TEL AVIV —It has been a while since Prime Minister Benjamin Netanyahu has pulled out some impromptu economic graph or catchy slogan.
You can say he matured. Netanyahu of the third term is not the same man he was during his first or second, where he'd been drunk on victory from decimating the left the way he did. He no longer needs to praise himself. He is more considerate and deliberate, without having to rush to take credit for anything that happens. He has become a sort of a slightly more chic version of the later years of Ariel Sharon.
However, none of this is really the issue. The economic slogans are gone, and with them the whiteboards and their simplistic drawings. But they are not gone because the copywriter inside of Netanyahu is gone, but because the "economic Netanyahu" is gone.
When the product you are trying to sell is not working, there is no point in having sparkling slogans to try to hide it. That part of Netanyahu that remains from his days as a salesman knows that there is no point in promoting his economic self, because that part has lost.
It remains a mystery: How did the "economic Netanyahu" lose? And to whom exactly? In the Israeli domestic scene, he doesn't have any strong rivals — neither from the right nor left. It is the same in the Israeli economy, where everything is written under his name: the policies, the achievements and even the failures. No other politician has influenced the population’s wallet over the last decade and the financial future for decades to come the way Netanyahu has.
For better or worse, all the big economic policies in Israel over the last 10 years were done by him, directly, indirectly or even only inspired by him. With the current state of the economy, this should have resulted in the unpleasant truth that Netanyahu has politically defeated himself.
The obvious proof for this strange win-lose situation is the massive budget deficit that grew under Netanyahu’s watch. The ex-governor of the Bank of Israel, Stanley Fisher put it very clearly. “The Israeli market is in excellent condition, despite the bad handling of the budget and despite the deficit,” he said after resigning. Netanyahu could not have been more humiliated.
So we have arrived at a point where the "Economic Man" of 2013 is a brand new Netanyahu. His tax policy has exploded everywhere, and over the next two years (2013-2014) the government will increase taxes in such a drastic way that it will almost completely cancel out every tax cut of the past decade.
A questionable future
The next few years will mark a turning point for the Israeli market. The explosion during the 1990s that injected the market with engineers, doctors and scientists is nearly over. The number of physics, biology and math teachers is plummeting. The number of doctors who are retiring every year is growing in shocking numbers. Israel's accelerating economic growth is gone.
As the prime minister in this critical period, Netanyahu is the man the population has entrusted to equip the Israeli economy for the future. He knows well the numbers and the forecasts. He understands economics, what it means that the population is aging.
He also knows about the decline of the competitive advantages of Israeli industry compared to countries like China or India. He knows that something must be done or else the quality of life is going to crash in Israel. The only person who is able to do it is in fact Benjamin Netanyahu himself.
Instead of thinking in the short term, of how to wiggle out of the latest crisis, Netanyahu has to start being a leader with both political and economic wisdom.
Phrases like “without the Jewish orthodox and the Arabs our situation is excellent” must be eliminated. It is a way of thinking that is archaic and resembles the old Israel that can develop only thanks to its high-tech industry.
Today the demographics have changed, and that state of mind is as wrong as the graphs Netanyahu drew when he was the country's Economy Minister in 2004. As we said, he does not draw those graphs anymore.
Soon enough, only the wealthy will be able to give their children a proper education and good health care to their parents. It will not be “without the Jewish orthodox and the Arabs our situation is excellent” but "if only all these brains wouldn’t have left us behind.”
Netanyahu is the only leader, politically and economically. He has no rivals. He will surely make his mark on the history of Israel. For better or for worse, it is still up to him.
