Thursday, January 31, 2013

Fischer King Departs


From Open Zion, a featured section of the Daily Beast, where I have a regular column

Stanley Fischer is not saying why he is resigning from the Bank of Israel. He doesn't have to. The Likud government's budget, which is now on a two-year cycle, is busted, with a projected deficit of 40 billion NIS, about $10 billion, or 4.2% of GDP. The chickens are coming home to roost. Presumably, Fischer would rather be roosting home in Cambridge, Mass.

The target ceiling for annual deficits in euro zone countries is 3.5% of GDP. Considering its accumulated debt, Fischer thinks Israel's should be at 2.5%. This means Israel's incoming government, if it is prudent in an MIT sort of way, will have to cut social programs severely. Oh, but Israel is a country where average salaries are $2500 per month, a couple's apartment of 100 square meters in Tel Aviv is about $600,000, labor force participation (largely owing to subsidies for Haredi "students") is at least 10% below the OECD standard, major hospitals are at over 150% capacity, universities budgets are being cut by $10 million, and it takes 8 years to build a high speed rail link between Tel Aviv in Jerusalem. (That's 36 miles, a rounding error for China's construction engineers.)

The alternative to draconian cuts is raising taxes like the (instantly regressive) VAT or income taxes on the "well-to-do," meaning people currently netting about $4000 a month. Or imposing an inheritance tax, which means most apartments will no longer pass to children without probate. One could raise taxes on capital gains, already at 25%, but this will hit mainly the middle class, which earns virtually no interest from bank deposits, and invests in stocks as a hedge against inflation, since big money people invest (and successfully shelter) fortunes abroad.

Apropos inflation, the government could try to inflate its way out of this crisis, covering the deficit by printing money. Exporters would presumably like that, since it will lead to a devaluation of the shekel. The trouble is, a lot of exporters are also importers of components and capital equipment. Global corporate investors, whose intellectual capital is crucial for Israeli entrepreneurship, will be spooked. It also means higher interest rates, not only for the government, whose debt to GDP is 75%, but for people buying real estate. Raise the mortgage rate by three points, and the housing bubble will burst, leaving some tycoons like Nochi Dankner (who owns Discount Bank) and Lev Leviev under water.

Thanks to Fischer 's more or less stringent regulation of Israeli banks, Dankner's IDB can no longer use Discount Bank as a personal piggy-bank. (Neither can Shari Arison's group use Bank HaPoalim to cover her losses.) Fischer has kept Israel's banking system as tightly monitored and protected from foreign competition as Canada's, which is probably the only reason why self-satisfied Israeli banking executives did not become Icelandic during the 2008 global melt-down. On the other hand, Israel's banking oligopoly feels to ordinary consumers like a protection racket. Households and small businesses funneled over $5 billion (19.2 billion NIS) in banking fees and service charges to the banks, double the major business sector.

In other words, if the Israeli government does nothing but stay the course, start-up nation will be slow-down nation, more like Europe's basket-cases than Asia's tigers. When reporters asked him if he were leaving to avoid presiding over the looming fiscal crisis, Fischer answered, with the shrewdness of a politician, that reporters would be asking him this no matter when he left. As they say in South Boston, "I'm all set."

I am not suggesting (nor is Fischer) that this last Netanyahu government has been as irresponsible as Likud Finance Minister Yoram Aridor was back in 1981, when--facing an election, too--he bought off Likud's poor Mizrahi base with mountains of consumer subsidies and alleviations of import tariffs, eventually running inflation up to 400% in 1984. Fischer is probably right that a combination of cuts (say, to family allowances), or defense, and, moderate tax increases, can get Israel's balance sheet back to where foreign bond holders will sigh with relief. He would certainly rather raise taxes, and absorb moderate inflation, than cut the public sector--45% of the economy--to the point of spiking unemployment. Spread the pain.

But what Fischer is not saying--at least not since January 2007, when he committed the ultimate gaffe, namely, telling Haaretz what he really believed--is that this economy is not growing at anything like the pace it could if the government were internationally assumed to be moving to peace--as in the 1990s, when global corporate investors were crowding in, and rates of 6-7% were common. In 2012, the population grew by 1.8% and the economy grew by only 1.5% per capita, 3.3% in all. How do you pull 1/3 of Israeli children (and 40% of Arab households) currently below the poverty line into middle class lives, or save Israel's public educational and medical institutions, with anemic growth?

