At the time of this speech, Argentina was grappling with monthly inflation of 12.8% (a 211% annual rate). The government was printing money at a frenzied pace, resulting in a budget deficit of billions and a massive trade imbalance that created a foreign currency crisis. Poverty engulfed 42% of the population, the real exchange rate of the Argentine peso against the dollar was at a record low, and the economy was sliding into recession.

Since entering the "Pink House," as Argentina's presidential residence is known, Milei has taken drastic steps: firing 30,000 public sector workers, closing 13 government ministries, cutting 13% of government expenditures, reducing taxes on foreign investments, eliminating funding for anti-poverty organizations, and privatizing state-owned enterprises. Unsurprisingly, these measures caused poverty rates to soar from 42% to 53% within six months. Pensions took a hit, median wages fell, and Argentina's economy contracted for three consecutive quarters.

This week, however, bore fruit. In the last quarter, Argentina recorded its first positive economic growth in years—3.9%. Inflation has also dropped steadily and impressively to just 2.4% monthly. While still alarming by Israeli standards, this marks an unprecedented low for Argentina in four years. Moreover, Milei managed to balance the national budget for the first time in 15 years and executed a significant currency devaluation, nearly closing the gap between the official and black-market exchange rates—crucial for curbing dollar flight from the country.

Meanwhile, the markets are responding positively. The International Monetary Fund (IMF) projects 5% growth for Argentina next year. Foreign investments are flowing in, boosting the local stock exchange, and the country's risk premium has dropped significantly. Real wages are on the rise, recently closing the gap that opened when Milei assumed office. Updated poverty rates will only be released in a few months, providing a clearer picture of whether the macroeconomic improvements are translating into real benefits for the average citizen.

It's the housing market, stupid

It's important to note that economic growth figures include government expenditures. For instance, during the recent conflict, Israel's economy contracted only slightly due to an 88% increase in public spending on the military and aid to the north and south. Naturally, Milei's sharp cuts in government spending initially dragged down Argentina's growth metrics. However, the positive growth reported in the last quarter is promising because it stems primarily from increased private consumption and capital investments.

Economic reporting often overlooks these nuances, treating growth data simplistically without analyzing its components. This oversight was highlighted by American economist Robert Solow in the 1960s, when he debunked doomsday predictions that the Soviet Union's economy was outpacing the US by pointing to the superficial nature of such growth comparisons.

In Israel, too, since the onset of the war, reports have focused on declining investments without delving into their specific origins. This discourse, often driven by political convenience, tends to tie investment declines to the tech sector or government policies. But a closer look at the data reveals the central issue lies elsewhere—residential real estate.

Yes, headlines noted that the economy has lost around 60 billion shekels in investments since the war began. However, the fine print reveals that most of this sum comes from a decline in the housing market, particularly residential real estate. When we discuss "investments in the economy," we often refer to structures, which might not align with the public's mental image.

For example, in 2023, total fixed asset investments in Israel amounted to 459 billion shekels, more than half of which was allocated to buildings. This total was split roughly equally between residential and commercial properties. Most of the drop in construction investments since the war—about 30%—has occurred in the housing sector.

This decline is not due to an ideological boycott by housing developers but rather the acute labor shortage in the construction industry. Since October 7, the sector has been grappling with a persistent lack of tens of thousands of workers, exacerbated by the government's failure to provide alternatives to Palestinian laborers. This paralysis has stalled numerous projects, a cost all Israelis will bear for years to come.

While politicians endlessly discuss "growth engines," actionable decisions capable of injecting tens of billions of shekels into the economy are waiting beneath their noses. The term "growth engines" has become a cliché, often misused to justify wasteful or highly sectoral budgets.

It's too early to draw definitive conclusions about the political alien Javier Milei's economic experiment. But there is one lesson Israeli politicians could learn from him: rather than promising a rose garden, be honest with your voters. Prepare them to endure hardship by clearly explaining how it will benefit them in the long run. This requires a standard of transparency and a deeper understanding of growth components—practices uncommon in Israel but undeniably rewarding.

