IMHO, the dominant view of the policy-making elite on Israel is little like the current dominant view of the policy-making elite on deficit spending: it's largely wrong and against their own interests as system managers. And while one is long term and one is short, there is a similar origin in both cases: an underlying premise has fundamentally changed and they aren't taking it on board because, to paraphrase Michael Lind, turning around the policy-making elite is like turning around an aircraft carrier.
In the case of economic policy, it's the fact that we're in a liquidity trap. In the case of Israel, it's the fact that the cold war is over.
Policy makers who miss this change in the fundamental premise are like Keyne's description of Hayek: drawing logical conclusions about hallucinations.
Michael
^^^^
CB: The "liquidity trap" and "cold war is over" comments seem to be pretty heavy theses succinctly dropped on us ( you may have written about them before, I don't know).