Stanley Fischer's super status, along with his title of the "responsible adult," have created the mistaken appearance that the most important person in the Israeli economy is the governor of the Bank of Israel.
But the most important person is the finance minister. Wielding the tool of the budget, he is the one who influences tax collections, wage policy, capital market policy, privatization and reforms on all the main variables in the economy. These include the pace of economic growth, unemployment rate, inequality and standard of living for all of us. He influences investment levels, private consumption, exports and imports, and sets the amount of the budget deficit and debt - and also the stability of the economy.
The governor's job is also important. He is responsible for keeping inflation in check, for the stability of the shekel and for preserving the resilience of the banking system. His decisions also influence every other economic variable, but he is not the key player.
The governor is like the first officer who stands on the bridge of the ship beside the finance minister, who is the captain.
That is why the coming choice of a new governor is important, but more important is the choice of a suitable finance minister.
Let's start with the first political rule: A finance minister must come from the ruling party. He must be someone who sees eye to eye with the prime minister on all policy matters military and economic, and distributes the money accordingly.
That is why the idea of giving the treasury portfolio to Yair Lapid is fantasy, and it's also impossible to give it to Avigdor Lieberman, who also has a legal problem.
The idea of giving this key portfolio to an outside "professional" is also impractical. A "successful businessman" may manage a company well but does not necessarily understand macroeconomics.
In addition, the finance minister's work is purely political: creating alliances in the cabinet and Knesset to pass legislation and implement reforms - and to know how to steal horses. Only a finance minister who is a politician knows how to do all that.
That is why the finance minister must be a senior politician, one who has power inside his political party, who also understands macroeconomics and has courage. He has to be an independent type unafraid to stand up to the prime minister and say no.
We need a politician who will not shrink from battling one-on-one with Histadrut labor federation chairman Ofer Eini, the strong unions and the big tycoons - and against all the good and generous Knesset members who always want to hand out more and more.
His economic worldview must be based on a free market but be tempered with social sensitivity. He needs to be the "bad guy" treasurer who guards the public coffers and does not allow the build-up of a deficit.
He must believe in a smaller and more efficient public sector in order to leave as many resources as possible for the private sector - and in doing so encourage growth and employment. He needs to be a firm believer in privatization and reforms, since that is what propels the economy forward.
He also needs to oppose raising taxes, since they put the brakes on economic activity and prevent growth, and if there is a problem on the revenue side he must get the money by canceling infuriating tax breaks.
When Benjamin Netanyahu chose Yuval Steinitz as finance minister, he told his confidants that Steinitz may not understand economics, but don't worry - he, Netanyahu, will intervene every time there is a need to do so.
As time passed, the prime minister realized he had made a mistake, since it is impossible to deal with matters of security and defense, foreign affairs, Iran, Palestinians and the United States and also find time for the economy.
We must not forget that it was Netanyahu who tripped up Steinitz by ordering him to give in, pay out and not make waves that would rock the boat. But Steinitz should have stood up to Netanyahu, guarded the kitty and not have let the economy deteriorate with such huge deficits - which he will pay for with his head.
True, Steinitz had achievements in the area of economic growth and employment, but Netanyahu now needs a strong and independent finance minister who is not dependent on him. Steinitz also received a low ranking in the Likud primaries and there is a long line in front of him. For example Gideon Sa'ar, or Gilad Erdan. Netanyahu may not receive the same degree of loyalty from any of them that he got from Steinitz, but that is the price he must pay if he wants to pull the economy out of the pit that is the budget deficit.
Want to enjoy 'Zen' reading - with no ads and just the article? Subscribe todaySubscribe now