THE TIKVAH FUND 165 E. 56th Street New York, New York 10022 UPDATED APRIL 23, 2014 The Israeli Economy April 28, 2014 – May 2, 2014 Roger Hertog, Dan Senor, and Ohad Reifen I. Description: Like much about the modern Jewish State, the Israeli economy is an improbable, fascinating, and precarious mix of great achievements and looming challenges. The legacy of its socialist past persists in many sectors of the economy and in the provision of many social services. And yet, Israel has emerged as one of the most dynamic, creative, entrepreneurial start-up economies in the world. Amid the recent economic downturn, the Israeli economy has fared well by comparison to most other advanced democracies. And yet, some of the pro-growth reforms of the recent past are under increasing political pressure. And for all the dynamism of its entrepreneurial class, the fastest growing sectors of Israeli society—the Haredim and the Arabs—are, comparatively, not well trained and not fully integrated into the work-force. For the Jewish State, economic success is a strategic—indeed, an existential—issue. Like all modern nations, Israel and its people yearn for a better life: more opportunity, more meaningful work, greater wealth for oneself and one’s family. And like all decent societies, Israel seeks an economy that serves and reflects the moral aspirations of its citizens, balancing a safety net for those in need and a culture of economic independence and initiative. But Israel is also different: economic stagnation would make it impossible to sustain the national power necessary to deter and confront its enemies, while exacerbating social tensions and fault lines between the various sectors of Israeli society. This course will examine the various dimensions of the modern Israeli economy, with a view to defining a strategy for promoting economic growth, strengthening the social fabric, and sustaining Israeli power and Jewish sovereignty. Led by prominent public intellectual, investor, and Start-Up Nation co-author Dan Senor and Start-Up Nation Central policy director and former Israeli budget department official Ohad Reifen, this course will explore both a series of fiscal policy ideas, as well as the sources of Israeli entrepreneurship. It will include discussions with prominent Israeli political leaders and high-tech entrepreneurs, looking back and looking ahead at how economic vitality can help sustain the Zionist project. 1 THE TIKVAH FUND 165 E. 56th Street New York, New York 10022 UPDATED APRIL 23, 2014 II. Course Calendar: **denotes supplemental readings not included in Course Reader Monday, April 28 Time Instructor(s) Topic Reading 8:30- Welcome Breakfast 9:00 9:15- Roger Framing 10:00 Hertog, Dan Remarks Senor, and Ohad Reifen 10:15- Dan Ben- Macroeconomic • Dan Ben-David, "The Start-Up Nation's Threat 12:45 David Overview of the from Within,” in State of the Nation Report -- Society, Israeli Economy Economy and Policy in Israel 2011-12, Dan Ben-David, ed., Taub Center for Social Policy Studies in Israel, pp. 17-93. • State of the Nation Report -- 2013. Focus on: o Dan Ben-David and Haim Bleikh, “Poverty and Inequality Over Time: In Israel and in the OECD,” pp. 17-72. o Ben-David, “Labor Productivity in Israel,” pp. 95-118. • State of the Nation in Pictures 2013, Dan Ben-David, ed., Taub Center for Social Policy Studies in Israel. 2:15- Martin American Tax • **Martin Feldstein, “The Effect of Taxes on 4:00 Feldstein Policy: A Case Efficiency and Growth,” National Bureau of Study Economic Research. Working Paper No. 12201 (May 2006). • **Martin Feldstein, Daniel Feenberg and Maya MacGuineas, “Capping Individual Tax Expenditure Benefits,” National Bureau of Economic Research. Working Paper No. 16921 (April 2011). • **Feldstein, “How to Achieve Stronger U.S. Growth,” Paper prepared for presentation at meeting of the American Economic Association on January 4, 2014. • **Feldstein, “The ‘Tax Expenditure’ Solution for Our National Debt,” The Wall Street Journal, July 20, 2010. 2 THE TIKVAH FUND 165 E. 56th Street New York, New York 10022 UPDATED APRIL 23, 2014 • **Feldstein, “The Tax Reform Evidence from 1986,” The Wall Street Journal, October 24, 2011. • **Feldstein, “Want to Boost the Economy? Lower Corporate Tax Rates,” The Wall Street Journal, February 15, 2011. • **Feldstein, “A Simple Route to Major Deficit Reduction,” The Wall Street Journal, February 21, 2013. • **Feldstein, “How to Create a Real Economic Stimulus,” The Wall Street Journal, September 17, 2013. 4:30- Participant Introductions 5:30 5:30- Dinner Discussion with Ambassador Ron Dermer 7:00 3 THE TIKVAH FUND 165 E. 56th Street New York, New York 10022 UPDATED APRIL 23, 2014 Tuesday, April 29 Time Instructor(s) Topic Reading 9:15- Dan Senor The Start-Up Dan Senor and Saul Singer, Start-up Nation: The Story of Israel's 12:00 and Saul Nation Economic Miracle (New York: Twelve, 2011). Focus on Singer Phenomenon chapters 1, 3, and 4. 