Sanction What?

While this site has been pretty busy tracking the failures of Divestment and the success of counter-Boycott, the S of BDS (“sanctions”) seems to have gotten short shrift. Partly, this is because no institution that could apply sanctions (economic or otherwise) against Israel is even remotely considering doing so. But it’s also because an analysis of what sanctions could include leads to some discomforting facts for BDS advocates.

The holy grail of the “Israel is Always Guilty” crowd would be the US ending financial support for the Jewish state. Before divestment became such a fad, ending US military and economic aid to the Jewish state was considered top priority since – according to Israel’s critics – US military aid was the only thing that gave Israel an edge over its neighbors and US economic aid was all that kept Israel from financial ruin.

This analysis ignores the fact that Israel’s most impressive period of nation building, between its founding in 1948 through the late 1960s, was during a period when Israel received little to no aid (financial or military) from the US. During this period Israel managed (without Uncle Sam’s help) to build its national institutions, integrate millions of citizens (including over a million Jews expelled from the Arab world), and win three major wars in ’48, ’56 and ’67.

It was only in 1973 that the US realized that Israel (which repeatedly defeated the Soviet Union’s Middle East clients) was an asset rather than a liability and began investing accordingly. Eventually, the US Foreign Aid budget included an annual $3 billion line item for Israel, one which critics pointed out meant the largest recipient of US foreign assistance was a modern thriving nation. But, as A. F. K. Organski’s intriguing book The 36 Billion Dollar Bargain pointed out:

* Aid to Israel was primarily directed at giving it a qualitative military advantage to make up for its numerical inferiority (much as our $50 billion per year NATO investment was designed to give Europe the edge over the Soviets). But by putting its annual donation to Israel in the Foreign Aid budget, the US could maintain the fiction with key Arab allies (such as Saudi Arabia and the Gulf States) that they did not have a military alliance with the Jewish state

* Because foreign aid has historically been unpopular with the US Congress, putting Israeli aid into Foreign Aid bills helped get those bills passed. In other words, far from taking money out of the mouths of starving Bangladeshis, Israel defense aid (disguised as general foreign aid) was the only way to ensure those Bangladeshis got anything at all.

Fast forward to today and the notion that cutting Israel off from US aid is the key to the Jewish state’s collapse is even more fanciful. For, over the years, US military aid has been earmarked for spending in the US (creating a domestic constituency for such spending). With the vast sharing of security-related intelligence and know-how between the two countries, during a period of war with common enemies, US money put into Israeli security channels continues to look like a wise investment indeed.

As for economic aid, this was generally used by Israeli governments to mask their own economic failings and would probably have begun a phase out years ago, but for the fact that US aid to Egypt (which is in dire need of such financial support) is directly tied to grants to Israel.

The changing financial relationship between the US and Israel has only become more stark in the last year when the Israeli economy continued to surge while the US continued to accumulate more and more debt. Just recently, talk of using US loan guarantees to put pressure on Israel induced giggles between Israeli and US negotiators who realized that today it is Israel that is helping to support US deficit spending, rather than the other way around.

So, as with so many things, those who talk of sanctions or US financial pressure on Israel are demonstrating nothing more than their ignorance, as well as their wishful thinking that an Israeli economy that today receives more venture capital from Europe than any European country is in imminent danger of financial destruction due to the noisy, but increasingly irrelevant, efforts of BDS.

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