Bibi got back: Israel’s election

Hey, Ryan Reynolds here wishing you a very happy half off holiday because right now Mint Mobile is offering you the gift of 50% off unlimited. To be clear, that's half the price, not half the service. Mint is still premium unlimited wireless for a great price. So that means a half day. Yeah, give it a try@mintmobile.com Switch upfront payment of $45 for three month plan.

Equivalent to $15 per month required new customer offer for first three months only.

Speed slow 135 gigabytes of network busy.

Taxes and fees extra. See mintmobile.com.

Hello and welcome to the Intelligence on Economist Radio. I'm your host, Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. As the outcome of Israel's election becomes clear on the ground, its citizens can look to the skies. An Israeli space probe nicknamed Sparrow is on its way to the moon. Sure, it'll do some science, but mostly its purpose is symbolic. And these days, plenty of countries are joining the moon rush. And there's a massive demographic shift going on in the world's workplaces. Employees are growing older and retirees living longer. How will economies adjust as the old increasingly outnumber the young? But first, It's been another close election for Benjamin Netanyahu. Last night, both the Israeli prime Minister and his main rival, Benny Gantz, claimed victory in yesterday's vote. Their parties are neck and NEC with 35 seats each in Israel's parliament, the Knesset. But Mr. Netanyahu has a clearer path to forming a coalition government.

Netanyahu seems to have won the election. His potential coalition of right wing and religious parties has 65 seats out of the 120 seat Knesset. So that's a clear majority.

Anshul Pfeffer reports from Jerusalem for the Economist. He recently wrote a biography of Mr. Netanyahu.

What happens next is that assuming with 90% of the votes almost counted, assuming these are the final results, the president will call in the party leaders next week for consultations. And assuming Netanyahu has a majority of recommendations, he will be called upon to form a new government. It will take him probably a couple of weeks of coalition negotiations and then he'll present his government to the Knesset. Probably in early May, we'll have a.

New Netanyahu government, which sounds more or less like the way things have gone over the past few elections. Why does this one matter?

Every election matters because you have to hold the election once in four years. But Netanyahu was facing a more severe challenge this time, both in the identity of his challenger, Benny Gantz was someone poised to take away the mantle of Mr. Security from Netanyahu. And he ran a close race. If the results are accurate, then at least in the party vote, he equaled Netanyahu. And the other challenge facing Netanyahu was the fact that since the previous election, multiple corruption allegations have emerged, resulting in three potential indictments, perhaps more investigations down the road. So Netanyahu is also going to the nation, to the Israeli voter, and saying, vote for me, despite all that you've heard about my alleged corruption.

Well, about those allegations, I mean, how might they affect his premiership, his ability to form a government? How do you think that will figure into things from here on out?

Well, Netanyahu has won a fifth term, but that term may be pretty short. If he can't avoid the indictment and is charged in court. It will also influence the coalition negotiations over the next few weeks because potential coalition partners are aware of the pressure Netanyahu is under, and they will probably be extracting a heavier price for sitting in his coalition, whether in the shape of ministerial positions or in policies and budgets. And they're not just joining the coalition to form a government, they're joining a coalition, which Netanyahu hopes will act to shield him from the indictments, perhaps in a new immunity legislation, or even standing by him if he insists on remaining prime minister once charged in court. So this is going to have a huge effect on everything happening going forward.

And supposing he avoids the imminent danger there, what should we expect from a government that he forms? What kind of campaign promises did he make?

Well, there weren't really that many campaign policies in this election. This election has been about Netanyahu, whether or not he should remain prime minister. The one big policy bombshell that he threw into the arena just a few days ago was the sort of half promise to annex parts of the West Bank. Now we have to wait and see. First of all, if he has that far right coalition right now, his potential partners are even more to the right than they were in the previous coalition. There still is an option, perhaps of him going to Benny Gantz and saying, let's form a grand coalition, national unity government, which will be more moderate. That doesn't seem very likely at this point, but it's an option. And the other wild card here is the Trump peace plan, which is expected to be presented in a few weeks, perhaps late May, mid June. And that will affect Netanyahu's foreign policy going forward.

