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It’s the Cost of Living, Stupid

As Jonathan noted, Benjamin Netanyahu’s unexpectedly poor electoral showing resulted partly from his abysmal campaign. But it was also a clear vote of no-confidence in his policies. The problem, from the world’s perspective, is that what voters rejected wasn’t his foreign and defense policies. Rather, it was his domestic ones.

The Jerusalem Post’s Herb Keinon has an excellent analysis of just how dominant domestic considerations were in this election. As he noted, the parties that significantly increased their parliamentary representation–Yair Lapid’s Yesh Atid, Shelly Yacimovich’s Labor and Naftali Bennett’s Jewish Home–campaigned almost exclusively on domestic issues. Even Bennett, who is unfairly caricatured overseas as representing “the extreme right,” ran mainly on domestic issues, capitalizing on his record as a successful high-tech entrepreneur. In contrast, parties that ran on diplomatic/security issues–Netanyahu’s Likud, Tzipi Livni’s Hatnuah and Shaul Mofaz’s Kadima–did poorly, aside from one exception: Meretz picked up the diehard peacenik votes Labor lost by focusing on domestic issues.

The same conclusion emerged from another Post reporter’s visit to the former Likud stronghold of south Tel Aviv (the city’s poorer neighborhoods): Person after person praised Netanyahu on security issues but panned him on bread-and-butter ones, and cited that as their reason for abandoning his party.

In an article for Commentary following the socioeconomic protests of summer 2011, I detailed the many pressing domestic issues Israel faced and warned that Netanyahu would be judged on whether he exploited the protests’ momentum to address them. As it turns out, he didn’t–and especially not the one most important to Israelis, the high cost of living. That partly explains how Lapid could come from nowhere to win 19 seats by running on pledges such as “Our children will be able to buy apartments” and “We’ll pay less for gasoline and electricity.”

Equally important, however, is that Israeli voters tend to vote tactically. And with Netanyahu seemingly a shoo-in for the next prime minister, they primarily focused on trying to ensure that his next coalition would be both willing and able to carry out the needed domestic reforms.

For this, a party that could replace the ultra-Orthodox in his coalition was essential. It’s not just that the ultra-Orthodox would block any attempt to make them serve in the army–something Israelis care about, but not as top priority. Far more important is that they’d block any other reforms aimed at benefiting the middle class. When the outgoing government proposed an initiative to create affordable middle-class housing, for instance, the ultra-Orthodox parties demanded that the criteria be altered to favor ultra-Orthodox applicants. And since he had no government without them, Netanyahu capitulated.

Yacimovich, having pledged not to join the government, couldn’t fill this role–and in any case, her economic views were too different from Netanyahu’s to make a partnership likely. Livni cared only about the nonexistent peace process, and would cheerfully sacrifice domestic reforms for freedom to pursue that goal (which the ultra-Orthodox would grant). But Lapid repeatedly promised his voters two things: He would join any government if at all possible, but not a government dependent on the ultra-Orthodox and incapable of carrying out reforms.

In short, he promised exactly the tactical solution that domestic-oriented voters were seeking. And in the final days of the campaign, when it became clear there were no better options, voters flocked to his banner.



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