[JohnGalt]

I'm not sure you answered the question, and I wholeheartedly disagree with your assessment that it's not an issue of freeing the economy.

[anotherview]

Your views are, at best, dated. Israel began moving seriously to a free market economy in 1977 when Menachem Begin was elected, and the trend has continued ever since, most recently with the privatization of El Al, Israel's national airline. (There have also been competing, private Israeli airlines, like Tower Air, for years.)

Every successful western economy, including the United States, is a blend of capitalism and socialism. Examples of socialism in the American system include social security and medicare. Does the government build roads in America, or are they all private toll roads? See what I mean?

The one area where Israel is more socialistic that the U.S. national healthcare. Other than that the two systems are remarkably similar nowadays. Heck, even the Labor Party claims to be for a free market, since any other view in Israel today is unpopular at best.

The problem isn't economic regulation. The problems are the heavy dependency on high tech and the ongoing war with the Palestinians. The war has indirect costs, too, like the disappearance of tourism revenues, once very important to the Israeli economy.

Oh, and yes, the U.S. administration does severely restrict how Israel can fight its war.