We just returned from a family trip to the United Arab Emirates including Dubai, Abu Dhabi and the Empty Quarter desert, Petra and Amman in Jordan, and Rome. You can read about it in a separate posting by clicking on the link at the end of this article.
A friend of mine is going to Disney World next month and he is staying at a Disney resort which allows you to arrange your fast passes for popular rides 60 days in advance instead of the normal 30 days in advance. He says that all this advance planning has completely drained any spontaneity out of going because you have to literally plan your every move 2 months in advance. I was thinking that if Disney got into the funeral business people would be planning their exact burial times months if not years in advance.
It used to be that there were quiet seasons at Disney World, but now you can’t count on it anymore. We traveled in mid-October to find it was an Indian holiday and we saw thundering hordes of thousands streaming into Volcano Bay water park on a Friday morning. In February at Las Vegas it was Chinese New Year. You have 2 billion more people making their way up into the traveling class and it is affecting world tourism. Increasingly, you have to go midweek during off-season to a place like Ferrari World in Abu Dhabi, where it was nearly empty and the kids could jump on and off rides they liked and get as much simulator time as they wanted. And you have to book timed tickets online to avoid disappointment at places like tall buildings with observation towers.
One thing about reading the Economist is that I have to look up several words each week that I don’t know the meaning of. It’s annoying to get up and go ask Google all these definitions (especially since many of them turn out to be French, which I think is pretentious for an English newsweekly) albeit educational at the same time.
Interesting article I read in the Haaretz is that Arab countries who were overjoyed when Trump was elected have come around to being confused by the lack of any meaningful policy by his administration. They were hoping to find the hidden meanings of this actions and have realized that there is no hidden meaning, and that he has no idea what he is doing. They are worried about this because there are no ambassadors in place, policy changes every day and there doesn’t seem to be a strategy or an objective to it all, which makes it impossible to plan ahead. They are still glad that Trump is not Obama but they are frustrated.
On my trip I heard a few grumbles about Saudi’s crown prince MBS; he is viewed as a bit of a regional troublemaker. The UAE and the Saudis are close allies; they are in a feud with Qatar. You won’t find Qatar in the in-flight magazine or on the air-show on a UAE airliner – just like Israel, although I suspect that lately the Saudis and Emiratis have a better relationship with the Israelis than with the Qataris.
I as a tourist was very impressed with our visit to the UAE. The tourist infrastructure is great and the whole country looks really good with fabulous infrastructure. They built it all up from virtually nothing. Just 50 years ago there were no schools and there was not even one bridge in the city of Abu Dhabi. The problem is that few Emiratis are around and even fewer wish to contribute. Someone said to me that the Qataris invest in people while the Emiratis invest in infrastructure. There are college campuses here from major foreign universities but the young people don’t want to attend because they want the freedom that they get outside the country and high school kids are too lazy to pass high school so that they can be admitted to college. Women attend because their families don’t want to allow them to go abroad, but in the Emirates women who graduate will probably never do anything important so it is a wasted resource. Women in Qatar rise to positions of importance but not in the Emirates; I know of one who is heading up a major medical project. The downside here is that real estate values are down 25% in the past year and it is one of the worst performing markets among its peers in the world; a recent VAT tax has driven people out of the country, hiring is way down, and expatriates are souring on the country because they don’t like having their social media accounts monitored and having the wrong tweet land them in jail. It is a country that has endless oil money and can live outside reality to a point and to some extent it is wonderful. Then again it’s not real and although it’s great for a tourist, it’s not offering a viable future for people I know that moved there years ago and now want to get out of there. A passing thought on my visit– I used to see Arabs fingering worry beads when I visited the region. Increasingly they are fingering phone earbuds and cords.
