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.
Read more on Times of Israel: http://www.timesofisrael.com/george-shultz-in-a-world-awash-in-change-follow-the-reagan-playbook/