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Thoughts — 22 August 2010

Dad and I at Yankee Stadium; Grandma Arriving by Pedicab (when you just can’t get a taxi in midtown Manhattan); Elizabeth and Karen at Statue of Liberty;  and our  son hooded in a pair of underwear watching TV.

We are finishing up our summer. My kids eat sushi and endamame with chop sticks, not that I do. “Dad, what are my options for breakfast?” 4½ year old Elizabeth asked me one morning…Another quotable between her and her grandfather: “Papa, I don’t want to have this discussion with you anymore (about responsibility). Can’t I just chase you around the room?”…Jeremy just turned 3 and chirps “Why?” all the time. He will go to the fridge, pull out a yogurt, sit down at a table with a spoon and feed himself, and unfold a napkin across his lap to avoid a mess while eating it….Elizabeth is taking her swimming lessons and is just about ready to swim by herself. She thinks my French Toast is better than the Ritz Carlton’s. She told me tonight several times that she hates me. Perhaps she is becoming a teenager too quickly?…We had our first discussion about why I pray every day. Mom and I are boss over the house, I said, and God is boss over the world…Elizabeth and her mum went to the Statue of Liberty together. Her mom told her that liberty means that you can do what you want. Elizabeth liked that idea. I’m quite glad she takes to principles of democracy.

My dad was in town and we went to Yankee stadium to see a game. It was his first time in 65 years to see the Yankees play in NY. They have a brand new world class stadium and if you buy special tickets for what is known as the Legends Suite, you get a full buffet dinner and really great seats plus they keep putting out treats all night long. Ours were just behind 3rd base and they have a kosher food section catered by the best caterer in New York City. A great activity to be had at least once in a lifetime. The subway runs right to the stadium; you can go from midtown Manhattan in 25 minutes on the D train.

I went with Karen to a day spa to chill out for a few hours one afternoon this month. I’d been told to get a body wrap, that it was going to be relaxing and fun. Tell you the truth, I felt like I figure you would feel if you were being washed and wrapped before burial. If this is supposed to be fun and justifying a rather large expense, I’d hate to find out what it means to be tortured somewhere. And, on top of this all, you still feel obligated to leave a 15% tip to the person who did all this to you.

Obama – I really think he is going to be a one-term president if the Republicans run somebody decent against him. It is not helpful that a majority of Americans expect things to get worse not just in the near future but for the next generation. America actually has a lot of things going for it but Obama just talked the talk and wasn’t prepared to walk the walk on fundamental change, and the change that is needed is less government while he really believes that more government is the answer. The rest of the world is somewhat ignoring him to our detriment; the Arabs think he is full of hot air and that he doesn’t “get it” with regard to their world and Iran. It helps explain why Turkey does what it does. Fouad Ajami’s “The Obsolence of Obama” is a telling oped piece basically harping on this theme. The economy will eventually pick up; at this point it is not moving and people with money aren’t spending because everyone is waiting to find out how much they are going to be taxed by the US government. Once they get this out of the way, people will decide if they want to become consumers again. People feel poor when they know they are going to be taxed. In NY, they are taxing clothes again and already the shoe store is selling a lot of shoes they were supposed to sell after October 1. After October 1, they expect to be dead for a few months. People who used to come and buy lots of pair of shoes at the beginning of the year (ie: winter boots) are only buying shoes they expect their kid to actually need right now and are being much more practical about the styles of shoes they actually buy for their kids. I don’t think these spending patterns will change just because the economy improves As I stated earlier, It is very troubling that a majority of Americans expect the long term future to be worse than the present. This is a most unusual situation in this country which tends to be more optimistic. For instance, people don’t expect their homes to appreciate in value anymore and small investors are pulling money out of stocks; on the other hand, this could be a good move. Small investors should not try to be beating the stock market which is rigged against them and home ownership is a bad investment. Maybe we shouldn’t be leading people to dream of home ownership anyway when it is not really the best way to go. The top housing researcher at the fed said so this month in the Financial Times article titled “Sunset Boulevard.”

There is an article in today’s New York Times about why Obama is unpopular among Jews. One reason he might be is that last month I told you about that guy who was a double agent for Israel against Hamas and how he was being hounded for deportation by Homeland Security that wanted him out for having ties to a terrorist organization, even though the Israeli Knesset sent a Thank You note to the deportation hearing vouching for this guy. According to Emet, an advocacy group in Washington, which was curious why this agency was so interested in pursuing him and investigated further, the Department of Homeland Security in Washington was instructed to keep appealing this case even if they lost until they would finally hope to win. The guy behind this crusade was an Obama appointee who had spoken within the past year at a Moslem Public Affairs Committee fundraiser. Hmm, so we have an Obama guy using the levers of Homeland Security to choose sides with hardliners within Palestinian affairs in their intra-Palestinian disputes. Yeah, like I really want this kind of administration to continue in power.

