The markets responded with fear: losses on the stock exchange and gains for the dollar against the shekel.
There are two reasons for this. First, the market loves stability. The moment Amir Peretz promised that Labor would leave the government and sever its alliance with the Likud, approval of the budget was cast in doubt, and there went stability. From today on, the election year has moved into high gear.
The second reason is tied to Peretz' worldview, which is genuinely unloved by the people of the exchanges, and scares them, to boot.
Through it all, the big question today is whether Peretz will make good on the statements and keep the promises he made prior to the primaries - that is, will he continue to be radically extreme left on socio-economic issues - or, with responsibility now on his shoulders, will he become more moderate and turn into a European-style social democrat?
His remarks to date indicate that Peretz is a loyal and consistent representative of the old-style class warfare socialism reminiscent of the 19th century. He is a believer in a centralized economy, big government, and in the economics of nationalization.
This is a worldview that no longer exists today, with the exceptions of Cuba or North Korea. It no longer exists in social democratic parties in Europe, neither in England nor in Germany, France or even Sweden.
However, Peretz, in his every speech, invariably speaks of increasing the budget, increasing the deficit, and imposing more and more taxes on the public.
In April 2003, with the economy in deep crisis, Netanyahu presented his plan for rescuing it. Peretz then put forth an "alternative plan," which stated that the budget deficit should be closed by placing additional taxes and debts on the public....