The Peres-Herzog plan does not propose freeing the economy, so that enterprises could flourish and entice more workers into the labor force; or the reduction of taxes so that more workers will find it beneficial to work.
Instead it proposes a series of massive and costly grab-bag of government programs that will involve large wasteful bureaucracies, increased inefficiencies and arrested economic growth.
Filed under:
reform
Shimon Peres gives us the finger
Israeli poverty can be vanquished in a year or so, Deputy Prime Minister Shimon Peres asserts.
That is if the government will adopt a Peres plan, based – believe or not – on Lyndon Johnson’s “Enlargement to Poverty Law” [sic].
It is astonishing to find the visionary Peres reviving – in collaboration with Housing Minister Isaac “Bougi” Herzog – a Sixties “War on Poverty” plan – especially since it was really a failure. It cost the American economy and its society, especially the poor, very dearly. But the plan is a bargain, we are reassured. It will cost “only” NIS 4 billion, a mere trifle, representing only half the cost of disengagement.
The plan is remarkable in admitting that “the policy of allocating government benefits did not prove itself and often the system led to the opposite result: The perpetuation of poverty and the increase in the income gap, so much so, that they caused a real affront to human dignity.”
Peres and Herzog not only admit the bankruptcy of Labor’s traditional policies that arrested growth and cost the Israeli taxpayer billions, but that former finance minister Binyamin Netanyahu’s cuts in the profligate and corrupt benefits system were justified. You would think that this would make Peres retract his accusation that Netanyahu practiced a malignant “piggish capitalism.” Dream on.
On first reading, some elements of the Peres-Herzog plan sound good. “The objective of our plan” they declare, is ”...to reduce poverty and the social gaps in Israel… through the increase in the rate of participation in the labor force, the reduction of income gaps, the encouragement of employers to absorb workers, and helping in locate employment opportunities.”
Even if you question the absurd, statistically manipulated, “poverty line,” there is no questioning the fact that hundreds of thousand of working families cannot make ends meet in Israel. Poverty is especially common among two groups, the ultra-Orthodox, who prefer to have their males study Torah rather than work, and the Arabs, who prefer that their women not leave the home to work.
There are also many Israelis, especially in the aforementioned sectors, who find it more lucrative to receive unemployment benefits that exceed the minimum wage and then earn extra cash on the gray market. All these may be encouraged to join the labor force by a combination of a carrot (reduced taxes on work) and a stick (making benefits harder to get by able-bodied workers).
The problem is that when it comes to specific measures. The Peres-Herzog plan does not propose freeing the economy, so that enterprises could flourish and entice more workers into the labor force; or the reduction of taxes so that more workers will find it beneficial to work. Instead it proposes a series of massive and costly grab-bag of government programs that will involve large wasteful bureaucracies, increased inefficiencies and arrested economic growth.
The plan consists mostly of the usual government handouts, tax breaks for employers hiring additional workers. The initiators concede that these represent a huge opportunity for cheating, so they framed a law with 21 definitions of who should be considered an additional worker, and four additional pages of more elaborate definitions of the conditions for employers’ eligibility, and what punishments they will get if they try to cheat by, for example, laying off workers in order to hire new workers to make the employer eligible for a tax break – all a feast, really for lawyers and lobbyists.
Also included are “meaningful” assistance for the disabled; increased old-age benefits; new instruments (whatever this means) for raising the income of low salaried workers; improved housing benefits and an enforced saving scheme that will enable every child to get a university education (the new fetish; as if without a university degree no one can find useful employment).
The one exception to this “more-handouts plan” is a proposed “revolution” in the field of vocational training. Here too, however, the plan relies on more, easily corrupted, government handouts.
Peres and Herzog admit that “the state’s vocational training systems have not proven themselves, and they mostly do not fit the needs of the time and the economy.” What a delicate understatement, given that hundreds of millions, if not billions, have been squandered on these schemes. So they propose to gradually hand over the task to “private independent bodies.”
But to assure that these bodies will do a good job they will be directed by a government-appointed “experts committee,” and obey stringent rules and regulations that will be monitored by government bureaucrats.
As happens whenever government funds projects, such as government housing, bodies formed as “private and independent” contractors will most probably be associated with Likud and Labor operatives. It will be mostly such bodies that will win the tenders and will be able to navigate the bureaucratic shoals. The “Committee of Experts” designed to direct these bodies will be stuffed with “public figures” subservient to politicians, and will be about as effective as the “public directors” that monitor the banks’ activities.