2:00- Arthur The New • Arthur Herman, "Will Israel be the Next Energy 4:00 Herman Israeli Energy Superpower?," Commentary 137, no. 3 (2014), pp. 17-25. and Economy • **Herman, “Israel’s Fortune is Putin’s Horror,” New York Jonathan Post, February 9, 2014. Baron From Jonathan M. Baron, “The New Israeli Energy Economy,” prepared for The Tikvah Fund, Spring 2014: • David Wurmser and Jonathan M. Baron, “Energy Leviathan Rises Offshore Israel,” Forbes, Jan. 14, 2011. • Wurmser and Baron, “Tapping Israel’s Natural Gas,” The Wall Street Journal – Opinion Europe, May 10, 2011. • Wurmser and Baron, “Israel’s Strategic Opportunity Calls for Exports,” Forbes, September 27, 2012. • Amiram Barkat, “Noble Energy Puts Horse Before Cart,” Globes, Nov. 25, 2013. • Wurmser, “The Geopolitics of Israel’s Offshore Gas Reserves,” Jerusalem Center for Public Affairs, April 4, 2013. • U.S. Chamber of Commerce U.S.-Israel Business Initiative, “Recommendation for Advancing U.S.-Israel Cooperation in Energy Exploration and Production,” submitted to the Government of Israel in May, 2013, pp. 38-48. 5:00- Working Groups on Israeli Energy Policy 6:30 4 THE TIKVAH FUND 165 E. 56th Street New York, New York 10022 UPDATED APRIL 23, 2014 Wednesday, April 30 Time Instructor Topic Reading 9:15- Alan Feld Investing in Dan Senor and Saul Singer, Start-up Nation: The Story of 11:00 Israeli Israel's Economic Miracle (New York: Twelve, 2011). Innovation 1:30- Yuval Levin Politics, • Irving Kristol, “‘When Virtue Loses All Her 4:00 Morality, and Loveliness’ – Some Reflections on Capitalism and the Welfare ‘the Free Society,’” The Public Interest, no. 21 (Fall State 1970): pp. 3-15. • James C. Capretta, “The New Middle Class Contract,” National Affairs, no. 1 (Fall 2009), pp. 6- 21. 4:30- Ohad Reifen Working • Government of Israel, Ministry of Finance, State 7:00 Groups on the Budget Proposal for Fiscal Years 2013-2014, pp. 43- Israeli Welfare 71. State • “What Has Been Achieved?,” in Israel Debates, Ralf Hexel, ed., Friedrich Ebert Stiftung, No. 12 (2012), pp. 1-19. • Ayal Kimhi, “Income Inequality in Israel, ”in State of the Nation Report –2010, pp. 113-128. • Nehemia Shtrasler, “Who Benefits From Privatization?,” Haaretz, May 25, 2010. • Dov Khenin, “Why Privatization Is Doomed to Failure,” Haaretz, Aug. 7, 2013. 5 THE TIKVAH FUND 165 E. 56th Street New York, New York 10022 UPDATED APRIL 23, 2014 Thursday, May 1 Time Instructor Topic Reading 9:15- Douglas Pro-Growth • Richard A. Easterlin, “The Worldwide Standard of 11:00 Holtz-Eakin Economic Living Since 1800,” Journal of Economic Perspectives 14, Policy: An no. 1 (Winter 2000), pp. 7-26. American View • Alwyn Young, “Lessons from the East Asian NICs: A Contrarian View,” National Bureau of Economic Research. Working Paper No. 4482 (October 1993). • Michael J. Boskin, “Fiscal Policy for Economic Growth,” The Economists’ Voice 9, no. 2 (March 2012). 11:15- Tal Keinan Pro-Growth • Tal Keinan, "Exploiting the Bust for a 1:00 Israeli Policy: Boom," Haaretz, June 5, 2009. Case Study • Tal Keinan, “Teach Your Kids English,” Times of Israel, March 19, 2012. • “Schumpeter,” “The English Empire,” Economist, Feb. 15, 2014. • Securities Industry Association, “The Key Building Blocks of World Class Financial Centers,” (2006). 3:00- Working Groups, continued. 4:45 5:00- Discussion with Paul Singer and Roger Hertog 6:30 Friday, May 2 – candle lighting at 7:34 pm Time Instructor Topic Reading 9:15- James The TBD 11:00 Pethokoukis Relationship between Policy, Politics, and Economics 11:15- Roger Closing 1:00 Hertog, Dan Reflections Senor, and Ohad Reifen ** - denotes supplemental readings not included in Course Reader 6 THE TIKVAH FUND 165 E. 56th Street New York, New York 10022 UPDATED APRIL 23, 2014 III. Faculty Biographies: Primary Faculty Ohad Reifen Ohad Reifen is the policy director at Start-Up Nation Central, a new initiative elaborating on the bestselling book, Start-up Nation: The Story of Israel’s Economic Miracle (2011). He spent seven years working in the budget department of Israel’s Ministry of Finance, where he was involved in a variety of fields including trade and industry, tourism, social security, welfare, immigrant absorption, and strategic planning and oversight. A native of Rehovot, he completed his high school education in Hong Kong. Following his service in the IDF, he studied at the Hebrew University of Jerusalem, where he completed a dual B.A. in economics and the Amirim honors program. He subsequently received an M.A. in the politics of the world economy at the London School of Economics. Reifen spent a year as a Tikvah Fellow in 2012-2013. Daniel S. Senor Daniel S. Senor is a bestselling author, adjunct senior fellow at the Council on Foreign Relations, and co-founder and a member of the board of directors of the Foreign Policy Initiative.