Prime Minister Binyamin Netanyahu and Israel’s new political superstar Yair Lapid, the former talk show host and celebrity anchorman and current head of the brand new Yesh Atid party are busy at work hammering out our next governing coalition. President Shimon Peres is expected to formally task Netanyahu with forming the next government in a few days.

The question everyone is asking is what do these election results mean? What can we expect from the next government?

What follow is the first of two blog posts. This one discusses how we got to where we are. The next, which I will post tomorrow, discusses what we can expect from the next government.

So how did we get here? How did Likud/Yisrael Beitenu drop 25 percent from their 42 combined seats in the 18th Knesset to 31 combined seats in the 19th Knesset? How did Lapid, with no political experience and no managerial experience become an overnight political powerhouse with 19 seats in the Knesset?

How are we to assess Naftali Bennett and the Bayit Hayehudi’s 12 seat count which quadrupled the representation of the national religious public from the last Knesset?

Until the last week of the election, Lapid was consistently trailing the Labor Party as the second largest leftist party, polling around 8-10 seats. Bayit Yehudi was polling between 12-18 seats. Likud was polling between 31-34 seats. In the end, Likud came out on the low side of the polling numbers. Bayit Yehudi came out on the low side of its polling numbers. And Lapid came out a stunning 10 seats above his average polling position.

The most common, and probably the correct assessment, is that there is a direct correlation between the drop in public support for Bayit Yehudi and the rise in public support for Lapid in the last week to ten days before the election. What does this mean about the interests and hopes of the Israeli electorate? What, if anything does this tell us about the future of Israeli politics?

It is beyond dispute that once the Bayit Yehudi’s polling numbers began rising, Netanyahu decided to direct his campaign towards destroying Bennett and the party. Likud assaulted Bennett mercilessly. First Netanyahu attacked him personally. Those initial attacks backfired. Bennett’s polling numbers went through the roof. After that, the Likud redirected its attacks against the Bayit Yehudi’s slate of Knesset candidates. With the active help of the media, Netanyahu and his campaign advisors sought to portray the list as extremist.

As for the Left, Netanyahu completely ignored Lapid, while directing Likud’s attacks, such as they were, against the Labor Party and to a lesser degree, against Tzipi Livni and her party.

The impact of Netanyahu’s two-stage assault on Bennett and his party is interesting for what it tells us about the electorate, first and foremost. The personal assault on Bennett backfired because it was so over the top that it disgusted the public. No matter how you slice it, there is no way for anyone to tar and feather Bennett as an extremist. He isn’t one and he doesn’t look or act like one. It was an utterly unconvincing campaign and it made Netanyahu look vindictive. To the extent that Bennett was able to capture Likud voters, the exodus from Likud to Bayit Yehudi came at this time.

The second phase of Likud’s campaign against Bennett was more effective. In attacking Bennett’s list Netanyahu was essentially attacking the national religious community. This is the community that the media hates more than any other sector of Israeli society. And so, the likes of Channel 2’s Amnon Abramovitch, Dana Weiss and Rena Matzliah were happy to join in this assault. Amazingly, the main target in this campaign was the Bayit Yehudi’s Orit Struck, who rose to public prominence through her work as a human rights activist.

But for Likud, this victory was unhelpful. While it no doubt was responsible for the Bayit Yehudi’s descent from 18 seats in the most favorable polls to the 12 it ended up winning, it appears that all of the lost seats went not to Likud, but to Yair Lapid’s Yesh Atid party. The voters who left Likud following Netanyahu’s personal assault on Bennett had no interest in coming back.

The question is why? What were voters looking for that they couldn’t find in Likud? How could they move from the centrist Right Likud to the hard Right Bayit Yehudi, to the centrist Left Yesh Atid? What is happening to the Israeli public?

Over the years, I have written periodically about the sea change occurring in Israeli society. Israelis are becoming more nationalist, more capitalist, more individualistic, and more interested in their Judaism. This is particularly the case among Israelis under 40 years old. Yair Lapid and Naftali Bennett both appealed to this target demographic and for the same reasons.

Unlike his late father Tommy Lapid, who was comfortable making anti-Semitic statements about ultra-Orthodox Jews and was reasonably perceived as an Israeli Archie Bunker, Yair Lapid always couches his opposition to the ultra-Orthodox in nationalist language. As he puts it, it isn’t that the ultra-Orthodox are inherently bad. They are bad because they don’t work and they don’t serve in the army and our taxes go to subsidizing their way of life which rejects our way of life.

