3 tips for America

In at least three areas, the American administration would do well to adopt Israel’s solution. In these three areas, we are better than them.

The first area

The first area is health insurance. Until the mid 1990s, Israel faced a maze of inefficient and inadequate health arrangements that outraged the public and were rather expensive. But then, under the leadership of then-Health Minister Haim Ramon, a national health law was legislated and at once changed the state of the health system. Today it is a good, adequate and efficient system that is the subject of envy in many countries. Mostly, the system offers equality, as much as is possible.

On the other hand, America’s health system is a mess. It’s inconsistent, incredibly inefficient, bureaucratic, regressive, and replete with mediators, lobbyists, and dealers who gain personal benefits. Moreover, this system is on the grey borderline of public and private. Meanwhile, huge interest groups suck off their wealth from it; that is, take it away from the patients requiring its services.

Attempts by the previous two presidents, Clinton and Bush, to improve the system without changing it ended with political, budgetary, and social defeats. Now, president Obama is walking in their footsteps. The American health insurance system cannot be fixed; rather, it can only be replaced by a different system premised on the principle of mandatory national health insurance, as is the case in Israel.

A shift to the Israeli model will cut health expenditures in America by half. National health insurance for everyone will boost the social security of the American worker and the competitiveness of American businesses.

The second area

The second area is fuel. Fuel prices in the US remain ridiculously low, thereby encouraging wastefulness and transferring tens of billions of dollars from the pockets of car owners to the pockets of oil-producing states. Had the American administration imposed fixed taxes on fuel, as the Treasury does in Israel, of 60 cents per liter, it would have prevented the wild oscillations in prices at gas stations, covered about one third of the predicted deficit in the federal budget, and left enough money for investment in public transportation and the upgrading of infrastructure. America’s infrastructure is ruined after all, and Obama knows it.

However, Obama is also unable to overcome the lobby of car manufacturers and fuel consumers. As long as the United States continues its addiction to oil, its economic problems will not be full resolved.

The third area

The third area is monitoring of the banking system. The financial crisis that emerged in America in late 2007 stems from a failure of official monitoring of the credit markets. This monitoring was divided, limited, not professional enough, too ideological, replete with holes, and indifferent to the distress of smalltime borrowers with a mortgage and credit card.

America’s regulatory system was premised on the theory that the market can take care of itself and clients can take care of themselves. That’s nonsense. We know well that financial markets are prone to recklessness and that citizens are forced into reckless financial behavior.

It would be good to mention that some people advised Israel to import and implement America’s maligned financial system, including its irresponsible monitors. Fortunately they failed to carry out the entire plan.

Now it’s clear that the direction should be the opposite: The Americans should learn from the Israelis about effective and reliable monitoring and proper regularization of capital markets, with emphasis on the client.

In this field too, the Obama administration attempted to offer some fixes while avoiding a complete turnaround – unsuccessfully so far. Indeed, regulatory chiefs were replaced and many plans for reform exist, yet the system as a whole has remained disorderly and inadequate as it was in the past.

It is very possible that the US economy is recovering and that the nadir is behind it. Yet should Obama and his cabinet fail to utilize the coming months in order to introduce deep changes based on the Israeli model in respect to these three critical fields – health, fuel, and money – the empire will sink again.