Fischer was born in Rhodesia and doesn't need lectures about colonial over-reach. But the economic problem is not just past billions wasted on settlements, or Haredi Yeshivot, for that matter, or endless air force practice bombing runs on Iran. It is rather a government that does not understand the opportunity cost of occupation; a country that is heading toward economically damaging global isolation when it needs to grow robustly out of explosive social inequalities:

"We can grow without progressing toward peace," Fischer said, but with peace, growth would be much higher: “[W]e are talking about the difference between four percent growth a year and growth of five to six percent a year. And the difference between four percent growth and six percent growth is not two percent—it’s 50 percent.”

Fischer was asked if he might agree to become the finance minister in a new government. He dismissed the idea out of hand. He was then asked if he might agree to become the foreign minister.  He answered that this was not offered. As I said, the shrewdness of a politician.

Thursday, January 24, 2013

Lapid: Transformational Leader or Passing Fancy

From Open Zion, a featured section of the Daily Beast, where I have a regular column.

The final tally is in: Likud 31, Yesh Atid 19, Labor 15, Jewish Home 12, Shas 11, well, just get the rest of the numbers here.

And so Yair Lapid is holding the strongest hand of any novice politician perhaps ever in the country’s history. Oh, except for Naftali Bennett, whose ability to pull blocks out of Netanyahu’s tower is exactly as great.

Can we get real?

31, whose step-child is 12 (but doesn’t particularly like the leader of 12), is trying to get to 61. So 31 also needs 19. But 19 and 12, though superficially similar in their youthfulness, are diametrically opposed regarding the elephant in the room. 12 would very much like to have 11, which mostly agrees with 12, so as not to have to knuckle-under to 19 about the elephant. (So would 31.)

But 19 ran against and sort of hates 11, and so cannot sit only with 11. Therefore, 19 would prefer to sit with 12 and pretend to ignore the elephant. In any case, 31 needs 12 as much as it needs 19: 64–19=45, but 64–12=52. And 31+12+11+the pious 7 gets to exactly 61, but must appoint a speaker.

So Lapid may be getting the kind of attention this week that Bennett got most of last month, but he actually has no more power over Netanyahu than Bennett—unless, that is, Lapid is prepared to expand the universe of numbers, which I’ll get back to in a moment.

Yes, Lapid can forget about diplomacy with the Palestinians, where Bennett neutralizes him, and focus on stopping subsidies and military exemptions to Haredim, that big issue Kadima’s Shaul Mofaz fumbled last summer. He can say he wants to build more housing, that is, within the Green Line and pretend Bennett will not be wanting more beyond it, albeit only in settlements requiring “natural growth.” He may gesture toward “electoral reform,” though to what change that will matter exactly?

What Lapid cannot do is avoid this simple choice: Do I move to gain political power, or, do I join a Netanyahu government only with my own party?

I KNOW that putting things this way is unconventional. Isn’t joining the government exactly the way Lapid gains power—prove himself a serious leader—doesn’t it mean the Foreign Ministry or the Education Ministry, and more?

This is a terribly rash conclusion.

First, Lapid cannot pretend a reinvigorated Obama administration in not also in the room. He may pretend that Israel can be transferred to Mars for four years. But it can’t: nobody outside of Israel thinks Palestine is just Israel’s internal problem. And Obama, who's said 31 doesn’t “understand Israel’s best interests,” is virtually the only friend Israel still has in the world.

Second, the people who voted for Lapid know they need the world. It has been clear for some time that there are, for all the factions, only two political parties in Israel, representing two—let us call them—gestalts: the party of Greater Israel and the party of Global Israel, Jerusalem’s fire versus Tel-Aviv’s cool. The election created a virtual tie. Lapid’s voters expect him to hang tough.

The supporters of Greater Israel—people like Bennett, including most of the Likud—believe in the continuing military imposed integration of “Judea and Samaria.” Lapid cannot sit with such people solo for four years, as the status quo continues to work entirely in their favor, and not become their window dressing or their tool. Their actions, or should I say their inactions, along with their creepy propaganda, will tar him, just as Ariel Sharon’s Likud tarred his father Tommy Lapid’s Shinui Party, whose 15 seats were, for a while, the talk of the 2003 election.