Indeed, throughout the past year, even as poverty rates surged, Milei maintained stable public support of 46–48%. In recent months, as successes began to materialize, his popularity has soared to 54%.

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What would happen if Israel bombed Lebanon's power stations tomorrow? For many Lebanese, it would make little difference. For 15 years, Israeli officials have threatened to "push Lebanon back to the Stone Age," but Lebanon got there on its own. With electricity available for just four hours daily, Lebanese citizens have turned to alternative solutions, triggering a massive wave of solar panel installations. From zero solar energy production in 2010, Lebanon reached a capacity of 90 megawatts by 2020, then surged by another 600 megawatts in the following two years.

Gaza tells a similar story. In the past decade, residents installed over 9,000 independent solar systems on rooftops, reducing their reliance on the already limited power supply. Meanwhile, Hamas equipped their tunnels with generators and stockpiled fuel. In June, Israel had to directly connect Gaza's desalination plants to its power grid to avoid sending fuel trucks that armed groups were hijacking. While cutting off central power still matters, the trend is clear: as energy sources become more scattered, smaller, private, and affordable, their strategic value diminishes. If this pattern exists in enemy territory, consider what it means for Israel's capital. 

Walk along the seam between west and east Jerusalem, down Salah ad-Din or Sultan Suleiman streets, and you'll spot signs advertising rooftop solar installations. The sponsors? The European Union and the UN Development Agency. When the project launched in 2016, EU Representative Ralph Tarraf was candid about its true purpose: "This isn't just about infrastructure and economic development – it's about preserving Palestinian identity in east Jerusalem." The Muslim Waqf later took charge of maintaining these solar panels.

The European Commission's 2018 "annual action program in favor of Palestine for 2018, including one action on budget 2019 and 2020" revealed Palestinian autonomy as its core aim: "The Commission adopted the joint European strategy to support Palestine towards a democratic, accountable and sustainable Palestinian state." Among its priorities: "improving access to water and energy" in east Jerusalem to "strengthen Palestinian residents' resilience and maintain the city's Palestinian character."

While comprehensive data about the scope of this phenomenon in east Jerusalem is lacking, a recently published study offers insight into attempts to bolster energy independence through foreign funding, and what appears to be its failure. The researchers, Dr. Elai Rettig from Bar-Ilan University and Professor Lior Herman from The Hebrew University of Jerusalem conducted 25 interviews with key figures in these projects to understand why authorities cooperate with initiatives that seemingly undermine their sovereignty. According to the study, aerial photograph analysis confirms the growth of rooftop solar panels over the past decade, but exact numbers are difficult to obtain due to the extensive illegal construction in east Jerusalem. According to Dr. Rettig, east Jerusalem is nowhere near achieving energy independence.

Who's funding these initiatives? The list is long: the EU, two UN agencies, the US, Norway, Sweden, Austria, France, Qatar, and Turkey. All have been involved in various east Jerusalem infrastructure projects. According to the research, Europeans particularly favored providing loans for rooftop solar panels, viewing them as small-scale projects unlikely to draw opposition from authorities.

An east Jerusalem manager at a UN agency explained the rationale: "Electricity is the backbone of independence. For me, it's more important than the Temple Mount. You can't be 100% dependent on Israel. This is about the future of the people, and it aligns perfectly with the two-state solution." An EU Commission diplomat told researchers: "We're working to ensure the viability of a two-state solution, and energy infrastructure is part of that strategy... You can't build a state without energy or water."

"Collecting garbage is sovereignty"

Jerusalem Deputy Mayor Aryeh King offers a contrasting view: "It's our responsibility to develop east Jerusalem's infrastructure because building infrastructure equals sovereignty. Collecting sewage and garbage is sovereignty. If we don't do it, we legitimize others stepping in." As with education, public transportation, and many other aspects, the governance vacuum in east Jerusalem has sparked a contest between those seeking to unify the city and those working to preserve it as a future Palestinian capital. Nearly six decades after unification, the Jordanian-established East Jerusalem Electric Company still handles power distribution (using Israeli electricity) in east Jerusalem, Ramallah, Jericho, and Bethlehem.

