During a visit to Jerusalem, the former secretary of state discussed current U.S. foreign policy, his own experiences in the Reagan administration, and the breakdown of the Middle East. He also reflected on Israel’s current situation (“All things considered . . . it’s doing well”) and the hostility it faces (“I think it’s a lot of anti-Semitism”), and told the story of his own involvement in Israel’s transition to capitalism. (Interview by David Horovitz.)

When I was in office as secretary of state (1982-89), I had a lot of dealings with Israel. And early on I was called on by prime ministers and foreign ministers to talk about security issues. I said to them, “Are you watching your economy?” And nobody even wanted to talk about it. . . . So sometime in the mid-1980s: hyperinflation. Big trouble. They came to me, and they said, “Well, you said we should pay attention. What should we do now?”

I told them what I thought they should do. My great friend Milton Friedman was my unpaid consultant. We developed ideas. . . . Then we made a deal—the Israeli government, the American Jewish community, and the American Congress. They all agreed: I would be the heavy; I would be the guy who said all the tough things. The other side of the deal was [the Israeli government] would do what I said. . . . We brought about the softest landing from hyperinflation anywhere.

There is little doubt that if Hizballah had participated more intensively in Saturday’s attack, Israeli air defenses would have been pushed past their limits, and far more damage would have been done. Daniel Byman and Kenneth Pollack, trying to look at things from Tehran’s perspective, see this as an important sign of caution—but caution that shouldn’t be exaggerated:

Iran is well aware of the extent and capability of Israel’s air defenses. The scale of the strike was almost certainly designed to enable at least some of the attacking munitions to penetrate those defenses and cause some degree of damage. Their inability to do so was doubtless a disappointment to Tehran, but the Iranians can probably still console themselves that the attack was frightening for the Israeli people and alarming to their government. Iran probably hopes that it was unpleasant enough to give Israeli leaders pause the next time they consider an operation like the embassy strike.

Hizballah is Iran’s ace in the hole. With more than 150,000 rockets and missiles, the Lebanese militant group could overwhelm Israeli air defenses. . . . All of this reinforces the strategic assessment that Iran is not looking to escalate with Israel and is, in fact, working very hard to avoid escalation. . . . Still, Iran has crossed a Rubicon, although it may not recognize it. Iran had never struck Israel directly from its own territory before Saturday.

Byman and Pollack see here an important lesson for America:

What Saturday’s fireworks hopefully also illustrated is the danger of U.S. disengagement from the Middle East. . . . The latest round of violence shows why it is important for the United States to take the lead on pushing back on Iran and its proxies and bolstering U.S. allies.