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Friday, May 05, 2006

Vote early and vote often

After shaking off our Yom Ha'atzmaut hang overs, we can get back to business. After watching yesterday's swearing in of the new Kadima led government, I can't help but feel even more confident in my prediction that I will be voting for the 2nd time within 6 months to a year. Give or take 6 months. Kadimg is coming into the government with a coolition of only 67 mandates (seats), with 2 members of their own Kadima party abstaining from voting in the first of what should be many "rebellions". That means that there are 67 members of the coalition, but only 65 of those members voted the coalition into government. There has also been talks of a split coming within the Labor, with many MPs mad at Peretz that they were sacrficed in order for him to get the big Portfolio. Of course, the fact that Peretz got Defense Minister is a laugh in and of itself. I can hear the headlines tomorrow: "Peretz sells tanks for bread. Guns for butter deal tomorrow." "Peretz threatens a General Army strike if budget doesn't pass." Wouldn't surprise me at all, but I'm getting ahead of myself here. Let's take a look at the government that was formed.

Kadima went into this coolition with Sha'as, Gimlaim, and Labor. For a few days, Meretz was rumored to be in negotiations, but Olmert wisely decided against it. This government is supposed to be lauded as the centrist government. That truly remains to be seen. Sha'as is right wing. Labor is left, and G-d only knows where the Gimlaim stand on issues other than the retirees. With only 67 mandates, this government really isn't looking too strong. On top of that, Olmert may very well be seeing Netanyahu as the head of the opposition and will have to see him everyday. This is not a favorable prospect for Olmert. There has been rumors of joining a couple of parties together with Yisroel Beitanu in order to have a Lieberman led opposition. Also, not such a great prospect for Olmert. This is also a government of socialist minded parties, with a Kadima made up of former Likudnicks, which translates into capitalist minded people who don't want to see the current economy stutter stop or move backwards. We're not completely sure what's been promised to these three supporting parties, but it's been estimated in an additional 3+ billion shekels to the soon to be approved budget. Basically, these 3 parties would love to break apart every economic move made by Bibi over the last 4 years. Sha'as wants, of course, all child subsidies put back to where they were. The Gimlaim wants more money and benefits for retirees. Labor wants privitization to stop, and they want minimum wage to be raised to $1,000 a month. (The ridiculousness starts at the fact that the dollar changes just about every day. Some-times going up, and some-times going down. This would mean our minimum wage would change every-day. Some-times for the better, and some-times for the worst. I guess Peretz wasn't really thinking about that when he made this declaration.) These desires would cost, right off the bat, tax payers over 10 billion shekels a year. Of course, the government that has made speeches about helping the poor just announced a 7% increase in the price of bread (Source: Maariv). But, I digress. The new Finance Minister, of course, won't let all of these plans come into fruition. This is the same man who was largely responsible for ending El-Al's monopoly over the non-stop New York to Tel-Aiv line and creating competition between them and IsraAir. So, I have confidence in him.

But, Olmert has made monetary promises to these groups, and we are already seeing their negative effects on his own party. One lady MP from Kadima, #6 on the list so not a nobody, abstained from voting in yesterday's government because she feels that not enough people and minorities are being represented in this government, and she's absolutely right. Other members of Kadima are upset over Olmert's choice of Peretz for Defense Minister. They have every right to be. Olmert has stated that he is "tired of winning" the war against terrorism, and picking Peretz for Defense Minister illustrates this point. Peretz has no security experience, and he has no relevent Army experience in order to carry out the position. Even his own party members, the Labor of the past, have spoken out against the choice. It blatantly shows Olmert's general desire for retreat with no concern for the security matters of his own country. Either that, or he is counting on his top brass Army Generals to get the green light to make their own decisions about security in light of Peretz's lack of expertise. Having no central leadership and no-one in the government to answer to or ask for advice is not the best case scenario, to put it mildly.

The last item is considering whether Olmert honestly thinks that this coalition will be all he needs in order to pass his "Convergence" plan, and evacuation over 60,000 people from their homes. Sha'as will vote against it. Labor will vote for it, and, again, G-d only knows where the Gimlaim stand on the issue. I can go through what every other party will do, but, needless to say, this is not the the optimum government for Olmert to get much of what he wants done.