In short, the Peres-Herzog plan will make NIS 4 billion more available to the politicians’ for pork-barrel spending. Better still, it will leave enough poverty behind so that for the next election a new anti-poverty plan will assist in the election of our noble-hearted political protectors.
Log in or Register
Labor’s ‘war on poverty’ rerun
The Jerusalem Post
26 Oct ’05
The Peres-Herzog plan does not propose freeing the economy, so that enterprises could flourish and entice more workers into the labor force; or the reduction of taxes so that more workers will find it beneficial to work.
Instead it proposes a series of massive and costly grab-bag of government programs that will involve large wasteful bureaucracies, increased inefficiencies and arrested economic growth.
Filed under:
reform
Shimon Peres gives us the finger
Israeli poverty can be vanquished in a year or so, Deputy Prime Minister Shimon Peres asserts.
That is if the government will adopt a Peres plan, based – believe or not – on Lyndon Johnson’s “Enlargement to Poverty Law” [sic].
It is astonishing to find the visionary Peres reviving – in collaboration with Housing Minister Isaac “Bougi” Herzog – a Sixties “War on Poverty” plan – especially since it was really a failure. It cost the American economy and its society, especially the poor, very dearly. But the plan is a bargain, we are reassured. It will cost “only” NIS 4 billion, a mere trifle, representing only half the cost of disengagement.
The plan is remarkable in admitting that “the policy of allocating government benefits did not prove itself and often the system led to the opposite result: The perpetuation of poverty and the increase in the income gap, so much so, that they caused a real affront to human dignity.”
Peres and Herzog not only admit the bankruptcy of Labor’s traditional policies that arrested growth and cost the Israeli taxpayer billions, but that former finance minister Binyamin Netanyahu’s cuts in the profligate and corrupt benefits system were justified. You would think that this would make Peres retract his accusation that Netanyahu practiced a malignant “piggish capitalism.” Dream on.
On first reading, some elements of the Peres-Herzog plan sound good. “The objective of our plan” they declare, is ”...to reduce poverty and the social gaps in Israel… through the increase in the rate of participation in the labor force, the reduction of income gaps, the encouragement of employers to absorb workers, and helping in locate employment opportunities.”
Even if you question the absurd, statistically manipulated, “poverty line,” there is no questioning the fact that hundreds of thousand of working families cannot make ends meet in Israel. Poverty is especially common among two groups, the ultra-Orthodox, who prefer to have their males study Torah rather than work, and the Arabs, who prefer that their women not leave the home to work.
There are also many Israelis, especially in the aforementioned sectors, who find it more lucrative to receive unemployment benefits that exceed the minimum wage and then earn extra cash on the gray market. All these may be encouraged to join the labor force by a combination of a carrot (reduced taxes on work) and a stick (making benefits harder to get by able-bodied workers).
The problem is that when it comes to specific measures. The Peres-Herzog plan does not propose freeing the economy, so that enterprises could flourish and entice more workers into the labor force; or the reduction of taxes so that more workers will find it beneficial to work. Instead it proposes a series of massive and costly grab-bag of government programs that will involve large wasteful bureaucracies, increased inefficiencies and arrested economic growth.
The plan consists mostly of the usual government handouts, tax breaks for employers hiring additional workers. The initiators concede that these represent a huge opportunity for cheating, so they framed a law with 21 definitions of who should be considered an additional worker, and four additional pages of more elaborate definitions of the conditions for employers’ eligibility, and what punishments they will get if they try to cheat by, for example, laying off workers in order to hire new workers to make the employer eligible for a tax break – all a feast, really for lawyers and lobbyists.
Also included are “meaningful” assistance for the disabled; increased old-age benefits; new instruments (whatever this means) for raising the income of low salaried workers; improved housing benefits and an enforced saving scheme that will enable every child to get a university education (the new fetish; as if without a university degree no one can find useful employment).
The one exception to this “more-handouts plan” is a proposed “revolution” in the field of vocational training. Here too, however, the plan relies on more, easily corrupted, government handouts.
Peres and Herzog admit that “the state’s vocational training systems have not proven themselves, and they mostly do not fit the needs of the time and the economy.” What a delicate understatement, given that hundreds of millions, if not billions, have been squandered on these schemes. So they propose to gradually hand over the task to “private independent bodies.”
But to assure that these bodies will do a good job they will be directed by a government-appointed “experts committee,” and obey stringent rules and regulations that will be monitored by government bureaucrats.
