Global Thoughts — 16 August 2009

Images: With grandparents at Mohonk Lodge and in upstate NY; 
Karen & Ivan at Basin Harbor Club in Vermont.

Jeremy is now 2 years old and we had the pleasure of celebrating his birthday in upstate New York at the Mohonk resort where we hosted my parents. Karen and I visited Vermont last month for the first time and the Basin Harbor Club was a nice family resort about 45 minutes from Burlington airport. We had a secluded cabin in the woods facing a lake and tall mountains. Not much to do there, and at night-time we watched TV shows from the 1950’s on DVD. Actually, some of these shows were excellent and it is amazing how low the quality of TV has fallen over the past 50 years.  Elizabeth is taking swimming lessons next week, going to soccer camp the week after, and then starting nursery school in September. We moved into a new apartment; 4 bedrooms at 76th and Broadway with 15th floor views straight to New Jersey. I’m moving up in the world; in the previous apartment my home office was in a large bathroom, now it is in an 80 square foot room next to a bathroom. 

The New York Times Magazine has a food column called Cooking with Dexter, about a 4 year old that likes to cook. It seemed rather precocious except that our 3 year old Elizabeth also likes to cook and bake with her mum and she knows by heart all of the “ingredients” necessary to bake cookies right down to the baking soda and she keeps reminding her mum what she needs to get the job done.

The most important thing I’m missing this summer (and last) is a BBQ. I Googled “legal places to BBQ in Manhattan” — there is a municipal website that tells you, but there are no places south of Harlem to do this. I guess they don’t care if Harlem burns down, and the only location south of that is on East 10th Street but you need a Special Events permit.

This is the best idea I’ve come across lately and it was in a Wall Street Journal column. Have a lottery on savings accounts. Meaning every savings account is entered into a lottery and some accounts each month get a cash bonus of say $1,000 – $10,000. This would definitely spur people to save.

Here’s a thought — we live in cramped space in Manhattan and are often giving stuff away to charities. But charities are extremely fussy in what they will accept. If a sofa has a little nick on it, they won’t take it. A Financial Times article says that the daily food waste alone in the US and the UK would feed 1.5 billion people. There is definitely room for people to circulate one man’s trash as someone else’s treasure. 

When we moved into a new apartment, we needed two jacks to be put on in our living room for our two phone lines. Verizon, the phone company monopoly, wanted $350 just to install the two jacks. This should tell you why so many people are dumping land lines and just sticking with mobile phones.

These days I look forward to Peggy Noonan’s columns on the Saturday Wall Street Journal op-ed page. I think she is really spot-on in terms of where the country’s mood is. Obama really lost a lot of political capital over this health care reform issue and it is not to his credit that a lot of the trouble was caused by Nancy Pelosi putting forth a radical bill even her own party moderates cannot stomach. When the Congressional Budget Office said the plan would raise deficits, not cut costs and raise taxes, it was a triple whammy.

A telling article in the New York Times Sunday Magazine by Richard Cohen on an article essentially about Dennis Ross published August 2: On April 29, Ross met with King Abdullah of Saudi Arabia. “He talked to a skeptical monarch about the Obama administration’s engagement policy with Iran — and talked and talked and talked. When the king finally got to speak, he began: ‘I am a man of action. Unlike you, I prefer not to talk a lot.’ Then he asked questions: What is your goal? What will you do if this does not work? What if the Chinese and Russians are not with you? How will you deal with Iran’s nuclear program if there is not a united response?”  Ross, a little flustered, tried to explain that the policy was still being fleshed out.

On the economic side, there may be some real policy initiatives, such as the new policy on derivatives. But for the most part, economic cycles come and go and the press and the president really don’t matter. A few weeks ago, the word in the Economist, Stratfor and elsewhere was that Europe was mired in recession even if the rest of the world was recovering. Today’s Wall Street Journal headlines that Europe is ahead of America in its recovery. It would be silly to think that a billion dollars of cash for trade-in cars is rescuing the auto industry. In China, the problem was not America and that’s why it is recovering independently of America. It will be a year before everyone sees the improvement in their daily lives, but the economic cycle appears to be definitely on the upswing. Think about this — it took the world’s economists a year to declare the world had entered recession even months after everyone could plainly see a recession was taking place but it took them barely a month to declare that it was over. Clearly though, Asia is doing well and between Asia, Oceania and Brazil, there are good opportunities in emerging markets.

In Iran, as I said last month, the real fight is not on the streets but in the power centers among and between the military and the clergy. The fissures run deeper than I first thought; this will take time to play itself out. Keep an eye on Lebanon; Hizbullah thinks the Israelis are preparing to strike at its forces in Lebanon in preparation for a strike against Iran – it wants to eliminate the northern front which Iran would use as retaliation. 

The various talk about settlements in Israel was a one month story which will go away; the Americans overplayed their hand on the issue with the Israelis by seeming to care not a whit about anything other than settlements as if that were the root of the entire conflict and as if the entire relationship depended on solving that issue. The Arabs liked it but the Israelis couldn’t care less what the Americans say about the settlements. But to humor the Americans and to keep the ballgame diverted, Bibi now has his government negotiating endlessly with the Americans over teeny tiny issues concerning settlements while everything else gets thrown to the side. As I’ve said before, what goes on in the West Bank is really not an important issue to Israelis and very few Israelis really care if they get overflight rights to Saudi Arabia on the way to Thailand or interests sections in Oman or Qatar. For their part,  I’m sure that most Arab governments told the Americans that they were much more concerned about dealing with Iran than Israeli settlements. Another thing to keep in mind, elegantly pointed out by a columnist in last week’s Haaretz, is that most Israelis don’t really care if there is peace with the Palestinians or Syrians. They have the situation under control right now; every time they would give back something such as Lebanon, Gaza or the West Bank all they got was rockets until they went back in and established order; and between Hamas and Abbas there is nobody to speak for a united Palestinian front. They also have a decent working relationship with Abbas and Fayyad, the economy of the West Bank is improving and security barriers are going down, so why aggravate the status quo with big talk about big issues which only infuriates Hamas and Iran who then go in and create tension in order to remain relevant? I think that Netanyahu and Abbas will basically keep improving things on an incremental level, people will stick with the status quo for the time being and build up confidence, the Israelis and/or Americans will deal with Iran and then try to bring in Syria after Iran is weakened, Hamas will be weakened by the loss of its patron, and then things will move forward on the broader issues. There is some sense to all this; Fayad and Abbas understand that as they build working governmental institutions and the Palestinians begin to see people with guns as problem solvers rather than mafia, they will convince those in Gaza and the West Bank that Fatah rather than Hamas offers them a solution. Another thing to watch is Syria in Lebanon – they are closing PFLP-GC bases there and moves like that reflect real progress with Saudi Arabia and the US over the future of Lebanon and Syria.

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