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Global Thoughts — 27 March 2010 Political Notes; Travel Notes Mexico & Panama

Jeremy threw us for a flip this morning — he got up by himself, took off his diaper and neatly put it into a garbage bin (such a neatnik), moved a chair to his closet and got up on it and took a pair of underwear from the closet and put it on.  Elizabeth meanwhile went to the Metropolitan Museum of Art yesterday with her nursery school to see the ancient Egyptian exhibit to better understand the Passover story. At least we know she is getting a good education for the tuition dollars we are spending. Funny story — yesterday was Karen’s birthday and I went to an Australian tuck shop in NY City and got her a bag of goodies from Australia such as Tim Tams and Vegemite. Across the street from that tuck shop which only sold one type of Tim Tams (the originals) and only about 4 products from Australia and was known to be the only place to get this kind of stuff, there was an Israeli grocery that sold all kinds of Israeli goods — including 6 types of Tim Tams. The manager told me that Israelis really go for Tim Tams. You hardly see them anywhere in the US (although I’m told they are about to be sold here through Pillsbury). 

Middle East — Stratfor takes it as a given that there will be an Israeli military campaign in Lebanon against Hizbullah. This would in my estimation be a precursor to action against Iran. If the Palestinians start a third intifadah against the Israelis, it will backfire. The Israelis will be free to do what they want to do, and the US objections over settlements and East Jerusalem will fade into the background. The Americans would be more successful with the Palestinians if they would back Israel to the hilt and make it clear they have no hope rather than to pressure Israel and give them hope that they can profit from distance in the relationship. I’m not swallowing an Israeli line on this — it’s just a fact that every time there appears to be distance between the Israelis and the Americans, the Arabs in the area start rioting or whatever and basically the Israelis put them down and the result is a no-gainer for anyone. Better not to raise false hopes. The Israelis are not going to make meaningful concessions to the Palestinians just because the Americans pressure them. If they do, they will be meaningless concessions that don’t hold up over time.

Embarrassing Biden showed Washington that the Israelis couldn’t be trusted and alienated a good friend. The Israelis and Bibi as CEO of the enterprise needed to control their urge to have factions use the Vice President’s visit to score points in the domestic political arena; this was the time they needed national unity to welcome a valued guest and broadcast to the world. And the Israelis couldn’t put on a show with the Americans to show a semblance of diplomacy after a year of US work and attempt to put together a coalition against Iran. The Israelis too busy thinking of the short term and their own little microcosm viz. the Palestinians and nothing else.  If Iran doesn’t work out in terms of the Americans working with the Israelis, it started here. Biden’s visit to Israel is not just a 3 day story. And people fixated on Israel’s media image need to know that no amount of propaganda can fix crap like this. Besides, if this is how they treat the VP who is friendly to them, why would Obama even want to visit the Israelis and expect to be treated much worse…Anyway, the Israelis will wait Obama out. He will be gone in 3 years and the Israelis are very good at waiting out US presidents they don’t like. The Arab leaders are also very good at passing time and doing nothing and the funny thing is that if Israel and America don’t get along, the odds are that the Arabs and the US get along even less. Because at the end of the day, the Arabs and the Israelis have more in alignment with each other than not; the Iranians and not the Palestinians are the region’s main concern, and Obama so far on Iran is a big fat zero.

But let’s talk bottom line…Meanwhile, this week in Washington, the Israelis and Americans agreed to a massive arms deal of a quarter of a billion dollars for planes being built specifically for Israeli specifications. So despite the rhetoric, business goes on. And I am also now given to understand that last month’s comment I made about the waste of the Iron Dome missile defense system ostensibly to protect Israelis in the South against Gaza is actually very explainable — the Israelis built the system not really for the South but as part of an arms program financed by Singapore that was to be tested in Israel but sold to Singapore. Now I understand…Another interesting point…Remember that assassination in Dubai in January? Nobody contests the fact that 2 of the 26 suspects left Dubai by boat and went to Iran. Some went to Jordan and were arrested there. And somebody in Syria decided that this guy would fly to Dubai without his security entourage. As I said last month, it may be true that the Israelis were part of this but they didn’t do this job alone. 