As happens whenever government funds projects, such as government housing, bodies formed as “private and independent” contractors will most probably be associated with Likud and Labor operatives. It will be mostly such bodies that will win the tenders and will be able to navigate the bureaucratic shoals. The “Committee of Experts” designed to direct these bodies will be stuffed with “public figures” subservient to politicians, and will be about as effective as the “public directors” that monitor the banks’ activities.
In short, the Peres-Herzog plan will make NIS 4 billion more available to the politicians’ for pork-barrel spending. Better still, it will leave enough poverty behind so that for the next election a new anti-poverty plan will assist in the election of our noble-hearted political protectors.
More recent commentary
The New Republic
19 May ’11
Economic Miracle
A Middle East peace strategy that could actually work.
The Jerusalem Post
15 Mar ’11
The government-tycoons-media triangle
Israel needs to slash its state budget by as much as possible if it wants a chance at fighting waste and corruption.
The Jerusalem Post
9 Mar ’11
Welfare and rebellion: The economic factor in the Arab uprisings
Too little attention has been paid to how Egypt’s socialist past and welfare-state present shaped the current rebellion.
The Jerusalem Post
7 Feb ’11
Is all quiet on the economic front?
The Herzliya Conference has become an important international event, but one central issue is absent: Israel’s debilitating economic concentration.
The Jerusalem Post
22 Jan ’11
Teaching an elephant to dance
It’s highly unlikely that government can ever learn to make long-term plans and execute them efficiently.
The Jerusalem Post
23 Dec ’10
Hellenization and Enlightenment: Post-Hanukka ruminations
How can one dare compare narrow-minded religion with the all-embracing faith of universality and equality that is socialism?
The Jerusalem Post
1 Dec ’10
Would Milton Friedman have approved?
Many of the social and economic troubles we are experiencing are due to the public’s lack of understanding of the need for economic literacy.
The Jerusalem Post
17 Oct ’10
Perverting public discourse
The PM’s courageous decision to tackle economic concentration was misrepresented by several of our media publications—owned of course by tycoons.
The Wall Street Journal
8 Oct ’10
Breaking Israel’s monopolies
Economic concentration hurts the country’s viability and the chances for peace.
The Jerusalem Post
4 Oct ’10
Israel’s progress undermined
A damaging ethos of ‘welfarism’ and distributive politics has come to dominate not only academia but our cultural, military and even our business elites.
The Jerusalem Post
19 Aug ’10
Unable to decide
The reformers must know the importance of the reform’s success both for Israel and for their careers, and what damage they will incur if it fails.
The Jerusalem Post
13 Jul ’10
Elana Kagan, terrorism and the law
Kagan’s admiration for Justice Aharon Barak’s philosophy may have revealed her own predilection for radical judicial activism.
The Jerusalem Post
30 May ’10
Yes, break them up
We must dismantle the oligarch-owned monopolies that impoverish the Israeli consumer and choke our economy.
The Wall Street Journal
18 May ’10
Land of silicon and money
The OECD’s invitation to Israel is a “seal of approval” but the country still needs more reforms.
The Jerusalem Post
10 Feb ’10
The surprise of it all
The world’s astonishment at Israel’s response to the Haiti disaster is insulting. What we saw there was Israel’s true face.
The Jerusalem Post
10 Jan ’10
Hi-tech prospects and pitfalls
Individual initiative and freedom are essential for creativity—in hi-tech as in all other spheres.
The Jerusalem Post
14 Oct ’09
A woman who knew her worth
As far as Rose Friedman was concerned, public kudos did not matter that much. She persisted in being a rose, no matter what.
The Jerusalem Post
22 Sep ’09
Movies in Nablus, dramas in Bethlehem
Lasting peace must grow from the bottom up, from an “economic peace process” that proves what advantages peace has to offer on a daily basis. It cannot come from signing peace agreements with radical and corrupt entities propped up by corrupting Western handouts.
The Jerusalem Post
15 Aug ’09
Israel’s ‘scrambled’ economic system
A courageous recent film has exposes the strong connection between Israeli oligarchs and bureaucrats. Unfortunately however the film’s simplistic pseudo-Marxist treatment is more misleading than revealing.
The Jerusalem Post
24 May ’09
The economy: look to the future
Netanyahu paid heavily to pass a budget in time; his “partners”’ bargaining tactics, bordering on blackmail, reflect poorly on our politics.
