What's Happening in Israel Today

Article #1

July 27, 2024

The last several months have been very busy, but several people have asked me for an update on what I see going on in Israel and abroad. There is lots of coverage on both social and traditional media, but I will try to show things as I see them.

The simple answer to any question about Israel is: “It’s Complicated.” That was my answer a year ago, and will likely be the answer a year from now.

With that in mind, I thought I would break up my thoughts into bite-sized chunks and try to touch on everything over the next few days:

1. What is happening inside Israel
2. What is happening inside Gaza and the war with Hamas
3. What is happening at the Lebanese-Israel border and the war with Hezbollah
4. What is happening in the West Bank
5. The Houthis
6. It all comes back to Iran
7. Iran’s useful idiots
8. What it is like to be a Jew today!

What is happening in Israel today

Israel is a miracle. Full stop.

Since the UN declared the creation of the State of Israel in 1948 and it was attacked by the armies of six nations plus local Arab militias, it has never been allowed to live in peace. The most recent war is, of course, the result of the October 7th invasion of Israel by Hamas and the resulting murder, rape, and dismemberment of 1,200 men, women, and children at concerts, in their homes, and in their neighborhoods. This was followed by the capture of about 240 hostages who were taken into Gaza, and the firing of hundreds of missiles into Israel by both Hamas from Gaza and Hezbollah from Lebanon.

I have been to Israel three times since October 7th, taking elected officials, political staffers, and other non-Jewish influencers, and I still don’t know how to describe Israel and Israelis today.

So let’s start with some facts:

1. While there were originally about 300,000 people displaced from their homes, today about two-thirds have been able to return, with about 100,000 still unable to return due to regular rocket fire in their region or because their homes were destroyed.
2. Since October 8th, there have been over 7,000 rockets fired into Israel from Lebanon, with 40 people killed and more than 250 wounded. The latest victims were 12 young kids playing soccer. In the same time period there were close to 20,000 rockets fired from Gaza.
3. Almost everyone I know went to multiple funerals for the 1,200 victims of October 7th or for the approximately 400 soldiers, 50 police, and others killed in action.
4. 100 hostages have been returned to Israel by Hamas. Almost all suffered emotional torture as well as physical abuse. I have seen some of the testimony of those returned and don’t even want to repeat the stories of gang rapes of both women and men.
5. About 120 hostages remain in Gaza. No one will say how many are still alive, but an unofficial consensus is that Israel will be lucky to get back 50 that are still alive. That number will drop as the war goes on.
6. Prior to October 7th, 80,000 Gazans a day came into Israel to work. That has now ended, and there is an incredible shortage of labor, particularly for construction and agriculture. Israel had one of the largest crane counts, and many are now sitting idle, while volunteers from all over the world are coming to pick crops as Israel struggles to bring in semi-skilled foreign workers.
7. Well over a thousand soldiers and victims of terror have been injured. I am proud of my brother who, after suffering a near-fatal spinal injury and recovering far more than every doctor predicted, has now gone to Israel three times to spend time with soldiers who have similar injuries or lost limbs to show them how important perseverance and attitude are in the recovery process. The CEO of one of our portfolio companies lost both his legs but is fighting hard to get back to the office!
8. Every business is suffering as over 350,000 reservists were yanked out of the workforce to put on their army uniforms. Today the vast majority have been sent home but can be called back at a moment’s notice.

It sounds pretty grim, and to us it is. But the attitude of Israelis is incredible. All 9 million Israelis—Jews, Catholics, Muslims, Druze, and Bedouin—are united in their determination to survive and on their need for security. There are political differences over how to prosecute the war, but not on the goals of the war.

The bars in Tel Aviv are full, and on the weekends the beaches are packed. A couple of weeks ago, talks between Google, who had just offered $23 billion to buy Israeli start-up WIZ, fell apart, but the Start-Up Nation is still alive and kicking, and the tech sector is even more creative after the war uncovered gaps that need filling.

But there is an underlying tension. Everyone is suffering some effects of PTSD. Everyone knows someone who knows someone who was killed or is being held hostage. The economy has fared a little better than expected, but due to increased military spending, political issues, the decrease in certain exports and investments due to increased Jew hatred, and the urgent need to ramp up domestic military armament production, I predict that Israel is in for a very difficult economic period. GDP may continue to rise marginally, but I can only see deficits and increased debt for the next 10 years. Generally that implies a drop in the standard of living, in a country that like Canada is already expensive.

But let’s end on a slightly bizarre note. I just finished describing a country at war on multiple fronts, whose people are living under threat of missiles, whose workforce has spent a lot of time in battle, whose economy is tanking and whose people are only beginning to feel the effects of post traumatic stress.

Yet…..and here comes the bizarre part. With all of the issues it has, Israel was rated the 5th happiest country in the world for 2024 by the University of Oxford’s World Happiness Index, rising from the #9 position in 2022. As a comparison, Canada ranks 15th, while the US is number 23.

Next time: Inside Gaza and the War with Hamas