Global Thoughts — 13 April 2021

Nemacolin Resort in Pennsylvania

Headline news: The CDC has confirmed what it admits it has mostly known for a year – that you are not going to catch Covid by touching things and that all these misguided souls who have been fumigating their groceries and packages for the past year have been wasting their time. According to the CDC, you have less than a 1 in 10,000 chance of catching covid by touching stuff and a leading scientist speaking to the NY Times couldn’t point to a single case anywhere of someone having been infected through touching a surface. I can just feel that brush of schadenfreude wafting across the land. Now if we could only reach the silly people wearing masks inside their cars while driving solo. No doubt more people are going to get cancer from all this hand sanitizer than the covid they would have caught from not using it. Now let’s all sing Happy Birthday twice one last time!

Watching so many people be so silly even after a full year of this (just go outside and see all the people walking down the street wearing masks, which we know doesn’t make any difference) all the time helps me realize why 1% of the population makes over 90% of the money. A friend of mine with a masters in public health at Harvard says that the reason public health rules are so broad and make no sense is that most people are “stupid” and that rules need to be so black and white so that people can make sense of them. Ever stand at an ATM and watch the average person spend 3 minutes trying to get $100 out of the machine (you figure maybe they do this pretty often) or renew their subway card at a kiosk, and this begins to make sense instead of sounding like sop from your correspondent.

In that light, I have not been avoiding travel for the past year, at least not where I can go without having to test in order to return (not wanting to get stuck someplace away from home). Travel is safe and when I see these maps tarring entire regions as dangerous with a broad stroke it is really silly and defamatory. There is nothing in the Florida air that has covid; it is what you do with people that will get you covid. You are more likely to get sick on a crowded New York City bus than minding your own business at a pool area or on the beach in Miami. Everyone taking the bus home from work should quarantine upon arrival, if you want to be logical about it.

In other happy news, a recent study of thousands of people who got the Pfizer vaccine in Israel shows that they are unlikely to spread the virus to others. The viral “load” you might carry after being vaccinated is one-fourth the normal load and it is generally not enough to infect other people. Hopefully, at some point less than a year from now, countries will get with the program and allow people to start traveling again. Australia is completely nuts; they still require vaccinated people to quarantine in a sealed room behind an armed guard for 14 days without open windows or balconies and they can’t even have stoves or ovens on for fear that in a fire they might come out and infect somebody. This is expected to continue for as long as it takes them to vaccinate almost all Australians. They haven’t even reached 1% of the population and they don’t do vaccinations on weekends, just to give you a sense of their urgency. As I’ve written earlier, Australia is not a place you ever want to get sick.

This whole pandemic I’ve been thanking God that the synagogues have been closed and that I haven’t had to go to pray at the synagogue. I wonder how God feels about that…. I got my vaccine at Coney Island Hospital, where every shot comes with a free hot dog! (OK, not really.) I felt that this is one of the only experiences I’ve ever had in life where I and almost everyone in the world are joining to do the same thing. It’s just about one year to the date since the lockdowns started in New York.

The first weekend after Biden’s inauguration, I noticed at the gym that the TV’s that were usually tuned to the news channels had all switched to other types of stations. It looks like Boring Washington is officially back in vogue. Journalists are thrilled to have their weekends off again.

You can see that things are recovering; I bought a round trip air ticket to Miami for a weekend in March a few months ago and it cost $150. Now the same seats cost about $1,000. I just bought the brands I prefer of toilet paper and paper towels at Amazon for something approaching a normal price and I am getting next day delivery.

Every museum that charges admission has reopened by now; the Smithsonian museums are all free and closed, and no reopening date has been scheduled. Incentives matter. Same reason why private schools are open and public schools are closed or limited to zoom. Free stuff paid for with your tax dollars is usually worth what you pay for it (and I suspect that if covid shots cost money they would be more widely available). We went to the American Museum of Natural History and saw an IMAX movie; the theater could hold several hundred but at that showing there were about 25 people. We are supposed to go to DC in late June; at least now there are all sorts of museums in the city and many of the Smithsonians are dated anyway, so I expect we’ll have something to do if we go there.

I went to synagogue for Passover services and noticed that most people came in sneakers; people haven’t gotten around to buying dress shoes yet. Two weeks later I saw that most people got their shoes on.

