The News Behind The News
May 3, 2000
Ran Cohen's Priorities
By Yossi Laster, IASPS Associate fellowIn an interview appearing in Ha'aretz on April 30, Ran Cohen, the Minister of Trade and Commerce, stated that after a year in office, it can be stated with certainty that the government's economic policy has failed since it has not "understood the needs of the economy" and has not allocated additional resources to government projects. Ran Cohen is indeed correct when he says that the government's economic policy has failed but it appears that he does not understand why.
First, it should be emphasized that in a rational country, the government does not attempt to "understand the needs of the economy" but rather should allow the economy to operate with a maximum degree of freedom and a minimum number of restrictions and interventions. No government bureaucrat, no matter how smart, can understand the needs of the economy better than market forces themselves.
The News Behind the News has quoted Ran Cohen's "pearls of wisdom" on economics many times in the past. More than any other minister in the government, and probably more than any other minister during the past decade, Ran Cohen represents the philosophy of a centralized economy, the politician's craving to control the economy and the waste of taxpayers' money on projects which are not economically viable.
Ran Cohen has so much sympathy for the residents of the development towns and the textile factory workers to whom he has channeled millions of dollars, that he has none left for the Israeli taxpayer. When all is said and done, someone has to finance his grandiose plans to "save the textile industry" or to "save the plywood industry" or to "save the steel industry", etc. (circle the correct answer).
We wish to offer the following advice to the government: A law should be passed obligating politicians who wish to serve either as the Minister of Finance or the Minister of Trade and Commerce to manage a business of any type they choose for a period of at least one year. We have no doubt that once Ran Cohen is forced to deal with the Israeli bureaucracy, the absurd tax burden, the high cost of labor, the fees and levies and all the rest of the difficulties facing Israeli businessmen, he will adopt a different attitude. Perhaps then Ran Cohen will understand the effort required for an Israeli businessman to achieve a reasonable income. Perhaps then he won't be so quick on the trigger when allocating tens of millions of dollars to projects, which are not economically worthwhile.
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