1. Elections…Too close to call. Gore has not managed to convince Americans via the debates that Bush is a moron who has no business being president. Just as much as Bashar Assad has the basis for being president of Syria. The US will be OK with either Bush or Gore; each has their advantages and neither of them are good choices. Here is an off the cuff list of pros and cons: Bush will not be the one in charge if he wins but he is likelier to get along with the Congress and get legislation passed; Gore does know things on the national level while Bush was a figurehead governor but maintained popularity during his term. Bush will be better than Gore at showing sympathy during times of national tragedy, an important presidential duty. Gore shows a dangerous precedent for being naive in international affairs; he showed as much with his deals with Russia concerning such things as Iran; to this extent, Bush may be better in just letting some princes of darkness run the show but I fear these guys are still living in the 80’s fighting the communists and have no idea how to deal with the fact that the world has changed. They will be on the learning curve for the first year. Gore is a smug and wooden guy who stands on ceremony, cocoons himself with Secret Service, no one I know who has ever worked for him likes him and thinks he has wacky ideas and personifies the idea that a little knowledge is a dangerous thing; he also has never met a tax he didn’t like. Bush is Arabist; there is a lot of blackmail material on him which both sides in the Arab/Israeli conflict will use; he will have no influence with the Israelis and the region will not benefit from his disinterest, especially as things continue to deteriorate.
This will be one election where Americans are voting for a person they really don’t want to see on TV each night for the next 4 years and that alone has generally been enough to decide the outcome (ie: that’s why Dole, Dukakis, Mondale and Bush Sr. in his second run lost). Turnout will be the lowest in years. The projections are almost even in the electoral college as well as in the popular vote. The Economist as usual gives the best forecasts and analysis of US issues and notes that Bush has 3 advantages going into the last 2 weeks: (1) More money; (2) Low voter turnout helps Republicans; (3) Undecided voters are more likely to go for Bush; if after 8 years they haven’t decided they want Gore, they are more likely at the last minute to go for Bush. I am already working under the assumption that Bush will win but I really don’t know or want that result.
2. Oil and Equities Markets…This high price is unsustainable in the long term. Consumption is steady but the search for alternative fuels is being given higher priority and the oil producers know they must milk oil for all its worth over the next 3 years because the future is natural gas. Beyond the fact that high prices are the Arabs’ way of helping Bush get elected (ie: it shows Americans that the economy under Clinton is not that good), the real reason at this point for the high prices is that if the price goes below $28 a barrel, the Russians might well default on their debt. This would do more than anything to destabilize world markets; it is true that foreign investment in Russia is low and nobody really cares anymore about Russia, but it would attract attention to world economic instability and make people look more closely at East Asian economies that are in worse shape than expected and whose markets are ripe for a big fall and would also drive the US markets downward and that would really cost people money; as it is, people are losing a lot of value in their portfolios and no one wants to further spook the markets. Hi-tech companies don’t care about the high price of oil and Arab countries are finally balancing their budgets and other countries such as Mexico and Venezuela are getting money through oil revenues they would otherwise need in foreign aid; so right now it is best not to rock the boat and let the price stay where it is. Gas in America is still cheap at $1.50 a gallon; it is $4 in Europe. I have read through the reports of a dozen companies this weekend; I believe that people should hold the stocks of companies they believe in and weather this storm. Markets overreact and it is not that bad out there; Amazon’s decent quarter just reported this evening as well as other major tech companies shows there is money being made and internet companies in New York are subleasing real estate they don’t need at a healthy profit due to healthy demand so the real estate market has not really been affected except in the lower-priced apartment sector where support staff have been laid off and so prices have dropped somewhat. I don’t know where the bottom is but I am doing my best to ignore this quarter and look forward.
3. Consider the Economist’s discussion in the current issue of insurance and genetic testing. This is a real important issue for the future. To the extent we can predict disease through genetics, sick people won’t be able to get insurance and healthy people won’t buy insurance. Insurance companies will not be able to make money under such a scenario. This means national systems of health insurance may have to take over to either subsidize private insurance or tax everyone in order to benefit certain sectors. This may change the world as we know it. This goes beyond ideologies and your feeling about the role of government; it involves the provisioning of public goods if a sector of the capitalist system fails. I am interested in comments about this; the issue should be monitored.
4. Serbia…This month’s overthrow of Milosevic is an inspirational reminder that people do not want to be living in pariah states and that a system that does not respect the popular will faces quick fall. The Peruvian president should take notes.
5. Middle East Christian demographics…Christians are being driven out of their cities in the Palestinian Authority. Arafat probably likes this; the PA will be virtually all Moslem finishing off a trend that has been quietly going on the past 7 years since Arafat took over. The rioters in many of those cities are from outside the cities. The Israelis will meanwhile hit back because they are shooting on Jerusalem. A real tragedy affecting those who are not making the trouble. Christians are being bled dry by Moslem majorities throughout the Middle East. Jordan is the exception and a model for coexistence in this region.
6. North Korea – I have said for the past year that this country was a target for trying to engineer a soft transition into the world community rather than having its deck of cards fall abruptly. Whether or not the US is currently being played for a sucker or whether this is part of the change I don’t know. I do know that Albright is not that bright or influential so anything she is a part of tends to be a loser.
