The Economic Case for supporting Israel

By GEORGE GILDER, WSJ

America’s enemies understand deeply and intuitively that no U.S. goals or resources in the Middle East are remotely as important as Israel. Why don’t we?

Israel cruised through the recent global slump with scarcely a down quarter and no deficit or stimulus package. It is steadily increasing its global supremacy, behind only the U.S., in an array of leading-edge technologies. It is the global master of microchip design, network algorithms and medical instruments.

During a period of water crises around the globe, Israel is incontestably the world leader in water recycling and desalinization. During an epoch when all the world’s cities, from Seoul to New York, face a threat of terrorist rockets, Israel’s newly battle-tested “Iron Dome” provides a unique answer based on original inventions in microchips that radically reduce the weight and cost of the interceptors.

Israel is also making major advances in longer-range missile defense, robotic warfare, and unmanned aerial vehicles that can stay aloft for days. In the face of a global campaign to boycott its goods, and an ever-ascendant shekel, it raised its exports 19.9% in 2010’s fourth quarter and 27.3% in the first quarter of 2011.

Israelis supply Intel with many of its advanced microprocessors, from the Pentium and Sandbridge, to the Atom and Centrino. Israeli companies endow Cisco with new core router designs and real-time programmable network processors for its next-generation systems. They supply Apple with robust miniaturized solid state memory systems for its iPhones, iPods and iPads, and Microsoft with critical user interface designs for the OS7 product line and the Kinect gaming motion-sensor interface, the fastest rising consumer electronic product in history.

Vital to the U.S. economy and military capabilities, tiny Israel’s unparalleled achievements in industry and intellect have conjured up the familiar anti-Semitic frenzies among all the economically and morally failed societies of the socialist and Islamist Third World, from Iran to Venezuela. They all imagine that by delegitimizing, demoralizing, defeating or even destroying Israel, they could take a major step toward bringing down the entire capitalist West.

To most sophisticated Westerners, the jihadist focus on Israel seems bizarre and counterproductive. But on the centrality of Israel the jihadists have it right.

U.S. policy is crippled by a preoccupation with the claimed grievances of the Palestinians and their supposed right to a state of their own in the West Bank and Gaza. But the Palestinian land could not have supported one-tenth as many Palestinians as it does today without the heroic works of reclamation and agricultural development by Jewish settlers beginning in the 1880s, when Arabs in Palestine numbered a few hundred thousand.

Actions have consequences. When the Palestinian Liberation Organization launched two murderous Intifadas within a little over a decade, responded to withdrawals from southern Lebanon and Gaza by launching thousands of rockets on Israeli towns, spurned every sacrificial offer of “Land for Peace” from Oslo through Camp David, and reversed the huge economic gains fostered in the Palestinian territories between 1967 and 1990, the die was cast.

It’s time to move on.

For the U.S., moving on means a sober recognition that Israel is not too large but too small. It boasts a booming economy still absorbing overseas investment and a substantial net inflow of immigrants. Yet it is cramped in a space the size of New Jersey, hemmed in by enemies on three sides, with 60,000 Hezbollah and Hamas rockets at the ready, and Iran lurking with nuclear ambitions and genocidal intent over the horizon.

Clearly, Israel needs every acre it now controls. Still, despite its huge technological advances, its survival continues to rely on peremptory policing of the West Bank, on an ever-advancing shield of antimissile technology, and on the unswerving commitment of the U.S.

But this is no one-way street. At a time of acute recession, debt overhang, suicidal energy policy and venture capitalists who hope to sustain the U.S. economy and defense with Facebook pages and Twitter feeds, U.S. defense and prosperity increasingly depend on the ever-growing economic and technological power of Israel.

If we stand together we can deter or defeat any foe. Failure, however, will doom the U.S. and its allies to a long war against ascendant jihadist barbarians, with demographics and nuclear weapons on their side, and no assurance of victory. We need Israel as much as it needs us.