Sunday, April 12, 2009

Netanyahu's New Governmeent - Questions

On this blog, I sometimes post articles I don't quite agree with. This is one from Daniel Doron, the founder of ISCEP. My comments about the article are shown below, in bold. For full disclosure - I voted for Likud.

Big government? Yes, but there's a reason

Apr. 11, 2009

Is Binyamin Netanyahu's government too big? Yes. Is that good? No. So why would Netanyahu, an experienced politician, create such an unwieldy beast? He and his government face two historic challenges: an economic crisis that has yet to fully unfold, and a nuclear threat from Iran.

How big is this crisis? We do not know. World-class economists had disagreed about how long it is going to be, what are its causes, and whether it is a crisis at all. Many say it'll be over by the end of this year. Similarly, we are not certain that Iran is such a huge crisis at all. It's not certain that Iran is developing nuclear weapons, it's not certain it's capable of having them, it's not certain that they plan to use them on us.

We all want a government that can face these challenges. Could Netanyahu's critics suggest a better alternative to the coalition he managed to form, considering the sanctimonious refusal by Kadima to join a wider coalition?

No, I cannot suggest a better alternative. But that does not make Netanyahu beyond criticism. We must continue to criticize all parties when they deserve it, to improve Israel's political climate to the point a truly free society is possible and feasible.

Netanyahu would probably prefer a more compact government. No one has suffered more from coalititis - the disease afflicting our body politics - than he. When previously prime minister, he had to devote most of his time to political survival, fending off his many adversaries from the Left and Right. They so exhausted him that he was unable to carry out most of the excellent reforms he had planned.

So he sacrificed ideas and decency for political purposes. Thank you for making this clear.

As finance minister, Netanyahu proved exceptionally able to push through crucial reforms when given a chance. When he enjoyed the backing of prime minister Ariel Sharon, Netanyahu exhibited not only an ability to frame and execute major reforms, but also a willingness - so rare among politicians - to pay a heavy political price to get them enacted. He succeeded in saving the country from an Argentina-like collapse, and in transforming 20 years of no growth and deep recession into five years of spectacular growth. But he paid for his boldness and determination by losing an election.

SO YES, Netanyahu's first task was to establish a (relatively) stable government that will allow him to handle the challenges facing the country with a modicum of a national consensus. This required as big and as varied a coalition as he could get. In politics, especially in our politics, there is no free lunch, so Netanyahu had to pay with a large and costly government. However, should Netanyahu - as he probably intends - manage to use this wide coalition to push through even some of the reforms he spoke about, especially in land use and education, the savings from these reforms, the bureaucratic waste they will cut and the efficiency they will generate will pay in spades for the additional costs of his big government.

So what some condemn as wastefulness may turn out to be a wise investment in facilitating basic reforms that have enormous potential returns.

IF YOU WANT to appreciate how intense is the personal and ideological animus that certain critics in politics, but especially in the media, have toward Netanyahu precisely because he is not part the cabal that dominates both our politics and our economy, precisely because his reforms are the only real challenge to the corrupt system of spoils that enrich them - just examine the maelstrom of criticism that greeted his appointment of Yuval Steinitz as finance minister.

True, it may have been better had Netanyahu found an accomplished economist to serve as finance minister. But a good finance minister needs qualities even more rare than a knowledge of economics (which Steinitz, a very capable man, can acquire in a reasonable time). Steinitz certainly has integrity, a keen intelligence, a good temper, a knack for teamwork and loyalty to his mentor, Netanyahu. Above all, in contrast to almost any economically savvy candidate for the job, and certainly any candidate with former economic or business experience, the very fact that Steinitz does not come from such a background may prove a refreshing guarantee that he is neither tainted by nor beholden to any of the vested interests that dominate the economy.

I invite our readers to list those they consider qualified and experienced candidates for finance minister, and to find one who would not come loaded with baggage and representing vested interests. A clean slate can have immense advantages.

Two word: Omer Moav.

MOREOVER, UNTIL he learns the ropes Steinitz will be helped by a prime minister who, unlike most politicians, has an excellent understanding of economics, and of how vital a healthy economy is for the survival of a country. Netanyahu also knows what must be done to assure that the economy gets well.

Steinitz will also be helped by an excellent professional team, the "treasury boys" as the enemies of reform often refer to them. Last, but certainly not least, he will enjoy the advice and backing of our exceptional Bank of Israel governor, Stanley Fischer, a top-notch economist of international fame. Steinitz will not be facing the crisis alone.

Yes, it would be great if circumstances had allowed Netanyahu to form a smaller, more efficient government based on a stronger Likud. But under the circumstances, he should be congratulated for his determination and skill in forming a government that may yet do great things, especially in economic reform.

This is the main question that I would like to ask Mr. Doron. What is this 'reform' that we're talking about? We already understand that Netanyahu's economic platform as expressed before the elections will not be implemented.

We already realize Mr. Netanyahu is not a principled free marketeer in the vein of Paul Broun, Ron Paul, or even Reagan or Thatcher. So what is this reform so precious and wonderful that we must all not just rally behind Bibi but defend him from all criticism?

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