What will get done? With the current Finance Minister in place, the government will reinstate some of the subsidy packages discarded under Bibi. They also plan to "experiment" with a minimum wage increase. However, Head of the Bank, Stanley Fisher has already stated in subtle hints and threats that neither he or the economy will suffer a minimum wage increase. Other than that, the economy will, most likely, continue to grow and thrive, with the eventual and inevitable process of closing the social gaps.
With a civilian, with no security background, heading the Defense Ministry, I expect to see Peretz not last very long. Unlike having a former Ramatkal or high ranking officer, with the relevent military background, Peretz will face extensive critisicm every time he makes a wrong move. And, unlike with the aforementioned person in the position, it is criticism that will be taken seriously since it will be coming from the top military brass. Peretz will come under heavy fire. Expect that shortly after he makes his first defense related decision. Also expect to see members of the top brass and, perhaps, Dan Halutz himself threaten to resign if Peretz tries to cut the Defense Budget even further, as he has threatened.
As for Olmert's "Convergence" plan. As of now, there is no realistic possibility that this will get done. At least, not with the current government. Happy elections!!

13 Comments:

At 4:42 PM, Blogger menachem said...

minimum wage is currently 47.5% of the average israeli wage. this has to be adjusted yearly. why would it be any more difficult to link it to the dollar? there's plenty of really good reasons to notraise minimum wage to 1000$, but this isn't it.

better reasons would be countrywide layoffs, a rise in the cost of services (as the companies that are now paying more in wages raise prices to compensate, thus negating any benefit to the poor), and gradual exportation of all those outsourced American jobs to places like India or Thailand.

also, shas is not right wing. they are a-wing, and vote without reservation with whichever side promises more money (see Oslo accords).

 
At 7:51 AM, Blogger Ezzie said...

Very thorough post, with only the same points as Menachem to make. I'd wait a week or two on a no-confidence vote, after things are really screwy, but I see they're not...

 
At 7:52 AM, Blogger Ezzie said...

[waiting]

 
At 9:55 PM, Blogger Avi Green said...

Whether Olmert's government will fall is something we can all agree upon. He raised the price of bread loaves just a day afterwards. But if the Israeli right is to rebuild itself, that's why they're going to have to start confronting what it was that caused the damage in the first place. And that's exactly what I did on my blog: the National Union. With such below rock-bottom ads as they put out, that totally left the residents of Ashkelon, is it any wonder that so many people were alienated? The NU, as I've come to realize, is a horrible party, and if they're not told to look at themselves in the mirror, they'll only end up ruining us.

 
At 1:25 AM, Blogger shlemazl said...

Great blog. I'll keep following you guys.

BTW, minimal wage is a bad idea in any currency. It's better to have people employed than priced out of jobs.

Doubly idiotic to link wages to another country's currency. Menachem: just think how are the companies trading in Israel supposed to budget for their payroll if it flactuates with the exchange rate?

 
At 4:13 PM, Blogger menachem said...

i'm not in favor of the 1000$ minimum wage. i AM, however, in favor of a minimum wage in general, just not so high. What exactly are you in favor of, shlemazel, a return to 1910 industrial america, with orphans working for pennies? the minimum wage is fine where it is.

as for linking it to another country's currency, i don't think they plan on changing it every day, as the exchange rates fluctuate. that would be just about the dumbest thing i ever heard. they'd probably just adjust it yearly (much like they do now).

ezzie, i hate to disagree with you on this, but it looks like this is going to be a stable gov't. true, any one of the four partners has the power to dismantle it, but none of the four has any reason to, now or in the near future. all three of the partners were bought with one thing, and one thing only: money. money for yeshivas, money for old people, and money to throw at the minimum wage as we spiral down the drain. so long as olmert keep the cash flowing, he can pursue any policy he wants.

wow, that was so good, i think i'll put it on my blog.

 
At 12:51 AM, Blogger Olah Chadasha said...

menachem, your cynicism is infectious. There are plenty of reasons why I disagree with a minimum wage increase, many of which you pointed out. The reason I put the reason I did was to point out just one of its idiotic points. You assume that that they would adjust it yearly, but you know what happens when you assume, don't you? Especially, with Peretz driving drunk at the helm. If it was higher, he'd want it higher. If the dollar keeps going down, he'll switch it to 1,000 Euros a month minimum wage. Remember who we're dealing with here.

