Israel’s Other Enemy: The Blue Social Model
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  • Lorenz Gude

    Well spotted WRM! I have been aware of Netanyahu’s understanding that the Blue model needing to be walked back ever since I saw him on Charlie Rose many years ago. He told a boot camp story that supposedly pitted a large soldier with a small comrade riding on his back racing against a small solder with a large soldier riding on his back and a third team consisting of an average sized soldier carrying another middle sized soldier. The point was that if you ask the private sector to carry too large a public sector you get slowed down and if you privilege the private sector too much you get destabilizing inequality where the ordinary person has no chance, but if you find the sweet spot in the middle then things proceed best. Netanyahu, was the PM that first moved away from Israel’s very socialist past. Their Thatcher, as it were. He is still characterized as far right wing by the left for those efforts, but it now appears there is further work to be done clearing out some of the more costly enclaves of the Blue model. All of which leads me to say that it may be useful to notice how well Israel has been doing economically since the crash. For me the implication is that Israel is getting economics right where much of the West is still bitterly clinging to the inefficiencies of the Blue model. I would add that Australia is also doing well and that our center right Treasurer Peter Costello under the Howard government pursued very similar policies and we have done well. Of course Australia is the ‘lucky country’ full of natural resources. Then again so is Argentina in about equal measure, which shows that getting the balance right and administering it well is extremely important. Hmmm – just noticed. Big poorly run entities like the US and the EU not doing so well. Small countries like Israel and Australia doing well.

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