A guest post by Dr. Harold Goldmeier
An
old saying among economists defines a recession
when you’re out of work. A depression
is when I’m out of work. Economic
downturn is a euphemism for intolerably high numbers of unemployed workers.
Some
argue tightening the grip on spending coupled with government budget cuts turn
things around. Other economists push economic
stimulus packages. Governments increase spending, lower interest rates, and
flood the economy with cash spurring consumers to spend and corporations create
new jobs. Paraphrasing economist, Diane Swonk, never underestimate a consumer
with money in his pocket.
Greece,
Ireland, and Spain, among others, employ austerity measures, since the 2007
worldwide economic meltdown. Budgets
move towards balance, but unemployment still grows at 12% in the Euro Zone.
The
US tinkers with both proposals investing billions of dollars in private
corporations stemming growing unemployment. Companies too big to fail including
banks, AIG, GM, and Chrysler pulled themselves back from the abyss. Congress
cut budgets for medical and social programs driving more Americans homelessness
and more children living in poverty.
In
Israel GDP growth exceeds 3.5% and unemployment is down to 6%, but there are
worrisome signs. The economy is plagued
by low productivity and relentless underemployment of over qualified workers. Government
cut funding for social services and subsidies to families with children; medical
care, education, and affordable housing programs stagnate to reduce a
reportedly huge budget deficit that dissipated in one year rather than the
anticipated three years.
The
Organization for Economic Cooperation and Development’s 2013 Economic Survey on
Israel reports that more than 20% of Israelis live below the poverty line with
society bordering on the dissilient. The
vast working poor struggle to survive the disparity between income and
purchasing power despite the exponential growth in corporate executive incomes
and company profits. The Prime Minister instituted his own economic stimulus
program realizing budgets cuts by novitiate Ministers will hurt the public and
his foreign policy successes.
Prime
Minister Netanyahu was Minister of Finance from 2003 to 2005 when Israel was in
its worst economic crisis. His strident critic and nemesis, Haaretz, concedes, “He succeeded beyond
all expectations. His decisiveness, courage and rectitude in pursuing unpopular
but important policies succeeded in stabilizing Israel’s economy.” His
2011-2013 plan is of utter hardihood.
Netanyahu
and his family are way over budget on their spending per the government
allowance. The household expenditures for three family residences are one
million shekels over government budget for housekeeping, decorating,
landscaping, furniture, and clothing. The plan is put to work an army of maids,
servants, house painters, designers, security guards, and gardeners employing
local talent. Put furniture makers to work, assure jobs for salespeople,
seamstresses, and others buying made in Israel goods. The Netanyahu $22,000
water bill probably creates two or three more jobs in the water authority.
The
$127,000 special sleeping cabin built for flights overseas put machinists and
carpenters to work in the Israel aircraft industry. Mrs. Netanyahu helps stimulate the economy employing
hairdressers and beauticians who travel with her. An entourage of 18 people by
one account on a recent trip to China put car drivers, security personnel,
mechanics, and car washers and cleaners, to work who might otherwise be sitting
at home. Their telephone bills of more than NIS26,000 directly went to local
companies, so they can hire more Israelis. One can only imagine the number of
jobs the Netanyahu’s create in the scented candle business, ice cream, and
flower arrangements. Who makes less money than maids, laundry mistresses, and
food servers? The Netanyahu’s smartly
target these industries spending millions of shekels, so these folks can pull
themselves up by their own bootstraps.
Shame
on critics charging Mr. and Mrs. Netanyahu are solipsists equating them to French
monarchs living in splendor lavishing themselves in the finest things in
life. Former prime ministers lived
intemerately modest lifestyles. Critics are not smart in finance like
Netanyahu. He knows government must
prime the pump to stimulate growth.
International
newspapers and Internet web sites including Yedioth
Ahronoth, Maariv, Haaretz, The Jerusalem Post, The Guardian, The Los Angeles
Times, mock Netanyahu. Huffington Post, Arutz Sheva, Fox News,
Philly.com, and National Post commit space amid the rush of news to castigate
Netanyahu for his “capricious, hedonistic lifestyle.” They underestimate
Netanyahu, as always.
He
sacrifices his own reputation for an economic stimulus plan that will forestall
unemployment numbers creeping up, and short-circuit social protests. Even I
sometimes wonder, like Mark Twain, “whether the world is being run by smart
people who are putting us on or by imbeciles who really mean it.”
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