Unholy Alliances

Israel's election is bringing together some strange bedfellows.

TEL AVIV, Israel — For the impatient reader, we can begin at the end. On Jan. 22, Benjamin Netanyahu will win the Israeli election and become prime minister for the third time. This much we know already. He will likely form a government of parties that have opposing views about most of the issues that matter to most Israelis -- the occupation, the economy, the role of religion, and more -- just as he did in 2009. Foreign pundits will lament the country's rightward drift and the growing influence of settlers and the ultra-Orthodox.

Given this certainty, a casual observer might easily conclude that Israeli politics suffer from akinesia, remaining helplessly rigid and motionless like the sorry Parkinson's patients Oliver Sacks described in Awakenings. But that's the paradox of these elections. The outcome will be widely seen, reasonably, as more of the same and a sign of worrisome stasis. In fact, they reflect tectonic changes in the parties Israelis vote for and the issues on our minds. While Jan. 22's vote is almost guaranteed to be a victory for the status quo, the status quo is likely to be short-lived.

The first thing one should realize is that the security issues that have dominated Israeli politics for decades, and get most of the attention abroad, have not been a major factor in this election. Such a state of affairs would have been unthinkable a decade ago, when the Second Intifada and a spate of terrorist attacks allowed Likud to double its strength in the Knesset (19 seats to 38) in a single election. This campaign season is taking place as Iran draws within months, by some estimates, to being able to build a nuclear weapon, and was interrupted by a war with Hamas-controlled Gaza during which Tel Aviv and Jerusalem were shelled. So one might expect security to fully eclipse all other issues. But this has not happened.

Defense minister and perennial candidate Ehud Barak hastily ended his own Knesset campaign and resigned from politics after polls showed that his proficient prosecution of the war with Gaza brought him no popular support. Elections are just under three weeks away, and so far Iran has been raised only once in a high-profile way -- by Shaul Mofaz, the head of the opposition Kadima party, whose election billboards show a mushroom cloud and, referring to Netanyahu by his ubiquitous nickname, bear the text "Bibi will get us in trouble." (Kadima is poised to be the biggest loser of these elections, dropping from 28 Knesset seats to just two, according to the latest polls.) No other major party leader has challenged the present administration's handling of Iran or has said much about the issue one way or another. Even Netanyahu, after months of speaking of little else but Iran and after a ham-fisted effort to scare pro-Israel American voters into backing Mitt Romney in the U.S. presidential election, has mentioned Iran only rarely and has generally refrained from making it an issue in his own campaign.

Of course, the issue of Israel's security is inseparable from discussions about the occupation, territorial compromise, and peace with Palestinians. These issues too have been less prominently debated in this election than in past ones -- at least among the parties likely to play a major role in the new government.

The liberal-left Meretz party and the joint Arab-Jewish communist Hadash party remain unwavering in their support for a two-state solution, with the 1967 armistice lines, slightly amended here and there, serving as the border between Israel and Palestine. Present polls give them three and four seats, respectively, of the Knesset's 120. Former Foreign Minister Tzipi Livni's new Hatnua party supports immediate negotiations with Palestinian President Mahmoud Abbas and the Palestinian Authority. Netanyahu's failure even to reach the negotiating table is at the heart of Livni's campaign. Were the elections held today, she would receive eight seats. The mostly modern Orthodox and settler-supported Habayit Hayehudi and Ihud ha-Leumi parties steadfastly oppose relinquishing any of the occupied territories, ever. They poll together at 10 seats or so.

The larger parties -- Likud and Yisrael Beiteinu, which are running together; the Labor Party; the new, centrist Yesh Atid party; and the ultra-Orthodox parties -- doubtless all have positions about the occupation and peace negotiations, but they express them with surprising reticence and a seemingly willful lack of clarity.

For almost 30 years, since 1984, every election has brought clashes about religion and state of unparalleled acrimony. Over these issues of whether yeshiva students should be forced to serve in the army, whether Orthodox Jews should decide who can marry and how, whether buses should run on the Sabbath -- and more -- parties have risen to power and prominence and governments have fallen. In this election, however, the perennial enmity between secular and religious Israelis, especially ultra-Orthodox Jews, is strangely absent.