Given the awful history of Jews in the 20th. century, it would be tactless to call the 31+12+11+7 “fascist.” So let’s just say they believe in lording over and, if this proves impossible, expelling Palestine’s Arab inhabitants to Jordan. They also believe in Jewish state defined as special material privileges for legally—that is, religiously and biologically—defined “Jews”; a legal system incorporating Halacha; an educational system teaching strident nationalism; a supreme court divested of its power to ruin things in the name of individual rights; and a police force empowered to suppress sedition from "the left."

You see, the 59 un-Likud (un-Bennett, un-Shas, etc.,) seats that Lapid is nominal custodian of, for this month anyway, are actually a kind of fire-break against anti-democratic forces that have been taking Israel into a morally awful and terribly dangerous place. In this context, remember Shinui? Or Dash, or the Center Party, or the rest who thought they could “change things from within”?

Third, and correspondingly, Lapid was polling around 10 seats a month ago. He won 19. But he’s done nothing in the past month to establish himself as a mobilizing force. He is rather Global Israel’s unopened present, a symbol, not a leader, the recipient of projected hopes and feelings of cultural affinity—Rothschild Blvd.’s Chauncy Gardiner. This can't last.

LAPID HAS talent and many serious people on his list. He can yet rise to the occasion. How?

Tommy Lapid.
Remember Shinui? Anyone? 
Lapid said last night that he is unprepared to create a blocking coalition to deny Netanyahu the prime minister’s job. This, he said, speaking in code, would mean making common cause with Arab parties, and particularly Balad, which he implied is “anti-Zionist”—an arguable point, maybe worse, but let it go.

What Lapid could yet do—actually, has a once-in-a-lifetime chance to do—is lay the foundation for a broad-based Israeli Democratic Party, inviting Labor, Tzipi Livni’s Tnuah, Meretz, what’s left of Kadima, and all Arab parties (or public figures) that sign on to basic principles of negotiations with Palestine, entrepreneurial globalism, social democratic approaches to education and infrastructure development, and civil rights-based constitutional reform.

All the leaders of these parties have said, one way or another, that they would welcome the chance to join forces. All have new people who could work well with one another here, Yesh Atid’s Jacob Perry with Labor’s Erel Margalit, for example. (Once, in a moment of grace, I allowed myself to imagine a notional platform for such a party.)

Note well: I am not advocating that Lapid go to the opposition or try to find a prime minister other than Netanyahu. But he should go into the government armed to the teeth. He should organize a block of 45+ members and then offer to join a Netanyahu government. If Livni or Yacimovich or Mofaz or Galon refuse his leadership, they will justifiably become irrelevant.

With that strength, Lapid could negotiate Global Israel’s agenda and not lose credibility if, as a block, the 45+ bolt and force new elections. He could greatly diminish Bennett’s influence, and turn himself into the prime minister-in-waiting. Alternately, he could simply tell Netanyahu to create a government of 61 types even more unwelcome in the world than the last government was and wait for it to fall over Obama's next diplomatic demand, or Shas's next financial one.

Make no mistake: this election was a turning point. As I wrote a few days ago, suggesting a surprise may be in store, this is the first election in which native born twenty-and-thirty-somethings have become the electoral majority. Unlike their parents, their political identities are less influenced by ideological parties, then homes to immigrant resentments, and more by scattered impressions. The country has suddenly become less tribal—and that’s a good thing, because it means the facts of the wider world can penetrate as well as the facts on the ground.

Lapid is the first politician to emerge from this politics and is in any case a portent of things to come. In the days ahead he has to decide if he intends to become Global Israel’s transformational leader or just its passing fancy.

Tuesday, January 22, 2013

U.S. Inaction, Mideast Cataclysm?

This op-ed, from today's New York Times, co-authored with my friend Sam Bahour 

ISRAELIS go to the polls today in an election that will likely give Prime Minister Benjamin Netanyahu a third term; like the current one, Israel’s next governing coalition will probably be heavily reliant on right-wingers and religious parties.