I think that Britain ought to have a second referendum on Brexit and that it would probably vote to remain in the European Union, although I would never underestimate the nation’s capability of committing national suicide. I think that the people were fed a pack of lies and that the day after the vote the people who made those misrepresentations all fled the scene. Corbyn basically is alive because prime minister May has been so mealy-mouthed about creating a sensible option that Corbyn presents himself as an option even though he has no clue what he would do otherwise. If May would announce that she is unilaterally renouncing Article 50’s withdrawal provision and that England is staying within the EU (a legal position affirmed by the European Court of Justice), it will piss off Brexiteers but probably create a big sigh of relief in the UK and in Europe, and she would probably get more respect for having made an executive decision. Corbyn would then cease to be of any interest whatsoever. The way things are going, May will be gone within a year and the UK will be in a disaster zone, neither here nor there. The EU is not going to give her any concessions when she looks weak and flaky. Brexit is a strategic disaster for the UK, consigning it to third-rate status for the next generation. You can’t put the genie back in the bottle; there is a generation of open border with Northern Ireland and immigration into the UK has at the least improved the quality of food offerings and I’d hate to go back to fish and chips uber alles. I’m sure the UK could negotiate some curbs on immigration and over-regulation by EU bureaucrats but basically the UK belongs in the European Union. Corbyn would be a disaster as prime minister and he needs to be shown for what he is, obsolete.
China needs new thinking from America. I’ve written before that fixation on trade deficits is old hat and you can read that everywhere. The Economist notes that consumption in China has greatly increased and that the country will soon begin running deficits, just like other developed countries. Focusing on the Chinese devaluing their currency is also old hat. We are fighting an old war that is increasingly obsolete. Chinese elites are very concerned about the country’s economic policies and are voting with their feet trying to get out. American pressure could help reform China but it needs to stem from a better of understanding of where the country is actually going.
Here are some notes from a recent conversation with a Chinese friend who knows what he’s talking about. He says that the current fight with the US was anticipated years ago when the current leader Xi was chosen by his peers. They wanted a hard-ass guy to deal with the US. He didn’t want the job at the time and received assurances that things would be done his way because he didn’t like the party’s policy at the time. This helps explain why he has been a real strongman and why he took over the party’s policy apparatus. My friend says that the Huawei company produces superior telecom technology which is the main reason it is beating the pants off Western competitors. None of the western companies such as Cisco even come close. The West is doing whatever it can be find fault with that company and raising national security concerns to stave off competition. A possible solution to the North Korea problem is for the US to withdraw forces from South Korea and the North gets rid of its nuclear arsenal. The Chinese have offered to do big deals in the US to build infrastructure, such as a liquid natural gas deal in West Virginia and a people-mover system in Miami but these deals are being turned down or sabotaged due to illogical fears of anything having to do with China. Competition between the US and China is inevitable; China is #2 in world economy and it doesn’t want to be #2 forever, especially if they are working their asses off and the US is squabbling in its own country and its government is not investing in its own infrastructure, education, research and development. Manufacturing in China is moving away from low cost goods. China is outsourcing that stuff to the rest of Asia. A more reasonable US leader should be able to bridge the gap with China’s premiere Xi, he says. For instance, you can’t make headway with a US president who can’t think past trade deficits and who insists that the Chinese economic model has to be trashed in order to deal. Everybody pretty much knows that reducing the trade deficit is not the key to economic prosperity nor is it the root of the problem. I’ve always found the Chinese to be sophisticated and clever and that they value education and hard work as opposed to simple slogans and straw-man issues; perhaps that is why the Israelis have a good time dealing with the Chinese. All said, there are strong indications that the Chinese intelligentsia are frustrated with economic policies taken by the country’s leadership and feel that Xi is moving the country in the wrong direction; people with status and money are fleeing the country. A generation ago people thought that the Japanese were eating the West for breakfast and it turns out the Japanese way of doing things was not so good and the country has been in a funk for the past generation. They lost tons of investments and have been in perennial recession with poor demographics heading into the future. Recently people thought that the Chinese were eating the West for lunch but it turns out that they built a house of cards that might not last very well either. The Gulf looks glitzy but runs narrow – many of those great looking buildings are empty or were built poorly and will have to come down. The Americans are squandering their opportunities because of political infighting and stupid policies from the top but overall the American economic system offers the world the best in opportunity and that’s why the US markets outperform the rest despite good reasons for it to drop.
