Fixing Israel’s Economy

Michael Sarel, who recently stepped down as chief economist at Israel’s Treasury Ministry, speaks about the challenges facing Israel’s economy, the political roadblocks that prevent improvements, and the dangers of over-regulation. (Interview by Amnon Lord and Akiva Bigman)

The populism contest [among politicians] is the primary obstacle to a fundamental improvement in Israel’s economic situation. According to Dr. Sarel, since the days of Netanyahu’s reforms in 2003-2005 when he served as Treasury Minister, Israel has not had an economic policy that deals with fundamentally changing the situation but only one dealing with the symptoms of the present one. “Very often, there are very attractive ideas which ostensibly deal with the problems in the economy,” he says, “and they have good visibility. On the macro level they seem to solve the problems, but when you properly examine these cures, you understand that the negative results are greater than the positive ones.”

Read more at Mida

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


If Iran Goes Nuclear, the U.S. Will Be Forced Out of the Middle East

The International Atomic Energy Agency reported in May that Iran has, or is close to having, enough highly enriched uranium to build multiple atomic bombs, while, according to other sources, it is taking steps toward acquiring the technology to assemble such weapons. Considering the effects on Israel, the Middle East, and American foreign policy of a nuclear-armed Iran, Eli Diamond writes:

The basic picture is that the Middle East would become inhospitable to the U.S. and its allies when Iran goes nuclear. Israel would find itself isolated, with fewer options for deterring Iran or confronting its proxies. The Saudis and Emiratis would be forced into uncomfortable compromises.

Any course reversal has to start by recognizing that the United States has entered the early stages of a global conflict in which the Middle East is set to be a main attraction, not a sideshow.

Directly or not, the U.S. is engaged in this conflict and has a significant stake in its outcome. In Europe, American and Western arms are the only things standing between Ukraine and its defeat at the hands of Russia. In the Middle East, American arms remain indispensable to Israel’s survival as it wages a defensive, multifront war against Iran and its proxies Hamas and Hizballah. In the Indo-Pacific, China has embarked on the greatest military buildup since World War II, its eyes set on Taiwan but ultimately U.S. primacy.

While Iran is the smallest of these three powers, China and Russia rely on it greatly for oil and weapons, respectively. Both rely on it as a tool to degrade America’s position in the region. Constraining Iran and preventing its nuclear breakout would keep waterways open for Western shipping and undermine a key node in the supply chain for China and Russia.

Diamond offers a series of concrete suggestions for how the U.S. could push back hard against Iran, among them expanding the Abraham Accords into a military and diplomatic alliance that would include Saudi Arabia. But such a plan depends on Washington recognizing that its interests in Eastern Europe, in the Pacific, and in the Middle East are all connected.

Read more at National Review

More about: Iran nuclear program, Israeli Security, Middle East, U.S. Foreign policy