Israel

Economic Protest Continue

The news from Israel continues to be dominated by economic protests. The tent city in Tel Aviv, that expanded to other cities, morphed into a large scale demonstration last night in Tel Aviv. The Tel Aviv protests continue at the same time the doctors' strike has continues. These issues are symptoms of the continuing economic inequalities in Israel. These inequalities have continued to increase in a country that has been doing very well, at least in terms of "macro-economics". Despite Israels economic achievements, most Israelis are not enjoying the fruits of that success. The average inflation adjusted salary in Israel has not gone up in the last 10 years.
In Israel, the highest marginal tax rates have gone down considerably in the last few years. Unfortunately, that has resulted in a much more regressive tax system. Over 50% of Israels tax income comes from in-direct taxes, (e. g. VAT luxury taxes on cars etc.) This is inherently regressive. In addition, the income tax rates themselves are problematic. The highest rate is 43%, a rate that starts at income of over about $100,000 a year. There are no state and local income tax in Israel. Therefore, the highest rate is indeed the highest rate. However, even more problematic, is the fact that a 30% tax rate begins when an individual earning reaches  $40,000 in annual income. In the United States an individual making that sum of money will be paying little if any taxes, yet the cost of living in Israel is today higher then those in the United States. 

In other news, it would seem Israel assassinated another Iranian nuclear scientist yesterday. The method was the same as the last two assassinations, men on motorcycles attacked the scientists as they left their homes. If it was in fact Israel responsible for the assassination, it shows a continued ability to maintain a lethal cell right in the heart of Teheran.

According to a report in Ha'aretz, Israels relationship with France have now gone full circle. In the 1950s and 1960s, until the Six Day War, France was Israels prime arms supplier. Then under the government of President Charles DeGaulle, the French placed an arms embargo on Israel, forcing Israel both to buy weapons from the US and develop its own planes (until the US forced Israel to abandon development of its Lavi fighter.) When the Lavi was abandoned, Israel began to concentrate on development of unmanned planes. Now France is about to become the first foreign customer of the "Eitan", the largest Israeli drone, whose wingspan is as large as a 737. The "Eitan" and can stay aloft over a target for 36 hours.

Housing Sleep- In, Boycott Law

The news from Israel in the last few days has been concentrated in two areas. The first, economic, and the second, legal/political.

On the economic side, a small city of tents has been set up in Tel Aviv to protest the high cost of rental in the city. Demonstrators are correct in pointing out the rising cost of rental in Tel Aviv, which seem to have doubled in the past few years. As some one who has been looking to rent in Tel Aviv (long distance, at the moment), I certainly share the pain of these demonstrators, and understand this problem.

Unfortunately for those who want to live in Tel Aviv, there is no solution. Since at this time, prices for apartments in Tel Aviv are not out of touch with apartment prices in leading cities worldwide. Apartment prices in Tel Aviv seem to be slightly more than half the price of apartments in any of the desirable neighborhoods of Manhattan. Of course, Tel Aviv does not have the subway system that New York has; a system that would allow someone to live in Holon or Rishon Letzion to live as if they lived in Queens and Brooklyn. The Tel Aviv subway system has been under construction, in fits and starts, since the mid 1970s.

Furthermore, Tel Avivs housing cost problems (which are tied to all of Israels housing problems,) where prices have risen to the levels of western countries. However, in Israel, the Middle class has not benifited from the country's economic rise. The take-home pay of the overwhelming majority of Israelis is considerably lower than those living in New York or similar cities. Understanding Israels economy has been a puzzle, even for those who do it for a living. This is something I plan to explore over the course of the next few years.

The other issue discussed at length has been the passing of the a new law that outlaws the support for any boycott against Israel. While I do not share the view of some, that the passing of this law is the end of Israeli democracy, the continued attempts of the political right to try to make the the actions of the political left illegal are troubling. The words of Reuven Rivlin, Speaker of the Israeli K'nesset, and whose political views are heavily to the right wrote on Friday:

"I stand ashamed and mortified before my mentor, Jabotinsky, for not having succeeded in protecting the individual, whom he likened to a monarch, against the parliamentary fists of the majority. It might have been hoped that in an era in which Jabotinskys followers are scattered across the whole political spectrum, from the coalition to the opposition, things would be different. But in the absence of an ideological backbone, it appears that even the deep commitment to democracy and individual freedoms of those who call themselves his successors is conditional. It is the State of Israel that is compelled to pay the price of political interests that supersede national interests." (the whole article)

Finally, the Israeli Education Ministry announced today that in five years, no textbook would be approved that is not available electronically, and for which the cost of the electronic version was not at least 60% less than its print equivalent.