Here’s the long-range item in our conversation I found most interesting. 95% of the most important jobs in the next generation will have to do with Artificial Intelligence and only 5% will be involved in those jobs. They are going to make the most money. The #1 challenge for both the US and Chinese governments will be to figure out how to keep the other 95% of its population from not revolting against the other 5%. In Europe, they are talking about giving the population a guaranteed amount of income, but I know from history that whenever government gives out a subsidy, the people controlling the markets for goods and services such as housing simply raise the price because more money is available to be spent. This kind of socialism has never worked in the past and price controls simply guarantee that supply will be limited, ultimately making the price go up even more. There are no good answers that pop up in my head here, but this is really what should be turning heads in Washington and Beijing. Raising tariffs is not where the action is and I find it frustrating that the same pro-tariff arguments get raised in the US every generation and nobody learns from history that it is a siren call that leads to failure. The Dow Jones’ worst year was 1974 which was also the year that Richard Nixon tried to raise tariffs. Argentina never recovered from losing its prominence in the world economy after a terrible policy of tariffs and protectionism. In the 1970’s Israel tried to manufacture its own refrigerators and its whole economy was just awful. They’ve never looked back since they reformed their economy. Speaking of Israel, I know very little about Benny Gantz who might well be the next prime minister of that country now that Bibi Netanyahu is going to be indicted. I think the Sefardi voters who made the difference in previous elections will not vote for him this time and that they will vote for a centrist like Gantz, a previous chief of staff of the army. I have no idea if Gantz would be a good prime minister – the skill sets are different and Ehud Barak of similar ilk was not an effective prime minister – and I’m told so far that he would offer much of the same with perhaps better optics.
I just got word that a friend of mine was leaving Jordan this month having established permanent residency in Canada. Over the past 25 years since I first visited the Arab Middle East, virtually all my friends have moved away from these countries. When I first visited Jordan in 1994, I was impressed how people in their 20’s had so much responsibility in their jobs compared to what I saw around me in the US. I figured these people had it made here and were going to be part of a great elite and establish themselves within their countries. It turned out that though they had responsibility, they didn’t have opportunity to go along with it. And ultimately they got frustrated and left. It didn’t help that over the past number of years the situation became less pleasant for people living in these countries as an awkward tweet or social posting could land you in jail. People don’t want to sit inside their cars with the radio on so that they can have a private conversation outside the reach of the local intelligence service. It’s just not a life that people want if there are alternatives. The brain drain in this region is very real and it portends a dark future. Saudi’s crown prince has hired a lot of talent for his sovereign wealth fund but has had trouble keeping people; he is micromanaging and the people involved don’t feel they get to make real decisions and tire of making presentations in the middle of the night to the crown prince without any follow-thru. Twenty five years ago you’d present something to a 70 year old minister of telecommunications and he’d say that he had 7 applications in front of him, had no idea what to do, and therefore was rejecting all of them. Nothing has changed even with a new generation of people in power. It is a microcosm of what I see in the region – responsibility without opportunity. I hate to stuff this in there, but I have to notice that in 25 years I have seen only one or two Israelis I know leave their country. People used to joke about Israelis dying to leave, but the truth is that Israel succeeded in retaining its next generation offering both responsibility and opportunity. In the region in terms of providing a life for the next generation, it is no contest. Someone who recently met with all sorts of Palestinians said that people should be less apathetic about their situation but yet he still feels that the situation is hopeless and that nobody has a way out, both because leadership on both sides is stuck in the mud and because the economic prospects are simply poor for many reasons involving the faults of both sides. Perhaps if Israel’s leadership changes and there is a feeling that movement is possible the Palestinians will also change leadership and then maybe something will happen.
An important need in the world is to restore faith in liberal democratic institutions and a sense of order. Some nations such as Russia are offended by the sense of Western World Order which they see as imposing upon them some kind of rule. Western policy makers are aghast that after a quarter century China did not fall in love with these institutions and want to buy into them. Current populist and nationalist trends may be running their course and it is not clear that the world is going as populist as some want to believe. What is the future? Is it a New World Order as Bush declared? So far not. But as I have demonstrated earlier in this posting and in the previous posting, the world doesn’t want to be like China. The Arabs don’t want to stay in the Middle East. Russia is not a country with a great future. Saudi Arabia has lots of oil but it is not attracting any investment and it is bleeding capital and brains. People like the ideas of the USA even if they don’t like what the US is currently doing or who is leading it. There is value to liberal institutions and to systems that keep order. It is the challenge for an American president to do a better job of leading the world and showing Americans that the leadership role it plays is for the common good. People complain and grouch, but they do want the Americans to lead constructively and not withdraw into its shell. And they want systems in place that keep the peace and provide a stage for economies to flourish. As attention turns to the 2020 election (and I am doing my best to avoid it especially with all the liberal wackos the Democrats are putting forth), you do see that several important candidates are declaring that they won’t run, such as Michael Bloomberg and thankfully Hillary Clinton. Joe Biden is looking at all this and may very well run, and one reason Bloomberg bowed out is the figuring that Biden will run. Although he would be 78 if elected, he might be a decent choice although he probably would be only a one-term president. He could get Congress to deal on a bipartisan basis, he knows his way around the world and he is likable. He will say some stupid things, but after 4 years of Trump we are immune to it. As he once said, he has forgotten more than many around him have ever learned.