A recent Economist survey on the future of work has some interesting news: 1.5 million new companies were started in the US during 2020, up 19% from 2019. Before the pandemic, people were upset over the fact that startups in the US had been the lowest in a generation. Startups are good because they create lots of jobs as the companies expand. Another finding is that during Covid, companies had to work extra hard to keep off-site workers engaged and they succeeded. People’s job satisfaction ratings actually went up during 2020. And for all the talk of the gig economy, it still represents a very small fraction of the overall number of jobs out there. Investment in automation, meaning robots doing the jobs that people do, actually went down last year showing a “lump of labor fallacy” – meaning the idea that there is a finite amount of work, so the more you automate, the fewer jobs there can be. Automation creates demand for goods and services, boosting higher quality jobs. In fact, the wages of the lowest paid Americans went up 50% faster than those of the best paid. Half of young Americans are able to translate their first low paying job into a better paid job within 5 years. What this tells you is that the state of jobs in America was better pre-covid than people thought and that things are still in a position to be good, despite the pandemic. I spoke to a CEO of a company this week that is a startup that deals with room service to hotels, and he is planning to hire 1,200 people over the next 6 months. And here’s one more thought about automation: Studies show that robots prepare better tasting coffee than barristas. But people get upset finding out that a robot prepared their coffee. Part of the pleasure of going to a Starbucks is knowing that somebody made your coffee. My son confirmed this finding.

Despite all this talk about hybrid working into the future, I don’t think it will last for several reasons: First, over the past year a lot of people in office jobs didn’t move from company to company but normally people do. Every 3-4 years on average people switch jobs. People won’t want to hire new people who don’t want to come to the office consistently even if they were willing to tolerate it among people they already had on staff. Companies don’t exist in vacuums but have to compete; how long do you think an investment banker at Credit Suisse is going to be sitting at home while his competitor at JP Morgan Chase outhustles him or her and gets bigger bonuses? I was in my office in late March and there are sales teams sitting around without masks working their asses off propelling our companies to post-pandemic profitability. That is where the future is going to be for anyone who expects to do well. People in Israel are being told by their bosses to get back to work 5 days a week or else. Also, many jobs that deal with people being on site went away during covid but they are poised to come back, such as retail, meeting and travel industries. Manufacturing looks set to have a banner year and you can’t do that from home.

I once wrote in Global Thoughts that half the people in the US House of Representatives did not possess a US passport, because they never traveled outside the country. Now I have to write that 25% of the US House of Representatives have not been vaccinated, even though they are eligible. Maybe they are the same 139 people who voted against certifying the election. You have to wonder what kind of ignorant people this country is electing to Congress.

One thing I find extremely annoying is that in the US there are only several kids sizes and if you are in between sizes you are just plain out of luck. Boys sizes are 10-12 and then 14-16. Where does that leave a kid who is in between 12 and 14? At Marks and Spencers in the UK, there is a size for every age. Macy’s flagship store at Herald Square in Manhattan is hopeless; they have all these sections with clothes that don’t match. Target, which is outperforming other chains, has a 12-14 size. Many stores such as Kmart and Geoxx have closed in Manhattan. We just did our shopping in Miami instead, where the world increasingly comes to shop. At the Aventura shopping mall in Miami, the Citibank ATM’s think they are in Switzerland; ask for $300 and you get 3 hundred dollar bills. What do you do with these?

I’ve been bowling for fun for over 40 years and never knew how to actually throw the ball down the lane. So one day I took a subway and bus to Queens and took a bowling lesson. You can learn a lot in an hour and once you get the idea, it becomes harder not to miss instead of totally random every time you throw. In Manhattan, I called all the bowling alleys and none of them offered lessons. The pro in Queens said they don’t want anyone actually bowling in Manhattan; the alleys just want you eating and drinking there.

I heard about this 3D printer that just produced something that tastes like a rib steak. Maybe we could start printing spouses and kids?

Every time I walk in Central Park I see these ugly Lego-like apartment buildings shooting up in the sky as you look toward midtown Manhattan. All I can say is that if some terrorist wants to fly a plane into these eyesores, I won’t be mourning their destruction. I’ve never heard anyone else say they look anything other than f-ugly.

The New York Times published a Men’s Style magazine and as I leafed through it I couldn’t help but notice that except for one or two advertisements, none of the men in the magazine looked like you expect a man to look. A whole lot of them looked more like women.  In the women’s fashion magazine, the women look like women. Maybe they should call it the LGBTQ Style magazine.

