January 6, 2004

The wildest optimists would not have predicted...

Here's a little more good news.

One could describe a great many places on this planet as: "Experimented with Socialism in the heady days after WWII. Now clawing themselves out of the resulting stagnation and corruption." Conspicuous on that long list is Israel. One of the oddities of israel's history is that many of the daring young Zionists were doing exactly the opposite of their parents. (Like hippies being long-haired and unwashed just to be the opposite of their tidy suburban parents.) The Jews of Eastern Europe were very much businessmen, even if only poor Peddlers. Their offspring were Socialists. The Kibbutz was an extreme of this, replacing an intense, urban, family and religious life with a sort of secular rural commune including communal childraising...

Jerusalem
WHEN FORMER prime minister Benjamin Netanyahu took on the thankless job of finance minister last March, Israel was facing a grave economic crisis. In the sixth year of a deep recession, the country had seen its tax receipts plummet while welfare transfer payments kept growing, amounting to more than a third of the government's $70 billion budget. The budget deficit had reached a perilous 5 percent of GNP. It was feared that the government might not be able to meet the payroll of a bloated public sector that employs every third worker in Israel, or keep paying generous benefits to the more than 10 percent of the workforce that is unemployed. To guard against inflation, the Bank of Israel kept interest rates so high (9.1 percent in real terms at their peak) that the economy was choking. There were murmurs Israel might slide into an Argentinian-style crisis or a deflation like Japan's....
Those of us who are interested in Israel have spent decades wishing they could shake off the Socialism that has crippled them. (It's has got to be one of the cruel ironies of our times, that Israelis get to be reviled as money-grubbing Jews, without actually making much money.)
....The wildest optimists would not have predicted that Netanyahu could reverse this downward economic trend, and in fairly short order. Yet the economy is growing again. Netanyahu has managed to make substantial cuts in two consecutive budgets and reduce the bloated public workforce and salaries (though not enough). He has even managed to reduce unemployment benefits that discouraged lower paid Israelis from working....
I just love it. Of course, the way things have been going recently, us "wildest optimists" are mostly yawning and saying "Lordy, not another impossible victory? I don't have time to blog 'em all."

And, like most of those positive developments that seem to be happening now, there lurks in the background the sinister gray-cloaked figures of the mysterious cabal known as...

....His trump card was, no doubt, the $9 billion in American loan guarantees this summer that allowed the government of Israel to tap international markets for desperately needed funds, as they have nearly depleted local credit markets. The U.S. government astutely made the loan guarantees conditional on the enactment of basic economic reforms, tipping the political scales in favor of Netanyahu's bold moves....
Ha ha, the Bush Administration...

Posted by John Weidner at January 6, 2004 6:56 PM
Weblog by John Weidner