs of the changing reality. Solving this crisis will take much more than getting rid of Bibi. In any case, the sole way to get rid of him is to hold a fourth round of elections, but the public – including both government and opposition – is not ready to hear of that. In fact, there is currently no political readiness for the demand that Bibi resign, and all that remains is to hope that COVID-19 will do to him what it is doing to Trump – turn his electorate against him. The thing is, though, Bibi is not Trump. He does not deny the pandemic, he makes sure to wear a mask, to wash his hands and to socially distance. And not only that, he is also flexible enough to understand that the wind has changed direction and that he must turn the ship from neoliberalism to an Israeli New Deal, thus pulling the rug out from under the left. Bibi Version 2020 has become a kind of socialist, while continuing to call the protesters anarchists and radical leftists. He is on the economic left and the political right.
To deal with Bibi, one must present an economic and political alternative, and not remain content with the protesters’ rhythmic cries of “bribery, fraud and breach of trust.” Bibi’s days are numbered not because of these demonstrations, but because COVID-19 does not forgive – and the prosecution is breathing down his neck.
To deal with the economic crisis, one must understand that humanity will not return to the pre-pandemic period, and that the lost jobs will no longer be as they were, if at all. The forecast for Trump’s expected fall in the US marks the opening of a new era in which the economy can work for society and not for corporations. What Netanyahu is doing today is very similar to what Obama did in the 2008 crisis, when he indiscriminately poured money into the banks to save them at the expense of American citizens. Bibi also wants to save the Israeli economy in order to return it to the tycoons, and instead of asking the big companies to contribute to the national effort, he takes out billion-dollar loans in our names, exempting companies from paying taxes or returning even a small percentage of their profits made over the years.
Netanyahu’s New Deal is thus light years away from that of Franklin D. Roosevelt. It does not intend to strengthen and unite the working class, or present an ambitious plan of public infrastructure works to create employment and improve productivity. It has no intention of significantly strengthening the health care system, raising the level of education or rehabilitating the welfare system. There is no trace of distributive justice in his New Deal. Moreover, after failing to annex parts of the West Bank, Netanyahu remains without a policy for resolving the conflict with the Palestinians, either in one state or in two. Israeli society is hovering in limbo, and relations with the Palestinians depend on restraint.
It is now urgent to commence a broad public debate around economic and policy alternatives to Netanyahu’s policy. The questions before us are how to create stable and real jobs, how to move from polluting to renewable energy, and what is the future of our relations with the Palestinians as partners in an egalitarian democratic society, not as subjects of a corrupt and failed Palestinian autonomy. It is true that in the current protests there are numerous young people with a lot of energy. These youth define themselves as political and are indeed so, but their politics lacks an economic or political vision, and its narrow range runs only between “yes to Bibi” and “no to Bibi”. It is a great pity that this energy is not used to demand new economic and political priorities.