So how does the content of the Trump peace plan change the calculus here?

Well, Netanyahu is well briefed on what he can expect to find in the Trump peace plan. His ambassador in Washington, Ronda, is very close to the Trump team. He himself obviously has a good relationship with Donald Trump. And we don't know quite yet how he's planning to gain the Trump peace plan. He could wait for the Palestinians to turn it down, which will almost certainly happen, as the Palestinians have already said that due to all the concessions made by the administration to the Israeli side, specifically over the recognition of Jerusalem as Israel's capital, they are not going to have anything to do with the Trump plan. So he may just wait for them to reject it and then say, since they've rejected it, things have changed and we can now do new things in the West Bank. We can change the status of parts of it. We can extend Israeli sovereignty to some settlement. That's one possibility. The other possibility is that some of the things in the plan are things that Trump and Netanyahu want to work with, even if the Palestinians aren't on board. And that could include some kind of change in the status of the west bank and Gaza Strip, border changes, final status issues that we don't know yet if they'll be in the plan and what the plan says about them.

But Mr. Netanyahu has made these promises or have promises to do this annexation. I mean, doesn't that upend the whole idea of any Trump peace plan, regardless of its content?

Well, you're assuming that the Trump peace plan is something that the Palestinians are going to even agree to dealing with. And right now, as far as we know from the Palestinians, they have no interest in engaging with the Trump peace plan. So whether or not the Trump peace plan contradicts Netanyahu's latest election promise may be a moot point, but it also may be possible within the parameters of the Trump peace plan. We'll have to see what is in that plan.

Do you get the feeling that the kinds of noises that the Trump administration has been making have in turn emboldened Mr. Netanyahu in his sort of courting of the right wing?

Well, Netanyahu certainly feels that he has Trump's complete support, and therefore it's safe to assume that he also feels that he can make the kind of promises which will bring the far right into the coalition. At the same time, there is a possibility that Netanyahu will use the Trump peace plan to try and bring a blue and white Benny Gantz's party into the coalition and in that way have a much more stable government. And he can say to Gantz, look, we both said during the election many things. We both said that we won't sit with each other in the same coalition. But now with the Trump peace plan on the table, there is an opportunity to make some serious progress towards final status issues. You don't want me to do that with the far right in the government, but you and I can do that together. So we'll have to wait and see how that plays out. Netanyahu now has different options for building his coalition, assuming Benny Gantz is open to discussing with him a joint government, though so far they've both ruled that out. But anything said before election day is subject to review the day after.

Anshul, thanks very much for joining us.

Thank you for having me. Good morning.

The trajectory of Israel's politics may be a bit unclear, but there's another path that's known down to exceptional precision, that of an Israeli probe nicknamed Sparrow that will land on the moon tomorrow. For now, it's a fairly quiet place.

It's basically been a pretty peaceful last few decades for the moon.

Oliver Morton is a senior editor at the Economist and an avowed fan of Earth's natural satellite. He's just written a book called the Moon A History for the Future.

The Eagle has landed.

The noisy neighbors next door who all over the place in the 1960s and 70s, sort of like coming up, walking around, leaving stuff behind.

That's one small step for man, one giant leap for mankind.

That'S all gone away. So the moon's been basically taking it easy. But the last couple of years, things have started warming up again and the moon's had visitors from China. And this week, all going well, it will see its first robot visitor from Israel.

Well, about that. What's happening this week, a not for.

Profit group called SpaceIL, which is backed by various philanthropists and also by the Israeli government a little bit as we speak. They've made it as far as orbit and Thursday I believe they're going to try and land.

So what is this little moon robot going to do?

