The Knesset is considering an ambitious budget bill that promises sweeping reform. As Haviv Rettig Gur explains:

This bill . . . upends the old ways of thinking about the Israeli state’s responsibility for its Arab citizens; takes a sledgehammer to structural obstructions that have long plagued the Israeli economy, from protectionist import policies to state price-setting on basic staples; reimagines Israel’s public-transportation network and environmental commitments; . . . opens the banking system to more competition, especially online and via mobile apps; dramatically increases spending on health and defense while cutting expenditures on most other things; and promises a major overhaul and streamlining of governmental red tape.

To Gur, there are only two precedents in Israeli history for such radical change, each of which followed a major economic crisis, perhaps parallel to that caused by the coronavirus: the first was in 1985, when a unity government similar to the current one ended crippling inflation by wresting the country away from the socialism of its founders. The second was in 2003, when then-finance minister Benjamin Netanyahu enacted a further program of economic liberalization, paving the way for Israel’s high-tech revolution. At that time, the crisis was of a different kind:

[T]he Palestinian economy before 2000 was deeply integrated into, and dependent on, the Israeli economy—and was flourishing because of it. Israelis could safely travel in Palestinian cities in those days and had developed a habit of buying cheaper Palestinian goods and services, from car parts to dentistry, valued at hundreds of millions of dollars annually. Together with overseas tourists, they dropped half a billion dollars annually, equal to over 10 percent of the Palestinian GDP, at Jericho’s casino.

But Israel’s economy needed the Palestinians, too, at least in those days. As they grew wealthier from trade with Israel, Palestinians became eager consumers of Israeli products, with some $1.7 billion in Israeli exports to the PA annually, or 7 percent of total Israeli exports excluding diamonds. Palestinian labor drove the Israeli agriculture and construction industries.

The onset of the second intifada reversed those trends, hurting both sides deeply and in interconnected ways.

Yesterday, the beepers used by hundreds of Hizballah operatives were detonated. Noah Rothman puts this ingenious attack in the context of the overall war between Israel and the Iran-backed terrorist group:

[W]hile the disabling of an untold number of Hizballah operatives is remarkable, it’s also ominous. This week, the Israeli defense minister Yoav Gallant told reporters that the hour is nearing when Israeli forces will have to confront Iran’s cat’s-paw in southern Lebanon directly, in order to return the tens of thousands of Israelis who fled their homes along Lebanon’s border under fire and have not yet been able to return. Today’s operation may be a prelude to the next phase of Israel’s defensive war, a dangerous one in which the IDF will face off against an enemy with tens of thousands of fighters and over 150,000 rockets and missiles trained on Israeli cities.

Seth Frantzman, meanwhile, focuses on the specific damage the pager bombings have likely done to Hizballah:

This will put the men in hospital for a period of time. Some of them can go back to serving Hizballah, but they will not have access to one of their hands. These will most likely be their dominant hand, meaning the hand they’d also use to hold the trigger of a rifle or push the button to launch a missile.

Hizballah has already lost around 450 fighters in its eleven-month confrontation with Israel. This is a significant loss for the group. While Hizballah can replace losses, it doesn’t have an endlessly deep [supply of recruits]. This is not only because it has to invest in training and security ahead of recruitment, but also because it draws its recruits from a narrow spectrum of Lebanese society.

The overall challenge for Hizballah is not just replacing wounded and dead fighters. The group will be challenged to . . . roll out some other way to communicate with its men. The use of pagers may seem archaic, but Hizballah apparently chose to use this system because it assumed the network could not be penetrated. . . . It will also now be concerned about the penetration of its operational security. When groups like Hizballah are in chaos, they are more vulnerable to making mistakes.