[null, {"document_url": "http://kishkushim.blogspot.com/2009/04/obama-and-netanyahu.html", "unformatted_src": "http://4.bp.blogspot.com/_lm_TDunaU_s/SfHZ2L688VI/AAAAAAAABhE/vSoZlGF9JhU/s320/Benjamin_Netanyahu.jpg", "src": "http://4.bp.blogspot.com/_lm_TDunaU_s/SfHZ2L688VI/AAAAAAAABhE/vSoZlGF9JhU/s320/Benjamin_Netanyahu.jpg", "formatted_filename": "Benjamin Netanyahu"}, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null, null]

Obama and Netanyahu Aluf Benn provides an  excellent analysis of Netanyahu's Washington-strategy. Many commentators are convinced that Israel's new prime minister is on a collision course not only with the Europeans but also with the White House. Benn contrasts Netanyahu's strategy so far with that of his predecessor, Ehud Olmert, in order to explain what Bibi might be thinking:

The prime minister is aware of the assumption of many that his rejection of the idea of a Palestinian state, and opposition to withdrawals from the West Bank and the Golan Heights, will result in an inevitable crisis in relations with Obama and propel Israel into political isolation. But he is not afraid. The way he sees it, it's better to come to the White House with a list of demands and requests, and to condition any concession on a quid pro quo, than it is to play the role of yes man to the president and gain nothing in return.

Ehud Olmert emerged from his many talks with Palestinian President Mahmoud Abbas with the impression that, because of the Palestinians' positions on the so-called core issues, there is no chance for a final-status accord with them - which is why he opted to emphasize Israeli generosity to secure international support. Netanyahu prefers to enter into negotiations with maximalist positions rather than to begin with concessions that may win the world's approval but won't satisfy the other side. He is ready to pay the political price this will exact abroad for the sake of appearing consistent in his positions and preserving his coalition at home (Ha'aretz).

We will see what happens, but for now, Benn's reading seems more persuasive than the hysterical fears of a collapse of US-Israeli relations and of Israel's position in the West. Netanyahu does not seem fazed by the missteps of his foreign minister, Avigdor Lieberman. My sense is that Lieberman will not play a major role in foreign policy at all - Bibi will hold the reins tight here as well as in his economic policy.
Posted by Amos at 8:15 AM Labels: Lieberman, Netanyahu, Obama, US politics



I am discouraged by the very fact that Lieberman was nominated FM. It's a very bad start. I have nothing against him as infrastructure minister or something, but as FM this is a colossal mistake if not an outright PR disaster. Makes me doubt that this government can handle such a delicate issue as the current US Israel relations properly.

4/24/09, 11:03 PM 
Are Israeli-European relations not deteriorating significantly because of the new positions of the new government?

On a different note, Bibi has had a lot of success in terms of PR in the US in the past, and I mean with non-Jewish TV audiences. I wonder how he'll do on cable news in coming months.

4/25/09, 1:11 PM 
Nobody - see my translation of large parts of an interview Lieberman gave to an Austrian paper yesterday. It's interesting how Lieberman positioned himself as "one of many players in a large team." He's creating some space for himself. We'll see what happens. I really wonder how Netanyahu will deal with Lieberman and with the rest of the coalition.

I want to put up a post in a few days with some estimates about 1) how long this government can last, and 2) what the likely sources of trouble (inside the coalition) will be? I.e., who will bolt first?

Noah - I think both the EU and the US made it clear that they did not want a Netanyahu-led government, especially one without Livni. Netanyahu's opening positions were the same ones he ran on, and they have definitely put off many of the Europeans as well as members of the Obama administration. I am looking forward to seeing Obama manage the talks later in May.

I think Bibi will continue to appeal to centrist audiences in the U.S.

4/26/09, 12:19 AM 
Here's the link to that interview.

4/26/09, 12:20 AM 

Frankly I am a bit worried that a big damage can be done to us in terms of PR and image. I don't how much has been left to damage, but my impression from the last Lieberman's appearances is that he is living on the moon. He is trying to play a bulldozer in foreign policy. This may end badly, this is not an area in which one would like to try such a thing. Never mind that we got an FM who is virtually persona non grata everywhere. For god's sake, why do we need this?

4/26/09, 1:49 AM 
Yah, looks bad. Very erratic. But did you seriously think he could have ended up as infrastructures minister with such a large share in the coalition? Still, I can't understand foreign minister. It was such a huge gamble by Netanyahu. And Lieberman seems to operating with a long leash. Frankly, I don't think Lieberman has the stuff. It could be an intellectual problem. I'm not saying that he's stupid, but I think he doesn't get diplomacy and he hasn't made the transition from the domestic to the international stage.

4/26/09, 7:03 AM 
Frankly, I don't understand these coalition and party politics at all. I read your blog to get an idea about what's happening. But I guess something like treasury or god knows what. FM is the most prestigious ministry they have?

4/26/09, 7:13 AM 
Treasury, are you kidding me? I wouldn't want this fool anywhere near the economy. Foreign policy, at the end of the day, is a lot of words that can be managed or taken back (even at some cost) by the prime minister. Anyway, he was insisting on a high-profile post, but I don't think anyone wanted to give him internal security either. plus, there are those pesky investigations against him.

This interview is interesting though. Very long but worth checking out.

4/26/09, 7:18 AM 
I think he could be a good one. In particular now, when some really tough bargaining is needed. Otherwise they may bury us under a pile of debt.

