Playing the ‘socialist’ card
Labor may recover from election defeat by playing socioeconomic card
“We are all socialist now,” was Newsweek’s cover story, referring to the mood of American public opinion these days. Whether we admit it or not, the weekly’s editors wrote, America at this time is moving towards becoming a European-style socialist country. Failure to recognize the new reality, which see the government play a central role in the economy, will force us to fight the wars of the 21st Century using 20th Century tactics and terms, they wrote.
The ideological shift that has been sweeping America and the world started about a year ago, when the US Administration decided to earmark tens of billions of public funds in order to takeover bankrupted investment bank Bear Stearns. This move, which horrified Wall Street veterans, marked the beginning of the global socialist revolution of 2009.
The revolution continued with the graduation nationalization of the financial and manufacturing establishment in many countries and with Barack Obama’s election as president. Obama, in line with the preference of his voters, submitted to Congress last week a budget premised on an unprecedented increase in government expenditure in real terms – 40% compared to last year; if we include the aid offered to banks, the rise in the civilian budget skyrockets to 80%.
Yet this is not the end of the story. According to estimates by experts, the US government will have no choice but to take over further sectors of the American financial system in order to prevent its collapse – and this is after the Administration already took over, in practice, the insurance and mortgage sectors, as well as several large banks.
Those who support nationalization include, for example, former Fed Chairman Alan Greenspan, who up until a year ago was an enthusiastic an uncompromising supporter of the free market and a no less enthused opponent of government intervention. The 83-year-old Greenspan finally realized that the system he preached for was exposed as wholly weak and should no longer be espoused.
From now on, if you are a serious economic statesman, do not say: “The government is the problem and the market is the solution.” Rather, say: “The market is the problem and the government is the solution.”
Will Bibi change?
This is the state of affairs around the world. Around here, on the other hand, we are seeing the establishment of a government that views the word “socialism,” even in its new American meaning, as anathema. The prime minister-designate, while he was finance minister, premised his economic policy on the principle of small government and large market, privatization as the cure for any malady, and minimized regulation. Will Netanyahu change his spots? Will he adapt himself to the spirit of our time, or will he continue to cling to the tactics of the previous Century?The answer to this question can be received via an immediate political experiment. Labor Party Chairman Ehud Barak is dying to bring his party into the Netanyahu government. It would not be wise to reject this idea out of hand. Labor may in fact rehabilitate itself inside the Netanyahu government, should it join it as the bearer of the socioeconomic banner and the promoter of Obama-style “socialism.”
The ultimate condition for the Labor party’s entry into Bibi’s government should therefore be two portfolios: The Treasury and the Trade, Labor, and Employment Ministry. Labor can in fact give up the Defense Ministry.
Should Netanyahu agree to give Labor these two ministries, he will be committed to its economic and social plans: Using the government budget as a lever for taking the economy out of recession, massive public investment in infrastructure and education, deeper government involvement in managing the economy, frank cooperation with the Histadrut labor union federation, utilizing the means of nationalization instead of privatization when this is warranted, tighter regulation, higher taxes on high-end salaries, and other steps.
Labor was defeated in the elections because it completely abandoned – under Barak’s leadership – the economic and social issues. That was a colossal mistake. At this time, Labor will perhaps be able to correct the mistake, as after all, “We are all socialist now.”
