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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.
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