Israel/Palestinians – I still read the Haaretz every Friday and the Jerusalem Report every 2 weeks but am finding it takes less time to get through them. The stories are just not that interesting. Mostly scandals and no movement on the things that count. The vested interests are totally entrenched; people I know there are sick of paying 65% income tax to give money to ultra-orthodox parties to support communities with 65% male unemployment who think that work and army service are evil. That kind of statistic is as much an existential threat to the country as Iran with nuclear weapons 600 miles away. My sense is that Bibi isn’t going anywhere and, considering how much people don’t like him, the Arab countries seem to be dealing with him. J.J. Goldberg, writing this month in the Atlantic, apparently states that after interviewing a few dozen people, he is convinced that Israel will attack Iran unilaterally in the next year if it gives up on the US.  I assume that is why his neighbors are dealing with him. What I think is going on is that Israel is taking the increased military cooperation they are getting from the US and getting as much as they can out of it. The US is doing so hoping it can keep Israel boxed in. But at a certain point, the Israelis will do whatever they want and figure that Obama will live with it or wind up a one-term president whose opinion in another year or so doesn’t count. As long as Bibi’s dad insists that he take care of Iran, I figure it is only a matter of time before he does…. I read with interest today a story that says that the Emirates hasn’t sent a dime to the Palestinian Authority so far this year as opposed to $174 million last year to date, and that Saudi Arabia has sent $30 million so far this year versus its $241 million it sent last year to date. The Western countries have sent all the money that they promised to send. I wonder why the Arab countries are stiffing the PA after they promised to send them this money at the Paris donor conference?

Iraq and Afghanistan – The US will walk away from Iraq knowing that it has not left a real government intact and that Iran will make sure that Iraq is to its liking. Other allies such as Saudi Arabia hate the US for leaving a big mess in their backyard and for essentially creating a Shiite stronghold in the Arab world out of what was a Sunni stronghold. Afghanistan is a similarly lawless place where Pakistan plays a double game destabilizing Karzai’s government. The US cannot win there and cannot figure a face-saving way to get out as attacks against US soldiers increase. Perhaps Petraeus will declare a surge, show some metric of success and then declare victory and pull out just like Iraq. I don’t see any other way forward or out.

Economy – There is a slowly but surely recovery taking place under the nose of consumers and I don’t expect a double dip recession. As I said earlier, it is uncertainty about taxes that is drawing out the cycle. Europe is still bad news; they didn’t really fix anything but the world moved on past their crisis. Certain parts of the US economy will not really recover; the H1B industry has moved on as R&D moves to other parts of the world. I think it is a fatal mistake that the US made during the past decade from which it will never recover. The results are in – there is less innovation taking place in the US during the past decade and less creation of companies that employ lots of people in the US. More of that innovation is taking place in developing countries and Americans are increasingly moving abroad to work. They are not just selling versions of what we invented; they are selling to us things that they are inventing. What I would suggest is a tax moratorium for 5 years on all startups involving R&D of technology in excess of $250,000 and a fast-track system at the patent office to review and file patents. You could also give tax incentives to existing companies that are involved in R&D.  I would also have a fast-track system without quotas for 5 year visas for people with advanced degrees who want to start companies with investment of at least $500,000 and who will work in these start-up companies. In order to deter fraud and the importation of low-paying jobs that take away domestic jobs, they have to be start-up companies or divisions clearly related to startup activities and the compensation paid out has to be at least $75,000 per year to said employee. I agree that we don’t need to bring in 50,000 computer consultants at $35,000 a year to crunch code, but companies should be able to bring in qualified people to do real work. All those people can continue to work through the H1B program. I would also have an automatic 2 year work visa for anybody graduating from a US institution with a BA degree or higher. People are increasingly taking their higher education abroad because if they can’t work here and get some experience afterward, the education here is useless. It is a scandal that the entire crop of foreigners graduating from Harvard this past year had to return home because there were no visas for them.

UK – It will be very interesting to see how Cameron’s experiment works. The rest of the world will have to go in the direction of less government; it’s just a matter of how the UK pulls it off and whether or not pulling back helps or hurts the economy. In the short run, it is a problem. All these countries have bloated public sectors; prune those sectors and you increase unemployment and reduce consumption. But in the long run, the workers find more productive jobs for the country and the country does better.

Look for my oped article on the College of Jewish Leadership in the Jewish Week on Friday August 27. You can find it and other info at www.collegeofjewishleadership.org.

Travel — This past month we experimented with a weekend hideaway a 90 minute drive from New York at Crystal Springs, New Jersey. You get a condo for a decent price with a kitchen; can bring your own food or use their restaurants. The pools are great; there is mini-golf right outside; also a small playground nearby. Music in the evenings and various activities in the area such as hikes on the Appalachian Trail and a country fair in August. The La Tour restaurant is excellent; the others range from average to mediocre. It is a nice weekend getaway – from your room you see mountains, trees and sky – it feels a lot further away from the City than you really are. On the way back about halfway home there is a Target hyperstore. We filled up the car with about $200 worth of paper goods such as garbage bags, paper towels and toilet paper. Almost paid for the rental car for the weekend. Paper towels were 75% cheaper; baby shampoo 50%; garbage bags 50%. And, I don’t know about you, but I get really depressed when I buy a roll of Bounty paper towels and after a day it runs out and has to be replaced. I feel like I never get to enjoy the feeling of not having to constantly feel like it is running out on me. These rolls at Target are actually huge and last close to a week. Definitely psychically more fulfilling. Target has just opened a store in the Harlem section of Manhattan, but we are sure the prices are significantly lower in New Jersey and when you have a car, you don’t have to waste all the money you might have saved on taxi fare had you gone to the Manhattan store using taxis.

Going on vacation with wife and kids August 25 – September 5. Where is a state secret. Don’t want all you readers booking up all the choice tables. Will let you know upon return.

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