My daughter’s school seems obsessed with woke issues such as white privilege. My daughter says that the kids in her class are sick of it and think the whole thing is stupid. The teachers and administrators do not seem to understand that all these attempts at brainwashing people just makes them even more aware of how stupid the whole thing is and makes them more resistant to the message. If you don’t know what I mean by this, try watching some of the ridiculous videos on sexual harassment that New York requires every employee to watch every other year. Anyway, my daughter was recently asked to go home and think of an episode of white privilege that affected her the past week. She couldn’t think of anything. I suggested she tell the teacher that being in a classroom with a teacher was an episode of white privilege and that if the teacher wanted to right the injustice she ought to cancel school for the rest of the week and go to a minority neighborhood and teach those kids instead.

The local authorities around here have become so obsessed with wokeness in general and equitable distribution of vaccines in particular that the homeless people in the neighborhood now have an easier time of finding vaccines while the wealthy white residents were being told for 10 days that there were no vaccines at the local distribution sites. To save the planet, we have to pay for reusable shopping bags everywhere so now I pay several times a day for big beautiful shopping bags that I of course throw out the minute I get home because I have no place to put them and have almost never thought in advance to walk around with reusable shopping bags especially since I often don’t know when I leave the house that I will be walking into a store somewhere. No animals are being saved but the humans around here are being aggravated to no end.

I don’t understand why people are so upset that there are a bunch of kids at the Mexican border trying to get into the US. During covid, the birth rate went way down and, all around the world, countries such as Russia, Japan, China and most of Europe are dealing with graying populations with not enough kids coming into the work force to sustain them. The Europeans have had to take in all these Muslims which are not integrating very well into these Christian-dominated societies. America needs more kids, and we’re just lucky enough to have Christian neighbors dumping them on our doorstep whenever we want. We should rejoice in our good fortune.

My dad on his 85th birthday,

I think that the biggest mistake America made was tossing aside Jeb Bush in 2016 in favor of Trump. Yes, we were tired of Bushes and Clintons and this is not a nation of kings. But the Republicans had a stable of competent people and now it is hard to find serious people in the GOP in a position to take over the party. The party leaders are all afraid of Trump’s shadow and it is pathetic to look at these people now. Democrats are also competent but they saddle people with stupid rules, taxes and surcharges to help everyone other than those being charged to pay these taxes, and are so obsessed with being fair to minorities, that everything from PPP loans to vaccines takes longer than it should because the perfect becomes the enemy of the good.  PPP loans are stuck in a thicket of bureaucracy trying to prevent fraud to the extent that people were not getting their loans. Vaccination would go much faster if they just said Come and Get It to broader swaths of people rather than try to pinpoint exactly who deserves it first and then second. And anyway, lots of people don’t want it. At least, by the time you got to the end of March and supplies caught up, they pretty much figured that out.

Governor De Santis in Florida had lots of critics, but during the past year a good number of them came around to like him a lot, because it turned out that letting people live their lives during this pandemic did not cause results that much different than other states where everyone was locked down and constantly told what to do. People may like Democratic policies in principle, but people enjoy living under Republican policies better. Now Floridians are hoping he won’t run for president because they don’t want to lose him as governor.

Prior to the pandemic, prices for travel were increasing too quickly for my taste and I was hoping for some kind of come-down, although this was not what I expected. Except for the fact that traveling during a pandemic is not nearly as fun, you at least get empty airports and train stations and planes and trains that run on time with travel product at decent prices with few restrictions. In a certain way, it is has been golden age for travel which is about to end.

I’ve noticed that the weekend sections of the newspaper are starting to come alive again as we start to imagine the idea that people will go out for entertainment. Imagine what it will be like for the next few years when people sit through concerts coughing. Do you get the feeling that security guards will come running or that riots will break out?

Dorado, Puerto Rico

Here is why you should care about how the rest of the world deals with Covid. As long as people are not vaccinated and the virus keeps going around, there will be more variants and mutations. It will be like fighting against a wave pool that never stops working.  The US might have a glut of vaccines by April, partly due to lack of demand. In that case, the US and others ought to work to make sure the vaccines get distributed everywhere, whether they come from China, Russia, the UK or anywhere else.

