ISRAEL’S UPCOMING WITHDRAWAL FROM GAZA is drawing so much attention that few have noticed the dramatic vote this week in Israel’s Knesset Finance Committee ratifying a government resolution to finally reform Israel’s regressive financial markets. This reform will break up a bank duopoly which has inflicted more harm on the Israeli economy than Japanese banks have inflicted on Japan. Despite continued resistance from the banks, once this reform is enacted and bureaucratically implemented, Israel’s economy will take off, realizing its potential to become one of the 10 richest countries in the world

Israel–which has excellent human capital–is economically hampered because after 60 years of socialism and statism it is dominated by highly concentrated, inefficient monopolies. Israel’s labor and real estate markets are poorly utilized due in large part to punishing government regulation and ownership of land, utilities, and communication.