To win over nationalist voters, Lapid made Rabbi Shai Piron, an esteemed and serious national religious educator his number two. For people seeking a party that advances causes of Jewish identity and the transformation of the Israeli rabbinate from the fiefdom of non-Zionist ultra-Orthodox rabbis to an institution led by national religious rabbis who better represent the general population, Piron’s placement on Lapid’s list was a powerful statement of good will. By putting Piron in as his number two, Lapid was also able to blunt attention to the fact that he has radical leftists on his list. For instance, former Shin Bet director Yaacov Peri who cultivated strong business relations with corrupt PLO leaders after he retired from the Shin Bet in 1994 is number 5 on Lapid’s Knesset slate.

Both Bennett and Lapid won public support due to their ability to cast themselves as socially tolerant, free market capitalists, who are also strong and committed patriots. When Netanyahu opened his attack on the Bayit Yehudi’s candidates’ list, the move from the socially moderate and strongly nationalist Bennett to the socially moderate-liberal and relatively nationalist Lapid was a natural one.

But what about Likud? Why couldn’t Netanyahu, the father of Israel’s free market economic policies, compete with Bennett and Lapid for a voting demographic that on the face of things should have naturally gravitated to him?

Netanyahu’s problem is multifaceted. The headline is that he ran a campaign based on coasting to victory, not on inspiring anyone to vote for him. This is the same campaign Netanyahu ran in 2006 that brought Likud its most stunning defeat. Likud limped to the finish line seven years ago with just 12 mandates. It is the same campaign that won Likud the elections with a paltry 27 Knesset seats in 2009.

This campaign involves doing essentially nothing but negative campaigning. Aside from showing footage of Netanyahu speaking before the US Congress and the UN, and looking at his family album with his wife, the Likud’s campaign had almost no positive imagery
. It was all about tearing apart its opponents, and particularly the Right and Bennett.

There is a suspicion, still whispered but becoming more and more strident in Likud circles, that Netanyahu’s decision to bring Avigdor Lieberman and his Yisrael Beitenu party into Likud owed to Netanyahu’s desire to weaken the political Right. The rightist candidates won the Likud primaries. Netanyahu made no effort to hide his distaste for his own list, attacking it the night of the primaries by saying that despite the results, he intended to reappoint his dovish ministers Benny Begin, Dan Meridor and Michael Eitan despite the Likud party membership’s utter rejection of their candidacies.

Although Lieberman is characterized, (or caricatured) by the international media as a super-hawk, his record indicates no such thing. In 2006, Lieberman singlehandedly saved Ehud Olmert’s government. After the war in Lebanon, with thousands of angry reservists and citizens marching on Jerusalem demanding Olmert’s resignation after his incompetent leadership of the war, Lieberman joined the government, and joined it for nothing. He got a phony ministerial portfolio with no executive powers. If it hadn’t been for Lieberman, Olmert would have fallen, new elections would have been called and Likud would have returned to power with a large coalition.

Moreover, Lieberman’s policies on one of Israel’s central security issues–the fate of Judea and Samaria and relations with the Palestinian terrorist groups–are closer to Israel’s Left than its Right. Like the Left, Lieberman exaggerates the threat of demographic changes to Israel, while downplaying the threat of Palestinian terrorist groups controlling territory in Israel’s heartland. Like the Left, Lieberman favors surrendering strategically vital and historically Jewish territory on demographic lines while ignoring security threats.

Beyond that, even though there are some hawks – notably Yair Shamir and Uzi Landau – on Lieberman’s list, the fact is that his party members have no independent power. They are entirely creatures of Lieberman’s will. The three party members that distinguished themselves – for better or for worse – as independent political forces in the last Knesset were unceremoniously dumped by Lieberman in the current election cycle.

By bringing Lieberman into Likud, Netanyahu was able to undermine the Right’s power by forcing his own party to surrender a third of its Knesset seats to Lieberman.

Still, had the elections been smooth sailing, Netanyahu and Lieberman might have been expected to hold onto their current seats in the Knesset rather than go down 11 seats. Aside from Netanyahu’s inability – and unwillingness – to connect with and inspire voters, another problem Likud was presented with was the State Prosecution’s decision to intervene to harm Likud.

Lieberman has been under police investigation for various corruption allegations for more than a decade. After dragging out the investigation interminably, Attorney General Yehuda Weinstein suddenly sprang into action after elections had been called and announced he was indicting Lieberman for using his influence as Foreign Minister to get a political ally appointed Ambassador to Belarus–a charge that was only peripherally related to the decade plus-long investigation and a charge that had never been seriously explored. Lieberman was forced to resign his position as Foreign Minister and suddenly a stench of criminality attached itself to Netanyahu’s latest acquisition.

In summary then, the electorate that produced these surprising results is an electorate that supports economic growth through free markets, seeks reform in the religious institutions in Israel, and is patriotic and uninterested in appeasement. Likud lost 25 percent of its support because it failed to make a case for any of these things and instead devoted its campaign to attacking its own political camp. If Bennett and Lapid prove to be competent politicians in the next government, it is possible that Likud will be eclipsed in the next elections.