Monday, December 10, 2012

Some Tips for Rand Paul When He Visits Israel

Tyler Cowen is in Israel a month ahead of Rand Paul's planned trip and provides some tips and observations (Note, the tips will only work for Rand if he finds the time and is able to break away from polishing Benjamin Netanyahu shoes)
The food is quite good, as is the gelato.  Don’t forget the Libyan, Ethiopian, and Yemeni offerings.

Poverty is more evident than I had expected, and one wonders whether extreme Israeli income inequality is a harbinger of a broader global future.  A simple, small bottle of mouthwash costs about $10.  It is surprising, for this American, to see beggars wearing yarmulkes.

How much of the high cost of living here is from inefficient retail and consolidation?  How much from “the Island effect”?  Since the locals feel the high costs too, we cannot rely on the productivity of the tradeables sector as an explanation.  As for the rent, when it comes to construction permits, Israel ranks #137 (!, pdf) on the World Bank’s Doing Business Index.  Yet the quality of the construction is often somewhat ramshackle, although I expect the Wall and the Iron Dome to last for some while.

Cost of living aside, I imagine living in Tel Aviv as quite pleasant, and I prefer it to most of the other Mediterranean cities I have visited.  The Israel Museum in Jerusalem displays its collection wonderfully.

This place is now a preliminary R&D laboratory for good U.S. TV shows.  Hani Furstenberg is Israeli, it turns out, and Tel Aviv has been named the world’s #2 city for high-tech start-ups.

I am basing this following comment on a limited sample, but so far I have found this country to have a disproportionately large share of taxi drivers who are Jewish, at least compared to anywhere else I have visited.

The Segway seems to have some commercial viability in Israel.

Sometimes the security question consists simply of “Do you have a weapon?”  I do not.

Against my expectation, Jerusalem is a more populous city than Tel Aviv.

Some thoughts: I find it curious that Cowen mentions a possible broader global extreme in income inequality but fails to mention that this expanding development of the haves and the have nots is because of the elitists building barriers around what they have and making it very difficult for outsiders to join the club.

Why does Cowen find it odd in Isreal to find "a disproportionately large share of taxi drivers who are Jewish" ? Was he expecting to see U.S. congressmen driving the taxis?


  1. "Don't be a schmuck, take the chicken!"

  2. Surely his comment about taxi drivers was just an attempt at humour.

    1. I think RW's was also.

  3. Tyler Cowen is fast becoming a walking, talking caricature of himself.

  4. Curiously, he didn't ask how much of the income inequality and high cost of living stems from the high level of socialism in Israel, or the high level of inflation.

  5. I've lived in Israel for nearly 20 years. Some comments.

    Jerusalem (the city) is about twice as populous as Tel Aviv (the city). But the metro situation is different.

    Imported mouthwash (or non-domestic brands, since I don't know if it's imported) is indeed insanely expensive. Local brands are far cheaper. This is normal.

    Jewish taxi drivers? As someone else said, hopefully this was just an attempt at humor.

    If you compare total income tax levels here to the US, the marginal rates don't differ all that much (although they ramp up much faster here).

    The government, after many years of modest tax reductions, has considerably raised taxes recently, particularly on middle-class incomes (with the key rate jumping from 21 to 31%!). A friend of mine, who works in high tech in the Tel Aviv area, tells me it provides him with a sort of bitter schadenfreude. Most of the high tech workers there lean heavily left (this is far less the case in Jerusalem). He tells me they have been banging away at "supporting the less fortunate" for years (and driving him crazy) but are now quite angry at the looming massive increase in their taxes for 2013.

    Israel has been subjected to a housing bubble (by Stanley Fischer, Bernanke's mentor) that has topped and is (slowly, for now) deflating. I've been convinced for years that the pop will be quite bad. If you view the Bank of Israel outstanding credit report (updated roughly quarterly, with info back to 1999), you can practically pick out the month the bubble started, as credit growth was nearly flat from 2000 through 2007 or so, then took off at more than 10% annually.

    I don't like cops anywhere, but if you get stopped by them here, you are less likely (personal experience) to receive a civil rights reaming than you are in the states. No pretext stops or anything like that (though the drug war is alive and well here). You will not be felt up in the airport. Asking if you have a weapon is pretty normal. Almost every commercial building has a private guard and (often) a metal detector. Your gun will set it off. Gun control is very strict, but if you've been in the army, work with or spend a lot of time around Arabs, or live in the territories (and aren't a political rabble rouser), you likely to be able to have a handgun (even if you don't). You are not barred from entering a building for having a gun. Though to enter government buildings you will likely have to check them in (Gee, I wonder why? Are they worried, or something?).

  6. "This place is now a preliminary R&D laboratory for good U.S. TV shows."

    What an absurd statement. As if there were such and animal.