The most important aspect of whatever Biden wants to accomplish involves getting people vaccinated. I feel that last summer and fall Pelosi played politics with the stimulus checks and wasted a lot of valuable time hoping that she would get more if she held out. Meanwhile, a lot of people out there got hurt. Regardless of the optics, many Republicans want to put cash in the hands of voters and are likely to support a certain portion of Biden’s package if they can. They lucked out because it passed without them having to vote for it. The $64 million question is whether Biden should consort with Republicans or go his own way with Democrats. The history is that a decade ago Obama tried to make nice with the Republicans but they just delayed and played him, and the watered down stimulus at that time took a long time to get the country out of its recession. Biden doesn’t want to make the same mistake; on the other hand, he can sit there and keep issuing executive orders which will be overturned the minute he leaves office or he can try and legislate with the congress for more longer-lasting results, even if not as much as he wants. It’s a tradeoff. Now we know which side won and what you can expect: The Senate parliamentarian has ruled that Biden can avoid the filibuster with most of his spending plans so Biden can muscle through his spending bills without any Republican votes (and it is amazing that even with 70% popular support there are zero Republicans to vote for any of it; historically you would see some of them vote for this stuff. It’s just a sign of our hyper-partisan times and the abdication of responsibility by the Republicans who took ridiculous positions and get to just say no and stand aside and let the Democrats figure it out). The remaining question is whether or not Biden wins the battle and loses the war; if in 2022 the Republicans take over Congress, everything he did could be overturned in a few months. I think his gamble is that if the legislation passes and people see benefits, the Democrats will win big in 2022, but if he compromises and winds up doing very little, they will be punished in 2022 which is what happened under Obama. What Biden is trying to do is not just engineer an economic recovery, but to make sure it is a sustained recovery and this spending is designed to ensure that. I’m not worried about inflation ruining the party. That is a good problem to have.

Nevertheless, I do think that after considering all the evidence, Biden’s stimulus package is loaded with unnecessary pork. They don’t need to give $2,000 checks to people making $200,000 a year. For that person, this represents 1% of their annual income. I would put the cap at somewhere between $75,000 and $100,000 depending on how many kids you have. I am in favor of the earned tax credit to help reduce child poverty; it seems to work where it has been used. Most states tax receipts are within 1% of what they usually get so we don’t need to send $350 billion to most of the states, although some states can really use the money and places like New York need to be invested in so that things will be there when the economy turns around. The nonpartisan budget office says recovery will come even without this stimulus, which is new information that should affect decision-making; the situation now is not the same as 2009. A lot of the aid is for schools but so far many schools have spent tons of money and not reopened due to the teachers unions; if there is going to be money spent, it has to be tied to putting students back into the classrooms with teachers, otherwise it is wasted money. I would redirect this money toward helping schools have summer school this year to make up for the fact that schools were basically lost this past year. In other countries such as Israel, teachers have been holding secret classes to educate kids because the government was shutting down the schools. You don’t see that kind of commitment to education here in America and that’s why we have so many illiterate people buying into conspiracy theories, resisting vaccination and supporting people storming the capitol. (Yes, some PhD’s also feel that way, but in most of the cases, the lower the education, the more likely the above results.). Both parties agree on the vaccination money and it should not be held up while they fight about this stuff, as I’ve previously said. So much previously allocated money has not been spent as it is, so they should use that money for things like infrastructure projects which would put people to work and improve the country.

I think that teachers’ unions alienated a lot of people when they declared that even if teachers were vaccinated, they still wouldn’t go back to work. I don’t think the unions will ever recover from that from a public relations perspective, especially as parents move to other states where teachers are more enthusiastic about showing up to work and being committed to educating kids first.

The bottom line for me is this: Biden’s tax package will piss people off if he raises the rates of income taxes but the state and local tax deductions don’t come back. That will be a double whammy for the richest people in the highest taxed states such as New York and California and it will definitely help convince people to leave to lower tax states such as Florida. New York has just raised its income tax rates so that wealthy people living in New York City pay about 15% state income tax. And they will be the first to tell you they get nothing in return for it.

But all things considered, I’d rather pay an extra 2-3% income tax to Uncle Sam and see the economy boom rather than pay less taxes and make less money. Revenues in a company that does background checks for employee hiring doubled over the past 2 months and that’s a whole lot more than what I’d pay in extra taxes. The stimulus and infrastructure bills probably include a lot of waste but overall they are going to lead to booms in manufacturing and spending and a rising tide lifts all boats.