According to Rettig and Herman's paper, this vacuum is typical of many "divided cities" worldwide, like Nicosia, Beirut, or Belfast. It often stems from fear of local violence against authority representatives. "We can't enter for repairs without heavy security,"  Jerusalem's Water utility company official was quoted saying. "They throw stones when we dig. When we try to collect debts using Arab employees, they receive death threats. Everyone knows where they live." A Jerusalem municipal official added: "No manager would send their worker to fix power lines or water meters in Silwan and risk them coming back in a body bag."

Faced with this reality, foreign governments have embraced solar energy funding: The UN promotes solar panel installation in Bosnia; Germans fund a project in Kirkuk, Iraq; Japanese support non-Shiite areas of Beirut; and the EU works for energy independence in Northern Cyprus. However, the Jerusalem branch of this phenomenon appears to have failed. After initial success installing solar panels, primarily on public buildings in east Jerusalem, progress stalled. A senior EU Commission diplomat admitted: "We realized renewable energy in Jerusalem wouldn't take off as a long-term strategy for energy independence. We discovered that renewable energy initiatives to strengthen Palestinian autonomy and independence had limited success."

The Commission's next strategy document, for 2021-2024, dropped these projects entirely, redirecting funding to renewable energy in Gaza or Palestinian Authority areas. The main reason? Difficulty convincing east Jerusalem residents to install the panels. Many homes there access electricity illegally from neighbors, making them unreceptive to talks about "cost reduction" or "energy efficiency." Additionally, many suspected the initiative was an Israeli government ploy to inspect homes for unauthorized construction.

Another challenge: solar installations require regular maintenance. "None of my contractors would dare enter Shuafat and other neighborhoods," a director of a real estate company in Jerusalem explained. "They might attack my worker. I need to convince the population that these solar roofs belong to them, not to Jews." Moreover, the Jerusalem District Electricity Company claims the initiative hurts their profitability and increases their dependence on Israel's electric company.

The rise and apparent fall of solar power in east Jerusalem tells a broader story. Technological advances are enabling people worldwide to reduce their reliance on governments. Postal services, once the crown jewel of government services in the 19th century, are now largely provided by private companies. No one views this as negative, even though governments can no longer threaten to block information flow through their control of mail ships. In fact, that's the advantage.

There's a lesson here for authorities too. Infrastructure vacuums tend to fill quickly. If Jerusalem's unification was the goal, it should have been implemented comprehensively. If disconnecting from Gaza becomes the choice, it should be absolute. The alternative? Foreign entities with their own agendas trying to complete the circuit on their terms.

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Amos Yadlin, former head of the IDF Military Intelligence Directorate and retired major general, gave an interview last weekend to Israel's Channel 12 TV in which he asserted that Israel needs to do "two things: strike Hezbollah at a much higher level than we have so far, targeting their strategic infrastructure, their commanders, and their leaders. We should hit them every day."

The interviewer, Gideon Oko, sought clarification: "So you would continue the pattern we've seen over the past week?" Yadlin responded: "That has been Mind Israel's consistent recommendation: Israel should go after Hezbollah with full force, like drumming on a drum – hit after hit."

Mind Israel, if you didn't know, is a new security consultancy, founded by Yadlin.  But has "going after Hezbollah with full force" been Mind Israel's consistent recommendation, or is it in fact the opposite? Let's take a closer look.

"The short-term potential for an agreement comes from the fact that both sides have an interest in preventing a large-scale war" (quote from a policy document published by Mind Israel in February. (Mind Israel website).

"If we can secure an agreement that keeps Hezbollah away from the border, with no presence south of the Litani River, I believe we can avoid the immense costs of war. Such an agreement is within reach."  (Amos Yadlin in an interview on Keshet just a day earlier, on September 20).

"It is in both our interest and Nasrallah's to close this matter." (September 17, following the pager attack). "There is a man by the name of Amos Hochstein. If we can reach an agreement without war, that's preferable" (September 15, interview on 103 FM radio)."There is optimism in Washington that mediator Amos Hochstein will manage to secure an agreement to push Hezbollah away from the border – but only after a ceasefire in Gaza. The idea that, if Hochstein fails, Israel might push Hezbollah away from the border through a limited military operation has been met with a cold shoulder" (September 12, Mako website).