Even so, Mr. Obama’s second term could offer a pivotal opportunity to restart the Israeli-Palestinian peace process. In his first term, he backed away from the process, figuring that America could mediate only if the parties themselves wanted to make peace — and that new talks were unlikely to be productive.

This is a mistake. The greatest enemy to a two-state solution is the sheer pessimism on both sides. Unless President Obama uses his new mandate to show leadership, the region will have no place for moderates — or for America either.

The rationale for inaction rests on four related assumptions: that strident forces dominate because their ideologies do; that the status quo — demographic trends that would lead to the enfranchisement of occupied Palestinians, a “one-state solution” and the end of Israel as a Jewish democracy — will eventually force Israel to its senses; that the observer-state status secured by Palestinian President Mahmoud Abbas at the United Nations is empty because his West Bank government is broke, dysfunctional and lacking in broad support; and that given the strength of the Israeli lobby, Mr. Obama’s hands are tied.

These assumptions seem daunting, but they are misguided.

First, while Hamas, the militant Islamists who control Gaza, and Israel’s ultra-rightists, who drive the settlement enterprise, are rising in popularity, the reason is not their ideologies, but young people’s despair over the occupation’s grinding violence.

Last month, a poll by the S. Daniel Abraham Center for Middle East Peace, based in Washington, found that two-thirds of Israelis would support a two-state deal, but that more than half of even left-of-center Israelis said Mr. Abbas could not reach binding decisions to end the conflict. The same month, the Palestinian Center for Policy and Survey Research, in Ramallah, found that 52 percent of Palestinians favored a two-state resolution (a drop from three-quarters in 2006, before two Israeli clashes over Gaza). But two-thirds judged the chance of a fully functional Palestinian state in the next five years to be low or nonexistent. In short, moderates on both sides still want peace, but first they need hope.

Second, the status quo is not a path to a one-state solution, but to Bosnian-style ethnic cleansing, which could erupt as quickly as the Gaza fighting did last year and spread to Israeli Arab cities. Right-wing Israelis and Hamas leaders alike are pushing for a cataclysmic fight. Mr. Abbas, whose Fatah party controls the West Bank, has renounced violence, but without signs of a viable diplomatic path he cannot unify his people to support new talks. If his government falls apart, or if the more Palestinian territory is annexed (as right-wing Israelis want), or if the standoff in Gaza leads to an Israeli ground invasion, bloodshed and protests across the Arab world will be inevitable. Such chaos might also provoke missiles from Hezbollah, the Iranian-backed Shiite militant group based in Lebanon.

Third, the Palestinian state is not a Fatah-imposed fiction, but a path toward economic development, backed by international diplomacy and donations, that most Palestinians want to succeed. It has a $4 billion economy; an expanding network of entrepreneurs and professionals; and a banking system with about $8 billion in deposits. A robust private sector can develop if given a chance.

Fourth, American support need not only mean direct talks. The administration could promote investments in Palestinian education and civil society that do not undermine Israeli security. Mr. Obama could demand that Israel allow Palestinian businesses freer access to talent, suppliers and customers. He could also demand a West Bank-Gaza transportation corridor, to which Israel committed in the 1993 Oslo accords. America is as much a player as a facilitator. The signal it sends helps determine whether the parties move toward war or peace. The White House, despite its frosty relationship with Mr. Netanyahu, hasn’t set itself up as a worthy mediator by opposing Palestinian membership in the United Nations and vetoing condemnations of settlements.

In nominating Chuck Hagel to lead the Pentagon, Mr. Obama rightly ignored attacks by “pro-Israel” (really pro-Netanyahu) groups. He should appoint a Middle East negotiator trusted by all sides — say, Bill Clinton or Colin L. Powell. He should lead, not thwart, European attempts to make a deal. He has stated that the settlements will lead to Israel’s global isolation; he should make clear that they endanger American interests, too.

Washington has crucial leverage, though this won’t last forever. When it weighs in, it becomes a preoccupying political fact for both sides. If it continues to stand back, hopelessness will win.

Monday, January 21, 2013

The Election: Change We Can't Believe In?

