So we are left without Lawrence Summers; without Elhanan Helpman; without Ben Bernanke. We have no superstars. Coming to think of it, who needs this all-star team? Economic stardom is a myth. What's important is that we now have a governor. It is just unfortunate that the path to her appointment has taken so many twists and turns. This may be an opportune time to overhaul the vetting process by assigning it to a public committee or having public hearings at the Knesset. There is no way of telling why the three finalists vetted by the Committee for Reviewing Appointments of Senior Government Officials (the Turkel Committee) were ultimately passed over by the premier. The Bank of Israel is vitally important to the Israeli economy. It's not just one of those sleepy public institutions. The public has the right to hear what the candidates have to say, to size them up and evaluate their economic vision and overall views before they assume the governorship. Dr. Karnit Flug has pursued a responsible monetary policy ever since becoming acting governor in July, after Professor Stanley Fischer left. She has already lowered the bank's interest rate once and has announced she will continue her predecessor's efforts to check the shekel's appreciation by purchasing U.S. dollars. All in all, she has proved that she has what it takes when it comes to being a proper steward of the Bank of Israel. The economic heavyweights refused to come. You can't blame them. Who would want to come here and then learn Hebrew and have insults hurled at him or her from Israelis on the street? Just look at Jeremy M. Levin, Teva Pharmaceutical Industries president and CEO, who immigrated to Israel so that he could run a multinational drug company that has to grapple with an approaching crisis. Levin has a difficult task, both inside his corporation and outside. Why would the best and the brightest of U.S. economists ever want to stroll the Knesset hallways? Fischer's appointment in 2005, which was to Israel what Copaxone was to Teva, was probably just a one-off: a magic formula that is bound to expire. The likelihood of another Fischer-like appointment is like the chances of scoring from the halfway line: incredibly low. We must let Flug get things rolling and wish her all the best. She has three daunting challenges that she must confront. The first is the shekel's excessive strength. There are no easy fixes for that problem. A dramatic increase in the value of Israel's local currency could exacerbate the wave of layoffs Israeli manufacturers are going through right now. The second pressing issue is, of course, the housing market. A sophisticated, multi-phased policy could result in a gradual drop in the price of homes and still keep our fiscal health in tact. Flug and others need to think outside the box and cooperate. The Bank of Israel needs to help the government as it tries to lower the cost of living, but without hurting young couples. The third issue is the potential slowdown in global markets and an economic crisis that could once again hit. This, in turn, could have an adverse effect on Israel's economy, even if that seems far off for now. We must keep a watchful eye on the U.S. economy. We must have a finger on the pulse.
