Making Israel’s Economic Problems Worse

Excessive regulation, rising food prices, high taxes, and government waste threaten the stability of Israel’s economy. Yair Lapid, the outgoing Treasury Minister, rode into office promising to ameliorate these problems; instead, he wasted political capital on reforms that could not make it through the Knesset, accomplished little, or were simply counterproductive—leaving the Israeli economy in worse condition, according to Shoham Wexler, than it was two years ago:

The tax burden is scaring away investors and leaving the private sector in the lurch, which has already been buried under the weight of taxes and regulation. As Treasury Minister, Lapid wasted hundreds of billions of our taxpayer dollars. Rather than invest the money in reducing the tax burden on businesses, the stock market, and companies, and providing credit for small businesses, Lapid preferred to invest the money through the public sector. The enormous budgets of the Transportation Ministry continued to become more bloated, and the same is true for the boondoggles of Education Ministry reform and the government companies.

Lapid is a grave disappointment with zigzags, unsuccessful reforms. The Treasury Minister who declared “I am not a socialist” failed to understand the important principle of capitalism: entrepreneurship. Rather than encourage it, he crushed it. Rather than release the public’s money back to the public by reducing taxes and government intervention, he increased government involvement in the economy, dissuading both investors and consumers from increasing their activity.

Read more at Mida

More about: Capitalism, Economics, Free market, Israeli economy, Israeli politics, Yair Lapid

What a Strategic Victory in Gaza Can and Can’t Achieve

On Tuesday, the Israeli defense minister Yoav Gallant met in Washington with Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin. Gallant says that he told the former that only “a decisive victory will bring this war to an end.” Shay Shabtai tries to outline what exactly this would entail, arguing that the IDF can and must attain a “strategic” victory, as opposed to merely a tactical or operational one. Yet even after a such a victory Israelis can’t expect to start beating their rifles into plowshares:

Strategic victory is the removal of the enemy’s ability to pose a military threat in the operational arena for many years to come. . . . This means the Israeli military will continue to fight guerrilla and terrorist operatives in the Strip alongside extensive activity by a local civilian government with an effective police force and international and regional economic and civil backing. This should lead in the coming years to the stabilization of the Gaza Strip without Hamas control over it.

In such a scenario, it will be possible to ensure relative quiet for a decade or more. However, it will not be possible to ensure quiet beyond that, since the absence of a fundamental change in the situation on the ground is likely to lead to a long-term erosion of security quiet and the re-creation of challenges to Israel. This is what happened in the West Bank after a decade of relative quiet, and in relatively stable Iraq after the withdrawal of the United States at the end of 2011.

Read more at BESA Center

More about: Gaza War 2023, Hamas, IDF