Jerusalem: A golden opportunity for Israel? 

This Free Market Road Show has been full of novelties. One of the most important has been that, for the first time, the Free Market Road Show visited Israel. The city of the event was Jerusalem and the local partner was the Kohelet Policy Forum. This first stop in Israel did not disappoint and a lot was discussed during the event.

Omer Moav, a native economist, criticized some aspects of the Israeli citizenship. “People think that exports are better than imports. When you ask them why exports are so good, they tell you that they allow you to import…” This common misunderstandings are magnified, he claimed, by the lack of economic literacy of the mass media. He also warned that with the same sort of wrong arguments, a big part of the society and the political elite is pushing for rent control.

Americans John Chisholm and Terry Anker focused on ethics and its impact on economic life.

Chisholm assured the audience that “living frugally” and having “an impeccable reputation that we pay our debts” can be very convenient at the time you are looking financing for your start up.

Terry Anker, in turn, said that the real freedom is to choose to be poor or not to be poor. And he used as example his own family history. “My family was poor but my parents decided not to take the government’s handouts.” He believes that this will to make it “on your own” taught him an important lesson and had a deep impact on his life. “I think there is a difference between my life and the one of those whose family accepted the handouts,” said the successful American entrepreneur.

John Charalambakis was the man of the hour. The Greek-American economist divided his talk between the situation of Europe and Israel.

Charalambakis, a staunch critic of central banks worldwide, immediately started his remarks saying that “we live in times of financial repression.” Central banks depress interest rates under the false impression that they can creates jobs. But unfortunately for the Ben Bernankes of the world “you cannot create growth trough QE.”

Mr. Charalambakis also spoke against the secular stagnation narrative – which he defined as “propaganda.” he acknowledged that “we do live in environment of low growth and low productivity” but not because of the reasons Larry Summers believes.

He then turned to the hot issue of Greece. “A Grexit could be the Lehman Brothers moment of the EU.” Why? Because, “If Greece defaults next month the ECB will need to be recapitalized.”

Charalambakis final reflections were about Israel’s economy.

The economist found troublesome that housing prices are raising in the country and asked if this may be a sign of a bubble. He also found mistaken that “the global trend of expansionary monetary policy has been imitated by the Israeli Central Bank.” Lastly, he criticized that starting a business has become more difficult – which is very ironic and dangerous when you consider that Israel is the “start up nation” par excellence.

However, Charalambakis envisions a bright future for Israel. He even spoke of a “golden opportunity” for the country. He based this optimistic vision on the fact that Israel’s historical enemies are in disarray. Charalambakis called Israel to make good use of this opportunity and to work to establish, as soon as possible, a free trade zone with neighbors like Cyprus, Greece, and Egypt.