What should President Obama do after a new Commerce Department study finds that economic recovery has lost momentum?

The study shows gross domestic product slipping sharply, consumer spending and confidence remaining dim, private sector hiring staying anorexic. Still, government spending is ballooning.

Here’s a novel idea, Mr. President: to help America, learn from Israel in three areas.

Economy
Since 2007, Israel has experienced a mild recession, while America’s has been deep. 

Unemployment in Israel is 7%. In the U.S. it’s 9.5%.

Under the leadership of Prime Minister (also Economic Strategy Minister) Benjamin Netanyahu, Israel has pursued Reagan-like economic policies favoring free markets and supply-side tax cuts. 

Switzerland’s renowned Institute for Management Development ranks Israel’s economy as the world’s most durable in the face of crises. Israel is a net lender rather than borrower nation. Under Obama, borrowing and deficits are reaching record-high levels and his insistence on Keynesian economic policies is a bad bet that the U.S. can spend and tax its way out of severe economic problems.

So, Mr. President, do what Israel does. Make our economy grow and recover by letting people and businesses spend more of the money they earn instead of the government confiscating $862 billion of taxpayers’ money for “stimulus” and “recovery” spending that hasn’t worked — and won’t.


Enterprise

Enterprise and its result — innovation — drive Israel’s economy, but are in reverse under Obama.

Under Obamanomics, the government has enabled the ongoing failure of mismanaged private enterprises with buyouts or bailouts (also true for failing government-sponsored enterprises like Fannie Mae and Freddie Mac). Obama is ramping up government control or ownership of huge swaths of the economy.

Meantime, Netanyahu has cut government ownership of Israel’s leading corporations to 20%, down from as much as 80%.

Obama also preposterously pushes government subsidies of “green” industries like solar and wind power, which can only produce a thimbleful of America’s energy needs. Israel more wisely champions its high-tech industry, which has helped to produce more NASDAQ-listed companies than all of Europe. Israeli high-tech companies are innovating in areas including telecommunications, microchips, biotechnology, software and medical devices. Obama’s idea of innovation is a new big government program.

Obama panders to the protectionism of unions and is devoted to big government meddling. This stifles foreign direct investment in the U.S. that would generate jobs for Americans. In Israel, foreign investors ranging from Warren Buffet to Bill Gates are welcome. Thanks to this venture capital from overseas, Israel has led the world in high-tech start-ups, per capita. Dan Senor and Saul Singer’s best-selling book about Israel is called “Start-up Nation.”

Because of the uncertainty about the costs and consequences of Obama’s health care and financial reforms, America’s small and large businesses are reluctant to hire or expand, turning the U.S. into “Stall-Out Nation.” Sadly, the damage Obama is doing to America’s venture capital industry is severely drying up U.S. investment in Israel.

Mr. President, it’s not too late to change course. Make America a “Start-Up Nation,” too, using business development incentives — not government takeovers.

Exceptionalism

When President Obama visited France last year, a British reporter asked him about the idea of American “exceptionalism.” Obama replied, “I believe in American exceptionalism, just as I suspect that the Brits believe in British exceptionalism and the Greeks believe in Greek exceptionalism.”

Gee, thanks, Mr. President, for reducing American exceptionalism to just a chauvinistic notion. 

You’re on track to cripple America with British-style health rationing and Greek-style debt and bureaucracy. That’s not exceptional —it’s unsustainable.

George Gilder has written a book called “The Israel Test” and here’s how he explains his title: “The Israel test registers how you respond to people who excel in performance, achievement, innovation or creativity: Do you resent and envy them, or do you imitate and admire them? And in economic terms, do you regard their success as coming at your expense, or do you regard their success as creating new opportunities for you?”

Under Netanyahu, Israel embraces success and exceptionalism. But Obama fails “The Israel Test,” and thus fails America.

America is in regression as well as recession because Obama and the Democrats resent achievement and resist innovation in the private sector. Class warfare and envy of success won’t lead America to recovery; they will lead America into rehab.

Israel and America are two truly exceptional countries. They should be allies in freedom and could be even better partners in progress. Friends can learn from friends.

Mr. President, learn from Israel. It could help America.

Jon Kraushar, a communications consultant, is at www.jonkraushar.net

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Communications consultant Jon Kraushar is at www.jonkraushar.net. He is a consultant to corporate and political leaders including Steve Forbes.