Zionist Camp Economics 101: Out with the New, In with the Old

by GIDON BEN-ZVI February 11, 2015

Forget Hezbollah, Hamas, Abbas and Iran: the primary driver in Israel's upcoming elections is the 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 Zionist Camp smells blood. The left-center 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 the populist blather that passes for 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: 35% of the funds for less than 5% of Israel's population, while engaging in a campaign of diplomatic suicide.

Blame Israel's economic troubles on the settlements. It's an old leftist canard that delegitimizes the very real trials and tribulations of over 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 Vis a Vis West Bank settlement activity has unleashed a potent anti-Israel boycott, divestment and sanctions movement that is growing stronger by the day.

If Benjamin Netanyahu is re-elected, we are warned, Israel will inevitably find itself economically and politically isolated.

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 claim to be the heirs to 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's worth noting then that Israel's Zionist founders blamed the First World War on the failures of capitalism and embraced fashionable Socialist and Communist idea.

After Israel's independence in 1948, Socialist Zionism established a politically dominated, anti-productive, highly centralized economic system. The state's heavy-handed bureaucracies caused economic retardation and impoverishment.

Recent studies have shown that countries that are the least "business friendly" and restrict competition through artificial barriers to entry in the market are also countries that show higher level of corruption.

This grim economic landscape began to be overhauled in 2003, when Benjamin Netanyahu was appointed Israel's Finance Minister. Netanyahu initiated a series of pro-market economic reforms that Israelis are only now beginning to benefit from.

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 Hi-Tech industry is having a record 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 since it climbed out of its last recession more than a decade ago. We have had no bank bailouts, no debt crises and none of the wreckage from burst housing bubble. 

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% a decade ago to 44% today. Wages growth 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 Secretary General Hilik 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...

Gidon Ben-Zvi is an accomplished writer who left behind Hollywood starlight for Jerusalem stone. As a 'returning resident,' Gidon has vivid memories of playing hooky from Rene Cassin High School while strolling through Ammunition Hill. After serving in an IDF infantry unit for two-and-a-half years, Gidon returned to the United States, where he embarked on a twelve-year run of half-baked careers and wholly misguided educational pursuits. Today, Gidon is happily entangled to the prettiest, sweetest girl in Israel. The mildly unhinged Ben-Zvis aspire to raise a brood of children who speak English fluently - with an Israeli accent."

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