Gentle readers, let me worry about Tzipi next week.  This week I have something more general to get off my chest.

This blog is about Israeli topics, but it’s not inappropriate to comment on wider issues in the news and their possible effect on us.
The idea that that precious creation, the free market, is sustained by government going away is one of the most vicious myths people with libertarian tendencies have propagated.

The American financial meltdown underlines a couple of basic principles: 

1.  Economic survival depends on functioning markets.  The real threat to the world economy is the possibility that people, fearing the risks, will stop buying and selling capital—money, for those who want a simpler word.  That’s like no longer buying and selling oil because you’re afraid of the price, only worse; some things don’t run on oil, but every economic transaction runs on credit, even if you pay with what you think is cash in your pocket.  No capital transactions=everything stops. 

2.  It IS the job of governments to ensure that markets function, because that’s a vital social activity.  One doesn’t want the government actually running them, but it’s got to make sure they run.  That means efficient and effective courts, legal rules, monetary policy, fiscal policy, bankruptcy laws, etc., etc, not to mention judicious regulation.  Yes, regulation.  The idea that that precious creation, the free market, is sustained by government going away is one of the most vicious myths people with libertarian tendencies have propagated.  The free market is a delicate plant that needs a lot of cultivation. 

I’m a conservative, but I don’t think serious conservatives have ever doubted that proper regulation and oversight of markets is critical in order to make markets function well.  Regulation per se isn’t the enemy; there is a proper balance between more and less regulation at which markets function optimally over the long term.  The balance isn’t fixed, but American market regulation has been way below optimal for a while.
Israeli banks will also note serious losses, but Tel Aviv’s Ahad Ha’am Street is not panicking because it Can’t Happen Here. Seriously.

When people who should know better—like American financiers—go on a binge, like a drunk at the wheel, then preserving the free market requires aggressive intervention.  Now is one of those times.  Watch what happens to that drunk when he’s wheeled into the emergency room after the crash.  Watch the surgeon.  Is he engaged in nonintervention?  Is preserving the individual autonomy of the drunk on the gurney his highest concern?  Does he act like he believes that the doctor who operates least, operates best?  If he does, we’ll fire him after the funeral.

If the American economic tailspin deepens that’s going to be bad news for a lot of its allies and trading partners, including Israel.  One Israeli bank has announced that it will write off between 88 and 109 million dollars worth of Lehman Brothers paper that is now worth its weight in Confederate scrip.

That hurts, and other Israeli banks will also note serious losses, but Tel Aviv’s Ahad Ha’am Street is not panicking because it Can’t Happen Here.  Seriously.
An economic crisis in America may leave the next President, whoever he is, with a lot less time and attention to deal with the Middle East Peace Process. It’s an ill wind, they say.

That’s because Israel has first-rate regulators.  Its banks are regulated by the Bank of Israel.  Most Governors of the Bank of Israel during the past 23 years have been stellar, including the incumbent, Stanley Fischer.  Over a decade ago the BOI laid down a hard and fast rule:  No bank can invest more than 20% of its portfolio in property or property derivatives.  Other regulations on fancy derivatives have emerged with time.  The banks have complained.  So have property developers who weep that they’re being “strangled of credit.”  But most ordinary Israelis have little reason to weep over the BOI’s policies.

An economic crisis in America may leave the next President, whoever he is, with a lot less time and attention to deal with the Middle East Peace Process.  It’s an ill wind, they say.

Not all the news out of Israel is bad.   

In the last week of the Knesset’s summer session it adopted a law that may be the most important since the current system of judicial appointments was instituted in 1953.
For the first time, the government of the day will be able to block appointments to the Supreme Court.

 
To understand the significance of the new law one needs to know how judges are appointed in Israel.  A 1953 law established a committee of nine that appoints all judges in the country, including judges on the Supreme Court.  The committee consists of three Supreme Court justices (including, ex officio, the Chief Justice), two members elected by the governing council of the Israel Bar Association, two Knesset members elected by the Knesset and two ministers, including (ex officio) the Justice Minister.
 
This means that the committee is in the judges’ pocket.  The judges usually coordinate their position before the committee meets, and vote as a bloc (this was expressly outlawed three years ago, but hey, so what? How far are you gonna get, taking the Chief Justice to court?) The two representatives of the Bar Association are prominent attorneys, and either they or their partners are likely to depend for their livelihood on not alienating the judges.  Traditionally, by courtesy, the Knesset members divide, one for the ruling coalition and one for the opposition.  That means the government of the day never gets more than a third of the representatives on the committee and the judges appoint whomever they want.  The result is well known to readers of Arutz 7.
One can get positive change in Israel’s political system if one pursues it intelligently and consistently.

