I’ve long suspected it, but now I’m convinced: Israeli Prime Minister Benjamin Netanyahu has lost his mind. His announcement todayof forming a joint list with Yisrael Beiteinu and Avigdor Lieberman reeks of a panic not rooted in any sense of reality. And this time, it’s not about “the Arabs” or Iran, but about the upcoming election. It’s proof positive that the man running Israel, and who is going to continue to run Israel for the foreseeable future, is a frightened, perhaps even paranoid, reactionary man.

According to Yediot Akhronot’s web site, YNet, Bibi made the decision to do this because polls indicate Likud would lose a few seats in the next elections (sorry, the report is not available in English at this time). Netanyahu wants to be the leader of the next Knesset’s biggest party, not the second biggest as he currently is. So, he threw in his lot with Lieberman and his explicit fascism.

I think this move is going to backfire on Bibi in a number of ways. First of all, this is going to alienate a number of very high profile Likud members. Some will be seeing this as coming at their expense, especially those in top positions right now who will be bumped at least one rung, perhaps more, lower on the list and in their positions in the next cabinet. Others, like Dan Meridor, Benny Begin and more, are going to bristle sharply at having to work this closely with Lieberman. It would not surprise me to see several prominent Likud figures bolt.

Second, whereas before the so-called super-bloc of “center-left” parties was largely a media invention, Netanyahu has now given it much more impetus. While Yair Lapid and his Yesh Atid may still be more interested in making their own mark on the electorate, the more seasoned Labor and Kadima parties are going to find that they have little choice but to join forces now in some way. That won’t matter to Bibi…unless Ehud Olmert and Tzipi Livni re-enter the fray, which make Kadima meaningful again and would combine well with a Labor Party that Shelly Yachimovitch has kept at a steady second place in polls for months.

Third, Bibi has dealt a sharp slap in the face to Shas, the right wing Sephardic party. He is clearly trying to shed his dependence on religious parties in general, but he’s pushing Shas, a party which is very close to Yisrael Beiteinu in terms of Knesset representation and could gain some seats in January, completely out of his sphere. Their domestic program is absolutely at odds with Lieberman’s, and it was difficult enough for Bibi to keep them both in coalition. With Yisrael Beiteinu becoming a senior partner, Shas is going to have a hard time joining the government and explaining that decision to their constituents, who feel that Lieberman is their greatest political enemy.

More to the point, the return of Aryeh Deri, a far more liberal figure than current Shas leader Eli Yishai, to the head of Shas is now much more likely and, with it, the movement of Shas toward the center-left bloc is equally so. This changes the playing field, and is why, ultimately, this move seems so counter-productive for Bibi. Let’s imagine for a moment that Olmert and/or Livni come back and revives Kadima to some degree, whether as the party itself or in the form of a new party. That can attract Likud voters who are upset about the merger, and could even bring in people like Meridor and serve as a greater boon. Sure, some of their votes would then come from Labor, but a nice chunk would come from Likud. As a result, consider the following scenario, which is now absolutely realistic:

Labor comes away with 18-20 seats. Kadima gets 5. A Livni or Olmert-led new party gains 10-12. Yesh Atid gets 6-10. That’s 33-47 seats. Now add Shas, at 13-15.

The bloc of some combination of Labor, Yesh Atid, Kadima and a new party was optimistically projecting to about 35 seats. Now, there is real potential for that bloc to gain enough seats that Shas and Meretz can bring in enough seats to a coalition that a government could be formed. It is far from the most likely scenario, but it is also far more likely today than it was yesterday.

Does this mean anything outside of Israel? Not really. Bibi and Lieberman make Israel look very bad, but a Yachimovitch or Olmert or Livni-led government is unlikely to make any more progress toward an agreement with the Palestinians, or toward soothing relations with a changing Arab world and even less to see any real change in the attitude toward Iran. The rhetoric will be toned down, and the government will be more interested in the appearance of striving for peace. That’s about it.

It will matter to Israelis. A more centrist government will strive to address some of the economic and social concerns that many Israelis care about and which matter. But the global issues are not going to change.

But that’s not the point here. The takeaway here is how panicky a move this is. Netanyahu loves to speak in condescending, confident and calm tones in public appearances. But his political decisions, aside from their merits, have been consistently over reactive. The slightest threat to his agenda or his political ambitions and he pulls out the sledgehammer. That’s the man who controls the region’s only nuclear arsenal and most powerful military machine.

That should cause similar panic throughout the world.

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