Obama’s health care reform is now law. The majority of the country dislikes it. Nobody thinks it is going to solve any problems or save them any money. Just a simple socialist redistribution of wealth to the extremely poor who don’t pay any taxes anyway. The Democrats will pay for this. The law contains hidden tax increases on the wealthy, and the definition of wealthy is truly middle class in today’s day and age. People are just going to become more evasive of taxes as the government attempts to take more from people. It’s not just the feds; it is also state and local taxes that are being raised to pay for all kinds of mandates from the federal government that are not funded by the feds. My uncle calls Obama “the Terrorist President.” Peggy Noonan calls for the Democrats to turn down the temperature. I’m not sure what they can do — government is destroying the incentive to work. We were promised fundamental change. All I see is fundamentally new taxes without any real change for the better. Insurance premiums are going to go way up now in anticipation of these new laws. My company is stuck now paying in 2/3 insurance premium subsidies to people who were terminated for cause and now the rest of our employees were rejected from a far superior and cheaper insurance set of benefit programs because we have so many people on the COBRA program. It is insane that my company has to pay an extra $50,000 this year on premiums for an inferior program and the people who were fired for cause get to sit for 36 months buying health insurance for $195 a month (instead of $550) holding the rest of us hostage. I have never been so angry about anything — the US is simply ruining the interest of anyone to want to be here and do business here. That’s why I am increasingly looking abroad to do business. See below.

Travel Notes March 2010

I’ve felt like a bit of an ignoramus; I’m close to 44, have been in over 80 countries but never visited Mexico and other Central American countries beyond Costa Rica. So I’m off for a few days to check out Mexico, Panama and the supposed country of Texas.

Mexico City — Delta 5 hour flight from New York. Flew a day late because of chaos a day earlier at JFK with some rain storms; right now, with the runway construction in progress this year, every little thing creates a huge problem at that airport. Delta still has special meals for first class; continental doesn’t on flights under 5 hours (but had 3 entree choices on the panama-new york flight including a pasta which was fine). Really stupid way to cut corners with your best customers (not feeding them food they can eat). Overall this is my first visit to Mexico and my 24 hours here went better than expected. Mexico City airport was fine; Starbucks on the lower level arrivals area has beautiful grilled sandwiches. Went straight to the Teotihuacan pyramids about an hour’s drive away. Great world class attraction. Allow about 2 hours. Bring a bottle of water inside the attraction because none is available in the area. Expect to climb a lot of steep narrow stairs. By the main pyramid, somebody sells embroideries and the price here is 1/10 of what you will pay in town. In the City, a good place to shop for nice locally made items is the Museum de Arte Popular (folk art museum).  Afterward, we went to visit the Polanco neighborhood with gelateria, park and nice shopping plazas. My friend lives in the Santa Fe section of town; full of new construction, it is for yuppies and corporate headquarters that want to be in town but outside the city center. At multinationals, the pay is roughly equivalent to the US but the money you get goes a lot further here. A housemaid makes in a week what I pay someone to come and clean house for a few hours once every two weeks. Dinner at El Gaucho, a kosher restaurant in Polanco district, which is rather good as kosher restaurants go. St. Regis hotel in the La Reforma district of center city was excellent with beautiful and functional rooms and nice architecture; breakfast was in the top 20% of hotels and price of food in hotel is very reasonable. Nice gym with city views and an infinity pool. BBC World on the TV. For the elevators, you first press the floor you want and then put in your key to call the elevator to the floor. You then get sent to an elevator that takes you straight to where you are going. Four Seasons hotel is across the street and under renovation. Lots of other good hotels around. City was not as bad as I expected at ground level and I walked along the La Reforma boulevard by myself at night; there were cops on every block, mostly guarding the racks of bicycles that you can borrow to get around without a car. Good number of gay couples mulling about along the boulevard. Mexico City feels like Lisbon with a touch of Tel Aviv. Feels more European than American despite all the US chains represented there (ie: Sears, Krispy Kreme Donuts, Office Max, Starbucks, California Pizza Kitchen — but no Taco Viva!); and overall it is civilized in the city center with traffic lights, well delineated streets and landscaping. Certainly lacks spit and polish in most places though. It’s not first world and in several areas you can see the slums and there of course it is straight out third world. Did not feel unsafe walking around center city during the day. Except for tons of traffic during the day, it’s not too bad getting around. Did not get to the metro which I was told is good. Car with driver/guide is $35 an hour; my driver said he drinks the tap water at home but I wouldn’t try it. Took a 3 hour city tour with a guide the next morning; you can cover the central historical district in an hour. Another hour was spent in traffic driving around the rest of the city. In the central part you have the cathedral, national palace, indian ruins, teatro bella artiste (looks like radio city theater inside), and the museum of folk art. At the airport, Amex has a Centurion Club offering food, massages, shoe shine, etc. Flight to Houston was 1:50. 

Houston — Stayed at the Houstonian Hotel near the Galleria district; very good hotel and the hugest gym I’ve ever seen — but again, this is Texas. Rates were reasonable and the club lounge is very good for entertaining business guests. Restaurants were good; the Manor House on the hotel grounds is a nice intimate place for lunch with free valet parking for guests. When going to the airport or to the hotel, use the car pool lane on the highway. Can save you ½ hour as traffic can be awful even at 2pm. At the Continental lounge in international terminal E, go straight to the upper floor for much more available seating.

