It’s now official. The Israeli shekel has broken all records. It is stronger than the dollar, the euro and the sterling combined, so we are on the map and will remain on it. Economists and commentators are celebrating this event, explaining repeatedly that it is a welcome development, and that the wild appreciation of the shekel proves the Israeli economy’s strength. Moreover, Israel’s credit rating continues to excel, so the state can borrow any amount with zero interest and thus finance its expenses. Of this success it may be said, “Another such success and we are lost.” This is evident in the huge gap between the strength of the shekel and the value of labor productivity in Israel, which is lower per work hour than in other OECD countries by 24%! In other words, the Israeli economy relies on high-tech, which accounts for half of Israel’s exports and attracts the flow of dollars, while all other industries and services suffer from deliberate neglect.

It is enough to travel 30 kilometers north, south or east of Tel Aviv to understand the gaps that have opened up in Israeli society. The country’s 300,000 high-tech workers, who make up 10% of all those employed, live the dolce vita along with a handful of tycoons, real estate entrepreneurs and stock market speculators. The other 2,700,000 workers in industry, services and the public sector belong to a group whose labor productivity is low, and whose level of earnings is likewise low. Thus, absurdly, as the shekel strengthens, Israeli society weakens, and the gap between the center and the periphery widens.

Far behind the high-tech people, who earn NIS 30,000 and even more per month, are hundreds of thousands of workers, mostly women, who live on minimum wage, with 50% of employees in Israel earning below the tax threshold. Although Israel is a start-up nation, it is also the country with the second highest income disparities among industrialized countries after the US. The word “balance” does not exist in its lexicon. Either you succeed or you are a “failure,” and all thanks to or because of you.  Finance Ministry economists are not only proud of the shekel’s strength, but pound into our heads that the shekel will continue to get stronger. In other words, the gaps that exist today between a minority of those who benefit from this blossoming and the majority suffering from it, will only widen. Economists tell us again and again how a weak dollar to the shekel benefits us, because flights abroad are cheaper, as are imports of consumer goods, while tax revenues from high-tech rise.

What they do not say is that Israeli exports are increasingly expensive, and the hundreds of thousands of workers employed in non-high-tech industries are paying the price as manufacturers roll the profit reductions back to their employees. To maintain their profitability, employers require workers to put in more hours that are not reflected in wage increases. The cheaper it becomes for Israelis to travel abroad, the more expensive Israel becomes for both Israelis and tourists. The coronavirus epidemic has hit the tourism industry, which employs 30,000 workers, along with some 200,000 workers dependent on tourism, from bus drivers to peddlers in the market, while high-tech has flourished. These workers remain invisible in the dazzling glare of high-tech.

One does not have to be a genius to trace the source of the huge gaps in Israeli society. Every child and parent knows the answer – education, education and again education. The results of international exams demonstrate that the quality of education in Israel is low, and Israel is characterized by frightening inequality between the academic achievements of different population groups. “These are disturbing findings because there is a direct – and causal – connection between the quality of education of the labor force and productivity,” stated a Bank of Israel document from 2019. The Bank states that “the educational component in early childhood frameworks should be strengthened, and the accessibility and funding of early childhood settings for households with weak economic backgrounds should be increased, as part of the student’s educational continuum.” So simple and clear, yet so frustrating if you look at the Israeli education system, which leaves behind hundreds of thousands of children, Jews and Arabs from the periphery. The terrible result, felt today as a social scourge, is violence in the streets and in schools. This is not how we build a healthy economy that works for the equal benefit of all.

The Israeli formula is not limited to preferring high-tech over other industries. Its economy remains captive to the Reagan doctrine, which espoused the principle that “government is not the solution to the problem, government is the problem.” In other words, any public expenditure on education, health and welfare is a waste, since in order to finance it taxes must be raised, and high taxes hurt investors’ motivation to invest. That is why Israel has become a paradise for foreign investors, who want to convert their dollar into shekels. With an inflated defense budget on the one hand, and a tight fist in everything related to education, health and welfare on the other, the Israeli economy grows while its society shrinks.

The Bennett-Lapid “government of change” is talking about a “social” budget, that is, big reforms, especially in imports at the expense of local production. But this will not alter the image familiar to all. Classrooms will continue to be crowded, teachers’ salaries will remain low, preschool assistants will continue to receive starvation wages without any professional training, the queues for specialist doctors will continue to lengthen, overcrowding in hospitals will only increase, the wait for a child psychologist, or a communication clinician, will last a year or more, the elderly in public nursing homes will wait patiently to die without respect, and public transport will shut down every weekend to preserve the Jewish character of the state, thus increasing traffic congestion.

