As I was blogging yesterday about Israel’s economic status, Professor Stanley Fisher, Governor of the Bank of Israel, was presenting his annual report to the country.

With no small irony, the TV  cameras captured the new Finance Minister thanking Fisher for his efforts and then promptly forgetting the book on the table. Freudian slip, if ever there was one!

Much of the press has slammed Fisher. In another irony, nobody is interested in what happened in 2008. Everybody is focusing on the corrected and increasingly pessimistic predictions for 2009 and 2010. For the BOI, growth will recede by 1.5% and then rise by only 1% respectively. Allowing for population changes, this is a double whammy.

A headline in Yediot Ahronot, Israel’s largest daily newspaper explains why people are confused. Fisher talks with quiet optimism, but his stats are not looking good. He is now playing down Netanyahu’s call for lower taxes. Seasonal sales remain cool. Fisher is warning that there is more bad news to come before the upswing.

But I disagree with the critics.

The global recession is unprecedented in scope and form for at least 2 generations. Thus, any response cannot rely on standard formulas, usual policies, or spin. And that is what Fisher is saying today.

In fact, if I recall a briefing of his back in July 08 to a UK trade delegation, and before the credit squeeze really set in, Fisher was saying the same thing thing.

Any measures must be considered, now more than ever. Tax cuts to please politicians will not help the populace as a whole. calculated policies are the order of the day. Stay cool, endure some more nasty pain, and the economy could well already be seeing the first early stages of recovery.

The fact is that neither journalists nor politicians have a better solution to the crucial issues. Fisher’s opponents have chosen the easy path of being critical without providing an alternative.

They would be better off demanding that the Finance Ministry finally implements a package of measures to encourage small and medium sized businesses. That will clearly boost long-term and sustained growth.

Confused? For the moment it is Fisher who has the explanations. Stay tuned to him.