If security, peace, and religion absorb less of the electorate's attention, economics seems now to absorb more. In early December, the Labor Party issued a 66-page economic plan that advocates rolling back decades of neoliberal reforms and privatization and calls for massive government spending on public housing, increases in services across the board, an increased minimum wage, and more. The growing emphasis on the economy may be a sign the party, which had drifted away from its original socialist principles in recent years, got the message after 2011's massive social protests -- in which thousands occupied central Tel Aviv to protest the rising cost of living, privatization of government services, regressive taxes, and an ever-expanding gap between haves and have-nots. Several leaders of the protests entered Labor's primaries last year and performed well enough to be ensured a spot in the next Knesset. Labor has embraced economic issues with unmatched single-mindedness, yet almost all the parties have made economics a part of their election campaign, most promising sweeping reforms of an economic system that they describe as unfairly balanced toward the moneyed and powerful.

This shift in emphasis from security and cultural issues to economics reflects changes in the demographics of Israel's political parties, which themselves reflect changes in the demographics of Israeli voters, though in a complicated way. Over the past few years, many of Israel's political parties have grown more heterogeneous in ideology and varied in membership.

Kadima, which governed the country from 2005 to 2009 under Prime Minister Ehud Olmert, was an amalgam of sobered socialists and reconstructed Greater Israelites. The recent fusing of Netanyahu's Likud and Avigdor Lieberman's Yisrael Beiteinu into Likud-Beiteinu brings Russian free market enthusiasts with a high-European disdain for Arabs together with second-generation settlers and neoliberals in bespoke suits. Haim Amsalem, a former Knesset representative of the ultra-Orthodox Shas party, has started a joint religious-secular party named Am Shalem dedicated to "combating racism" against Sepharadim (though in interviews, Amsalem has said against Palestinians as well), pushing the ultra-Orthodox into jobs and the army, and "restor[ing] moderate Judaism to Israel," as the party's website explains.

Ultra-Orthodox Jews, who have traditionally preferred their own identity-based parties, ran this year in primaries for both Likud and Labor, suggesting a further shuffling of religious identities in Israel's old parties.

Unsurprisingly, this growing diversity within parties has come at a time when old voting blocs have begun to disintegrate. Although the million or so immigrants from the former Soviet Union still tend to oppose territorial compromise with the Palestinians and reject welfare-state economic policies that recall the brutal socialism of their birthplace, their political affiliations are increasingly spread across the political spectrum. Israeli Palestinians, though they are largely ignored by Jewish media and politicians during elections, will vote in larger numbers than ever for majority-Jewish parties, chiefly Labor. Settlers' votes are also spread among more political parties than in the past (though almost exclusively on the right). The same is true of Mizrahim, Haredim, and, no less, secular cosmopolitans.

The decline of the old voting blocs has come with a decline of old ideologies as well, on the right and on the left. Among the most notable losers in the Likud primaries was Benny Begin, son of Menachem Begin, the legendary founder of Likud and its first prime minister. The younger Begin represented perhaps the last of the old Likud ideologues, whose commitment to retaining the West Bank was matched, perhaps incongruously, by a commitment to liberal democracy blind to religious and ethnic background. Most politicians today, on the right and left, insist that they maintain consistent political opinions; few, however, will cop to having an ideology. In the past, ideology was de rigueur; now it is vaguely déclassé.

Taken together, these trends suggest that Israeli politics have recently lost definition and grown shaggier. They have changed from a French garden, sharp of line and in fine trim, into an English garden in which the shrubs and the trees have expanded into one another, and a skein of ivy stretches from this plant to that.

Where all this will lead in the long run is worth pondering. In the short run, though, it will lead us to nowhere new. This is in part because in Israel voting patterns are a lagging indicator of political change. The massive immigration of Mizrahi Jews to Israel came to an end in 1964, but did not receive full expression in the ballot box until the 1977 elections, when Likud won for the first time, ending three decades of left-wing rule dating back to the country's founding. A similarly profound political shift seems to be happening today, but while most of the new, established parties have scrambled to exploit the changing landscape of Israeli politics, no one (myself included) has yet come to understand the changes and what they mean.

Over time, the blurring of ideological definition and the demographic reshuffling that one sees in this election may or may not change Israeli policy in fundamental ways. The new focus on issues like housing, education, tax equity, and so forth could give rise to political coalitions that were unthinkable in the past: say, between the secular social democrats of the Labor Party and the Halakhocrats of the ultra-Orthodox parties whose constituents benefit most from government aid. The focus on economics may, in time, even launch sustained public discussion of the practical costs of the occupation, which may in turn diminish the electorate's patience for the status quo.