Surfing at Dorado

A cautionary tale: The Philippines passed up the opportunity to buy options on Pfizer vaccines last September because the country’s president didn’t want to put down a deposit before he knew the vaccine would be good. By the time he got interested, other countries took his place in line. Then he went to China, which had often tried to create a wedge between the Philippines and the US. But this time, he came away mostly empty-handed; they gave him enough for 10% of his population. Then he was back to begging Western companies to get his country vaccine after saying the Western pharmaceuticals were a bunch of colonialists. Countries will see this and realize that when things are in the clutch, the US is the go-to country, not China and certainly not Europe. Even Switzerland, with 6 million people, endless resources and no EU central purchasing restrictions, had only given at least one shot to about 13% of its population the first week in April. Singapore also is in the minor leagues on this while Australia and Canada are way behind. The UK is feeling oh so good about having left bureaucratic Europe behind. America is still the country to beat, although it could be so much better than it is. All of which tells you that despite everything America is still the best game in town.

Another cautionary tale: Astra-Zeneca has had a lot of problems getting their vaccine ready and out the door. The latest oops is that their European factory is only producing one-third of what they need. One cause might be that they promised to do it without making a profit. Profit is not a dirty word; it is an important incentive that gets things to work. It doesn’t help that they were consistently not being honest about their vaccine.

Here’s a story that makes you wonder about the concept of a “failed state”: In Lebanon, as of the end of January, not a single person had reportedly been vaccinated. Hizbullah, which controls the clinics offering PCR testing, didn’t want vaccines to reduce demand for PCR testing so they made sure the country didn’t get vaccines. Parliament sat on the issue for a whole month before agreeing to pass a law limiting liability to the vaccine companies, which is a precondition of acquiring the vaccines. Makes you wonder if there is any connection to the slow rollouts of vaccines worldwide and the vested interests all over the world that are making money from all this testing.

Here’s another story about Lebanon I heard a few weeks later: They were negotiating their maritime borders with Israel, and setting a border would be very good for both countries. For one thing, it would help gas deals that are in the making. But it appears that Lebanon backed out of the talks. Why? An impeccable source tells me that the person representing Lebanon was unhappy at the amount of money his family stood to gain from a successful conclusion to the talks so since he was in a position to scuttle the talks, he did.

Jeremy at Nemacolin

Here is why Republicans need to clean up their act and purge the party of their extremists rather than to continue to appease them: In Europe and Asia, America’s power has noticeably declined under Trump, and Biden will have a difficult time restoring America as an important voice in regulating the world unless countries believe that America’s position will not change the moment the Republicans take over again. Why do we care? Well, lots of American allies such as South Korea, Japan, Saudi Arabia and Turkey are about to dramatically step up nuclear development if they feel that America will not lay down the law and make it clear to China, Russia, North Korea and Iran where the boundaries lie and that America will be there to ensure those boundaries are respected. These allies want to know if America will be there for them or if they are on their own. Consider that North Korea has nuclear missiles that can probably reach America right now. Do you really want to allow chaos in Asia beyond our control that could come back to bite us because we have essentially said that we’re no longer players in the world the way Trump has? Establishment Republicans see the problem but all these Trumpists in the party do not. It’s like this game stopper thing going on in the market – makes you feel that the market needs a 10% correction to get rid of these speculative social media floozies from the marketplace. It’s similar to what the Republicans need to do within their ranks. I feel that instead of sticking their fingers in the wind, people like Mitch McConnel ought to be leading and let public opinion follow. In the Emirates, 80% of the population was against normalization till the government announced it; then half the remaining public came around to support it. Real leaders lead. Whatever you think of Mr. Xi in China or Putin in Russia, you can’t accuse them of being followers.

The Economist had an interesting survey on Chinese millennials. It is a complex situation out there. Although they are fond of social media and using the internet, they are proud of China and receptive to nationalistic propaganda (much like their counterparts in the West). They may have studied in the West but they are less enamored of it now (especially when they see how western countries dealt with covid) and increasingly want to return to live their lives in China, both in the cities and beyond. The government allows for certain safe spaces to promote causes as long as they don’t turn into demonstrations or go against the communist party.  This generation is likely to be supportive as long as they experience economic benefit. They don’t particularly love the party, but they do like being successful. The Internet is very controlled but deftly manipulated; people think it is more free because there many places to express opinions and to participate such as with massive government-provided clickbait on social media, which is posted as much as that coming from celebrities. China has been clever at manipulating its future generation and there is no reason for me to believe that the future will be different as long as economic opportunity abounds. Russia probably wants to try and take a page from China’s playbook; Putin has not been able to firewall the Russian internet to the same degree. Russians know they are being fed crap from their government; the Chinese don’t know nearly as much and don’t seem to care.

