38 Days to Go – Diversions in Israel

By Sherwin Pomerantz

With 38 days to go to the opening of the UN General Assembly and the vote on Palestinian statehood our government here has now had its attention diverted to domestic issues.

Over the last three weeks there have been growing street demonstrations against the high cost of living in Israel. That includes everything from housing, to fuel, electricity prices, food prices, day care, education, and…well the list is endless. It seems now that there is not a single issue in the life of human beings here that does not have its specific group protesting about the costs related to that issue. From a small group in Tel Aviv three weeks ago the size of the demonstrators grew to over 300,000 by last Saturday night with a promise of over 500,000 this coming weekend, spread over any number of cities across the country with even some sympathizers setting up tents in the US as well.

To be sure the cost of living in Israel is extremely high as compared to other western and OECD countries. For example, even though housing prices have tanked around the world over the last two years, in Israel they have seen a steady increase of 10-20% annually. Fuel is now over $8 a gallon (to use the US reference), spare parts for cars cost 4-20 times what they do in the west, and it costs Israelis who commute on public transportation from Herzlia to Tel Aviv (about 6 miles) double what it costs someone in New York City to get from any point A to point B via subway or bus.

So the demonstrators have a point although it seems to this writer that both they and the government are missing the boat as the voices of protest grow and the government seems not to know how to handle them.

As far as the demonstrators are concerned, I support them in principle. The cost of living here has spun out of control for a whole host of reasons, some related to the move from socialism to capitalism a generation ago and others to the fact that in so many areas vendors have monopolies (e.g. there is only one cement manufacturer in the country and for any one brand of automobile, only one dealer, albeit with many branches).

But the protesters are fooling themselves if they think that the government can simply decide to create economic equality in one fell swoop without bankrupting the country. So, instead of demanding adjustments to every one of the economic sectors in need of addressing, they should really put together a plan to assist the government to address the country’s social needs over a reasonable period of time and I have faith that they can do so. After all, as many people are quick to point out, a very large majority of these (mostly) young people are intelligent, well-educated and creative types who, if they exerted as much energy in developing a plan as they have in organizing the demonstrations, they could actually come up with something worthwhile and effective.

Of course, the government does not stand blameless either. One good example is the way that the Prime Minister has responded to the uproar. Almost four weeks into the cycle he has neither met with any of these demonstrators, nor addressed the nation with his plan for dealing with the concerns they have raised. Instead he has empanelled a committee to make suggestions for reform, a committee that contains no less than 12 government ministers and a host of other parties as well. As we all know, a committee that large has almost no chance of doing anything constructive and certainly not in the short run. Concomitantly his Knesset associates pushed through a housing bill that they claim will assist in alleviating the problem, even though the protestors and many others in the country see no chance of that really doing any good unless and until the Israel Lands Authority starts releasing large tracts of land for development.

Some people are claiming that the only solution is to abandon capitalism and go back to a socialist economy, even though it is difficult to point to one example of pure socialism that has served any nation well. Where the government has failed, in the transition from the socialism of the 70s (when there was high unemployment, rampant inflation, and life, in general was not so good) to a capitalist economy, is in not providing the means for people to benefit from capitalism.

For example, one can argue that not everyone can or should be able to afford to live in the center of Tel Aviv. Rather, people should be willing to live 20, 30 or 40 miles out of town where there is more affordable housing. However, in order to make that argument the government has an obligation to build a transportation infrastructure that enables people to get from their homes to their work places in a reasonable amount of time, and this was not done. As of today there is no intra-city rapid transit network anywhere in Israel and commuter trains, which were also late in developing, only serve a limited percentage of the population.

As for housing, the main reason that housing costs have skyrocketed is because there is a shortage of housing in the country. To alleviate that shortage, the government, which owns 95% of the land, needs to release that land for building and put certain controls in place to ensure that there will be pockets of affordable housing not affected by the willingness of overseas buyers to purchase second homes in Israel at inflated prices. Similarly, as a large percentage of the protestors are students, universities should be building high rise dormitories so that students do not have to consider living in expensive central Tel Aviv if they choose to go to school in that city.

As we have seen in the last few years, it is not capitalism per se that is a bad thing, it is the greed that drives certain capitalists to deal with today without worrying about tomorrow. Couple that with the lack of serious long term planning by every government we have ever had, and one has a recipe for socioeconomic disaster.

So the attention of the government has been temporarily diverted from the most important issues that speak to our survival here, the long term relationship with our neighbors and the very real threat of a nuclear Iran. Of course, the government was not doing so well attending to those issues before the protests started so, at the end of the day, maybe it doesn’t matter anyway.

We read earlier today in the service for the 9th of Av (Tisha B’av) the verse from Isaiah 46:4 which says “Even to your old age and gray hairs I am he, I am he who will sustain you. I have made you and I will carry you; I will sustain you and I will rescue you.” Let’s hope so because we are not doing so well in dealing with these issues on our own.