What do Israel's social justice crusaders want? It's unclear. But it's not unreasonable to ask them to take risks as well, at least for now, and moderate their demand to breach the budget and massively increase government spending and taxation. They are seeking this despite the fact that government spending accounts for almost half our gross national product. Government spending is not especially efficient, and its cost is borne not by the rich, as social justice crusaders would like, but by a middle class already strained by the burden of high taxes. Bank of Israel Governor Stanley Fischer hinted at the danger when he asked the public not to succumb to populism. He was referring specifically to the widespread desire to overstep the budget, a demand adopted by the social justice protesters at the urging of irresponsible "experts." Even barring the worst-case scenario of a euro collapse, the European and U.S. economies are in serious danger of contracting. The Israeli economy, too, is in danger. About half our national product is oriented toward exports, so our economy may contract as soon as our customers' means become reduced. We are liable to face widespread unemployment accompanied by a sharp decline in economic activity and tax revenue. Anyone who ignores this possibility -- in particular, Histadrut Chairman Ofer Eini -- and thinks we can waste money as in the past is liable to deal a harsh blow to Israeli workers. The foremost remedy for this crisis is to increase cost-effectiveness, making Israeli exports more competitive. For instance, we can invest in more advanced equipment for industry, as opposed to shopping centers in Moscow, where Israel's tycoons are currently wasting the public's savings. We can drastically reduce the cost of production inputs: raw materials, electricity and water. We can reduce import taxes and lower the cost of doing business, including salaries, especially in public monopolies (lowering extortionist consumer prices would improve buying power, and this would more than make up for nominal wage cuts). Another thing we could do is improve competitiveness and lower brokering costs in the financial industry, especially when it comes to pensions. Workers could be induced to migrate from the bloated public sector to industry and agriculture. The huge inefficiencies of government and municipal bureaucracies -- which waste billions -- could be curtailed, along with the corrupt working conditions obtained by the Histadrut Labor Federation for workers in the ports, banks and Israel Electric Corporation. The bloated salaries that prevail in these protected monopolies come at the expense of other workers in the economy. In addition, the Economic Concentration Committee should stop treating its mission as an academic exercise requiring textbook proofs that concentration exists, when its damaging consequences are apparent all around us. We must bolster the committee's recommendations so that economic concentration and monopolies can be dismantled within a reasonable period of time. Unless the committee gets its act together and issues recommendations with teeth, reforms could take ages. Real enterprises must be separated from financial ones. In addition, we need to break down the anti-democratic financial pyramids that allow a monopolistic minority to control a chain of companies that are financed by the broad public without that public having any say as to what is done with its money. And we can also make sure that those of the Trajtenberg Committee recommendations that are most likely to improve the efficiency of our economy be implemented within a reasonable period of time. We cannot allow the naysayers, who see the best as the enemy of the good, to delay reforms until we find the perfect solution to all our problems. As for medical residents, they should be allowed to resign on an individual basis, as long as the damage is contained. In the meantime, though, they ought to repay taxpayers, many of whom don't stand a chance of earning as much as they do, for the generous subsidies that helped finance their education. Perhaps we should publish a list of doctors who endangered patients' lives in the fight over salaries and work conditions, so that we know not to entrust ourselves to their medical care. In short, protecting the Israeli economy and its workers must be our foremost commitment.
Get the Israel Hayom newsletter sent to your mailbox!