 
The new law provides that a majority of seven committee members are required to elect judges to the Supreme Court.  For the first time, the government of the day will be able to block appointments to the Supreme Court.  That’s not the same as having the power to appoint whom you want, but it means that the judges are going to have to bargain, cut deals, and trade appointments with the government.  The ideological composition of the Supreme Court is likely to change slowly, and since the Supreme Court plays so large a role in determining both doctrine and appointments to lower courts, the whole judicial system eventually will be affected.  It’s not a revolution but it’s significant.
 
It also shows that a) one can get positive change in Israel’s political system if one pursues it intelligently and consistently.  This law wasn’t drafted by the Israel Policy Center but in the past six years we have contributed mightily to the change of opinion in the Knesset that made its adoption possible.  It also shows that b) the Knesset is truly sovereign and can change the rules of the game; it just has to want to, and in order to want to it needs to be educated.  (Thus far my promo for the Israel Policy Center).
The new law will not reduce but intensify conflict over judicial appointments. Where once the judges appointed their colleagues with no-one else having the right to interfere, every round of judicial appointments will now turn into a fight.

 
The person who did draft the law and get it passed in MK Gideon Saar of the Likud.  This in itself is very significant.  Saar considers himself a true-blue right-wing Zionist, but he worked for years in the State Prosecution before going into politics.  He is very close to Supreme Court Justice Edna Arbel.  He understands that the judicial system needs ideological revamping but shares the prejudice of its members against empowering Knesset members to appoint judges or at least confirm judicial appointments. 
 
Notably, the new law aroused no opposition from the Supreme Court, as past legislation touching upon the court’s prerogatives has done.  I believe that this, too, is Saar’s doing.  Given the current public animus against the judicial system, Saar must have convinced the judges to accept this partial reform as a way to head off a more serious crises and greater curtailment of the de-facto sovereignty the court has enjoyed hitherto.
 
Saar has presented his new law as a compromise, a “third way” between the old system where judges had exclusive control of judicial appointments and a full-fledged system of judicial appointments by elected officials.  He expressed the hope that the new law will lead to a system of consultation and compromise between judges and elected officials.
 
In my view, the new law will lead to nothing of the sort.  Where once the judges appointed their colleagues with no-one else having the right to interfere, every round of judicial appointments will now turn into a fight.  The new law will lead to constant, public and embarrassing bickering between judiciary and the elected branches of government, to a murky world of deals, counterdeals and bargains, all taking place under the eagle eye of the press.
And that's all to the good. Before too long people will realize that the only way forward is a full-fledged democratic system of appointing judges.

 
And that’s all to the good.  Before too many years have passed, I hope, people will come to recognize that the new compromise isn’t working; it involves too much conflict and drags the prestige of the judiciary in the mud.  It will be impossible to go back to the old system of de facto appointments by judges; the public won’t stand for it.  The only way forward will be to go to a full-fledged democratic system, where elected officials appoint and confirm judges after public hearings.
 
Two years ago there was a scandal when the current Chief Justice, Dorrit Beinish, blocked the appointment to the court of a gifted jurist, Prof. Nili Cohen, whom Beinish dislikes.  The episode was very embarrassing and highlighted that judicial appointments in Israel are not made simply on a professional basis, but on the basis of very human failings.  To paraphrase Che Guevara, “Two, three, many Nili Cohens!”

In releasing 200 Palestinian terrorists, including murderers, Olmert is not just abasing himself before Abbas.  He's testing the waters for his big legacy to Israel.

It’s a mistake to think that the Olmert government’s mass release of terrorists, including some involved in murder, is simply an exercise in supine toadying to Abu Whatsisname.  For Olmert, Barak and Tzipi Livni, this was a test case.  Could they get the Israeli public and professional opinion in the security establishment to overlook the release of murderers?
Olmert's prisoner release passed with barely a public murmer.

The security establishment was divided in its opinion.  That was sufficient for Olmert to ram the decision through.  With the security establishment diffident on the issue, the public protest was limited to those who assume—correctly—that releasing terrorists encourages terror rather than peace.  The release passed with barely a public murmur.