The Jerusalem Post
4 May ’09
Reform: prospects and pitfalls
Binyamin Netanyahu’s recent economic plan has great promise but faces obstacles—such as the media and the Histadrut—that may undermine its success.
The Jerusalem Post
11 Apr ’09
Big government? Yes, but there’s a reason
Is Binyamin Netanyahu’s government too big? Yes. So why would Netanyahu create such an unwieldy beast?
The Jerusalem Post
30 Mar ’09
To bail or not to bail
Should the government bail out those of our tycoons who cannot redeem NIS 100 billion worth of bonds?
The Wall Street Journal
12 Mar ’09
Mideast peace can start with economic growth
Billions of dollars in foreign aid to the Palestinians has resulted in war not peace. There’s a better way.
The Jerusalem Post
22 Feb ’09
Warning cries from Herzliya
The government is dysfunctional. The question is why—and how to mend it.
The Jerusalem Post
2 Feb ’09
A lesser economic evil
All government deficit spending is bad. But sometimes deficits are unavoidable. And some deficits are better then others.
The Jerusalem Post
22 Dec ’08
Spinners and cheaters
Why not exploit the crisis to destroy what little freedom Netanyahu’s reforms brought to the economy? Why care if the country will lose its only hope of deliverance from the economic retardation caused by our statist heritage?
The Jerusalem Post
3 Dec ’08
Precipitating the next collapse
Focusing on a putative pension crisis distracts our attention from the real serious crisis that a worldwide recession is bound to create here.
The Jerusalem Post
22 Oct ’08
The panic-mongers’ one-note chorus
The country, the pundits conclude, must return to the good old days of “social democracy.”
The Jerusalem Post
15 Jul ’08
The banks are bamboozling us again
In the name of stability the comptroller has ignored many of the banks’ offenses.
The Jerusalem Post
29 Apr ’08
An Irish-style banana republic
It must be either naiveté or cynicism that allows “Israel 2028” to recommend a reform that will make government a larger and a more efficient instrument for economic growth.
The New York Sun
29 Apr ’08
Israel still doesn’t get economy
Israel’s elites—especially the chattering classes in the press and the academy—are hostile to capitalism because our universities’ social sciences and liberal arts departments are dominated by post-modernist and neo-Marxist professors.
Ideas matter. Hostility to capitalism exacts a great price from the Israeli economy and from its hapless workers.
inFocus
2 Apr ’08
US charity to Israel reconsidered
Jewish institutional efforts must now undergo a period of reform and greater accountability. Some charitable efforts should be privatized. Individuals or groups of donors must take personal responsibility for specific projects, to ensure that funds are dispensed in a responsible and cost effective manner.
The Wall Street Journal
8 Mar ’08
Israel’s no-win strategy
Israeli politicians are preoccupied with political machinations designed to buy support from powerful interest groups by distributing government largesse. This causes not only the factionalization of politics and growing corruption, but consumes time and energy that leadership should use to address life and death issues.
The Jerusalem Post
20 Feb ’08
Dangerous infatuation
Government can no more control powerful economic forces than it can the rise and fall of tides. To effectively fulfill its nightwatchman role—to protect us from internal and external violence and to enforce contracts—government must be kept limited.
The Jerusalem Post
22 Jan ’08
What’s ‘public’ about their broadcasting?
Our “public channel,” funded by a compulsive tax, does not need to be pluralistic or even-handed.
Like other public institutions that lack well-defined ownership, Channel 1 has consequently been taken over by bureaucrats and by undemocratic workers’ unions.
The Jerusalem Post
21 Nov ’07
A year without Milton Friedman
This man did more good for humanity than any other.
The Jerusalem Post
17 Oct ’07
Getting beyond the teachers’ strike
As long as education remains a government monopoly, it is bound to function like all other government monopolies, where union bosses fill the vacuum that lack of defined ownership creates, and monopoly power allows them to blackmail the public.
The Jerusalem Post
19 Sep ’07
A healthy dose of skepticism
In the wake of the Second Lebanon War, there is hope that the phenomenal performance of the economy will finally make Israelis realize the crucial role it plays in their lives.
The Jerusalem Post
14 Aug ’07
How to grow Israeli hi-tech
At the recent Merage Foundation conference to help Israel’s hi-tech sector grow, calls were heard for more government “direction”. This despite sixty years of massive government intervention and “development efforts” that have led mostly to massive failures and waste.