From Open Zion, a feature of The Daily Beast, where I have regular column

 Just about everything that could go wrong for Benjamin Netanyahu during this election season has gone wrong. The biggest pre-election issue, Haredi sponging and shirking of military service, was captured by Yair Lapid. Two summers after the "social justice" demonstrations, the budget deficit has ballooned to double what had been predicted, over 4% of GDP--and makes new regressive, indirect taxes inevitable. Netanyahu's party primaries denied him centrist window-dressing (i.e., Dan Meridor). Arye Deri has retuned to Shas and is disparaging Likud, which once counted on poor Mizrahim, as the party of the rich and the Russians. Shelly Yacimovitch, a Labor leader, is walking thorough Mahane Yehuda, the Mizrahi market in Jerusalem, and coming out alive.

Likud amalgamated with Lieberman and Lieberman was indicted. Netanyahu's old chief of staff (not Lieberman, in this case, but Bennett) started a ultra party of his own that's outflanked Netanyahu to the right and will probably attract the very base of voters that determined Likud's list. Ehud Barak, Netanyahu's best link to the Pentagon and American media, retired. Worst of all, Netanyahu's new pal, Mitt Romney, lost badly; Hagel is on the way, and Obama is no longer hiding his disdain for Netanyahu or his special American Jewish friends. European leaders even more obviously condescend to him and Angela Merkel is not longer holding back about settlements. Abbas has got what he wanted from the UN, Hamas got what it wanted from Morsi--in both cases, Netanyahu seems a man without a plan. And as Willy Loman would have said, Netanyahu was always liked but not well-liked.

The big things that did not go wrong for Netanyahu may be enough to reelect him. They are, first, the inertia of the Greater Israel "consensus," that is, the defense of the status quo he has been peddling for the past four years, and, second, the fragmentation of his Global Israel opposition, the major leaders of which, Yacimovitch, Lapid, Livni, Meretz and Mofaz (viz., Olmert) seem unable to combine effectively for reasons that will someday seem absurdly trivial.

But with less than 24 hours to the opening of the polls, it seems worth noting again that a great many undecided voters will be heard from tomorrow. They could determine a swing of the five or so seats that polls say are all that are needed to even up the blocs in the Knesset. And the most ideological right-wingers tend to make up their minds early. The consensus is just fatuous enough, and only-skin-deep enough, to be jettisoned by voters looking to try something new, right and left.

Besides, undecided voters, as in the US, tend to be influenced by flocking behavior, the conviction that a vote should not make you look stupid to friends and family. And so you vote for the person you are not afraid to admit you voted for in the end--the person who just might make you look "b'cool." In this sense the fragmentation of the opposition could also work against Netanyahu. Yes, there is no big alignment to oppose him, or major figure who seems prime ministerial. But there are many niche players to cut into his bloc. Lapid is rising especially fast.

Rationale beings assume Netanyahu will win: all the pollsters have been conditioning this response for months. And political predictions, as Karl Rove inadvertently proved, are one-half information, one-quarter dread, and one-quarter wishful thinking. Still, my nose tells me there is something in the air that will change Israeli politics, if not tomorrow, then soon enough.

Olmert, for one, is assuming any Netanyahu government, if formed, will fall within a couple of years. The latter, Olmert has been telling his friends, will have to make big financial promises to Shas, Haredim, Lieberman, and the settlers (i.e., Bennett) to get the leverage he needs to invite centrists like Lapid (and, if he makes it, Mofaz) into the government without being utterly dependent on them.

Even if Lapid is prepared to disappoint his Rothschild Blvd. voters and join such a crew, what happens when Lapid starts expecting pay-back, say, a new military service law, or cut-backs to special Shas subsidies for their nurseries? What happens when Obama begins pressing harder on settlements? Where will the money come for new housing inside the Green Line, Lapid's most concrete promise?

And what happens to a new Netanyahu government if Lapid gets smart, stays out, and negotiates a big, alternative opposition alignment? What if Obama does indeed press Israel into new peace talks? Any talk about a compromise on Jerusalem becoming a part of the package, and Shas and Bennett bolt, as with Netanyahu's first government in the 1990s. But any talk about Jerusalem not being part of the package, and Abbas will (continue to) have nothing to do with the negotiations.

