The Bottom Line / True Friends

Israel needs to offer, and - the sooner the better - a much more generous amount of aid for the Katrina victims than Australia.

Katrina 1. When it was announced that Australia had decided to give the United States $8 million in aid and the Norwegians $1.6 million, and other rich countries proposed ridiculously small sums to aid New Orleans' hurricane victims - I knew that Israel had a golden opportunity.

Israel needs to offer, and - the sooner the better - a much more generous amount than Australia. In addition, we need to send doctors who will provide medical care and teams of experts in rebuilding ruins and treating mass disaster victims.

A country which receives $2.5 billion every year from the United States (not including special aid packages) needs to take advantage of the opportunity to prove that friendship is a two-way street: Israel can also give. The benefits in terms of Israel's standing in Congress and the American public is clear.

Katrina 2. George Bush and the American government have a great deal of respect for Ariel Sharon in light of his success in carrying off the disengagement. Bush has already announced his agreement to give Israel a special aid package for developing the Negev and Galilee, and to finance the transfer of IDF bases from Gaza to the Negev.

During his Washington visit two weeks ago, Ehud Olmert asked Condeleezza Rice to accelerate passage of the $2 billion aid package; but since then everything has changed.

The disaster in New Orleans has turned all attention to the South. The Congress has approved for now Bush's request for a special budget to assist the hurricane victims - $10.5 billion, and that's only the beginning.

Therefore, now is the least appropriate time to lobby Congress for Negev and Galilee aid. Everyone knows that the United States has a much-too-large budget deficit already, and your own poor come first.

Therefore, we need to approach the members of Congress on a completely different tack: to tell them that Israel is well aware of the disaster on the Gulf Coast, and request a delay of the debate over the aid package only once the handling of the hurricane victims has been completed. That is how friends act.

Katrina 3. As time passes, the true dimensions of the tragedy are becoming clearer and clearer - and they are much greater than what was originally thought. Initially, there was talk of 50 dead, and now it's many thousands. Also it is now clear that at least half a million jobs on the Gulf Coast and in New Orleans have been wiped out. As a result, U.S. economists have lowered their fourth-quarter growth forecasts from 3.5 percent to 2.5 percent - an enormous $30 billion loss in GDP. The total estimated damage of the hurricane is $100 billion.

At the same time, the storm closed down oil and gas production facilities in the Gulf of Mexico, and caused yet another oil price surge. Oil prices have returned to their pre-hurricane highs in the meantime.

In any case, the head of the International Monetary Fund, Rodrigo de Rato y Figaredo, said that the possibility of additional oil price hikes is the biggest risk to the global economy, and the fund has started to talk about a worldwide slowdown.

It appears that the world has decided to move from one extreme to the other - and to overdo it on both ends. At first it didn't relate at all to the hurricane as an economic disaster. Now it is turning the storm into an incredible cosmic event that will halt world economic growth. That is an exaggeration.

The economies of Louisiana, Mississippi and Alabama are a tiny percent of the U.S. economy. What has been damaged is the oil fields, but they are already in the process of recovery and returning to production.

The world knew how to get over much bigger disasters, so keep it all in proportion: there is no danger of a worldwide recession.