There is a clear linkage between the huge unprecedented protests (300,000 last night) now building weekly in Israeli cities, the Israeli government’s obsessive efforts to expand settlements in the West Bank, the government’s historic funding in the hundreds of millions of dollars annually to the ultra-Orthodox religious community, and the right-wing extremist assault on democratic freedoms of speech, political organizing and religion in the State of Israel.

The account below from “Media Line” (a superb independent American based media service – I recommend your subscription – medialine@list.themedialine.org) overviews the economic crisis in Israel which is a consequence of deregulation and de-funding of many essential industries in the 1990s and the unwise funding of West Bank settlements and the ultra-Orthodox.

It should be noted, however, that the deregulation and elimination of government subsidies in the 1990s under then Finance Minister Benjamin Netanyahu also had the effect of creating an entrepreneurial class of Israelis that has enabled Israel to rank second in the world after the United States in start-up companies in bio-technology and communications technology.

The current protests are now stimulating a debate that perhaps Israel needs to return to a more socialist oriented economy not only to enable middle class Israelis to survive, but also to bring greater equality to the citizenry as it was in its initial period of Israel’s history.

The Israeli government today has two major challenges – the economy and the scheduled Palestinian statehood UN vote in September. In thinking about how monumental each issue is for Israel’s future I am reminded of the Chinese curse: “May you live in interesting times!”

The following is the post this morning from Media Line:

Israel Takes to the Streets: More than 300,000 Nationwide Protest

By some estimates it was the nation’s largest-ever outpouring of citizens demonstrating for a cause with as many as 300,000 Israelis turning out on Saturday night as economic protests continue to build. The demonstration in Tel Aviv alone reportedly drew 250,000 while 30,000 others crammed into streets near the Prime Minister’s Residence in Jerusalem. The cost of living and lack of spending power provided the impetus for rallies that many noted had crossed the political divide – a rarity in protests here. On Sunday, Prime Minister Binyamin Netanyahu will name a panel combining experts with politicians to make economic recommendations the government hopes will stem the national angst. Netanyahu’s finance minister, Yuval Steinitz, is reported to be his choice to head the committee even though demands for Steinitz’s firing are among the most frequently heard demands. Three weeks in to the mass demonstrations, there appears to be no end in sight. The target is the massive gap between the “haves and have-nots”; the high cost of living and low spending power compared to other nations. Israelis find it impossible to make ends meet after paying high rents, costs of goods and services that are considerably more than comparable countries and taxes that rank among the world’s highest. The economic revolt is the first serious challenge to the Netanyahu government since it took office 27 months ago.