Another interesting point about China: Despite the fact that Hong Kong is losing whatever democratic freedoms it had left, the Chinese are offering its top 1% big tax breaks and multinational financial firms are doubling down on Hong Kong. Most if not all money managers are not really political animals anyway. Bottom line: Money talks, bullshit walks.

Let’s talk about Taiwan a minute. According to intelligence reports, China is ramping up to invade them within the next 6 years on the assumption that America really is only all talk about defending Taiwan. America has to decide if it is really prepared to go to war over Taiwan. I didn’t care about Russia taking back the Crimea from Ukraine; it is considered a strategic asset of Russia and Ukraine is a shitty corrupt country. I really don’t know if we truly care if China takes back Taiwan. There is no point in negotiating a deal with China because we know they will not keep their word as we all saw with Hong Kong. The question is do we care? I’m agnostic on this point but I do feel that America should either declare that we will defend Taiwan or that we really don’t care, but empty words are not a good option. It will look really bad if China invades and America does nothing. China is definitely in a position to invade and to make America look like a paper tiger. Any president in office at the time will be humiliated.

Philadelphia’s Four Seasons

I do feel that China is making a mistake interfering with its best technology companies and the stock markets, with many foreign investors, are punishing these companies’ valuations because of it. Further down the line, builders of companies are going to realize that China is not the best place to make their careers because a decade of work can be undone in an instant if the people running China feel their egos are threatened by the success of business tycoons, which seems to be the case, more so than whatever seems to offend the regulators. Investors and entrepreneurs of the next generation will realize that China is not the place to be and the next generation of growth will take place in other western countries. I also think that Western companies that are being bullied around by China should either decide that they are completely amoral and apolitical and just do business there or they should back each other up and pull out of China and understand that as long as China wants to be a country that doesn’t play ball with the rest of the world when it comes to human rights, Western companies will just make their profits in the west and China will not be part of their business plans. H&M and its peers have to decide what kind of company each wants to be.

I think that Team Biden is still working out its China policy but America’s policy will have to be more dynamic than Trump’s choose a side strategy. Hardly any countries have backed the US against Huawei in the 5G arena as to national security. I think that Biden is on the better track when he wants to invest in America’s infrastructure and compete. China will respect an America competitor rather than America the whiner. China really does believe that America is in decline, and considering that America hasn’t really invested in itself for 40 years it has some reason to believe that. Biden is right in gearing America up to compete and to have some credibility with its allies that it is back in the game by putting its money where its mouth is. Certainly China is out there working hard, building and competing. It has one-seventh of the world’s population and it is not going to be wished away. I just hope that it has enough sense to keep future viruses to itself; I don’t have any reason so far to believe this pandemic won’t repeat itself in the next 5-10 years as conditions in China that allowed it to happen haven’t changed and if it insists on obfuscating the origins of this virus, then nobody is really in a position to learn how to avoid the next one.

An irony of this past year is that Asia was great when it came to not getting Covid but they were awful when it came to getting people vaccinated. Asia will be far behind when it comes to rejoining the world economy as long as its borders stay closed.

Turning to Iran, here again I am not sure what to do about that country. Trump’s maximum pressure campaign did not really succeed. The country doesn’t care about economic sanctions because it has enough money to starve its people and still spend on whatever it wants to export its revolution and build weapons. The country has effectively been daring the world to continue its sanctions while it violates the agreements. China argues that the more trade Iran does, the more likely it will be to behave because it will not want to lose advantages it gains. They may be closer to right than we are even if their argument is self-serving. I think that Biden is right to negotiate with Iran and see if both sides can agree to terms and save face.