4/26/09, 7:26 AM 
I'm waiting for a really good report by someone on the state of the Israeli economy. Can the government really avoid big spending during this downturn?

How are people making a living these days in Israel? It seems like it's impossible to get anywhere unless you're in certain parts of the high-tech industry. I don't understand how it keeps going. I look at teachers' salaries, for example, which are also very low in the U.S. But in Israel, it really seems like a teacher could not, by him/herself provide for a family. It's impossible even to pay rent.

On the other hand, there is a huge unproductive part of the population that could be trained in all kinds of service jobs (I mean the ultra-Orthodox), which would boost their standard of living and contribute to overall competitiveness. Maybe social policy needs to change drastically for this to happen. One thing is for sure, the ultras know how to "learn."

Another thing: I wonder what the savings rate is in Israel.

4/26/09, 8:01 AM 
Israel is quite indebted to allow itself to borrow its way out of this crisis. Amazingly when Bibi was a finance minister he managed to both stage a recovery and reduce the debt ratio, I think from 120% to 80%. However the good years were not used to expand these achievements further, so there is a limit to how much we can borrow now. Even though we don't have a demographic crisis the style of Europe where Merkel seems to have refused to follow the US and UK examples on the grounds that the incoming demographic implosion does not allow Germany to start piling debts.

Another thing is that we are such a small country totally dependent on exports, we can't really create so much internal demand to pull ourselves out by our own means. It's technically impossible. But I have a feeling that there is a global deterioration in terms of fiscal and other disciplines. Some Western societies seem to be no longer capable to sustain any kind of shock therapy and austerity measures, so they decided to borrow today, pay tomorrow. And this thing is contagious.

I was mildly encouraged by the way they managed the issue of child subsidies. The compromise with the ultras they have reached is a very correct one. Gives me hope that there is some sanity at the top

4/26/09, 8:15 AM 
this thing is contagiousYah, there is a guy who calls it FIV (fiscal insanity virus).

4/26/09, 8:34 AM 
Yes. There is a big question over Obama's general style and orientation. I won't be surprised if he eventually ends in history textbooks as a president that sent his nation bust. However, regardless of how it pans out eventually, none of this applies to us. We are roaches in economic terms. The only thing we can achieve by stimulating ourselves Obama's way is to inflict on ourselves huge budget and trade deficits. We can't stimulate a fly.

There may be some sense in expanding programs for struggling companies, export oriented in particular. But I am pretty much sure that any such policy will be eventually hijacked by ultras and socially oriented bleeding hearts. So it will only end by adding up to our debts and deficits. Even though, as I said, we are not Europe and we can afford borrowing today with a view of passing this shit onto the next generation. This is because unlike many parts of Europe we are going to have one.

4/26/09, 9:35 AM 
I'm willing to wager that the opposite will happen with Obama (in history textbooks). I think the U.S. is the only country in the world that can afford this kind of fiscal insanity. Americans will experience high levels of taxation for generations, but they will accept this as a price that had to be paid.

4/26/09, 9:40 AM 
I don't see the US going away any time soon. However, I won't be surprised if the end result of these Obamaeconomics will be a lost decade Japan style. I am following Thomas Friedman with his low carbon stuff (he now has another one) and I don't understand why he does not give up on trying. It's absolutely hopeless. I have by now no expectations from this administration.

Obama's fiscal insanity looks to me just like... mmm ... insanity. It's based on very bold expectations - that the US will soon be out of crisis, that it will be growing by 4% every next year. That by taxing 2% of the population he will be both reducing deficits, paying his health care, environmental and other reforms, and cutting taxes for the middle class. I would say he is very lucky, if this is going to turn out his way.

4/26/09, 10:25 AM 
If we go through a "lost decade" Japan-style, it will not be a result of what you call "Obamaeconomics" (by which I understand you to mean big spending initiatives). Deflation here is the result of the credit bubble and the foolhardy investments of many American bankers.

4/26/09, 10:50 AM 
To elaborate on the above: the crazy levels of consumer debt, which were made possible by the credit bubble, will make it difficult for American consumers and corporations to spend at the rates they once did. But this economic fact has nothing to do with "Obamaeconomics."

4/26/09, 11:00 AM 
No. I don't mean deflation. Lets say, more like tons of debt. Maybe not Japan style. But say, huge debts, the economy will fail to take off on a scale they expect it to do. In many ways, they are now exploiting the dollar status of the world's currency. The same goes about t-bills. They should better be careful with exploring the limits of this situation. Because once they undo it, they will have hard time getting it back.

Also I don't know how long this crisis is going to take. China is apparently seeing the end of it, but who knows. Also I don't know how much of this debt markets are ready to buy. The Chinese reportedly are holding half of their reserves in t-bills and assets backed stuff. If they have to go on another stimulus package they may well start selling off this stuff. I don't know for how long the markets will be ready to finance such deficits.

4/26/09, 11:03 AM 
The Chinese are a bit stuck. If they start selling off dollars, the dollar will immediately sink in value and China will lose much of its investment. So, right now, they are very careful about this, though they are starting to explore other options than US t-bills.

Also, China has a real estate market that has not even started crashing.

4/26/09, 11:11 AM 
Real estate maybe, but all sorts of trade and manufacturing indexes have been collapsing recently. They are reporting some kind of recovery now, though some people claim that their figures don't add up

4/26/09, 11:25 AM 
I think you should read this. Makes an interesting read within the context of our discussion

4/28/09, 10:47 AM