This means that Olmert has been entirely successful and is now well placed to grant his most enduring legacy to the Israeli people:  Marwan Barghouti.

The situation resembles nothing so much as 1993.

In 1993 the PLO was on its last legs.  It had lost credibility with its own people, who realized that PLO was in no position to defend them against policies like that of the Shamir government, which initiated (under the aegis of Ariel Sharon) the construction of 10,000 housing units in Judaea and Samaria.  Hoed up in Tunis, having been chased out of Beirut a decade earlier by the IDF, the PLO had lost much of its international legitimacy as well.  It was almost dead.
Olmert has been entirely successful and is now well placed to grant his most enduring legacy to the Israeli people: Marwan Barghouti.

Then along came Yitzhak Rabin and Shimon Peres and plucked defeat from the jaws of victory.  Pursuing the will-o’the-wisp of peace, they more or less resurrected the PLO and Yasser Arafat from the dead and gave them weapons and a state in the heart of the Land of Israel.  The rest has been written in Jewish blood from that day to this. 

It has taken fifteen years for the peace virus to run its course in the Israeli body politic.  Today, two-thirds of the public does not believe peace is possible.  It has no faith in its government.  For its part the PLO is once again moribund.  It, too, no longer has any credibility with its public.  It is corrupt and, like its leader, totally ineffective.  For the first time in fifteen years, the Israeli public has a chance to redress the errors of the past and take a new course, encouraging as many Palestinians as possible to leave the mess that is Palestine and take up new lives elsewhere.

Once again, Israel’s leaders are about to prove their own people’s worst enemies.  Olmert’s parting gift to the people he has misruled will be the release of the murderer, Marwan Barghouti.  Barghouti is a terrorist.  He will do his best to destroy Israel.  His best is likely to be very good, because he is a charismatic, effective and ruthless leader in the mold of his master, Arafat.  He stands a good chance of uniting the divided Palestinian people and forging them once again into an effective political weapon against Israel.  Sophisticated in the use of the media, Barghouti will be very good at garnering international support as well.  The clock will be set back 15 years, and another generation of Israeli children, like my children, may grow up under the shadow of terror.
Barghouti is a terrorist. He will do his best to destroy Israel. His best is likely to be very good

I have little doubt that part of the reason why Israel’s security services failed to oppose the release of Palestinian murderers in an effective manner is because they, too, realize that what really is at stake is the release of Marwan Barghouti.  Barghouti is not only an effective Palestinian leader in the mold of Arafat; he is also the new messiah of the Israeli left.  He’s someone we can sign an agreement with!  In their heart of hearts, members of Israel’s political elite, to whom some leaders of the security establishment must belong, have to believe in a new Palestinian messiah for Israel.  What else do they have to believe in?

------------------------------

In reaction to some of the talkbacks to my previous blog, I spoke to Baruch Gordon of the A7 staff about censorship on the site.  Gordon was frank:  There is a censorship policy.  Gordon claims it has nothing to do with talkbackers’ opinions of blogs.  The policy is:  No Christian missionary messages; no abuse of talmidei chachamim; no use of the term “Nazi” or threats of violence against public figures.  The first two I believe are entirely consonant with the spirit of Arutz 7.  The second two are necessary to prevent the website from being shut down by the authorities who shut down the radio station.  Gordon said that the editorial staff was considering posting its censorship policy in public, and I urged him to do so swiftly.

For myself, I have no idea how to edit talkbackers’ responses and feel no need to learn.  If I were to edit talkbacks, I would adopt Gordon’s policy regarding the “Nazi” epithet, and threats of violence against any Jew, not just leaders, both of which I consider morally repugnant.  However enabling the writer of a blog to edit his talkbacks vouchsafes him a dangerous power I’d rather not possess.  Let Gordon do it. 

I am made extremely uncomfortable by abuse, even mild abuse, between talkbackers on the site.  If a talkbacker can, however, by his or her comments, make me look foolish, I probably deserve to be shown up for a fool.

Today is the day not merely to commemorate Gush Katif but to dedicate ourselves to her reconstruction--and the reconstruction of the benighted society that destroyed her

According to a still-recent convention, today, the 5th of Av, is the day set aside for commemorating the crime against the Jewish people—and, as individuals, the residents of Gush Katif and Northern Samaria—committed by the State of Israel three years ago.
Today, the 5th of Av, is the day set aside for commemorating the crime against the Jewish people committed by the State of Israel three years ago.