"A pause in the fighting in Gaza will have a cooling effect on the entire region. It will reduce the risk of the unification of fronts and provide the U.S. with an opportunity to advance a diplomatic agreement that could potentially allow residents in the north to return to their homes" (Yadlin and Col. (ret) Udi Evental, a senior adviser at Mind Israel, September 8, Mako website). "After a Gaza ceasefire, the fighting in the north is likely to end as well, creating an opportunity to explore a diplomatic solution to distance Hezbollah from the border." (Yadlin and Evental in a policy paper published on the Mako website, following the Iranian attack on Israel on April 14).

"In my view, Hezbollah wants a ceasefire... Hochstein is the person who can broker a deal because, at the core, Nasrallah doesn't want war, and neither do we." (Calcalist conference, April 9). "Radwan forces are no longer sitting directly on the border; they've been hit and pushed back by about three kilometers. For as long as the campaign continues, we can push them back even further without escalating into a full-scale war. We should prepare for an orchestrated operation that begins with a diplomatic efforts." (Yadlin in a radio interview on November 13, just over a month into the war).

"Nasrallah fears confrontation. He's trying to avoid an all-out war with Israel." (Analysis piece for Globes on October 10, three days after the massacre). Watching these same figures, whose professional failure we've all witnessed firsthand, continue to offer advice without pausing for a moment to reflect on their own role, is a disturbing experience. It's gaslighting in leather jackets and authoritative tones. In that same document, Yadlin wrote that "before any action against Hezbollah, there must be a massive military campaign to topple Hamas's rule in Gaza," in order to send Nasrallah a "critical deterrence message." Incidentally, that initial document did not make any mention the hostage issue.

In fact, the belief that "Hezbollah is deterred" appeared in Yadlin's writings and interviews even before October 7. Neither Nasrallah nor the State of Israel want to find themselves in a full-scale war," the former head of the Intelligence Directorate predicted as early as July 2023 in an interview with Maariv. In that same interview, he also expressed "unconditional support" for reserve pilots who had suspended their volunteering. He also conveyed a sense of urgency: "It is important for the Israeli public to understand that the Third Lebanon War will be much tougher than the wars they have previously experienced. This time, rockets will reach Tel Aviv. The IDF might have to stop Hezbollah attempts to cross the border southwards and take over settlements. Air Force flights over Lebanon will face significant challenges."

At the Makor Rishon conference held in the Negev that same month, Yadlin outlined similar scenarios in the event of war on the northern front. A few years earlier, in the summer of 2019, while serving as head of the Institute for National Security Studies, he warned in a ynet studio interview that "Hezbollah could strike Israel's power centers, Air Force bases, intelligence facilities, the Kirya in Tel Aviv, and power stations with an accuracy of 5–10 meters." It was quite surprising, then, to see Maj. Gen. (ret) Yadlin on television this week recommending strikes on Hezbollah and downplaying past fears: "People talked about hundreds, thousands of casualties. So, there are hundreds of rockets, but many are intercepted, and some miss their targets because of the chaos within Hezbollah today."

What about the southern front? In recent years, Yadlin has provided numerous assessments claiming that "Hamas is deterred."  on the southern front. His evaluations emphasized that Hamas had been deterred, particularly following key military operations. For example, during "Operation Guardian of the Walls," Yadlin stated: "Militarily, [Hamas] is defeated, they've lost by a knockout. The damage in Gaza is enormous, including significant hits to their underground infrastructure and rocket launchers. Next time, Hamas will think very carefully before firing at Jerusalem" (103FM radio, May 2021).

Later that year, in an August 2021 interview with Gideon Oko following rocket fire at Sderot, Yadlin said, "Deterrence can be measured in several dimensions. Strategically, it exists because Hamas isn't firing rockets in any significant way." In May 2023, Yadlin reiterated the deterrence narrative: "Hamas has been deterred since 'Guardian of the Walls''... Reoccupying the Gaza Strip is an option that comes with high costs – in terms of occupation, clearing the area, and long-term control – and negative benefits." (Mako, May 2023).

