With some 300,000 citizens displaced from their homes, a large proportion of the workforce called up for military service, tourism slowed, agriculture in border areas brought to a halt, and massive government expenditures on the war effort, the Jewish state is under considerable economic strain. Alex Brummer reports that, nonetheless, it appears able to whether the storm:

After an initial currency collapse at the start of the conflagration, the shekel has bounced back strongly. It is now worth 3 percent more against the dollar than on October 7. Blessed with strong foreign-exchange reserves, the Bank of Israel was able to come to the rescue with a large-scale intervention in the foreign-exchange markets.

In Israel, the collapse in total output or GDP in the final quarter of the year is estimated to have been 19 percent. In spite of this, there is no current forecast of recession in 2023 with the economy still expected to expand in 2024.

There will be severe economic costs for Israeli citizens and taxes may eventually have to rise to pay for the war. . . . But as investment bankers Goldman Sachs note: “Israel’s economic and financial vulnerabilities are much lower today than compared to other major episodes of escalating violence.”

The country is protected by its strong currency reserves, reduced dependence on inflows of foreign currency and robust underlying growth. The rebound in the value of the shekel means that when the conflict eases the Bank of Israel has scope to reduce interest rates. Past prudence in managing Israel’s economy mean that stability is not threatened. A rapid recovery of lost wartime output—once the guns are silenced—is eminently possible.​

Robert Satloff has some harsh words for the U.S. government in this regard, words I take especially seriously because Satloff is someone inclined to political moderation. Why, he asks, have American diplomats failed to achieve anything in their endless rounds of talks in Doha and Cairo? Because

there is simply not enough pressure on Hamas to change course, accept a deal, and release the remaining October 7 hostages, stuck in nightmarish captivity. . . . In this environment, why should Hamas change course?

Publicly, the U.S. should bite the bullet and urge Israel to complete the main battle operations in Gaza—i.e., the Rafah operation—as swiftly and efficiently as possible. We should be assertively assisting with the humanitarian side of this.

Satloff had more to say about the hostages, especially the five American ones, in a speech he gave recently:

I am ashamed—ashamed of how we have allowed the story of the hostages to get lost in the noise of the war that followed their capture; ashamed of how we have permitted their release to be a bargaining chip in some larger political negotiation; ashamed of how we have failed to give them the respect and dignity and our wholehearted demand for Red Cross access and care and medicine that is our normal, usual demand for hostages.

If they were taken by Boko Haram, everyone would know their name. If they were taken by the Taliban, everyone would tie a yellow ribbon around a tree for them. If they were taken by Islamic State, kids would learn about them in school.

It is repugnant to see their freedom as just one item on the bargaining table with Hamas, as though they were chattel. These are Americans—and they deserve to be backed by the full faith and credit of the United States.