Israel, once in the poorhouse, has turned the economic tables upside down on the United States, known to European and Russian Jews a century ago as the "Goldene Medina." Hundreds of thousands once were inspired to sail to the shores of America in the belief that its streets “were paved with gold," but Israel today has become an economic model for the United States, according to the widely popular American financial website CBS MarketWatch.com website.
The latest economic figures indicate that the Jewish State is more economically independent than ever and less reliant on Uncle Sam.
“The Jewish state unwittingly supplies America with sobering food for economic thought,” wrote Amotz Asa-El, a veteran Israeli journalist, in a column for CBS MarketWatch. He said that Israel, which barely dipped its feet in the treacherous recession waters, now is an economic model for the sluggish United States.
The U.S. is still struggling with its worst recession since the Great Depression in the 1930s, while the Bank of Israel Tuesday morning estimated that 2009 in Israel will end with zero growth instead of the minus 1.5 percent that had been predicted. The Bank now predicts that economic growth next year will be 2.5 percent, nearly twice earlier estimates.
The picture in the U.S. is much gloomier, where the recession has stretched through four quarters, while negative growth in Israel lasted only for two quarters and was much milder than in the U.S.
In Israel, "customers crowd realty agencies, car dealerships, appliance stores and gourmet restaurants,” Asa-El wrote. “True, over the past two years unemployment has mushroomed to eight percent from less than six percent, but the Israeli economy has clearly suffered less than others in this crisis.”
He noted that Israel has fared better because of a more independent Bank of Israel, restrictions on government debt and strict banking regulations. Israel’s tight rules have prevented financial disasters such as the bankruptcies of dozens of American banks, former business legend General Motors, and longtime financial institutions such as Lehman Brothers.
Those failures wiped out billions of dollars in savings of investors, while Israelis have generally fared better by investing in home-grown businesses. Although Africa-Israel’s shares plummeted by 25 percent Sunday on the heels of a huge second loss, its chairman Lev Levayev noted that the main reason for the decline was bad investments in the United States.
On the other hand, shares of Israeli firms, ranging from Teva Pharmaceuticals to bio-medical companies, have hit record highs, and Cellcom, its largest mobile phone provider, approaches its record high.
“America seems headed in the opposite direction of the path Israel took from the economic delinquency of its youth, to the frugality that has now helped it emerge from a global recession almost unscathed,” Asa-El concluded.