I finally finished reading David Rendell’s book “Saudi Arabia: Vision or Mirage?” by a retired 30-year American diplomat in the region. He strikes a more sympathetic portrait of MBS’s various actions that were widely viewed as erratic and disgusting.  Killing Khashoggi for his political views is beside the point; he was killed because his family was making tons of money from the royals and it was a stab in the back for him to piss on them. The detentions at the Ritz Carlton were widely supported as a move against real corruption at a time when MBS was asking the middle class to give up privileges to bring the country’s budget into order. (And people who stayed there got to keep their Marriott points.)  He points to significant progress over the past 5 years but thinks that the turn toward greater autocracy will be in conflict with the overall reforms the country is making and that the monarchy will be unsustainable in the long term unless MBS eases up a bit in favor of the consensus-driven political order the country once had, even if it needed to be set aside for a time in order to shake things up. One striking point is how Saudi Arabia managed its internal situation of Islamic terror when it realized that Al-Qaida was operating cells within its territory and trying to destabilize the country. Instead of the State declaring war against terrorists, it treated the matter as criminal acts deserving police response. They tried to show compassion and to rehabilitate these misguided souls rather than to clamp down on terrorists. At the time, Americans often accused the Saudis of double-dealing and secretly supporting these extremists, but the truth turns out to be complicated as you see when you read this book. It turned out to be a very clever strategy because doing the former would not have worked in a place like Saudi Arabia and the results were very good, such that other countries studied what the Saudis did. America now has to deal with similar issues; a radicalized sector of the population that has been conditioned to believe that its government is illegitimate, and which is creating terror within its borders. How America treats the right-wing extremist sectors could have reverberations for years. Learning from Saudi Arabia might have some benefit. I would also tend to say that perhaps Americans ought to give the Saudis more credit for being clever at managing their internal affairs over the past century. Whether MBS’s new kind of aggressiveness will ultimately work or bring the downfall of the Saudi dynasty remains to be seen, but one thing the book says is that King Salmon (his father) realized that Saudi needed a new kind of leader that had not been seen before and that the old ways wouldn’t work. He liked what he saw in MBS and that’s why he selected him to be the crown prince. He wanted someone who would work like hell, take charge and take a sledgehammer to the kingdom, which is pretty much what MBS has done. MBS definitely has rankled the establishment worldwide but there is method in his madness and Biden will have to work with him, especially since the alternatives are much worse and Saudi Arabia is the indispensable regional player.

Independence Hall and the mall in the snow, Philadelphia

Travel Notes: During February school break, we went to a great resort in Pennsylvania called Nemacolin which is about 90 minutes drive from Pittsburgh. It is one of the most interesting resorts I’ve visited. It is an independently owned hotel by a 97-year-old billionaire who was self-made and who still roams the property calling out flowers that are out of place. It’s a great place to learn how to ski and snow board, because the mountain is private just for resort guests and club members. Trails are through intermediate level. We also did things like dog sledding, snow tubing, “snow-go” which is a bicycle with skis underneath that you can use to simulate skiing down a slope (and at 20 mph, it was quite a ride for me). The owner has about 1,000 pieces of art all across the property, and there is a hangar with old airplanes and an antique car collection. The hotel has one of Pennsylvania’s finest restaurants as well as a casino. There is a chateau with 100 rooms and the building’s plans were obtained from the Ritz in Paris. A luxury hotel “Falling Rock” was under renovation.  There are also wild animals on the property, and I’m told they are for the people who post poor reviews. For several months this year, the Bachelor series on TV was filmed there and people on the property can tell you all the gossip.

We also went to Philadelphia for a mid-winter look at the city. Viewing Independence Hall from across the mall covered in snow is a nice sight. Although it was windy and snowing, we took a walking tour of Hamilton’s Philadelphia, listening to songs from the show and then hearing how they related to sites we saw that were part of his life as he lived in the city. It was a creative tour and we found it via Toursbylocals.com. Another tour we took was by a guide named Tom Walker who gives great tours of the city. We visited the Museum of the American Revolution and we spent over 2 hours there; even Jeremy was delighted. A tip: There is an ice cream shop on the corner of 2nd street and Market Street and they make really great apple pie and milk shakes. Definitely in the top 10%. A very old candy shop is also on that block, supposedly the oldest in the city and perhaps the country. We didn’t know that until the late 1700’s, Philadelphia was the largest city in America’s colonies. The Four Seasons has opened a new property in the city in the Comcast building. The owner of the hotel is the owner of Comcast cable and at least the rooms in the hotel have lots of cable channels. The hotel aims to be one of the world’s leading city hotels and it is a very good one, with beautiful rooms and common areas, an indoor swimming pool with a grand view of the city and a wonderful gym.