Meanwhile, with or without Lapid, the opposition will finally have the opportunity to coalesce into a common front.  Perhaps, finally, we will get a kind of Israeli Democratic Party, with room for Arabs, too. And Olmert may himself have court proceedings behind him. As I said, dread and wishful thinking. Stay tuned.

Friday, January 18, 2013

No Place Like Home

From Open Zion, a feature of The Daily Beast, where I have regular column.

There is a lot of talk about Israeli ultra-rightists gaining ground in Tuesday’s election, also about the emergence of the hardest-liner-du-jour, Naftali Bennett, and his "Jewish Home"party, built on the residuals of the old Gush Emunim settlers’ movement. But you read between the lines of David Remnick's trenchant new piece, or just watch Bennett emerge, and you realize they don't make "ultras" the way they used to. Which means—why not go out on a limb here?—that Israeli voters may hold more surprises for us, and for Jewish Homists, than most pundits imagine.

I have covered every Israeli election since 1973, back when Gush Emunim got off the ground. By 1975, mobs of fiery-eyed acolytes of Bnei Akiva Yeshivot and Hebron-based settlements screamed "Jew-boy" at the shuttling Henry Kissinger—much the way Alex Jones screamed at Piers Morgan the other night. You understood that ultra-rightist meant an aggressive ideology: a conception of right grounded in Torah revelation, after the younger Rabbi Kook; a sense of Jewish history as divine self-justification against Christian persecution; an ideal of  Zionist settlement as messianic and ongoing, a kind of complement to Halacha, indeed, a commitment to a Jewish state of Halacha. Arabs were current tokens for ancient biblical figures on the landscape, Edomites, if not Amalakites. (Look them up.)

To get Bennett, however, you have to get, not Alex Jones, but Paul Ryan: a man who seems curiously younger than his years, though his words imply world-weariness;his eyes conveying sincerity, fidelity, a trace of piety, but nothing so harsh as to preclude soft rock--also, perhaps, that glint of deviousness when he is delivering a smile for a campaign poster, his little "tell" only reinforcing your belief in his incorruptibility,like the enthusiastic kid-brother who, lacking a killer-instinct, can't stop his mouth from smiling when delivering a punchline--the kind of guy, in fact, who would organize a cousins club. The psychologist William James knew the breed. He called such people, with devastating irony, "healthy-minded."

You see, what is most disturbing about the Bennett phenomenon is his lack of imagination.His illusion is that he has no illusions. He reads biographies, he dreams of great men—a vicarious pleasure, presumably. For he stands for nothing but the defense of either received wisdom or the political (i.e., geographical) landscape he was born into.

Ryan came of age with Reagan’s disciples and tax-cuts. Bennett came of age with Begin’s disciples and settlements. He didn’t want to be a politician. He wanted to be in the army. “I…asked if anyone would volunteer to clean the washrooms,” Bennett’s elementary school teacher recalls; “He was the first. He was a nice boy…knowing how to behave in the right places. He didn’t excel in school. You could never say he was a star…” What is monstrous about Bennett now is not his mind but the forty-six-year-old status quo this forty-year-old man sweetly, bravely reflects.

THE MEDIAN AGE of Jewish Israelis is now thirty. That means a near majority will have done the army between, say, 1993 and now, from the beginning of Oslo to the worst of the Al-Aqsa Intifada to the Gaza violence—also from the origins of Netscape to the globalization of Teva Pharmaceuticals. You will have never lived in an Israel where the nightly weather maps did not present a kind of Revisionist Zionist dream-palace, satellite pictures in which temperatures are listed for Ariel and Mt. Hermon as casually as for Haifa; where Ramallah and Nablus are neatly effaced.

Even if you were a child of the last wave of immigration, from the former Soviet Union, you would now be part of a youngish Hebrew world of smart jobs, small children, TV satire, Shabbat with the family, and the odd meal out; as with all democratic electorates, there are simplified histories, dumb prejudices, and personality contests:

History? Holocaust. Land? Ours. Faith? Rabbis. Values? Army. Moslems? Killers. Palestinians? Fuck 'em. America? Standing ovations. Europe? Anti-Semites. UN? Hypocrites. Leftists? Naive. Settlers? Zionists. Education? Teach the above. Bibi? Our bastard. Obama? (I'll get back to this.)