Or it may not. And this is the point. Surveying with satisfaction the American financial system in 2005, Alan Greenspan praised "the remarkable resilience of the banking system," which would carry on much as it is for years to come. The lesson many will learn from this election is that nothing changes in Israeli politics, which will slouch and shuffle on much as it is for years to come. This lesson is wrong, though it will take time until this is obvious to all.



Is This Any Way to Treat Your Banker?

China recoils in horror at America's fiscal dysfunction.

SHANGHAI — At the last possible instant, the White House and Congress reached a compromise that prevented the United States from falling off the "fiscal cliff" -- or, as we in China have been calling it, caizheng xuanya.

By raising taxes on households that make more than $450,000 a year, the negotiations will save middle-class families from tax increases and also will likely prevent the United States from going into another recession. China can relax -- for now. Given how deeply the Chinese and U.S. economies are intertwined -- in 2012, the United States imported more than $350 billion of goods from China while exporting just under $90 billion -- a U.S. recession would hurt China's labor force. China's exports to the United States grew at 9.4 percent from 2010 to 2011 and at a similar speed in 2012; if that number slows significantly or becomes negative, it would undercut China's economic prospects and even impair China's social stability.

Why hasn't the United States been able to keep its financial house in order? The United States is the richest country in the world, but since 2009, the U.S. government has spent at least $1 trillion more than it took in. In its first term, the Obama administration aspired to solve all of its country's problems at once: addressing the financial crisis by bailing out businesses and stimulating the markets, wrapping up the wars in Iraq and Afghanistan, and reforming social security and health care. But the weak economy sent the U.S. federal debt soaring from roughly $10 trillion to $16.4 trillion in just four years. Real reform of the U.S. entitlement system has yet to happen. And the fiscal cliff deal merely locked in George W. Bush's unsustainable tax cuts for most Americans. All this has Chinese elites worried.

Frankly, China is fed up with the performance of U.S. democracy. People's Daily, the mouthpiece of the Communist Party, warned the United States in a recent article not to scare the world so frequently. In Beijing's eyes, the financial crisis instigated by the fall of the U.S. firm Lehman Brothers in 2008, followed by years of slow growth, 2011's debt-ceiling fight, and 2012's fiscal cliff showdown have weakened America considerably. Xinhua, China's national news wire, weighed in on the matter Wednesday: "So the politicians have chosen to kick the can down the road again and again. But as we all know, the can will never disappear. Sometime and somewhere, you might trip over it and fall hard on the ground, or in the U.S. case, into an abyss you can never come out of." By focusing on their own constituents and not making hard decisions for the benefit of the country, America's lawmakers are making things worse; another People's Daily article, published Dec. 31, called the fiscal cliff crisis "auto-sadism" arising from the U.S. political system.

One hopes that the United States can work out a sensible solution. The total 2012 federal budget of $3.8 trillion accounted for roughly a quarter of U.S. GDP. To be sure, the United States can keep sustaining its unbalanced federal account by printing money and selling Treasury bonds. By printing more dollars, the U.S. government stimulates its markets, as well as exports and employment, by increasing its liquidity. But much of this liquidity will actually go abroad, pushing inflation overseas.

Is that any way to treat your banker?

China helps the U.S. economy by lending money to the United States by buying Treasury bonds - it now holds $1.16 trillion of U.S. debt. U.S.-China cooperation has helped save the United States from financial insolvency -- and China has benefited from this system by keeping its currency competitive -- but this enablement has come with risks, including weakening the credibility of the U.S. dollar. To fundamentally improve its economy, the United States needs to stop the financial gimmicks and boost its exports the old-fashioned way, through innovation, while encouraging its citizens to increase their incomes and decrease their spending. China wants to partner with a healthy, balanced United States, not a profligate, irresponsible one.

And even if America's day of reckoning has been postponed, China still faces the risk that the United States could fall off one fiscal cliff or another in the future. Without a fundamental restructuring of the U.S. budget that significantly raises income while cutting expenses, the United States looks like a disaster waiting to happen.

No wonder many Chinese see an America in decline, even if many Americans don't believe it yet. We see few signs that the United States is ready to reinvent its national narrative and mission. But here in Shanghai, we understand basic math pretty well. The United States needs to balance its consumption and savings; weigh its pursuit of al Qaeda in Afghanistan with other foreign-policy goals; and cut its spending on defense and social welfare. How can Washington be responsible for the rest of the world if it can't even take care of itself?

SAM YEH/AFP/GettyImages