Learning about the American revolutionary era during the weekend I gathered three conclusions: First, most of these founding fathers were nasty back-stabbers. Thomas Jefferson wasn’t much different than Donald Trump after losing an election. He proceeded to go for revenge against those that he felt contributed to his loss and, for instance, leaked papers he had about Hamilton’s affair years earlier for no real good reason other than to get even at that point. Second, the Americans won the Revolutionary War not so much because they won military victories on the ground but rather because they picked up allies in Europe who began to pressure England to the point that England feared invasion from its neighbors and decided that holding America was no longer worth it. I don’t think many people realize that the French, Dutch and Spanish were all allied with America during the war, meaning they had also declared war against the British. Now 250 years later, as America tries to deal with an even more interconnected world, it needs to work with allies if it wants to achieve its aims. Third, the nation was bitterly divided from the start and the northern and southern states had to make serious compromises in order to pull the nation together. They really hated each other’s guts and did not see eye to eye on anything. 250 years later, nothing has changed.

Whoever is New York City’s next mayor better be good. If they don’t clean up the city, I can see the top 5% of the wealth fleeing the city after next year. We ourselves are counting the years at this point; as soon as our kids graduate high school, we’re going to have to decide if we stay or go. It’s a real problem that both major newspapers, the New York Times and the Wall Street Journal have become so national in scope that they really don’t seem to care anymore what happens to the City. The Times will want some progressive who thinks it is more important that the homeless get treated better than taxpaying residents. If the local newspapers don’t care, who is left to advocate for people in a city? The point of local journalism is to investigate, report and advocate – but the absence of local journalism with skin in the game in the metropolis it covers has really corrupted what makes a city tick. It’s really distressing. The winner will pretty much be decided with the Democratic primary election on 22 June.

Just to give you an idea of stupidity around here, the transit authority is spending a ton of money fixing up the shuttle that runs between Times Square and Grand Central station. Thousands of people a day ride that shuttle. Right now the stations are empty and they have a golden opportunity to fix it, so they are doing that. But the one thing they are not doing is fixing the old tracks, so the trains will continue to plod along at a slow speed the way they always have. Such a waste since they have closed off the tracks for a good year while they do the work. If they shaved 30 seconds off each 2-minute ride every day that constantly carries thousands of people across town, imagine the increased productivity it would add to the city which would repay the cost of the work. Now that work will not get done for another generation.

I recently went to St. Thomas in the US Virgin Islands for a few days of sun and fun on my own (a few days without “Daddy I have a Question…”) and stayed at the Ritz Carlton. It is basically a hotel with a pool and some beach with a beautiful view of other little volcanic-looking islands. You have to pass through US customs when you exit (so leave the fruit salad at the hotel) and the airport is said to be a pain to go through when it gets crowded, but it is basically an OK place to spend a few days. But if you had to choose, it’s totally worth a few extra hundred dollars a night to go to the Ritz Carlton in Dorado in Puerto Rico. There is no comparison between the two resorts and there are more flights to choose from. I paid about $300 each way for my flight in first class; I saw a pilot from NetJets in the lobby and the cost of a ride down there is over $30,000 each way. Wouldn’t you think that a private plane ought not to be 100x more than the cost of a first class ticket on Delta? It’s an extravagance I just can’t relate to at that price.

I was in Miami the second weekend in March; planes were almost 100% full and so are hotels. The causeway to Miami Beach was backed up all the way into Miami. At least in Florida, things are back to almost normal. We went back the first week in April and again it was jam-packed. You can still tell there is a pandemic but life is moving on. In Puerto Rico, where we went the third week in March, at the gym the rule is that you wear a mask if you walk around and talk to people but at your station you don’t have to. This is a more sensible rule and I hope it carries into more gyms around the world as we move on.

I don’t even really care who winds up forming the next Israeli government. The whole thing has become boring and worthy of a banana-republic, the latest episode being that Pfizer is holding up shipments of vaccines because the government is so dysfunctional that it has failed to pay its bills and sign new contracts for the booster vaccines it will soon need. However, here is something interesting to consider: The only way either Netanyahu or those that oppose him can create a government with a parliamentary majority is to take in an Arab partner. Historically, that’s been a taboo. I wrote some time ago that it is high time for Israeli Jews to welcome their Arab brethren into government coalitions and to stop letting the ultra-orthodox parties be the kingmakers. A good number of Israeli Arabs are actually at home with many of Likud’s policies and are not necessarily going to align with leftist parties, a fact that Netanyahu has realized. It will be interesting to see if the stalemate in that country will be broken by breaking this taboo and which side breaks it.

In my last posting, I gave Alex Navalny of Russia my stupidest man alive award. Is he still alive? Maybe, but not for long. Putin said he would rot in prison if he returned to the country and I would take him at his word.

Here is an inspirational parting thought: Be the person your dog thinks you are

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