I think the biggest problem in the US today is the culture of contempt that has enveloped the country. You can’t invite people to a social function without considering whether they are for or against Trump and who should sit next to whom because we have reached a point where people on one side of the issue don’t even want to talk to people who are on the other side. Half the country thinks the other half are a bunch of godless heathens not worth their talking to. It’s not even a matter of disagreeing – it goes beyond that: people have contempt for each other. I think you can blame Fox TV for this – they keep broadcasting propaganda every day showing the other side as being beneath contempt. For my dime, I’d say that the Russians might as well own Fox TV. They don’t need to own RT – Fox is doing a great job of undermining the spirit of America. For the past 2 years, they’ve been explaining away everything that Russia is doing because they have wrapped Russia inside the enigma of Trump collusion and they don’t want the issue of collusion to stick. The country’s intelligence services are heads over heels with agony over this denial syndrome and it is affecting the country’s readiness. People think it’s just politics but it’s more than that.
On the other hand, the liberal Democrats are quite capable of suicide and it’s amazing that they cannot learn from what worked for them this past November in the mid-term elections. They are instead infatuated with the party’s vocal base which is creating excitement for now but which will not help them when it counts and is fact alienating those in the middle who do count. There are plenty of people out there such as my local barber who are anti-Trump but also completely against the ultra-liberal ideas that are defining the Democrats in people’s heads way in advance of 2020 that threaten to solidify over the next year before the presidential primaries even begin. People don’t want a 70% income tax, they feel the Iran deal was a mistake, that China is taking advantage of the US, and they feel that immigration needs to be controlled. These are Trump’s issues and the Democrats are not dealing with the reality that fully 50% of the country agrees with him on this stuff.
One additional point, which to me is an important reason for Biden to be considered: Look back at the past several decades and you see that hardly anything of substance has been done in the US on any important issue. Congress passes something that one party rams down the other’s throat, and then when control of Congress passes to the other party, the law gets undone. Trump’s signature tax reform will be gutted when the Democrats take over the next Congress. Obama’s health care reform has withered under a Republican congress. You need bipartisanship to make major decisions in this country that will stick. The country needs a president that will say to his party and to the nation — I’m going to run a centrist presidency and join with moderates on both sides of the political aisle to pass important legislation that will stand the test of time. Not a person who panders to either the left or the right. No Congress will ever pass a 70% income tax or a law that calls for reparations to Blacks in America and it’s idiocy that our country keeps following and electing people who promise things they cannot deliver. Biden might be a good president if he can lead up the middle and work Congress; so far he is just pandering to the leftists and ultimately destroying his chances. That’s why Bloomberg would have been good; he would go up the middle and could tell everyone around him to screw off. But he knows that entrenched special interests will never let the parties support a centrist; the people writing the checks and supporting the politicians want their agendas advanced and some of these people are kooks, but they have billions. It’s a poor thing for America because we’re not leading and we’re not solving problems. We have a bunch of minions who can’t lead past the primaries and are hostage to flaks on both extreme ends of their parties. In the world, the US could be helping get Britain wiggle out of Brexit but Trump is probably in favor of it. The only reason the US doesn’t fall so far behind is that Russia and China are led by people more intent on stealing from their countries or clinging to power by sacrificing their economies so their countries fail. Europe is bickering. America, if not so distracted by this crap, could be such a better country and force in the world. It’s a real shame to see all this waste.
Following are links to some other articles being posted at this time: