Netanyahu’s triple escapism

Binyamin Netanyahu is determined to show the rest of the world that, Arab spring or no Arab spring, Israel can and will defend its citizens. The language of Israeli politicians, the brutal efficiency of this bombing campaign and the asymmetrical death count all mimic Israeli campaigns past. But the political dynamics surrounding this campaign could not be more different. The US president – rather than spending his time in the situation room – is flying around Asia. The Egyptian president, rather than sealing the border, sent his prime minister to Gaza in a display of solidarity (and other regional leaders are acting in a similar way).

When I was travelling in Israel and the Palestinian territories last year, several Israeli officials talked in the sanitised language of international diplomacy about how Israel has moved from making peace to “managing conflict”. Now I know what they meant: building a wall to pen in potential terrorists, while launching periodic attacks to disrupt the military operations of Hamas and Hezbollah (one official referred to these repeated attempts to defang Hamas as “cutting the grass”). Every nation is entitled to defend itself, but the problem with these repeat military operations is that they create a growing pool of anti-Israeli resentment in the neighbourhood and sap the Israeli state of legitimacy internationally. Israel under Netanyahu is indulging in a form of triple escapism – security, geopolitical and economic –which takes the country ever further away from engaging with the Palestinians directly.

Given the doublespeak of successive leaders of the Palestinians, the Israeli government’s questioning of the bona fides of the Palestinian leadership is more than justified. It is unlikely, however, that other former terrorist organisations such as the IRA would have been willing to engage in a peace process with these kinds of preconditions. Yet the bigger problem is the idea is that somehow Israel can get security first, and only after that deal with the unresolved political issues that are the cause of insecurity and resistance.

The second dimension of Israeli escapism is geopolitical. The elite are concerned about the effects of the Arab uprisings but they tend to dismiss the solidarity of new leaders for the Palestinians as rhetoric that will not come to anything.

Yet some of the more colourful intelligence analysts and members of the Knesset talked to me about how the map of the Middle East could be rewritten as a result of the Arab uprisings. The artificial states constructed by the west after the First World War might now collapse and be replaced by entities drawn around tribal lines. For them, it seems like an extraordinary idea to fixate on a two-state solution based on the 1967 borders at precisely the moment when the borders and governance of all states in the region are up for grabs. This misses the point that, whatever borders are settled for other states, the Palestinians will demand their rights as citizens.

The start-up nation

The third dimension of Israel’s escapism is economic. The governing elite have created a new founding myth for a time of consumerism: the “start-up nation”. (This country of less than eight million people – in a state of war since it was founded, and with no natural resources – apparently has produced more start-up companies than Japan, China, India, Korea, Canada, or the UK.) And for the left, which is keen to attack the government, it is economics rather than the peace process which takes centre stage.

The left claims that the economic reforms that have driven growth have led this aggressively egalitarian country to become very unequal, with rising prices and cuts in services increasingly hitting the middle classes. Many more Israelis are focused on house prices and the cost of staple foods such as cottage cheese. To the extent that last year’s “tentifada” protesters worry about the settlers; they resent them, as much because of the subsidies they receive at the expense of middle classes as because of their role in preventing a peace settlement.

The paradox is that Israel has retreated from the world at a moment when the long-term prospects for the country’s survival have never been so insecure. The current operation is euphemistically called “Pillar of Defence”, but ironically it comes at a time when each of the four real pillars of the country’s legitimacy and security are being eroded: the memory of the Holocaust, its status as the only democracy in the Middle East, nuclear and conventional military superiority, and US protection.

The nightmare scenario for Israelis would be to be out-victimed by the Palestinians, out-democratised by the Arabs, outgunned by the Iranians, and outside America’s main focus of interest as that shifts from the Middle East to the Pacific.

Mark Leonard is director of the European Council on Foreign Relations. This article is published in association with Reuters

This article first appeared in the 26 November 2012 issue of the New Statesman, What is Israel thinking?

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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.