Well, the most important thing it's going to do is kind of existential. It's just going to be on the moon and everyone's going to say, wow, it's on the moon. But it's also going to do some science. It's landing at a place where there is a slight magnetic anomaly in the crust. And it's also going to carry some tiny little mirrors which will reflect laser beams back to the Earth so that people can keep a track on the moon Doing what they think it ought to do. Though it must be admitted, that's a fairly well understood aspect of the moon, that it goes around the Earth at the rate that it does.

Well, exactly. This isn't primarily, as you sort of allude to there, a science mission, it's more of a flag planting mission.

Yeah, but it's not just the flag of Israel, though I'm sure that Israelis will be very proud and happy about it. It's also sort of like the flag for an entrepreneurial, excited, young, not for profit, hey, let's go back into space, that'll be cool kind of thing. That's the sort of flag it's planting.

How so?

A not for profit group called SpaceIL started up as one of the competitors in what was called the Google Lunar X Prize for people going to the moon with robots. No one actually ever won it, but a bunch of the teams that were almost close to getting to the moon have gone on even since the prizes stopped. And one of those teams is SpaceIL.

And Israel won't be the last country in the new moon rush.

I do not think Israel will be the last country in the new moon rush. The Indian space agency wants to launch a mission that will land and have a little rover walk or roll away from it later this year. We've already had one Chinese mission this year which was the first mission to land on the far side of the moon. And there's a Japanese group called Ispace that want to land on the moon next year. And the various American groups who are now looking at getting contracts from NASA to deliver scientific experiments to the surface of the moon. That might happen as early as the end of this year, though I slightly doubt it. And of course, this is all happening in the context of the various people thinking that they want to go back to the mo. America's Vice President Mike Pence say that America should get back to the moon with people by 2024. The Chinese have made no attempt to hide the fact that they, in the long run, want to go back to the moon.

So, as you say, things had been quite quiet on the moon and now they are anything but. Why this rush now?

It's now much easier to say this is the sort of thing that up to the minute 21st century nations are able to do. We're able to put things on the moon. And so these are now sort of like the ante for being a serious player. The moon's the OB thing to do in space. Right. Once you've gone up to Earth orbit, which is really actually useful. You're going to the moon. People have a relationship with the moon because they see it in their sky. Everyone was at some point told by a grown up, hey, look at the moon. And went, wow, look, there's a moon. The moon has a sort of like emotional significance that other bodies don't. And it's easy to get to.

Oliver, thanks very much for your time.

You're very welcome.

For the first time in history, the world has more people over the age of 65 than under the age of 5. In a couple of decades, there will be twice as many senior citizens as there are infants. Employees will keep working later in life, and retirees will enjoy more of their golden years. But as more people kick back and fewer work to support them, what risks do economies face?

Economies that aren't doing everything they need to do to grapple with the aging issue could end up facing some pretty significant challenges. You've got more and more people moving into retirement ages, collecting state pensions, and you've got fewer and fewer people in work paying the taxes that are going to fund that.

Ryan Avent is a senior editor at the Economist. He's been looking into how aging populations impact economic growth.

Conceivably, there'd also be worries about having enough people in work to take care of older citizens. You see health care, employment needs growing a lot, and if there aren't people to fill those jobs, then there could be a sort of crisis in this kind of elder care sector where a lot of people aren't getting the care they need. And that would, that would be ideal.

So, Ryan, is it just that older workers are themselves less productive, that makes sort of an older demographic less productive overall?

Well, I think that's a perception that people certainly have, that one of the worries is that productivity will fall because we have older people who aren't as capable of doing things. And actually the data suggests that's really not the case. That even in industries like manufacturing where you might think that age would take more of a toll on productivity, we really don't see any sor sort of decline in productivity performance relative to younger people, at least up to the age of 60. It's really other issues that are. That are the kind of the problem. And if you have a firm and the share of older people working in that firm is growing, it's more kind of what happens to the culture there and the decisions that the firm takes that end up being an issue with productivity. The thought is that firms that tend to have an older workforce are less likely to adopt new technologies. Now, why might that be the case? Well, one thing that we think could happen is that if you adopt a bunch of new technologies, you bring in new systems, you've got to spend a lot of money retraining your workers. If your workers are 60 and you spend that money, you might have a shorter time horizon over which you kind of reap the economic benefits of that training. Whereas if a worker is 20, you know, you could expect to earn that money back for decades. There is also some evidence that in terms of managers age, that managers around the age of 40 are, you know, are much more likely to adopt new technology systems than the managers that are. That are older than that.