I am not entirely comfortable with this date, which was chosen to fall within the Nine Days of national mourning leading up to Tisha B’Av.  In 2005 I maintained the customs of mourning until sometime in September, seven full days until after the destruction of the last community was complete.  Since then I have commemorated the 12th of Av, the Hebrew date of the official commencement of the destruction, and till then neither shave, nor eat meat, nor do any of the other things proscribed during the days of mourning.  But this date seems to have been accepted by most of those for whom today is not simply August 6th and another day at the beach.  Soon one will have to acknowledge that minhag Yisrael din hu—a custom accepted by the Jewish people has force of law.

For me the breaking point came when the Knesset passed the Disengagement Law in February 2005.  Unlike others, I could not fool myself that there was some kind of “democratic deficit” involved in the act.  Sharon’s parliamentary maneuvers were small change compared to the kind of things done in the British Parliament in the late 19th century.  A majority of the elected representatives of the Israeli people voted to violate the fundamental rights of a minority, after years of press campaigning carefully and deliberately delegitimized them.  There is no question that disengagement was an official act of the State of Israel.

The terrible thing about disengagement is what it says about the people who passed it, executed it, and let it happen.  Fundamentally, a free society can sustain itself only among a moral people.  The vicious indifference exhibited by many, perhaps most Israelis to cruelty to their fellow Jews, fellow citizens—still ongoing—is evidence of a deep moral handicap.  With disengagement, not justice but the will of the strongest became the law in Israel, and such societies cannot long endure.  Disengagement was a test of whether a sovereign Jewish state in the Middle East can survive, and Israel failed it.

When political theorists teach us that society is a civic compact based on the guarantee of each other’s fundamental rights, they are not just spinning a theory.  They’re describing reality.  A functioning society depends on citizens—ordinary citizens—pledging their lives, fortunes and honor to upholding the rights of all.  When that pledge is broken, it means that each individual must suspect that he may be the next victim, that his rights will be the next to be sacrificed.  Unless the trend is reversed, the act publicly and forcefully repudiated, each citizen will become just an individual, and will look after himself alone.  The demise of society and state cannot then be long delayed.

Disengagement aroused in me a Swiftian indignation that burns still.  In disengagement, the State of Israel broke the civic compact between itself and me.  Its laws now compel because of the threat of force, not the assent of conscience.
The Sages said, “Whoever mourns for Jerusalem merits and sees her rejoicing.” Let us mourn Gush Katif that we may merit and see her reconstruction.

But to say, feel and attempt nothing more is to remain mired in a paralyzing resentment.  Two approaches to commemorating the crime against Gush Katif are to be rejected.  One is to allow bitterness to paralyze us and prevent us from seeking redress.  The other is simple mourning, simple commemoration, a remembrance of the past and nothing more.  To me, both approaches imply acquiescence, and I will never acquiesce.

“It is rather for us to be here dedicated . . .”  The purpose of commemoration is rededication to the cause of the Jewish people.  Redress that can only come by replacing the failed culture and morals of Jewish society in Eretz Yisrael with our own—not by force but in the only meaningful way, by consent, expressed as well at the polls.  To that let us dedicate ourselves.  The Sages said, “Whoever mourns for Jerusalem merits and sees her rejoicing.”  Let us mourn Gush Katif that we may merit and see her reconstruction.

Ehud Olmert's political valedictory was written by his defense lawyers.  It was a passel of lies.

Olmert spoke to the nation last night for about ten minutes.  As I listened, I was reminded of Berlin Diary by William Shirer (his Rise and Fall of the Third Reich is better known).  Shirer was Berlin correspondent for the New York Times during the 1930s.  He would cover Hitler’s speeches on public occasions or in the Reichstag, and then go home and write in his diary how astounded he was that an entire nation should be spellbound by a speech full of lies that a 10-year-old could see through.
Some commentators praised Olmert for his statesmanslike, balanced valedictory. Actually, it was vintage Olmert: Bluff, spin and prevarication throughout.

Olmert took credit for strengthening Israel’s defenses; for improving Israel’s deterrent power (he didn’t mention Sderot); for removing the threat of attack from Israel’s north; for solving the problem of Israel’s impoverished Holocaust survivors (he gave them a hundred shekels a month); for supporting the poor and improving Israel’s education system.  The nearest he came to mentioning the Lebanon War and the Vinograd Commission was to claim credit for identifying needed reforms and implementing them (Judge Vinograd himself said some months ago that the IDF has implemented the recommendations of the report, while the government has neglected those it was supposed to attend to).

