What do foreigners really think about us? They're not scared about an unstable Middle East, or even worried about a shaky government. They're not even worried that the state budget might not pass the Knesset.

They see everything through rose-colored glasses. The war in the North did not even leave a mark on them. They see the war only as a fleeting, momentary glitch in the overall positive growth trend.

Political instability also does not move them: the government will not fall, the budget will pass, the economy will flourish, interest rates will go down, and inflation will disappear.

	Advertisement

In short: Don't worry be happy - everything is wonderful.

That is why these foreigners have moved into the Tel Aviv Stock Exchange in full force during the last month, and have led to 10 percent gains in the last 30 days.

You can see it clearly in the stocks that they particularly like: the banks, which they see as reflecting Israel's economy.

They are also responsible for the drop in the dollar against the shekel, because in order to pay for their share purchases they sold dollars.

Their optimism surprised many here given the overall gloomy mood here a month ago due to the war's failure, huge defense expenditures, and expectations that the 2007 budget would not pass the Knesset.

But in order to be optimistic and invest in stocks you need to have perspective.

You cannot look too closely at the risks and bad news. You need to sit somewhere in New York or London and look at reality from "up on high," or look at the "big picture."

From there everything looks much better, much more promising. The fact is that the world is willing to put its money down here in Israel - and that is the best proof that our situation is much better than what we think it is.

Some things never change
Last week we celebrated the 120th anniversary of David Ben-Gurion's birth.

The more time that passes, the greater he looks - in particular when compared to today's leaders.

At the beginning of the 1950s, during Israel's most difficult period - when the army was still small, thin and weak, and the threats from Arab nations were enormous Ben-Gurion forced a 10 percent cut on the defense budget in order to transfer resources to civilian sectors.

In a lecture he gave in 1949, "Guarding Israel's security," Ben-Gurion spoke of the importance of the army, which won "glorious victories" that enabled the founding of the state.

But he also added: "But it would not be an exaggeration if I were to say that they do not know what economizing is, and what its value is: economizing in personnel, time, resources, fuel, vehicles, food, bullets and so on.

Victory depends not only on the quality of the equipment
and combat readiness, but also on the people's economic and financial capability. Soldiers and commanders waste state property unnecessarily, and in doing so, they are assisting the enemy without knowing.

"Economy is one of the highest commandments in the army. You have to know how to carry it out in every army unit, and in every operation. Carrying out [economizing] is an entire organizational and planning doctrine and os complex; and our army has yet to learn to value this essential doctrine."

It's as if nothing has changed. Today, the IDF is also an incredibly wasteful organization. During the latest Lebanon war, the waste broke all records. Missiles that cost $100,000 each - the price of four classrooms  were shot off without any thought; and that is just one small example.

No one bothered to stop and think that security also depends on "the people's economic and financial capability" after the war. Open your eyes Ben-Gurion.