If I Were Rothschild

The Jewess is writing today from Israel!  This has the interesting effect of changing all of her blogging buttons to Hebrew, and setting the default text direction from left to right.  Fortunately for us all, I figured out which of those links is supposed to mean "new post."

The big news in Israel these days are the "tent" protests; in all of the major cities, people are camping out to protest the high cost of living here relative to income.  For the sake of international comparison, a typical Israeli spends over a third of their income on housing.  Additionally, prices have risen dramatically for food, electricity, and gas.  The protesters on Rothschild Ave. in Tel Aviv, where the Jewess is primarily hanging out, have been getting the most attention as their encampment was the first and is one of the largest.  At one point, over 300 thousand people were out protesting.  Over the weekend, there were also concerts by prominent Israeli singers all over the country.

A typical protest slogan, which is unfortunate because there have been some pretty funny literary and historical references in other protest slogans.

There are several causes behind the rise in prices.  The first is the international economic crisis.  Although Israel did not face significant unemployment, the relative weakness of the dollar and Euro due to the recession have raised the price of imports for Israelis.  Another reason for the high prices is the cessation of the transfer of gas between Egypt and Israel.  That raises gas and electricity prices, as well as increasing the transportation costs for consumer goods.  The housing issue is much more complicated, and various people will give you various explanations for it.

A definite part of the problem is that most of the employment is found in Tel Aviv and Jerusalem, but it is not easy to increase the availability of housing there.  As a result, the continually increasing demand for housing pushes up prices.  Another certain reason is that current incentives favor luxury housing rather than affordable housing.  Luxury housing is always more profitable for private developers.  The Israeli government housing authority is also tasked with maximizing profit, thereby exacerbating the problem.  Some additional reasons that I can't verify including speculation in the housing market and the domination of real estate by tycoons.

The protesters have come under a lot of criticism.  It has been alleged that the protests are a fig-leaf for far left activists.  This is completely untrue, although as in all social protests of this sort, the left has been prominently involved.  Another complaint lodged against them is that, at the same time the protesters are complaining about prices, record numbers of Israelis are traveling abroad.  This is unfair, as the people traveling are generally older than the people protesting, and they are mostly traveling for short trips to Europe under special deals.  Some of the more rational critiques include that the protesters do not really have a specific set of demands on how to solve the problem, that they are not making good use of the policy levers available to citizens in a democracy, and that the government does not really have the resources to provide subsidies given how much of the prices are due to circumstances beyond their control.  The Jewess was especially unimpressed when the face of the protests, Dafni Lif, responded to the question of where the organizers are getting their resources from with the answer, "I'm not an Excel person; I'm a Word person."

So those are the protests.  The real question will be if the protesters can keep up the momentum after September 1, when the schools re-open and vacations are over.