That same month he added: "Hamas is deterred. It desperately need workers to be able to leave [to work in Israel], it needs the Qatari money, and it needs to avoid the electric network being shut down." (Channel 12 TV, May 2023). However, just three weeks before the October massacre, Yadlin observed: "Hamas, which has invested significant effort in rebuilding the Strip since 'Guardian of the Walls,' generally prefers to keep Gaza out of the conflict." (Globes, September 2023). Just three days before the October 7 massacre, Yadlin said: "We are fifty years after the Yom Kippur War... At least now, [IDF] intelligence is much better at giving early warnings, reading the situation, and helping military and political leaders understand what's happening around us... In my view, the enemy's ability to surprise is much less than it was fifty years ago."  (Washington Institute, October 2023).

Shifting Positions

It isn't only Yadlin who is guilty of such an embarrassing series of statements and predictions. Every day, we are bombarded with a chorus of advice and confident analyses from those who misjudged the situation before the war. Almost everyone has past quotes reflecting outdated assumptions, and the most audacious are those who have shifted positions without signaling, even as the conflict continues. Nearly everyone has made statements in the past that show they were guilty of falling to the conceptzia, but the worst of all are those who changed their positions mid-conflict without any contrition for their previous beliefs. Maj. Gen (res) Israel Ziv, for example, now consistently support beating Hezbollah into the dust. "Already about six months ago, we should have shifted the entire campaign to the north and ended the southern conflict," Ziv said in a recent interview. "What's happening now is part of that strategy – albeit delayed – but the IDF's entry [into Lebanon] and pounding of Hezbollah is highly significant."

But not too long ago, he spoke rather differently. For instance, last June, he said: "Getting dragged into a campaign in the north right now is not in Israel's interest… Israel needs the courage to conclude the Gaza campaign, which could give a chance for a pause in the north. We need to wait a year or two until we build the army up to full strength." In February, he said: "We should work to bring residents back to the north, restore UN Security Council Resolution 1701, and deal with Hezbollah when it suits us." It is interesting to note the evolution of Channel 13 commentator Alon Ben-David's stance regarding the Philadelphi Corridor, as tracked by journalist Avishai Grinzeig. Prior to the IDF's entry into Rafah, Ben-David wrote that "entering Rafah would be a political mistake," calling it "the remote southern corner of the Gaza Strip, not the crux of our existence or the event that will determine the outcome of the war."

However, by the end of May, after the IDF entered Rafah, Ben-David commented that, "The IDF is currently trying to block the supply lines, ensuring no weapons flow from Egypt into Gaza." By June, he revealed in a column that "Rafah is a very significant component in Hamas' force build-up... IDF forces found a tunnel shaft every ten meters along the Philadelphi Corridor, the border between Gaza and Egypt. This isn't figurative language but a factual description. The entire border is riddled with smuggling tunnels connected to rocket launch pits, command tunnels in the city, and attack tunnels leading into Israel."

Yet, at the beginning of September, Ben-David suddenly explained that "not a single tunnel was found with an opening on Egyptian soil. No usable tunnels were found beneath the Philadelphi Corridor... this image of the Philadelphi Corridor as a roaring river of weapons smuggling into Gaza is simply not true."

In the end, it seems one's self-image is the most important thing.In September 2023, two weeks before the massacre, Brig.-Gen. (res.) Amir Avivi, Chairman of the Israel Security & Defense Forum (Bitchonistim) was interviewed by the Knesset Channel. When asked in connections with riots along the Gaza border fence, whether Israel was suffering from the misconception that "Hamas doesn't want a fight," Avivi confidently responded, "Hamas is currently acting for the usual reasons – it's about money... The way Hamas is behaving suggests that, strategically, it doesn't want a conflict at this stage. If Hamas wanted conflict, it would fire rockets. The activity along the fence is the type of operation Hamas knows won't lead to a full-scale escalation."

