July 13, 2007

The Israeli Economic Miracle

By Noah Pollak

Against the backdrop of the events that typically cause Israel to be in the news — the conflict with the Palestinians, war with Hezbollah, genocidal threats from Iran, and the like — people often forget that there are normal things happening in Israel. And in many cases, extraordinary things, like the amazing performance of the Israeli economy over the past decade. Haaretz reports that the TA-25, the flagship index of the Israeli stock market, has increased forty percent in the last year. A period that has included a month of warfare, massive public discontent with the Israeli political echelon, and the takeover of Gaza by Hamas.

CFT0713_0839252230E.bmp

The TA-25's performance over the past year.

This remarkable record has been occasionally noted in the press. If you're curious, you can read pieces in the Financial Times, the Christian Science Monitor, and the Jerusalem Post. And this profile of one of Israel's leading venture capitalists by one of Israel's leading journalists, Ari Shavit, is fascinating.

What accounts for this growth? A vital factor is of course the Israeli culture, which embraces entrepreneurship, risk-taking, and ingenuity. But no economy, no matter how entrepreneurial its people, can flourish in the poisonous soil of socialism. Israel was always strangled by an overbearing bureaucracy, punitive levels of taxation, and suffocating regulatory policies. In 2003, Benjamin Netanyahu became Ariel Sharon's finance minister, and during his three-year tenure pushed through a set of market-friendly, and desperately needed, reforms. The resulting growth is more evidence that Netanyahu's greatest accomplishment in government is arguably his economic reforms; he is Israel's Thatcher, and the line we see today that ascends across the TA-25 index is in large part owed to Bibi.

Add Israel's to the list of economies that have been saved from self-destruction by simple and obvious market reforms.

Posted by Noah Pollak at July 13, 2007 11:30 AM
Winner, The 2007 Weblog Awards, Best Middle East or Africa Blog

Pajamas Media BlogRoll Member



Testimonials

"I'm flattered such an excellent writer links to my stuff"
Johann Hari
Author of God Save the Queen?

"Terrific"
Andrew Sullivan
Author of Virtually Normal

"Brisk, bracing, sharp and thoughtful"
James Lileks
Author of The Gallery of Regrettable Food

"A hard-headed liberal who thinks and writes superbly"
Roger L. Simon
Author of Director's Cut

"Lively, vivid, and smart"
James Howard Kunstler
Author of The Geography of Nowhere


Contact Me

Send email to michaeltotten001 at gmail dot com


News Feeds




toysforiraq.gif



Link to Michael J. Totten with the logo button

totten_button.jpg


Tip Jar





Essays

Terror and Liberalism
Paul Berman, The American Prospect

The Men Who Would Be Orwell
Ron Rosenbaum, The New York Observer

Looking the World in the Eye
Robert D. Kaplan, The Atlantic Monthly

In the Eigth Circle of Thieves
E.L. Doctorow, The Nation

Against Rationalization
Christopher Hitchens, The Nation

The Wall
Yossi Klein Halevi, The New Republic

Jihad Versus McWorld
Benjamin Barber, The Atlantic Monthly

The Sunshine Warrior
Bill Keller, The New York Times Magazine

Power and Weakness
Robert Kagan, Policy Review

The Coming Anarchy
Robert D. Kaplan, The Atlantic Monthly

England Your England
George Orwell, The Lion and the Unicorn