Looking Up

Israel economics


February 27
Israel economics

Don’t confuse me with the facts. That seems to be the theme of the Israeli elections and of public discourse generally. The election campaign, as has been widely noted, is intensely negative — with almost all the parties engaged not merely in explaining why their opponents are incompetent, corrupt, stupid or all of the above but, in addition, joining in the general clamor about how bad the state of the country is.

There is room for disagreement as to exactly whom is responsible for that poor state of affairs — each party has its own candidate for responsibility for the problems, but none of them admit to having any share of it themselves. But there is no disagreement at all, not the merest shadow of doubt, as to the basic fact, namely that the state of affairs is bad and getting worse.

This common wisdom is trumpeted by almost every media vehicle — newspapers and other print journalism, radio stations, TV channels and internet sites — on a daily basis. To suggest otherwise, for instance that maybe things are not so bad, is to risk being branded an imbecile or of being totally detached from reality.

However, one man’s reality is another man’s la-la-land. Insofar as the Israeli economy is concerned, and insofar as the state of the economy can be assessed on the basis of data relating to economic activity — rather than anecdotes which are often merely rehashed booba meisses — the reality is that everything is positive. Those things that were doing badly are now doing well and the things that were previously doing well are now doing even better.

I’ve been in the economic analysis game a long time, but I can hardly remember a period of non-stop good news to compare with the last few weeks. True, one month ago I wrote a column here saying that things were generally good — but that was in January. Since then, virtually every new item of economic data has been either positive or very positive.

There is no space here to provide details, but the list of areas covered by these data includes: the overall economy (as measured by GDP — gross domestic product); trade in goods, especially high-tech exports; trade in services; industrial production; jobs in general and jobs in industry in particular — that’s new jobs; hours worked (in existing jobs); wages (up); prices (down); stock market (up); sales of high-tech companies to large foreign firms; raising new capital for start-ups; the list goes on, but that will do — I think the point has been made.

What is remarkable is that because much of this data is published with a lag of one, two and sometimes three months, the result is that history is being rewritten, as it were. What we thought about the state of the economy in November and December turns out to have been much too pessimistic. The rebound from the war in Gaza in the summer was both faster and stronger than we realized. The impact of the changes in the world economy on Israel — falling commodity and energy prices and the strength of the dollar against other currencies, including the shekel — came through more quickly than had seemed likely.

What is even more remarkable is that no-one is paying any attention. The data is published by official entities and is readily available to anyone who is interested — but it seems that no-one is. Why spoil the fun of complaining and moaning about how terrible everything is, by pointing out that things are actually not terrible — and that compared to most other countries, the Israeli situation is very satisfactory?

Since we have to judge everyone favorably, I have come to the conclusion that the reason nobody wants to mention the positive trends in the economy must be in order to avoid machlokes. People realize that if everyone agreed that the situation was good, there might — chas vesholom — be arguments between the politicians as to who should get the credit for these achievements.

Clearly it’s better that everyone should think everything is terrible than that there should be arguments over kovod.

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