Credit crunch? Who cares?

Is­rael is one of the few West­ern coun­tries where eco­nomics does not play big on the po­lit­i­cal scene

The Jewish Chronicle - - Comment&analysis - POWER GAMES DANIELLA PELED

IT IS an ill wind that blows no­body any good. And the cur­rent stiff breeze chill­ing the col­lec­tive tuches of the world’s bankers is — to stretch a metaphor a lit­tle painfully — ac­tu­ally blow­ing some po­lit­i­cal ca­reers right back on course. Take our own Gor­don Brown, for in­stance. It would have seemed log­i­cal that the man who was not only the in­cum­bent when trou­ble hit, but who di­rected the UK’s econ­omy for 11 years, might have taken a fur­ther beat­ing when our cur­rent mon­e­tary woes kicked in. In­stead, the polls show that he has halved the gap — one might say chasm — be­tween Labour and the Con­ser­va­tives over the last week.

The pub­lic might still dis­like him, but at least he has a record as a com­pe­tent Chan­cel­lor. Amid such un­cer­tainty, the elec­torate is not yet ready to trust the downy-cheeked duo of Cameron/Os­borne with their eco­nomic well­be­ing.

In Wash­ing­ton, the bailout plan has given Ge­orge Bush per­haps his last chance of sal­vaging any ves­tige of na­tional lead­er­ship. But more sig­nif­i­cantly, it stands to serve one Barack Obama quite well. Amer­i­can vot­ers tra­di­tion­ally run to the Democrats for com­fort and cud­dles when the econ­omy gets nasty, and Obama has been busily tap­ping into this. Af­ter all, last time things were this bad, FDR and his New Deal came along to res­cue the US econ­omy and set it on the path to fi­nan­cial su­per­power sta­tus.

Claim­ing credit for rein­ing back the eye-wa­ter­ing bailout plan and ex­ploit­ing pub­lic anger, Obama is build­ing up ground lost over na­tional se­cu­rity and for­eign pol­icy to McCain, who is now a lit­tle on the de­fen­sive.

So how does this fis­cal trend play out in Is­rael? As ever, trends in the Holy Land seem there to be bucked, if not en­tirely de­bunked. Here, it is most def­i­nitely not the econ­omy, shlemiel. One might think that such fi­nan­cial ills would boost the stand­ing of Likud leader Binyamin Ne­tanyahu. Af­ter all, as fi­nance min­is­ter in Ariel Sharon’s sec­ond gov­ern­ment, he presided over a pe­riod of it-hurts-but-it­works Thatcherite eco­nomic re­form.

End­less groups of for­eign in­vestors were treated to his creak­ing al­le­gory of his days as a com­mando, which pro­vided his jus­ti­fi­ca­tion for slash­ing the pub­lic sec­tor: if the lit­tle guy has to carry the fat guy, no one gets ahead. He cut taxes, he cut ben­e­fits and he pri­va­tised like all hell, a process long over­due for Is­rael’s outdated cen­tralised econ­omy.

But his resur­gence in the polls over the last cou­ple of years has had noth­ing to do with his fi­nan­cial acu­men and ev­ery­thing to do with the dis­cred­ited na­ture of the Olmert ad­min­is­tra­tion. The fact is that the Is­raeli pub­lic does not feel the urge to look for an eco­nomic saviour. An in­trigu­ing phe­nom­e­non of Is­raeli pol­i­tics has al­ways been the lack of cor­re­la­tion be­tween peo­ple’s eco­nomic well­be­ing and their vot­ing pat­terns. In 1984, the coun­try was fac­ing a fi­nan­cial melt­down verg­ing on hy­per­in­fla­tion, and yet that was not enough for them to boot Likud out of power af­ter seven years of eco­nomic mis­man­age­ment. It fell to a na­tional-unity gov­ern­ment to mud­dle through the cri­sis.

The fi­nan­cial hys­te­ria does not quite have Is­rael in its grip as yet. The Bank of Is­rael is mon­i­tor­ing the sit­u­a­tion but its chief, Stan­ley Fis­cher, feels con­fi­dent that the Is­raeli sys­tem is strong enough to weather the cur­rent storm.

The sim­ple fact is that Is­raeli vot­ers are ob­sessed with na­tional se­cu­rity. It is less a ques­tion of a chicken in ev­ery pot than a mis­sile-de­fence sys­tem in ev­ery back­yard.

Labour or Meretz might prom­ise bet­ter eco­nomic div­i­dends to vot­ers, but in Is­rael peo­ple want to feel se­cure. And if pos­si­ble they want the lux­ury of hope. Fail­ing that, they’ll go for a safe — or clean — pair of hands. Daniella Peled is the JC’s for­eign ed­i­tor. This page ap­pears ev­ery two weeks

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