Co-host David Asman asked him about ‘America’s lackluster economy and Israel’s booming economy.’
“Well, first of all, we’re a speedboat,” Netanyahu answered, “and you’re a cruise ship. So there’s a difference… I can tell you as captain of a speedboat that we have followed a certain policy that has been good for us, but I don’t pretend that it is necessarily good for every country, especially one that is a fifth of the world’s economy. We’re just, you know, a small niche economy. But what we’ve done and what we’ve instituted is essentially turning Israel into a high-tech free market economy. And that is a fundamental change from where we were decades ago.”
“We were growing oranges and selling polished diamonds,” he elaborated, “and now we’re selling the software on chips and we’re producing all sorts of innovations, technological innovations. And we’ve essentially become an export-driven, high-tech economy that has a very open marketplace. Not open enough. That’s actually our strategic opportunity for growth. That is, if you’re lucky enough to have a lot of bureaucratic controls, by removing them, you actually get added growth. And that’s the secret of what you do in an advanced economy and you want to keep it growing after it has reached $30,000 per capita income. That is our situation.”
He responded to questions about Iran.
He said Iran threatens not only the Middle East, but is also “a global threat, because Iran’s reach is far and wide. I mean, look at what they’re doing today. They’re in the Arabian Peninsula with a beachhead in Yemen. They’re in Eritrea. They’re in Sudan, in Africa. They’re obviously in Lebanon and in Gaza, we see them. They’re here in this hemisphere, [and] in South America. And this is what they’re doing without nuclear weapons. So if they have nuclear weapons, a nuclear umbrella, think of what they could be doing?”
“And the first thing they’ll probably do is make a bid for Middle Eastern oil,” Netanyahu continued, “and that’s going to affect the economies of the entire world. So this is not just an Israeli problem. It’s rightly seen more and more, by the United States, by the major European countries, by us, and I can tell you, by many, many Arab governments in our region… So I think the answer [is that] it has to be dealt with by the international community, not merely for Israel’s sake but for the sake of the peace and prosperity of the entire world.”
There was an adept attempt by co-host Liz Claman to get the PM to criticize President Obama but he was the supreme diplomat.
He said the “close nature between Israel and the United States… is a powerful bond, and President Obama has expressed it more than once. We have had security cooperation in the last year that people don’t know about, but I think has surpassed all previous levels… I was very pleased to hear that the president has said that he is determined to prevent Iran from developing nuclear weapons. I think that’s a very important statement.”
On the House majority turnover from Democrats to Republicans Netanyahu said both the outgoing and incoming Congresses are friendly to Israel.
He was also asked about the week Palestinian Authority economy. Netanyahu explained that his government continued to seek ways to work with the PA. “We haven’t waited for peace,” he said.
He was again pushed on the Israel prosperity.
“You folks in Israel are growing at great guns. You’re growing over 4 percent right now. We have anemic growth rates in the United States. The president’s budget called for 4 percent growth. We’re lucky to reach 2 percent this year. How have you guys been growing so well?'”
“I think we enjoy the fact that we had a concentration of young people who went through the military and received a technological education. That created the potential. That potential could not be unleashed until we made the Israeli economy more friendly to business. And I had something to do with that, first as Prime Minister, again as Finance Minister, and now again as Prime Minister. What we did was basically follow three things. We controlled spending. We cut tax rates and projected them in a very deliberate path into the future. And we removed obstacles to competition.
“And the combination of the three propelled our economy from a crisis of contraction, about 1 percent contraction, to about 5 percent growth within 18 months. And it stayed that way more or less since, with a dip during the height of the recent crisis. But essentially that’s what we’ve been doing. Now will that work for every economy? I don’t know. It has worked for our speedboat.
“…A lot of the changes that we did were very hard to do. I mean, they were politically very, very difficult. As Finance Minister I raised the pension age to 67; I haven’t found a single voter who voted for me for that. And we did a lot of other things. We did capital market reforms. We took away a third of assets of our banks. We have large banks, a handful of them that controlled most of the economy. And we took away the long-term savings from those banks. That was very tough. Cutting government spending doesn’t make you popular, believe me. It is very hard. So we did all of that. And the important thing is we did it [all] at the same time. So the effect of the reforms bundled together is greater than the sum of their parts. It’s a very powerful growth stimulus.”