Panama City, Panama — A 3 ½ hour flight from Houston and a 4 ½ hour flight to New York. Arrived at night; striking thing you notice is all these buildings without lights on. All that new construction — will anyone move in is the $64 billion question. Airport is fine; they are building a new terminal. My hotel is the Bristol, located in the central business district. No views or pool, but very attentive service, the restaurant is good and the food and beverage is very reasonably priced. Breakfast buffet is $6; dinner with salad, fish, side, juice and dessert was under $50. These hotels in Latin America tend to offer butler service because labor is rather cheap. I walked outside down the street; almost fell into a ditch which was not covered by sidewalk. A telling omen — it’s safe to go around here but you have to keep your eyes open. Also shows you what happens when you are not in a litigious society — no incentive to make things safe. I was here for one full day — started out in the morning looking at some real estate. Want to buy a condo here? Lots of people are doing that. Retirees from the US, people with business interests looking for safe havens from Venezuela, or even the US. Prices are reasonable but you really have to know what you are getting. For instance, lots of condos overlook the bay. The streets are narrow and will be full of cars when people move in. Raw sewage is poured into the bay daily; people will move in and realize they don’t want to go out on the terrace or open their windows. There is a program slated to clean this up but it will take years and nothing here ever finishes on time. Will your apartment have central air conditioning or sprinklers? Things you take for granted in the US are not so here. Trump is selling its building at a 40% premium and says they are building to Florida code, but a real estate developer who sat next to me on the airplane told me that the Panamanian building code is akin to California and that even if the government let you off the hook (which they don’t), the bank who gives you a mortgage demands that it’s perfect. Apartments are rather large but I noticed that they tend to lack formal dining rooms and bathtubs. There is a 20 year tax holiday on new investment but nobody knows what comes afterward; the real estate tax is 2% which is very high and which people hope will not exist in 20 years.  Lots of the new construction is in a small area near the city center; some of it is about 10 minutes drive away in Costa del Este, which used to be the city dump, so they are building tons of buildings atop a landfill and of course few of the tourists buying there know that. Other building is going on in the suburbs near the Panama Canal zone near the American embassy. Those areas look like US suburbs; the area was formerly the US military zone. I then met a local lawyer; the lawyers here don’t know US tax law. Panamanian tax law is pretty simple; they really don’t tax you on income made outside the country. I got stuck at the lawyer’s office looking for a cab and stayed there close to an hour before the driver from the hotel came to collect me. Here a car and driver is $25 an hour. After noon on this 90 degree day (not so bad actually as low humidity that day), we set out sightseeing mainly to the Panama Canal zone about 30 minutes drive from the city. We went to the visitors center, saw areas around the canal, saw a ship go through the locks, and drove through the suburban type areas. Headed back to the city and, because the historical district was closed due to a demonstration (same thing was going on back in Mexico City the day I was there — I guess demonstrations are part of daily life here), headed to a shopping mall called Multiplaza and looked around for half an hour. My night activity consisted of going to a 24 hour supermarket to see what you can buy in Panama; most prices are the same or below US and plenty of items are available. Some items are more expensive here such as aluminum foil and paper towels. The next morning I toured the historical district at about 8am (good time to beat the heat and the traffic); the area is UNESCO-designated and in a few years when it is all restored it will be gorgeous — there is actually a lot to work with here because there are hundreds of years of history here. Then headed to the airport for my 10am flight back to US. Panama airport is quite a hub with flights to everywhere in the region. So to sum up Panama I would say that it was quite civilized — you can drink the tap water, the roads are good, many people speak English, and there is definitely law and order there. Except that scratch the surface and basically 80-100 families own the country, Jews there number 10,000 but punch above their weight and are prominent in the country, and in many places you can see the poverty staring at you in the face. You can look at rather pretty real estate but you really don’t know what you are getting and you can find an entire portion of the city ringed with riot police if something goes wrong. The Trump investor being asked to put up $1-2 million for an apartment doesn’t have a model apartment or even a photo to go on, just a booklet with a pretty picture of a tower and descriptions of what the amenities will be in the building. It’s not usually the kind of thing people go on, but if you were down the road a bit in Venezuela and just wanted to get your money out of there into a safe haven, it would be enough. I think the big money has already been made by the Panamanians who bought the land a few years ago. A good driver here is Santiago cell phone 507.6441.7758. His English is perfect (he’s an American) and he and Roberto service a lot of the Hotel Bristol clients.

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