Rothschild Boulevard: Road to a better Israel

As we have seen events unfold, Rothschild is only the spark, not the flame of what is now taking place all over Israel.

By ARIEL HARKHAM
Man sitting on Rothschild Blvd 311 (photo credit: REUTERS)
Man sitting on Rothschild Blvd 311
(photo credit: REUTERS)
It is no coincidence that Rothschild Boulevard, one of the country’s busiest and poshest streets, has become the epicenter of its greatest social uprising. Rothschild was one of the first roads built in Israel. This boulevard was originally called Rehov Ha’am (Street of the People).
In its earliest days, it connected one of Tel Aviv’s poorest neighborhoods, Neveh Tzedek (now one of its most prosperous) to Habima (the theater). It was also the road where, 63 years ago, the country’s declaration of independence was signed.
In short, the boulevard that once served to connect all walks of Israeli life is once again serving as a locus. Indeed, it is not only the country’s economy, but also its democracy that is at stake.
Like it did nearly 40 years ago, Rothschild Boulevard has brought together a mix of faces and lifestyles. Walking past the tents, one hears the revelry of a drum circle while seeing an MK defending his positions against adolescents. Here, one can observe a desire for mass revolution on the one hand, and specific policy reforms on the other. Rothschild is only the spark, not the flame, of what is now taking place all over the country.
What is taking place is a frustration that bridges gender, generation and class. This is a frustration with a government and bureaucracy averse to reform. However, the mosaic of expectations and discourse, whether regarding doctors’ rights, the cost of living, cottage cheese or education, threatens to muddle the opportunity for bringing real change. A more precise civilpolitical discourse is needed.
This conversation begins with humility and leads to inclusive insights. The protesters should not forget that the economy has undergone tremendous positive changes. Though we hear from many on the fringe of a desire to return to the paternalistic state of yesteryear, reckless demonetization of the economy alienates the producers of wealth and disregards the fact that the majority of these also have an interest in reforms.
The government and international investors need to understand that this protest is not about challenging the fundamental economic structure. What is being looked at critically, and what has galvanized Israelis, are the factors that have stunted the flow of wealth to the country’s lower ranks, and have driven up the cost of living. As housing shortages get worse, the government continues to burden the average taxpayer through onerous revenue taxes, and the standard of living has risen while wages lag far behind.
Those 300,000 who gathered in the Tel Aviv streets last month all agree that the country’s oligarchs have enriched themselves at the expense of middle Israel for far too long. These protests are an expression of frustration with a democracy that is increasingly unaccountable to its citizens. Viewed in this light, what is taking place around the country is a repudiation not only of Israel’s economic situation, but also of its democracy.
Returning to Rothschild Boulevard, the squatters with hands to the sky are shouting for more than just lower housing prices; it is an authentic expression of protest. With the spark lit, how can it go forward? There is no voice to unify those in the middle, no ideal to inspire them, and no sacred symbols around which to rally. Similar to what occurred in political discourse in the late 1990s, the fringes of the political spectrum are driving economic discourse.
The country-wide anger at the government has been growing for decades, as policymakers and constituents have drifted apart. Bridging this gap will require much more than Prime Minister Binyamin Netanyahu and his administration have been willing to offer. But no one can put all the blame on these elected officials, as they only mirror the weaknesses of their constituents. Only with greater clarity among citizens will the government undertake the necessary reforms.

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A national protest with ambiguous demands and scattered leadership does not equal a platform for change. With this in mind, here are five popular proposals that could be championed, and that Netanyahu might be willing to support:
Trust bust – That around 20 families in Israel control nearly 25 percent of publicly listed firms increases opportunities for cartel- like behavior, including price fixing and underbidding. The Antitrust Authority should be better equipped to investigate these families in order to ensure that the Israeli consumer does not pay the cost of a highly concentrated economy.

Reduce market concentration – Credit in Israel is not allocated to those able to use it most efficiently. Holding companies, by controlling both finance companies (lenders) and corporations (borrowers), are able to allocate credit for their own benefit. This type of “cross-ownership” also makes it more difficult for small and mediumsized enterprises to get credit. Regulations to reduce the control that holding groups have on both lenders and borrowers would introduce greater competition into the country’s banking system – a key driver of economic growth.
Create a consumer protection agency – An agency with a mandate to investigate business malpractice is important for prosperity. Consumers deserve transparent information regarding business practices, and an address to which they can file complaints.
Lower regressive taxation – The reduction in direct taxes, which has helped individuals and corporations retain wealth, has also been accompanied by a rise in indirect taxes that put a disproportionate burden on those with lower incomes. Indeed, in 2008-09, indirect taxes accounted for 33.5% of all tax revenue, the highest among OECD countries. Reducing value added tax (VAT) by a couple of percentage points would lift some of this burden. So, too, would removing the burdensome taxes levied on automobiles.
Invest in transportation – One reason that demand-side pressures are driving up housing prices is that the job market is disproportionately located around Tel Aviv. According to Globes, fewer than 6% of hitech jobs created over the past three months are in the North or South. Though young couples, for instance, are not averse to moving to the periphery, the transportation system is ill-equipped to serve working populations. The construction of a national highway system would reduce some of the demand-side pressures on housing.
Rothschild Boulevard began as a middle road from south Tel Aviv to north Tel Aviv, from the flea market to the theater; today it has assumed its former role, connecting all strata of society. It is our deepest hope that the national fervor that managed to create a storm on Rothschild Boulevard can produce the same sort of leaders who, generations ago, had the courage and clarity to demand national independence.
The writer is co-founder of the JNI (Jewish National Initiative).