Israeli politics, in other words, is no longer the tribal affair we once reported on, which has become the stuff of those TV satires: brainy-pedigreed Ashkenazis, Mizrahi lumpen, Russian Putinists, sponging Orthodox messianists, and Arab nostalgic la-la-landers. Yes, there are still pockets of ideological and identity politics: poor Moroccan Orthodox for Shas, Hebrew University professors for Meretz. (Guilty as charged.) But for half of the electorate, young people—political swingers, as it were—choices reflect a flickering of impressions and half thought-through syllogisms: “We have no partner; Abbas can’t be trusted; anyway, Hamas is getting stronger; the problem is not our settlements; they always hated us; Olmert offered everything and they said no; it's not theft if they're trying to kill you"--you get the idea.

THIS IS THE “consensus” Likud peddles, AIPAC amplifies, Adelson bankrolls—and Bennett—this hybrid of yeshiva "learning," California hip, and Raanana’s "modern" orthodoxy—is perfecting the sale of. You hear this creepiness everywhere, even from (increasingly young) journalists in key radio and television newscasts, who ask cynical questions or just don’t have the depth to follow-up when Likud ministers snow them. Nobody wants to appear a fool, drawing outside the lines.

So young people want some fresh face to tell them what they already think and yet seem to be proposing something new, preferably with numbers attached, so they can assume somebody else has sweated the details. Bennett has made a cool four to five million on his "exit." He speaks of annexing Area C, 60% of the West Bank, and offering its "55,000 Palestinians" citizenship, which is about as realistic a solution to the present danger as the Ryan budget (or, for that matter, Herman Cain's 9-9-9). They're buying it, at least for now.

WHICH BRINGS ME back to Obama. The thing about Likud’s consensus is that, though not much more than skin deep, it can’t be changed from within. It is hard enough to fight xenophobia, or advance the hope of reciprocal decency, among young people who’ve experienced national conflict, punctuated by terror, their whole adult lives. It is doubly hard when strength in defense of nothing fancier than what-is means “keeping” world-historical goodies like Jerusalem's Old City and avoiding armed confrontations with, well, the likes of Bennett.

No, the peace camp, from Livni left, needs an even bigger fear to peddle than those of the market leaders. There is the “neighborhood” and Iran. But there is also the fear of being unable to remain a part of the West. The peace camp needs to make young people believe—Livni, to her credit, is hammering away at almost by herself in this election—that isolation, along with associated economic misery, is around the corner; that, as Ehud Olmert has chipped-in from the sidelines (also in conversation withDaily Beast's Dan Ephron), the Israeli budget is headed for a crash owing to military adventurism with Iran and the opportunity cost of the conflict is unbearable.

Anyway, there is no way of making the threat of global isolation real for young Israelis until the U.S. seems poised to join the globe. More and more since 2008, Obama has been dismissed by Likud politicians as a kind of passing irritation, the result of Americans and Nobel committees over-indulging on political correctness—anyway, something that a strong dose of Bibi has taken care of. Young
Israelis have not really digested Obama's reelection yet any more than Fox News.

Bennett's story, therefore, is a lagging indicator. Yes, we all know Obama’s real opinion of Netanyahu and Likud-world,which Peter Beinart and Jeffrey Goldberg have ferretted out in recent weeks. We don’t know what, if anything, of this opinion might yet get translated into American foreign policy.

In recent days there have been febrile rumors of Obama coming to Jerusalem this summer to celebrate Shimon Peres’ 90th. birthday, with Tony Blair and European endorsed principles for a settlement in tow. There is stronger than usual language from Washington about E-1. The appointment of Chuck Hagel, with Chuck Schumer falling in line, has led the news here. Gaza is quiet; and Morsi seems to be doing what he can to placate Washington. King Abdullah of Jordan speaks of a renewed peace effort. The last poll Haaretz is legally allowed to run before Tuesday shows the center-left closing the gap, 63-57 seats, with a sixth of the electorate undecided.

I am not suggesting Netanyahu will lose; but something in the air is changing, probably too little, too late. Still, if Tuesday produces any kind of upset, including the center-left exceeding current expectations, it will attest to the stealth power of the American presidency to utterly transform the Israeli political landscape. One can only hope Obama is paying attention, not to Bennett’s emergence, but to his own.