Private education, private health, private geriatrics, private psychological treatment, private enrichment classes, and the flourishing towers in the heart of Tel Aviv, all create not just gaps between the rich and everyone else. They divide the people themselves between those who have everything, and those who see with wide eyes how they are left far behind. This social rift has become the habitat of the populism that Netanyahu and those around him represent today. The hatred toward the arrogant Ashkenazis and the governmental system that works for the rich, is a result of the inequality, that is, a result of contempt toward the idea of a state for all its citizens. This is also what happened in the US, when a populist, anarchist and racist figure like Donald Trump, a soulmate of Netanyahu, was chosen on the basis of his promise to “dry the swamp”, meaning the administration in Washington. As is well known, this ended in a violent attempt by marginalized white citizens to act against state institutions and the democratic election process under the slogan “Stop the Steal!” Just as Wall Street is responsible for undermining the American democratic regime, the strong shekel is undermining democracy in Israel.

This is why the Biden government is working hard to get rid of Reaganism, adopting the opposite formula, which holds that “the state is the solution.” Biden has set the motto “Build back better!” no longer relying on the formula that the richer the rich become, the more the poor will benefit. “Tax the rich” has become a common slogan vis-a-vis billionaires like Jeff Bezos, Elon Musk and Mark Zuckerberg, but not in Israel. The Israeli ” government of change” continues to adhere to Reagan’s old formula, with Right, Left and Islamists locking arms to prevent the return of Bibi.

They act stupidly and blindly, and as with the Palestinian question, they bury their heads in the sand and refuse to face reality. Racism, violence and xenophobia are a direct product of the social disease from which Israeli society suffers, and Bibi simply nurtured it in a populist way. The gaps between Jews and Arabs, between Ashkenazis and Mizrahis, between Israeli and Palestinian citizens, all create the sad reality in which we live: violence in Arab society, hatred and violence within Jewish society, and the continuing daily bloodshed in the West Bank and Gaza. The country’s priorities need to change from top to bottom, but as long as the government sticks to the same old path, this reality will continue to explode in our faces day after day.

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After the number of Arab casualties passed 100 this year, Naftali Bennett declared that he takes the issue of violence in Arab society most seriously. At an October 17 government discussion on the issue, he went so far as to say that “we are losing the country. ” The Ministry of Justice is also preparing a package of laws that will permit house searches without a warrant, and economic laws are being designed to fight crime. Bennett announced that he himself would oversee a special cabinet to deal with the issue, and he appointed a project manager to head its staff, which includes the police, the Shin Bet (General Security Service) and the army. It appears that the cries of MKs and heads of the Arab councils have finally reached the ears of the country’s captains, in the sense of: “You asked for it? You got it, and got it big.” What accelerated this concern at the top were the events of May during the last Gaza war, when thousands of young Arabs went out to main intersections, and the mixed cities became battlefields between Jews and Arabs. Along with casualties, this fire consumed businesses, cars, buses and everything in its path. Taken by surprise, the government returned the concept of “governance” to its agenda.

The prevailing opinion is that Israel has a strong army, an omnipotent Shin Beth and a weak police force. The army and Shin Beth have proven they can solve complex problems. As proof, Israel has lived beside the territories it occupies for 54 years. Referring to the Palestinians, Bennett even coined the term “shrapnel in the butt” – something unpleasant, but you can live with it. The army and Shin Beth may excel in exerting control over another people, but they have never solved problems of a social and national nature, nor are they intended to do so. The Palestinian problem remains unsettled, erupting in different ways every few months.

What can the army, police and Shin Beth do about the fact that 40% of Arab youth are not in any occupational or educational setting? What can the Shin Beth do about youth who are careful to point their weapons not at the state and its Jewish citizens, but inwards against Arabs? And it is also worth asking how Shin Beth intervention can be justified, when the motive for violence is not nationalist but socioeconomic?

Violence is a product of the existing socioeconomic system, which has marginalized the poor countries of the world, as well as the underprivileged in rich countries. When 40% of youth do not work or study, the result is crime, drugs and violence, regardless of religion or nationality. In fact, crime among US blacks is much greater than in Israel, and among black youth, those who do not study or work exceed 40%.

