Is It Win at All Costs for Netanyahu?

The Bibi haters are out in full force today, charging that PM hopeful Benjamin Netanyahu has thrown his 'free-market' principles to the wind and will do/say anything to get elected.

Nehemia Shtrasler writes in Haaretz: "It will be interesting to see where else Benjamin Netanyahu goes in his eager pursuit of voters' hearts. He wants so badly to sit in the prime minister's chair that he is even willing to scrap his entire economic worldview and masquerade as Histadrut chairman Ofer Eini."

He says that Netanyahu has given up his ideology in order to get elected. Calling for a broad pension safety net, increasing child allowances and a large increase in government spending, Bibi has basically moved his policies to be in line with those of national labor chairman Ofer Eini.

I am not a big fan of Shtrasler but he does make some good points. Instead of calling for more spending and basically abandonding budgetary discipline, Netanyahu should be out there championing lower taxes, and incentivizing entrepreneurship. After all, the real engine to economic growth is not bailing out billionaires, but it's by encouraging small and and mid-size business creation.

As for the pension safety net, Shtrasler is correct on the facts but wrong on the safety net. He says, " He knows that this "safety net" is a regressive, antisocial policy that no other country has adopted. And who knows better than he that the people have not lost anything in the provident funds, but have in fact earned a profit? From 2003 through 2007, these funds posted a very nice profit - 66 percent. Only this year have there been a loss - 20 percent. In other words, the gains far exceed the losses. So why should we be transferring money to people who made a profit?"

No question that much of this discussion is based on zero facts. Most pensions increased handsomely since Bibi opened up the system. I am not for a broad safety-net. We need to follow the Chilean pension model. Chile faced a bankrupt pension system, and they decided to privatize the system by allowing people to have individual savings accounts. But for those approaching retirement they were given a choice. Accept the new system or you could take a guaranteed pension from the government. Basically a safety net for those close to retiring. That's exactly what we should do here in Israel. For those 5 years away from retirement, give them the choice of accepting a guaranteed government pension, or letting it ride in a private account.

This is the kind of policy we need Netanyahu to speak about. We don't need him encouraging building a road or bridge that no one needs.