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By Barry Rubin

A newly leaked U.S. Embassy cable provides a startling revelation not so much of extremist anti-Israel views of one high-ranking New Israel Fund official but how money supposedly raised for good deeds pays for full-time radical activists and finances the Israeli political far-left.

And this introduced the complex story of an Israeli social protest movement torn between trying to solve real problems by very specific reforms and seeking to bring down the government and transform Israel into a version of an economically faltering European welfare state.

As a result of the Palestinian leadership’s refusal to make peace, the 1990s’ peace process’s failure, and the violent 2000-2005 intifada, the Israeli left largely disintegrated or moved toward the center. Suddenly, however, the left has revived in recent months by shifting from failed proposals for massive concessions to the Palestinians to protests about Israeli housing and other prices. In this context, Israel’s social protest movement has nothing to do with the “Arab Spring” and everything to do with trends in Europe and North America.

Of course, many Israelis face real problems with the gap between wages and living costs. Almost everyone I meet–including those on the right—sympathize with the protest even if they have doubts about its leaders and demand. They also all know a long list of factors making Israel different from Europe or North America. Most understand that Israel has prospered because of jettisoning once-useful but now burdensome socialist features. A few years ago finance minister Benjamin Netanyahu became a hero even to many on the left for successful privatization reforms. More recently, the very economic decisions tending to make prices higher and keep wages lower also kept down unemployment, debt, and inflation.

Today’s problems that have motivated protests are a combination of remaining socialist practices, peculiarities of Israel’s social structure, and the country’s security situation. They have nothing much to do with capitalism or class conflict. And they could be reduced by some relatively simple measures.

The most criticized institutions are socialist-based like the dairy monopoly and the idea that the state should control land. The religious sector, rather than favoring Tea Parties and government spending cuts, tends to be the biggest per capita welfare recipients. Supermarket prices are high due to the country’s small market, protectionism, and kashrut standards. Israel’s health system, which some call “socialized medicine” functions pretty well. There are no big landlords; trade unions aren’t important factors.

Taxes are high and security issues–most recently the need to rebuild defenses on the border with Egypt–eat up money that might otherwise be used for social welfare. Despite all these things, living standards have risen steadily over the years but maintaining them is stressful for people who often depend on a revolving line of credit from their banks (the overdraft) which they pay off with every month’s pay check.

To demand the dairy monopoly is broken up to allow competition or that new land beyond the suburbs be opened up for building low-cost housing can succeed. To demand that capitalism be overthrown (in a country that isn’t wildly capitalistic to begin with), that banks provide loans to people who can’t pay them back to buy apartments in expensive urban areas, or that the government go into debt to expand entitlements won’t.

Now let’s consider how a recently revealed February 2010 cable from the U.S. embassy of a conversation with Hedva Radovanitz, then associate director of the New Israel Fund (NIF) in Israel, fits into this picture.

A media furor arose from Radovanitz telling the American diplomat “that she believed that in 100 years Israel would be majority Arab and that the disappearance of a Jewish state would not be the tragedy that Israelis fear since it would become more democratic.” In other words, the “New Israel” would be a dead Israel.

The NIF has issued a statement that Radovanitz was speaking for herself, left NIF a year ago, and that the organization disagrees with her statement. Radovanitz’s own statement seems designed to make the NIF look good. Mention of her past association is suspiciously absent from NIF sites. Her far-left background makes it seem as if the NIF knew her views when she was hired and wasn’t bothered by them.

Yet all of this is relatively unimportant compared to the rest of the leaked cable. The NIF solicits contributions in the United States by presenting itself as a pro-Israel liberal group promoting social justice in Israel including assisting the poor, helping the handicapped, promoting equality for Arabs, and other good causes. In reality, much of its funds go to support left-wing full-time “community organizers” and to subsidize political movements. In a sense, the NIF might be Israel’s equivalent of George Soros. The difference is that Soros knows the political goals his money being used for; the NIF’s contributors don’t.

So Radovanitz tells the American diplomat that the big problem is the “disappearance of the political left wing,” giving as an example one such NGO had shrunk from 5,000 members to less than 800. The left wing, she continued, only hold demonstrations by using NGO staff members, presumably paid with NIF grants, to pretend they were regular concerned citizens.

The NIF’s plan, said Radovanitz, was to create “a movement rather than just a lot of NGOs.” This strategy worked. Eighteen months later, the NIF was main funder of a large “social protest” movement.

A new NGO Monitor report details how NIF funding has gone to left-wing groups more involved in political propaganda and organizing than in charity or social welfare work. The money is used for challenging Israeli policies, helping its enemies, and rebuilding the Israeli left.

In other words, the NIF really doesn’t agree with Radovanitz that the New Israel should be a dead Israel. Rather, it wants the New Israel to be an Israel in debt with high unemployment, inflation, a sick economy, a strangling government bureaucracy, and even more onerous taxes.

Again, the social protest movement is contending with real problems. The demonstrators don’t want an anti-capitalist revolution but reasonable adjustments to make their lives easier.

But will the movement focus on solving shortcomings in a realistic manner—reducing government bureaucracy to increase construction; limited, focused help to those needing housing; and better competition to cut prices–or attacking capitalism and advocating massive government subsidies like those playing havoc with Western economies?

Uniquely Israeli factors may determine events. Possibly violent Palestinian demonstrations in late September; end of the fun-to-demonstrate summer period; growing Egyptian radicalism; and big UN mess over unilateral Palestinian independence may push Israeli conversation back toward the usual stuff. A new party based on the social protest movement might actually sabotage the existing left. Former general Shaul Mofaz might become leader of Kadima, the main opposition party, a development equivalent to Senator Joe Lieberman becoming head of the Democratic Party.

Finally, those far-left (rather than moderate left of center) tendencies in the movement are likely to turn off most Israelis. When a half-dozen kids recruiting for the scout movement at my son’s elementary school show up wearing red shirts with a picture of Che Guevara (who supported anti-Israel terrorists) and the slogan “Change,” it sets off alarm bells. Unlike many in Europe and North America, building fantasy utopias and ignoring reality are things whose high price will discourage Israelis even more than the cost of apartments and cottage cheese.

Barry Rubin is director of the Global Research in International Affairs (GLORIA) Center, editor of the Middle East Review of International Affairs (MERIA) Journal, and Middle East editor and featured columnist at PajamasMedia http://pajamasmedia.com/barryrubin/. His latest books are The Israel-Arab Reader (seventh edition), The Long War for Freedom: The Arab Struggle for Democracy in the Middle East (Wiley), and The Truth About Syria (Palgrave-Macmillan). GLORIA Center site is http://www.gloria-center.org.His articles published originally outside of PajamasMedia are at http://www.rubinreports.blogspot.com ed

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