In a May 2023 interview on Channel 12, Avivi explained to Sivan Rahav-Meir that, unlike Palestinian Islamic Jihad, "Hamas bears responsibility for the population and is keenly aware of the consequences of that responsibility, which is why it acts differently than Islamic Jihad." Days later, in another interview with the Kipa website, he stated, "Reoccupying Gaza is a major decision that isn't relevant right now; it doesn't align with the IDF's main tasks, like preparing for Iran... I don't think any of them will be rushing to fire rockets anytime soon."

When I confronted Avivi recently with his pre-war statements, he clarified that he had consistently opposed the idea that "Hamas is deterred" and had warned of the possibility that Hamas might launch a surprise attack to seize border communities, a warning he also mentioned in his book published six months before October 7. He emphasized that his previous comments in the September interview were specific to Hamas' intentions at that particular moment.

However, this explanation raises questions, given his statement just two weeks before the massacre that "strategically, [Hamas] doesn't want conflict." Nonetheless, Avivi does reference in his book, No Retreat: How to Secure Israel for Generations to Come, that attacks and attempts to seize settlements and military posts could be launched from both Lebanon and Gaza. Moreover, in a January 2022 lecture, Avivi declared, "We are not deterring anyone – certainly not the Iranians and certainly not the Gazans. They are not deterred; they are building up their forces. They are preparing themselves for battle. Whether they fire at us or not is not a matter of deterrence. It is a fact that the Gazans repeatedly engage in campaigns against us, so can we say they're deterred? No. It's a matter of when they choose to act, it is not a question of deterrence."

A Rare admission

Maj. Gen. (res.) Yaakov Amidror, former head of the National Security Council, is still a sought-after interviewee despite having previously stated in August 2018 that "Israel's real problem is not the Gaza Strip but Iran's entrenchment in Syria. Every ounce of energy and attention should be focused there, and if some concession in Gaza is required, we should go ahead." In that same interview, he also argued that a ground invasion of Gaza "would be foolish. It isn't something anyone is seriously proposing."

In a May 2023 interview on Channel 12, Avivi explained to Sivan Rahav-Meir that, unlike Palestinian Islamic Jihad, "Hamas bears responsibility for the population and is keenly aware of the consequences of that responsibility, which is why it acts differently than Islamic Jihad." Days later, in another interview with the Kipa website, he stated, "Reoccupying Gaza is a major decision that isn't relevant right now; it doesn't align with the IDF's main tasks, like preparing for Iran... I don't think any of them will be rushing to fire rockets anytime soon."

After Operation Guardian of the Walls in 2021, Amidror wrote that "there are many creative plans for Gaza's future, but the harsh truth is that the current status quo remains the least problematic option among the available alternatives." In the summer of 2022, the former head of the Intelligence Directorate's Research Division explained that "no one in Gaza doubts who's stronger; they're still licking their wounds from the last operation over a year ago. They know exactly who is stronger. It's no coincidence that Hamas is trying to rein in Islamic Jihad."  Around the same time, he also expressed support for the gas deal with Hezbollah.

However, Amidror stands out among security commentators as one of the few who has publicly admitted to his mistakes. In several interviews during the first weeks of the war, he reflected on those errors. In an October interview with Keren Marciano, Amidror admitted, "I too made mistakes; I'm not proud of them. My assessment was that Hamas had interests beyond terror. As a branch of the Muslim Brotherhood, I mistakenly thought that they understood how to govern a population, and that the economic factor was part of this and beneficial to them. I was wrong. It's a terror organization, like any terror organization, like ISIS, and we need to eliminate it."

Even though critics may dismiss this as mere lip service, the rarity of such admissions is striking. Those with experience in the security establishment can offer valuable insights, even if they've made significant errors, but they should acknowledge at least those errors. In a reality where the Prime Minister, the Chief of Staff, and the head of the Shin Bet continue to serve as though nothing happened, scrutinizing security experts who appear on television may seem secondary. Yet, watching individuals, whose professional failings are evident to us all, continue to offer advice without reflecting for even a moment on their role, is a deeply troubling experience.

It's gaslighting, dressed in leather jackets and spoken in authoritative tones. In the media world, even rambling football commentators receive more backlash than those discussing matters of life and death. If they continue to be invited to studios without being challenged, we should at least attempt to track their inconsistencies.

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