The City Sentinel

COMMENTARY: Whether start-up nation or pipeline nation, Israel’s economy booms, shadowed by Iran’s push for nukes

Patrick B. McGuigan Story by on October 21, 2013 . Click on author name to view all articles by this author. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

Patrick McGuigan

Patrick McGuigan




By Patrick B. McGuigan
Associate Publisher


JERUSALEM – An acclaimed book describes the modern state of Israel as a “Start-Up Nation” – an economic miracle wrought by determined people in a desert land, in the midst of war and despite the nearness of enemies.


The 300-page book by Dan Senor and Saul Singer is better than most publications with Council on Foreign Relations sponsorship. Their bracing narrative distills the remarkable story of how a vibrant and modern free market economy emerged triumphantly from roots in Nineteenth Century socialism.


Yoram Ettinger, an influential retired diplomat whose worldview puts him on Israeli Prime Minister Benjamin Netanyahu’s right flank, strongly prefers the term “pipeline nation” – a reference to his nation’s powerful role in commercial industry, defense technology and worldwide influence.


Ettinger thinks “start-up nation” looks backwards, not forward.


Ettinger – a man who loves America and particularly Oklahoma and Texas –- says that the combination of Israeli military strength and dynamic economics of recent decades have made the U.S.-Israeli relationship a two-way street.


Long gone is Israel’s absolute reliance on American generosity to survive. Over the lifetime of the still-active F-16 fighter plane, there have been 70 revisions to the craft’s avionics and internal design based on the input of Israeli soldiers and engineers. But focusing on only such military examples of creativity threatens to mask a larger story.


Something on which Senor/Singer and Ettinger agree is the amazing arc of the Jewish Nation’s emergence as a Mediterranean equivalent of Silicon Valley. Intel, Microsoft, Hewlett Packard and Facebook, among others, employ thousands of Israelis developing products serving the worldwide clientele of the information age.


In its founding generation, Israel was dependent on socialist assumptions and structures when it came to economic organization.


That was then, this is now: To continue its economic surge, which has dwarfed that of most western countries since onset of the Great Recession, Israel is counting on further development of what is arguably the most robust high-tech sector (certainly on a per capita basis) in the world (http://www.theettingerreport.com/Overseas-Investments/Investments-in-Israel%E2%80%99s-high-tech-accelerated.aspx).


The back story, detailed in “Start-up Nation” includes telecom titan Cisco, and a man named Michael Loar.


Born in Israel, after 11 years of successful work at Cisco’s California operations it might have seemed Loar had found his permanent home in the world. But he decided to go home in 1997. Cisco management, concerned at loss of its best engineer and architect, responded by asking Loar to run the company’s new research and development center – in Israel.


He did, and a few years later, Cisco executive John Chambers excitedly introduced the CRS-1 which that Israeli operation had produced. Chambers called it “the biggest jump in innovation since the router was first introduced twenty years ago.” It was a super-router, or more accurately the first tech-ware step beyond a router.


There will be more, not fewer, stories like this in the future, as private investment (which soared after the 1970s “peace” agreement with Egypt and the later 1994 accord with Jordan) continues to shower on Israel.


Americans in general talk about “brain drain” when they hear stories like Loar’s. The tendency of the best and brightest to leave one state or nation for another is a reality, but “brain drain” might no longer be the right way to describe it.


Senor and Singer point to new research highlighting “brain circulation” – which they sketch this way: “Talented people leave, settle down abroad, and then return to their home countries, and yet are not fully ‘lost’ to either place.”


During his tenure as the Israeli consul general in Houston, Ettinger often endeared himself to Oklahomans by saying, “Abraham was the first Sooner.” He wears cowboy boots, quotes Merle Haggard at ease, and believes the future is bright. Listening to him, you discern that Israel, in his view, is always in a state of creative tension, with the emphasis on both words.


For now, as has been the case for many years, the primary shadow over that future, Ettinger says, is the certainty that the nation of Iran is on its way to gaining nuclear weaponry (http://councilforasecureamerica.org/us-interests-energy-independence-and-israel/).


The American media’s obsession with the Palestinian issue led Ettingner, in a discussion here Sunday (October 20) to make another western American analogy.


He recalled a drive many years ago from Austin to Lubbock – the latter square in the middle of “the American Negev.” When he stopped for gasoline along the way, the station attendant told him, “Mr. Ettinger, if you come across a sandstorm on your way to Lubbock, concentrate all your attention on the road and that sand. Don’t worry about the tumbleweeds.”


For the long run, the issues that preoccupy most U.S. news coverage of today’s Israel are focused on the equivalent of tumbleweeds, things that are not the real story.


What does matter? Strengthening the Israeli economy, most importantly supporting private growth driving its remarkably vibrant high-technology and mutually beneficial partnership with the U.S.


On the U.S. side, Ettinger says, the key issue is to continue the remarkable American energy boom (http://councilforasecureamerica.org/u-s-oil-notches-record-growth/), driven by developments in North Dakota and playing itself out nicely in Oklahoma.


For both nations, there’s that shadow: How to resolve Iran’s nuclear ambitions in a way that protects Israel and the neighboring Arab nations who, behind the scenes, dread the day the ayatollahs might have such weaponry.


That’s why he recently came to Oklahoma City for to visit with Harold Hamm of Continental Resources. Hamm is also the founder of a group called “Council for a Secure America” – aiming to propel domestic U.S. energy production, assist the nascent Israeli natural gas industry, and maintain the U.S.-Israel relationship.


NOTE: McGuigan is vacationing in Israel. He is Oklahoma City Bureau Chief for www.watchdog.org, an editor of CapitolBeatOK, and associate publisher for The City Sentinel.

Patrick McGuigan
www.watchdog.org
ckane6@aol.com

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