And so in that sense, in terms of sort of recouping lost productivity, things like raising retirement age doesn't address that problem.

No, there would be some problems that would be kind of ameliorated if we extended the retirement age so that more people were staying in work longer. The fiscal side of things would certainly get better because you've got a shorter period of time where you're paying people's pensions and more time where they're paying into tax. But in terms of addressing the productivity issues, that wouldn't take care of it. In fact, depending on exactly what the mechanism is, it could make it worse.

So what can firms, what can governments do to try to sort of reverse these effects?

Well, so if you've got a situation where firms are not investing in new technologies, and that's partly because of the age of their workforce, one thing you might want to think about is what sort of competitive pressure are these firms facing? They're kind of fat and happy and earning big profits, then making those investments might not seem like such an important thing in terms of firm survival. If the competitive atmosphere in the industry is really intense, then they might say, well, it's going to cost us to retrain, but we've got no choice. If you look at the US Economy, where there's a lot of worry about market concentration, about the market power that big firms have and the fact that there's not enough competition, you might say, well, actually, using antitrust policy or other mechanisms to try to boost competition is something that could address this problem as well as other problems. It could force companies who would otherwise kind of sit back and let the profits roll in to work a little harder to adopt new technologies.

Well, I mean, what about changing the nature of the workforce itself, perhaps, you know, letting more people into the workplace who might be excluded now?

Yeah, I mean, I think there's A lot of room for improvement there in a number of different ways. I mean, one thing you could do is have more government funding for retraining to shift some of that burden off firms, and that might encourage them to adopt more technologies. But the big thing would be to allow more people who want to enter the workforces of rich countries to do so. So you've got just millions and millions of people who would love the opportunity to work in North America, to work in Europe, and who are prevented from doing so. Strict immigration laws. There are all sorts of reasons why people might want to make those restrictions, but it ends up being extremely economically costly.

It sounds as if this story isn't really just about productivity, but about how that feeds into, you know, wider societal change as we all get older and better taken care of in our golden years.

Well, I think that's right. I mean, we have a lot of polling on kind of how different generations view different economic issues. And, you know, older people definitely tend to be more conservative on an array of issues. Younger cohorts are much more in favor, both in Europe and North America, much more in favor of allowing higher levels of immigration than older people are. And so you have kind of this sad dynamic where, you know, it seems like really these countries are in a spot where they get to. They have the opportunity to choose between a dynamic future, an embrace of the future, and an embrace of efforts to tackle huge challenges and kind of going off quietly into that good night and protecting the way things are for as long as possible. Which is a little bit sad, especially when you think about the, you know, the billions outside of the rich world who would love the opportunity to sort of step in where there are shortages of labor in the rich world and just aren't going to get that opportunity.

It looks like, and may instead be replaced by robots, essentially.

Yes, they will be replaced by robots. We had a great piece on the future of robotics a few years ago, which was under the COVID line immigrants from the future. And it sort of seems like aging societies are, knowingly or not, making this decision to surround themselves with robots rather than people from other cultures and other races. It's certainly a statement about humanity that that's the case. You can decide for yourself what precisely that statement is.

Ryan, thanks very much for your time.

Thank you, Jason.

That's all for this episode of the Intelligence. If you like us, give us a rating on Apple podcasts and you can subscribe to the economist at. @exter.com radio. Offer 12 issues for $12 or 12 pounds.

See you back here tomorrow.