Why decision makers hate to admit to mistakes – Israeli case study

There is an old joke in Israel, often attributed to the air force: If you make a mistake, just shout louder and nobody will notice the problem.

In the past 24 hours, I have read 3 direct criticisms of the economic performance of the Israeli Prime Minister and his Finance Minister.

  • On last night’s news, a leading commentator urged the politicians to stop blaming European meltdown for the country’s worrying financial figures. The bottom line is that for two years, the politicians have spent too much and are continuing to do so.
  • This morning, in “Yediot” newspaper, a similar theme was echoed. The call was to wake up and to act decisively, before the money markets start to make their own painful demands for changes.
  • And, in some ways the act of Brutus, the Governor of the Bank of Israel, has  warned that “the decision to increase the deficit target to 3% of GDP and the uncertainty of meeting the target raise the concern that the credibility of fiscal policy – which was a central component of the economy’s success in dealing with the previous crisis will erode,”. Stanley Fischer, close friend of the head of the Fed and other central banks, has had enough.

The stats speak for themselves. Growth predictions are falling all the time – now down at around 2.5% for 2012. Exports are dropping off. Unemployment, expected to rise, is shooting up. etc. Cuts have been made to day-care centres and infrastructure projects. Investors are making a fortune out of government bonds these days, a sure indication of a problem.

And meanwhile, in order to shore up his coalition, the Prime Minister continues to approve heavy financial payouts to the parties that stay with him. In other words, in order to prove to others that they are correct and to stay in power, the prime decision makers for Israel’s economy are continuing to carry on with the very mistakes that took them into the mess in the first place.

I have just read a fascinating blog on why it is difficult for all of us to accept our own mistakes:

…..the setbacks and failures that derail your future plans or call into question your self-image. These are the ones that occur because of your deepest weaknesses and flaws. For this reason, we prefer to avoid thinking about these mistakes, or to attribute them to circumstances out of our control.

Anybody know how I can send that posting to Israel’ government before it is too late?

Advertisements
Explore posts in the same categories: Business, Israel

Tags: , , , ,

You can comment below, or link to this permanent URL from your own site.

3 Comments on “Why decision makers hate to admit to mistakes – Israeli case study”

  1. performance Says:

    Great case study you’ve shared here.

  2. Steven Olson Says:

    Very interesting information!Perfect just what I was looking for!


  3. […] confidence: Over the past few weeks, I have stressed how the politicos and civil servants in charge appear incapable of making longterm decisions, which are devoid of self […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: