NYT's Krugman Accuses Netanyahu of 'Wagging the Dog' Before Election

March 16th, 2015 9:49 PM

New York Times columnist Paul Krugman found a new way to be hostile to Israel. Not in the style of Jodi Rudoren, the paper's Jerusalem bureau chief -- criticized for humanizing Palestinian terrorists and dehumanizing their Israeli victims -- but by employing the paper's new left-wing hobby horse, "income inequality," with a dash of anti-Netanyahu conspiracy theory thrown in.

In his Monday column, "Israel's Gilded Age," Krugman longed for the socialist 1960s ideals of the Israeli kibbutz, and had a conspiratorial take on Israeli Prime Minister Bejamin Netanyahu's speech to Congress warning of the dangers posed by a nuclear Iran (a speech also loathed by fellow liberals President Obama and House Minority Leader Nancy Pelosi).

Why did Prime Minister Benjamin Netanyahu of Israel feel the need to wag the dog in Washington? For that was, of course, what he was doing in his anti-Iran speech to Congress. If you’re seriously trying to affect American foreign policy, you don’t insult the president and so obviously align yourself with his political opposition. No, the real purpose of that speech was to distract the Israeli electorate with saber-rattling bombast, to shift its attention away from the economic discontent that, polls suggest, may well boot Mr. Netanyahu from office in Tuesday’s election.

("Wag the dog" is a reference to the 1997 movie where a U.S. president threatened by a sex scandal makes up a foreign war to distract the media.)

But wait: Why are Israelis discontented? After all, Israel’s economy has performed well by the usual measures. It weathered the financial crisis with minimal damage. Over the longer term, it has grown more rapidly than most other advanced economies, and has developed into a high-technology powerhouse. What is there to complain about?

Krugman, self-assured as always, has the answer:

The answer, which I don’t think is widely appreciated here, is that while Israel’s economy has grown, this growth has been accompanied by a disturbing transformation in the country’s income distribution and society. Once upon a time, Israel was a country of egalitarian ideals -- the kibbutz population was always a small minority, but it had a large impact on the nation’s self-perception. And it was a fairly equal society in reality, too, right up to the early 1990s.

Since then, however, Israel has experienced a dramatic widening of income disparities. Key measures of inequality have soared; Israel is now right up there with America as one of the most unequal societies in the advanced world. And Israel’s experience shows that this matters, that extreme inequality has a corrosive effect on social and political life.

When the study he's citing inconveniently doesn't actually show Israel's income share to be dominated by the "1 percent," something he clearly wishes to say, Krugman finds it merely "puzzling" and retreats to his thesis:

At the other end, while the available data -- puzzlingly -- don’t show an especially large share of income going to the top 1 percent, there is an extreme concentration of wealth and power among a tiny group of people at the top. And I mean tiny. According to the Bank of Israel, roughly 20 families control companies that account for half the total value of Israel’s stock market....

Still, why is Israeli inequality a political issue? Because it didn’t have to be this extreme.