The Israel Center
for Social & Economic Progress
an independent pro-market
public policy think tank since 1984
Winner of the 2005 Award for Institutional Excellence and the 2006 Templeton Award for Student Outreach
Log in or Register
The Jerusalem Post20 Jul ’11
Although MKs appear concerned over rising costs, it was they who allowed this injustice to occur in the first place.
public policy • reform
As the “Cottage” revolution marches on, suddenly everyone is for protecting the consumer – especially those who for decades helped rob consumers by sanctioning monopolies once controlled by the government and Histadrut, and later mostly by our tycoons.
Our MKs were the first to raise the cry about the injustice committed against consumers, especially after 100,000 citizens voted “like” in the cottage cheese Facebook boycott page.
They suddenly learned how to pay attention to voters and not only to lobbyists.
Parliamentarians would like us to forget who created the system that plunders the public. They levy exorbitant taxes, especially regressive taxes on consumption, so that they can have enough funds to buy votes by handing out goodies to vested interests.
They are also the ones who allocate the monopoly privileges that add a hidden 30-percent tax on everybody by inflating the prices of all consumer goods and services.
Some of them would like us to forget that they habitually sneak small paragraphs into most economic laws designed to restrain competition. Such underhanded practices enabled about 10 car importers to amass NIS 500 million each by permitting them to control garage services and charge inflated prices for cars, spare parts and repairs. Our MKs allow cement, building materials and contractors’ monopolies to inflate housing prices so that it takes 14 years of salary to buy a small apartment.
Now they are shedding crocodile tears about the terrible burden they helped impose on hundreds of thousands of families.
Soon they will have a chance to prove how deeply they care for the consumer – to show whether they’ve really internalized the fact that the long-suffering consumers may threaten their political careers when they learn not only to boycott cottage cheese, but also to politically punish those who jeopardize their livelihood.
KNESSET MEMBERS will have to help disassemble the structures of economic and political concentration and reverse the dangerous abuses they have created that threaten democracy. The control by very few people over most large firms in Israel, the fact that six people use a third of all credit and control the media, is cause not only for high prices, but also for lack of competition, low productivity, low salaries and distorting public debate. It is responsible for the high rates of credit for borrowers without “access” (some banks make as much as 30% on the credit they extend to building projects), and for the far more serious mis-allocation of credit. Instead of investing in productive enterprises, instead of financing small and new businesses, most credit in Israel is allocated to tycoons who invest it in risky mega-projects, especially in real estate and mostly abroad. In the meantime, the Negev and the Galilee languish because they are credit-starved.
Yet we already hear voices among our MKs trying to protect the tycoons and prevent serious steps against concentration by trivializing the problem.
They must be exposed if they attempt to undermine a reform that will be one of the most important in Israel’s history.
Next to our politicians, the Histadrut labor federation is most responsible for the dismal lot of the Israeli consumer.
The Histadrut always protected the many monopolies and cartels it owned, and their associated unions, at the expense of consumers and lower-paid workers. It politicized the workplace, forcing Israeli workers to suffer under the tyranny of corrupt labor bosses, to waste their time on politicking rather than on increasing productivity. This is a major reason the talented Israeli worker produces a bare twothirds of what US workers produce, and why he is paid such a measly salary. The Histadrut’s apparatchiks make careers by fomenting labor strife and diminishing productivity, thereby harming the worker and the economy. Offer Eini, the current labor chief, is a partner of the industrialists and tycoons in exploiting the consumer. He recently objected to reducing the high cost of gasoline (almost $10 a gallon) because he feared that the loss of excessive profits would force the tycoons to cut the high wages paid to oil industry workers.
The Manufacturers Association under Shraga Brosh, Eini’s buddy, pays little attention to increasing productivity through investment in industry because it is totally preoccupied with protecting monopolies. It apparently pays better to work on the “line” to Jerusalem (for access to government favor) than on production lines.
Let us also not forget two MKs whose prescription for helping consumers is to return to the good old days of (corrupt) Mapai Socialism. Shelly Yacimovich and Zehava Gal-On are trying to jump on the cottage revolt bandwagon and steer it forward to a failed past.
But the cake must go to the two top executives of the most rapacious food conglomerates – to Zehavit Cohen of Apax and Tnuva, and to Ofra Strauss of Strauss Inc. They and their role model, Nochi Dankner, are among those most responsible for the inflated costs of consumer items. Yet they, too, had something to say about how others may ease the consumers’ plight.
Luckily we can rest assured that Izhak Alrov, who initiated the cottage boycott, and his associates are not only honest and upright, but also very smart.
The trust the public has in them will prevent all those who attempt to co-opt their revolution from succeeding. We may therefore hope, however cautiously, that this revolution will bring about a sea change not only in our economic system, but also in our political life.
Call it accountability.
The Jerusalem Post30 Jun ’15
Israel’s last elections proved how right David Ben-Gurion was when he said that, in Israel, whoever does not believe in miracles is not a realist.
PJ Media20 Jun ’15
The security challenges facing Israel obscure other deep concerns about the viability of Israel’s economic system.
