Viewpoint A new breed of liberal leaders cutting social
services
By NEVE GORDON
In 1992, it was still unclear that
Bill Clintons election would mark the advent of a new breed of leaders.
Yet a few years later, Tony Blair was elected in England and Lionel Jospin in
France. When Germanys Gerhard Schroeder and Israels Ehud Barak
entered office, it became apparent that we werent witnessing a series of
arbitrary events but rather a trend.
It is as if a specter is haunting industrial democracies -- the
specter of the new liberal leader. A variety of forces from the right are
noticeably apprehensive -- from Jesse Helms and the Christian right in the
United States to Jörg Haider in Austria and Christoph Blocher in
Switzerland -- and do not miss an opportunity to criticize the policies these
heads of state advance. Yet, what about progressives who still believe in
helping the poor and underprivileged -- shouldnt they be just as
frightened?
Lets consider the Israeli case. The resemblance between
Baraks campaign -- the Labor Partys representative -- and the ones
launched by the other liberal leaders is striking. Barak was elected prime
minister not so much for his foreign policy, but primarily because he promised
the Israeli public that he would attend to internal affairs. The predicament of
the poor, Israels collapsing health system, high unemployment rates and
the devaluation of pension income were central issues of his campaign.
Not surprisingly, Baraks course of action after entering
office has also been similar to the ones adopted by his counterparts. In the
past months he has taken measures to cut unemployment benefits. Libraries for
the blind have been shut down, and a women-in-crisis telephone hotline was
closed because the government failed to provide public funding. Moreover,
Baraks proposed year 2000 budget reveals that he does not intend to add a
penny to pressing social issues like health and education.
In response to the publics distress, Barak provides the
customary reply: There is no extra money in the countrys coffers. Yet,
rhetoric is one thing and truth another. Actually Baraks unwillingness to
restructure Israels monetary policies, which for years have been
benefiting the rich at the expense of the poor, and not the scarcity of
resources, has led to the wide disparity within Israeli society.
It is sufficient to examine who wins and who loses from the
existing capital gains policy and the extremely high interest rate (which is
almost 13 percent, about 9 percent above the annual inflation rate) in order to
understand why Barak does not allocate more funds to the social sector.
Surely, the millions of Israelis who have an overdraft in the bank
and pay about 19 percent interest annually are losers. The unemployed, who
comprise 9 percent of the population, as well as many of Israels wage
earners, are more likely to have an overdraft than the most affluent 20
percent. Also among the losers are small entrepreneurs who, in order to begin a
new business, frequently take out loans on which they pay 17 percent
interest.
The winners are, of course, the banks. They manage to procure
millions each year as a result of the high interest they collect from
Israels poorer segments. In addition, Israels wealthier citizens
invest in certificates of deposit whose annual interest rate is about 10
percent.
The beauty of it is that there is no capital gains tax on savings
or the stock market! Thus, if one invests $100,000 in an Israeli bank, by the
end of the year one has $10,000 tax-free income. The moral: One simply needs
money to make money.
So while Barak laments that he cannot help the poor because
Israels coffers are empty, the Israeli government gives, according to
conservative estimates, $2 billion each year to the rich simply by not
collecting a capital gains tax. Baraks failure to attend to the destitute
populations needs has little to do with lack of capital, but is rather a
direct outcome of his insistence on leaving Israels monetary policies
intact.
Baraks ap-proach is typical of the new breed of liberal
leaders. After all, it was Clinton, not Reagan or Bush, who destroyed the
social safety net. Schroeder, rather than the conservative Helmut Kohl, intends
to cut pension and unemployment benefits. Other heads of state are also
introducing similar economic policies.
All of which clearly suggests that the progressive voter should be
just as wary about current developments as the right-wingers are, if not more
so.
Neve Gordon writes from Jerusalem.
National Catholic Reporter, January 28,
2000
|