Beyond the Protests

Editor's Notebook

By Jane Eisner

Published December 19, 2011, issue of December 23, 2011.
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There’s the committee. And then there’s the person.

The Trajtenberg Committee was formed last August by Israeli Prime Minister Benjamin Netanyahu and charged with devising policy responses to the social justice protests that were sweeping the nation. The committee presented its report at the end of September, and it’s been the subject of government action and inaction ever since.

The person who lent his name to this effort is Manuel Trajtenberg, an Argentinian-born economist with a plain face and a manner of speaking that can make the complex simple, or at least understandable. You can imagine this guy as a first-rate teacher.

And he’s taking Israel through quite a learning experience. “We’re in the presence of something big,” Trajtenberg says. Imagine hearing that from a public official here responding to Occupy Wall Street. Not a chance.

Trajtenberg himself is walking a fine line — he’s so symphathetic to the protesters that he joined them in an early march, yet he also must work within a political system with obvious fault lines and limitations.

The 270-page report that bears his name (it’s 400 pages in English) addresses the issues of affordable housing, tax policy, family welfare benefits and market competition in a substantive but not radical fashion. From the left, leaders of the social protest movement immediately denounced the report for not being bold enough. From the right, the ultra-Orthodox criticized it for going too far in leveling the playing field with secular Israelis. And the defense establishment is fighting the $800 million cuts that it would have to absorb to pay for it all.

Nonetheless, as Trajtenberg patiently explained in a recent discussion with reporters hosted by the American Jewish Joint Distribution Committee, stuff has happened. In a move unlikely to be repeated in our Congress anytime soon, the Knesset actually raised taxes on the rich. While the percentage changes may not sound like much — corporate taxes will go up to 25% from 24% while the highest tax bracket for the very rich will rise to 48% from 45% — it’s the trend line that’s significant. When Netanyahu was campaigning for prime minister, he promised to lower taxes by 2017. Now he’s raising them, effective January 1.

That’s the good news. Unfortunately, although the report was accepted by Netanyahu’s cabinet in principle, it’s being picked apart in the Knesset, and Trajtenberg himself is unsure what else, if anything, will happen. But he sees a more far-reaching achievement.

Compared to the other protests roiling the Mideast, “this is more susceptible to evolve into something more constructive,” he says. “A whole generation of young people in Israel discovered they have a voice.”

Trajtenberg expects that some protest leaders will move into the political sphere, carrying a passion for domestic issues that has been muzzled for decades by security concerns and the conflict with the Palestinians. Middle-class Israelis who can’t make it financially until the end of the month are tired of waiting for an elusive peace before their problems are addressed, and this pressure, if sustained, could reshape the political landscape.

He urged American Jews to take notice: “Jewish people in the States should look at this not as a threat but a huge opportunity… a reawakening of a dormant strand of what gave rise to Israel.”

But it’s not a return to the old days he’s after. “You don’t build a new economic model with nostalgia,” the economist reminded. Rather, Trajtenberg envisions Israel creating what is lacking all over the Western world: a coherent model of a market economy that works on social principles and builds a more just society.

Imagine if that framework could be the basis for political action here, too.


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