News Behind the News

Israel’s gross domestic product is in the neighborhood of $100 billion. The government’s budget eats up half. Yet the most important item on Israel’s agenda since Ariel Sharon was elected prime minister has been trying to get another $800 million in free money, on top of the billions Israel already receives in aid, reparations, charity, and other remittances.

Shalom says that without the $800 million, Israel will experience budget difficulties.

Fancy that. In an economic downturn, every family, business, and government experiences budget difficulties. But Israel’s approach is to ask the U.S. for more money, even as the U.S. is facing its own economic difficulties.

What happened to Shalom’s free-market inclinations? Did he ever have any? There is land to sell, companies to sell, subsidies to cut—we have detailed a list of revenue-generating measures over and over again, which, if implemented, would free up the economy and raise money in the short-run to meet Israel’s legitimate defense needs without having to beg the U.S. for more money.

So what does Shalom talk about? He talks about the exchange-rate band, a minuscule tax reform, and coordinating fiscal and monetary policy. This is all narishkeit (foolishness). It appears that Shalom is as much trapped in the system as was his openly-socialist predecessor, Avraham Shochat. Too bad. Shalom is missing a great opportunity to push real reform that will not come again soon.