Except for improvements in the IDF’s tactical capability, not one of these claims is true.  We still have no idea whether the IDF is better able to use its better-trained forces in service of some useful and practical military strategy.  In addition, Olmert claimed wonderful achievements in areas, presumably security-related, that he claimed he couldn’t talk about.  Given the quality of his other assertions, one may be permitted to treat this completely unverifiable one with, to paraphrase Churchill, a double measure of the suspicion that attaches to all his statements.

Then there were the half-lies.  Olmert claimed to have preserved “economic and social stability” and the provision of employment for hundreds of thousands of new workers.  In truth, Olmert proved an indifferent guardian of the policies implemented by the man who really reformed Israel’s economy, Binyamin Netanyahu, whose feathers Olmert sought to steal.  Netanyahu slashed expenditure, balanced the budget, and reformed pensions policy.  As a result he was able to initiate a policy of progressive tax reductions, resulting in four years of rapid economic growth and rapid job creation. 
Olmert wants to create the image of a wise and farsighted elder statesman. He wants his judges to judge him on this mythical record, and treat his innumerable peculations as the small change a noble career. It worked for Shimon Peres, why shouldn’t it work for him?

During his two years in office, Olmert has thrown money at constituencies he wanted to bribe or who were able to make a big enough stink in the press.  Gradually, the deficit has been widening, threatening growth, tax reduction, and all Netanyahu’s achievements.  Ironically, next week the Cabinet is to meet to discuss a 9 billion shekel (nearly $3 billion) cut in the 2009 budget, 1.5% of GDP, 4% of expenditure, needed to close the deficit gap.  Hardly impressive stewardship of the nation’s economy.

Some commentators praised Olmert for his statesmanslike, balanced valedictory.  Actually, it was vintage Olmert:  Bluff, spin and prevarication throughout.

There’s a reason for all this.  Olmert’s political exit strategy is actually the entrée to his legal strategy.  There’s really little he can do to explain away envelopes full of cash, double-billing for junkets with the money passed on to family members, illegal appointments in government ministries, and all the rest.  His lawyers will do their best but the fact remains that Olmert is the epitomy of the corrupt politician in a public system characterized by the type.  No, Olmert’s real plea is to the grandstand.  He wants to create an image of a wise and farsighted elder statesman, dealing with grand themes and grand issues.  He wants his judges to judge him on this mythical record, and treat his innumerable peculations as the small change a noble career.

It worked for Shimon Peres, who was caught red-handed taking money illegally, why shouldn’t it work for him?

So it’s important to keep in mind that Olmert’s grand achievements and noble ambitions exist mainly in the scripts of his well-paid spin doctors.  He lost a war in Lebanon, let the Hamas take power in Gaza and then appeased it, utterly botched the prisoner exchange with Hizbullah, ran reckless with the government’s budget, legitimized Syria’s regime and Hizbullah’s de facto takeover of Lebanon for no visible return, and basically did nothing else besides.  His tenure has been “the years the locusts have eaten,” during which the strategic threat to Israel has grown enormously, the ring of heavily armed enemies has tightened about her, while her government sat paralyzed by indecision. 
Olmert’s theater is meant for the men and women in black gowns who make up Israel’s legal establishment, living in a dream world of their own, governed by dream values. He’ll probably get away with it.

As Olmert and the rest of Israel’s political elite know, with the possible exception of Tzipi Livni, all of Olmert’s peace negotiations were a sham, a shadow theater for a particular narrow constituency whom it was Olmert’s concern to appease.  Israel can make concessions but it cannot conclude peace with Syria, the Palestinians, or Hizbullah, and Olmert, who is not stupid, knows it.

I doubt most Israelis are like the Germans of the 1930s.  Watching TV last night, many will have pulled a wry smile.  Israelis tend to be politically passive but few retain any illusions about Olmert.  They're content to let Olmert have his say as long as gets on with moving on.  Sof-sof!

All Olmert’s theater is meant for the men and women in black gowns who make up Israel’s legal establishment, and who, while living in a dream world of their own, governed by dream values, decide issues of life and death of which they have no comprehension.  He’ll probably get away with it.