The "Economic Deep State" in Israel? The real problem lies in the government | Professor Yossi Spiegel

Professor Moshe Cohen-Eliya asks in an opinion column published in Maariv how it is possible that even though Israel's macro data looks good, "the Israeli does not feel rich" and "food, apartments, and cars are so expensive"? His answer is that in Israel there is a "structural problem" which he calls the "economic deep state." According to him, this is not a conspiracy, but a "system of interests, regulation, entry barriers, and connections between institutions that has been forming for decades, until it begins to protect itself."

And who is responsible, in his opinion, for the economic deep state? Who prevents "opening imports, lowering entry barriers, dismantling concentration, limiting the revolving door, accelerating planning and construction, and creating conditions where new players can truly compete with the veterans" which, in Professor Cohen-Eliya's opinion, are essential for dealing with the cost of living? Well, the blame, according to him, lies with the struggle of the Kaplan protest, which he says was "very selective" and did not show enough sensitivity "to unelected economic power centers that affect the pocket of every citizen in Israel every day." True, he does not claim "that every protester on Kaplan sought to protect monopolies," but that the Kaplan protest "sanctified the forces identified with the old hegemony." The conclusion arising from his words is that if the Kaplan protest had protested firmly against the cost of living, or perhaps had not arisen at all, then the price level in Israel would not be as high as it is now.

Strangely, Professor Cohen-Eliya, who claims that the old hegemony has a blind spot regarding power centers, forgets that the one who is supposed to open the economy to imports, lower entry barriers, dismantle concentration, limit the revolving door, accelerate planning and construction, and allow new players to compete with the veterans is the government. This is its job. That is why it was elected. And the one who has been at the head of the government since 2009, except for a year and a half hiatus, is Benjamin Netanyahu. He is the hegemony, and after such long years in the position, one can also consider him as the "old hegemony," the one towards which Cohen-Eliya has complaints. Alongside Netanyahu in the old hegemony stand other ministers such as Israel Katz, who served in all of Netanyahu's governments since 2009, or Haim Katz, Yariv Levin, Miri Regev, and Gila Gamliel, who served in all of Netanyahu's governments since 2015. If Cohen-Eliya has complaints against the economic deep state, it would be good for him to address them first of all to those who hold the power and who were elected to deal with the economy's problems.

Professor Cohen-Eliya also writes that "the economic deep state does not hide in the dark. We meet it every time we open our wallet." I will add that we also meet it every time we turn on the television, radio, or newspaper, and see one of the government representatives in them. It is the address for dealing with problems, including the cost of living problem. And if after long years at the head of the government Benjamin Netanyahu has not yet managed to deal with the problems that Cohen-Eliya points out, it is likely that he will no longer succeed. After all, he himself said in an interview with Dan Shilon that "if we don't do it in the first term, maybe we will do what is needed in the second term, but you don't need more than that. Do the things, go home - in the political sense."

Professor Cohen-Eliya is right: "Dealing with the cost of living is not just another 'reform'. It is a struggle against a power structure." Only the power is not in the hands of protest groups or ordinary citizens. The power is in the hands of the government, especially one that has been in office for many years. And if it has not yet managed to solve the cost of living problem, then salvation will no longer come from it.