The Jerusalem Post7 Jun ’14
Unless the laggard Israeli economy is reformed soon, its problems—including its morally debilitating corruption—may threaten its future.
Israel Hayom15 May ’14
What does it say about Israeli society and the system of government when a prime minister is convicted of taking bribes?
Israel Hayom23 Feb ’14
What kind of education should it offer and at what cost?
The Jerusalem Post9 Jan ’14
The productivity of Israeli workers is only two-thirds that of Americans, and their salaries are much lower.
The Jerusalem Post11 Jul ’13
As he completes an exceptionally difficult 8-year tour of duty during a worldwide financial crisis, Stanley Fischer has achieved a unique status.
The Weekly Standard7 Jun ’13
When Israel finally discovered a bonanza of natural gas about five years ago everyone was happy. But then fierce arguments broke out—and rightly so.
The Weekly Standard22 Apr ’13
The economic future of Israel now rests in the hands Netanyahu, Lapid and Bennet. will they succeed in fulfilling the most difficult and complex mission of liberating Israel’s economy?
Israel Hayom2 Jan ’13
The Israeli government could eradicate poverty by breaking the monopolies and spurring competition.
The Jerusalem Post7 Dec ’12
Our socialist and statist heritage bred our inefficient system. But foreign aid and remittances were serious enablers. The struggle against political and economic concentration could finally permit Israelis to overcome this destructive heritage.
Israel Hayom8 Nov ’12
The time to prepare the reforms is now, so that after the Israeli elections, the prime minister can immediately devote his time to moving them forward.
The Financial Times21 Jun ’12
Israel Hayom6 Jun ’12
To grapple with the impending crisis, Israel’s government must improve the nation’s competitiveness.
The Jerusalem Post7 May ’12
The Wall Street Journal3 May ’12
Reform-minded Prime Minister Benjamin Netanyahu is stymied by bureaucrats and monopoly tycoons.
Middle East Quarterly30 Mar ’12
As the high hopes for a brave new Middle East fade rapidly, Western policymakers must recognize that promoting market economics and its inevitable cultural changes are far more critical to the region’s well-being than encouraging free elections or resolving the Arab-Israeli conflict.
The Jerusalem Post17 Feb ’12
The choice is between an efficient, growth-inducing market economy or a welfare state, meaning a huge government that actually harms the poor and inhibits prosperity.
The Jerusalem Post25 Oct ’11
Aversion toward the rich has had strong roots in Zionism since its early leaders embraced Marxist practices.
Is capitalism in crisis? Of course.
The Jerusalem Post10 Aug ’11
The tent-dwellers’ revolt calls for the enforcement of ‘the will of the people’ (like all autocrats). It refuses to rely on Democracy.
The Jerusalem Post9 Aug ’11
David Lewis, the exceptional entrepreneur and philanthropist, and head of the Isrotel Group dies at 87
The Jerusalem Post28 Jun ’11
Who is to blame for the shameful situation in which millions of Israeli workers – who earn about half what American workers earn – have to pay double for goods?
The New Republic19 May ’11
A Middle East peace strategy that could actually work.
The Jerusalem Post15 Mar ’11
Israel needs to slash its state budget by as much as possible if it wants a chance at fighting waste and corruption.
The Jerusalem Post9 Mar ’11
Too little attention has been paid to how Egypt’s socialist past and welfare-state present shaped the current rebellion.
The Jerusalem Post7 Feb ’11
The Herzliya Conference has become an important international event, but one central issue is absent: Israel’s debilitating economic concentration.
The Jerusalem Post22 Jan ’11
It’s highly unlikely that government can ever learn to make long-term plans and execute them efficiently.
The Jerusalem Post23 Dec ’10
How can one dare compare narrow-minded religion with the all-embracing faith of universality and equality that is socialism?
The Jerusalem Post1 Dec ’10
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 Post17 Oct ’10
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 Journal8 Oct ’10
Economic concentration hurts the country’s viability and the chances for peace.
The Jerusalem Post4 Oct ’10
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 Post19 Aug ’10
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 Post13 Jul ’10
Kagan’s admiration for Justice Aharon Barak’s philosophy may have revealed her own predilection for radical judicial activism.
The Jerusalem Post30 May ’10
We must dismantle the oligarch-owned monopolies that impoverish the Israeli consumer and choke our economy.
The Wall Street Journal18 May ’10
The OECD’s invitation to Israel is a “seal of approval” but the country still needs more reforms.
The Jerusalem Post10 Feb ’10
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 Post10 Jan ’10
Individual initiative and freedom are essential for creativity—in hi-tech as in all other spheres.
The Jerusalem Post14 Oct ’09
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 Post22 Sep ’09
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.
Recognized by the IRS as a charitable organization pursuant to Section 501(c)(3) of the Internal Revenue Code.
Tax ID # 13-3129249
Copyright © 2001-2018
The Israel Center for Social & Economic Progress
“Where there is no bread,
there is no Torah.”
Pirkei Avot (Ethics of the Fathers)
Contributions made out to Friends of ICSEP can be mailed to:
Fox Associates, 100 Front St., West Conshohocken, PA 19428, USA