The Secret Netanyahu Economic Stimulus Plan

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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