Secondly, Sha'as has felt the bitter cold of being in the opposition. It doesn't want to be there again. With many of its votes headed toward Likud if they fail, I doubt that this time around they would vote for the Disengagement. No matter how much money they're promised. They like the lucrative nature of being on the inside, with all these pretty Ministerial positions. If they want the votes, they're going to go against the Disengagement. They're sure as hell not going to go against Rabbi Ovadia, and we all know what he thinks about withdrawals. And, while I agree that they're all about the green, they've already been promised plenty of gelt without a promise of a B'ad vote for the "Convergence". They're ahead of the game here.

Also, the Gimlaim will continue to be the snake in the weeds party. With Rafi Eitan at the helm, this party knows how to play its cards close to its vest. They've already made remarks that are very right wing, like today in the Knesset. They also want the gelt for the elderly, but they have not given much clues as to what they think of anything else.

Finally, I don't see where you could possibly get the idea that this is a stable government. There has already been infights and screams of splits. 2 members of Kadima have already voted against the government, with more threatening to not confirm the budget. This government is as stable as the Manson family. It will fall. It's just a matter of time.

Avi, I totally agree with you. Great post.
-OC

 
At 1:57 AM, Blogger menachem said...

OC: when you write this: "Sha'as has felt the bitter cold of being in the opposition. It doesn't want to be there again," and this: "They like the lucrative nature of being on the inside, with all these pretty Ministerial positions," they're arguments against what you're trying to say. i think you had two different ideas in your head, and they "converged."

i would argue with you on that point, but really, you just took anything i might have had to say, said them, and reached a different conclusion somehow. i'm not sure what to do with that. let's see what the other commenters have to say.

your faith in rav ovadia is cute.

i'm ashkenazi, so i throw my weight behind my g'dolei hatorah. you know, the ones marching down the street protesting the innocence of a man who's bite marks were found on his dead baby.

 
At 6:09 AM, Blogger shlemazl said...

Menachem,

I did not mean return to 1910 industrial America.

I meant return to today's Italy or 1990s Britain or today's Germany.

Minimum wage costs jobs: http://www.nber.org/digest/apr98/w6111.html

 
At 12:59 PM, Blogger Olah Chadasha said...

Menachem, are you suffering from PMS? Because your cynicism of late of is just dowright grumpy. You sound like the old guy in the corner of the coffee shop mumbling to himself with a surly look on his face.

What I said about Sha'as does not contradict my argument. They need votes to stay in the government, and they're not going to throw them away on a failed "Convergence" plan. They know that it will be held against them in the next government if they vote for this, and they would most likely be relegated back to the opposition. Their position in this government won't be taken away if they vote against the next Disengagement, so they're, as I said, ahead of the game right now. If anything, they can decide to leave the government, cause the government to fall, and enhance their position in the next government for their actions. I don't see how that's contradictory. But, I digress.

I don't know what you mean with your Rav Ovadia comment. Maybe, you should clarify yourself there. I don't care for the guy, but the members of Sha'as do. What did I say that grained on you there? I have written about what I think about what's happening with that guy. I really don't know what your problem is. Why don't you get some Midol or Motrin. I think that's supposed to help with the cramps and bloating.
-OC

 
At 9:08 PM, Blogger menachem said...

"They need votes to stay in the government,"

this statement is false. they don't need votes to stay in the government. they need to conform to coalition standards to stay in the gov't, i.e. continue supporting olment.

as for votes go, how to you explain shas's jump from 6 seats to 10 in the elections immediately following their infamous abstaination from the no-confidence vote on rabin? and their jump to 17 seats in the next election (1999) right after they voted no-confidence in bibi netanyahu? they seem to get more seats when they vote left.

 
At 9:10 PM, Blogger menachem said...

but as for your PMS argument... i have no answer for that. i stand corrected in all points i have made here, nay, all points i have ever made, anywhere! i bow before your wisdom. you have defeated me in debate.

 
At 11:25 PM, Blogger Olah Chadasha said...

Well, I stand corrected. I guess Sha'as voters are as idiotic as their representatives.

As for the PMS comment, I guess sarcasm
doesn't work both ways for you. However, you really have been very surly lately. I wasn't using that as a point of argument. Just as an observation on your behavior lately.
-OC

 

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