Israel should learn from America’s bitter experience. It made excessive use of draconian legislation that filled the prisons with a million inmates, mostly black. The arming of police resulted in the deaths of innocent black civilians and quite a few police. Black society sees the police as the problem, not the solution to the violence that rages within it, and rightly so. That is why the Biden administration decided to bring about change, with support of the black leadership. The Democratic Party wants to inject the huge sum of $ 5 trillion in direct assistance to citizens and renewal of physical infrastructure, bringing back many components of the welfare state. Biden and the Democrats reject the principle that the state is the problem, instead adopting the principle that the role of the state is to serve the citizen. Reagan’s conservative revolution, long maintained by the both major parties, ended with the rise of Donald Trump.

Poverty in Israel is not limited to Arab society. Hundreds of thousands of Jewish citizens are also left on the margins: these include people on minimum wage, temporary and contractor workers, and those who must live on meagre social security. It is clear that Arab society, like black society in the US, is the first victim of the existing economic system, because the tier of national discrimination is added.

The Biden administration, as well as leaders of the black community in the United States, understand that there is no separate solution for blacks and whites. Americans need to rebuild their economy from the bottom up, contrary to what has happened to date. In Israel, on the other hand, neoliberalism continues to dominate and the economy works for the rich. 300,000 high-tech workers act as the locomotive of the Israeli economy, attract foreign investment, get rich quick and enrich the state coffers. Behind them remain the crumbs with which other workers are forced to make do. These crumbs are tossed into Jewish society, and nothing remains for the Arabs. When you build from the top down, poverty grows and breeds violence.

The Bennett-Meretz-United Arab List (UAL) government is working to approve a budget dubbed “social”, thus ensuring its continuity. Yet this budget has no good social news. Finance officials continue to dictate the policy that sees the “bloated” state apparatus as the problem. The so-called reforms in question do nothing more than extinguish fires, and are far from meeting the need for a change in priorities. Give another NIS 500 to the elderly, as if this amount will save them from the shortage of food and medicine; impose a congestion charge to rescue Israel from traffic jams; provide a few hundred more jobs to solve the unbearable burden in hospitals, and impose a tax on disposable utensils to deal with environmental pollution.

This is not a comprehensive plan designed to rebuild growth and the economy to locate the foci of poverty and eradicate social gaps and discrimination. This is a program that maintains the budget framework at all costs, and upholds the same method that hundreds of thousands of young Israelis protested against in 2011. In fact, the Bennett government is continuing Netanyahu’s policy, approving a five-year, NIS 26 billion plan for the Arab sector through 2026. The problem is that only 60% of the amount allocated to the previous five-year plan (992) and approved by the Netanyahu government was ever used. Moreover, today we also know that some of these funds flowed in various forms to criminal organizations on the Arab street through unfair tenders. It is known that earmarked funds allocated to Arab society do not solve the problem, for two reasons. Due to its clan composition, Arab local government suffers from corruption and failed performance. In numerous cases, staff are hired not because of skills, but because they belong to the right family. Secondly, NIS 5 billion a year is not enough to make a real revolution. These funds are designed to keep the Arabs with their head above water, but not to grow and integrate.

The Arab leadership’s insistence on trying to address the problem in a sectoral manner, without a comprehensive look at Israeli society and the existing neoliberal economic system, leaves Arab society weak, isolated and devoid of any political influence. UAL’s participation in the government is intended to obtain budgets for the Arab sector in the same way used by the ultra-Orthodox parties. Yet these budgets nourish and perpetuate poverty, and do not solve fundamental problems in education, employment, transportation and welfare. Like its predecessor, the new Israeli government is unwilling to invest in these areas. It continues to starve the public sector, works to privatize government companies to hurt workers’ wages, harms employee pensions, encourages high-tech at the expense of creating jobs that pay a salary above minimum wage, and remains stubbornly unwilling to invest in vocational training.

The black leadership in the United States has become a leader in the struggle for democracy and social justice for all Americans – black and white alike. In contrast, the Arab leadership in Israel sticks to old slogans, differentiates itself from the Israeli public, and leaves the political arena in the hands of the right and its partners from the left. These pretend to fight for citizens, but in the meantime are abusing Palestinians, leaving workers in poverty, and Arab society rooted in poverty and violence.

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