Global Thoughts — 19 December 2019

Last month I got to see my daughter appear in a federal court room in a mock trial as a lead lawyer arguing in front of the US supreme court. I was very proud of her performance and could see the spark of a future professional there. Not only was she lead attorney arguing for her side, she coordinated a team of roughly 15 other kids acting as appellate attorneys and showed that teachers and other students view her as a leader. She now says that she wants to be a lawyer when she grows up doing some kind of specialty such as art law or archeology law. In our situation, our kids graduate elementary school at Grade 5, middle school at grade 8, and high school at grade 12. Which means we are in a never-ending process of deciding where they will go to school for the next stage of school, which is a huge obsession and a huge pain in the ass. When I went to school, there was really only one choice from Kindergarten thru 12th grade and if you did anything short of burn down the school building, you stayed there. Nowadays, it’s a totally different game. Also, the stuff on the chalkboard (ahem, digital smart board) that the kids are learning in high school doesn’t resemble what I ever saw even in college. There is no chance of me helping a kid with math or science homework past the fifth grade and I know that I wouldn’t get into half the colleges today that I got into a generation ago. Kids have come to be so on-it; 6th grade Jeremy corrected his history teacher who mentioned something about the French Revolutionary War in connection with the American Revolution – in fact, the French Revolution came much later. Kids can learn so much from the internet outside of school that teachers really have to be on their guard, even in younger grades.

In London you can get front orchestra seats for Hamilton during Christmas week for about $100 a ticket. But if you want to see Magic Show Goes Wrong, a takeoff from the Play that Goes Wrong, that show is an impossible ticket to buy at any price. Different bites for different likes.

Fun facts: Stressed spelled backward spells desserts. I saw a sign on the street today supposedly by Banksy: In the future, we’ll all want our 15 minutes of anonymity.

In my updated version of the Chanukah story, the priest of the Holy Temple of Jerusalem has a cellphone with enough battery power to last for one day, but it lasts for 8 days. Behold, a Miracle! And because there were 5 bars of signal strength on the phone, we celebrate and eat 5 potato pancakes and 5 jelly donuts! It’s taken years but we have decided that the bombolonis at Eatily in New York are by far the city’s best jelly donuts. The jelly flavors are better than the custard ones. Gotta try ’em!

The new Apple 11 phone has 3 cameras in it to justify the fact that it costs about $1,000. Isn’t it nuts that you really care? According to a recent survey, less than 50% of smart-phone users under age 30 have used the phone to actually make a phone call during the past 30 days. If they called phones digital cameras that could also send text messages, it would be a colossal failure. How many people today buy digital cameras even though you could get a good one for about $100? But when you think about it, what people are really buying today when they buy a phone is a camera. If Kodak had the vision to call their digital cameras phones, they might be among the top five companies in the world today.

The annual subscription price for 7 day a week home delivery of the New York Times is now in excess of $1,000. You basically have to be in the top 1% to be able to afford to read the paper, so obviously they can’t be talking to anything resembling normal people if they are talking to their print subscribers. But I find it a miracle that you can pay such an infinitesimal amount for thousands of people to work day and night to drop all that good stuff on your doorstep before you even get out of bed and to constantly put stuff out on the internet. Even at $1,000 it’s a privilege to be able to participate as a subscriber.

The Washington Post had a scary article lately telling you how Fox Television decides what to put on the air as news. They basically sit around concocting stories that they think will draw viewers. The NY Times just printed an investigation of some ex-Fox executive who set up a company with teenagers in Macedonia posting 15 phony news stories a day and his site is making a ton of money. He went through a lot of trouble to hide what he was doing but they snuffed it out. These are reasons I love newspapers.

One of the problems here with all this crap going on plus the complete partisanship on both sides of the political divide is that both in the US and in Israel, nobody can seem to agree on the definition of Good or Evil. It’s good if Our SOB (son of a bitch) does it; and it’s evil if the other side’s SOB does it. Like Teddy Roosevelt said a century ago of a Central American dictator, “he’s an SOB but he’s OUR SOB.” We’ve reached the point where everyone thinks that everyone is a liar, so you vote for the liar whose lies come closest to your version of the truth. Both Hillary Clinton and Trump were seen as corrupt on election day; you just chose which one you disliked the lesser of.

Here’s an insane statistic: Trump has spent more than twice as much money bailing out American farmers than Obama spent bailing out the automotive industry. That’s from economist Paul Krugman writing in the NY Times.

The NY Times and Washington Post are making my eyes droop with endless pages of words about Trump and I don’t have the time to do more than skim these articles and wonder if they mean anything. Let’s deal with this whole impeachment thing for a minute. Let’s think like Real People in America. Suppose that you agree that Trump did what he did with Ukraine and Russia. Suppose he is using the presidency to make money for his family. Suppose he is obstructing Congress and obstructing justice by lying and withholding information. Suppose he is a disgusting person. Great. Meanwhile, your taxes have gone down quite a bit and you are making lots of money in the stock market. As it is, taxes are high enough to deter investment and need to come down. You have to earn $1 million to be able to have less than $500,000 to invest and that with the threat of even higher taxes, that little leftover money you wind up with is a high enough risk that people will be less likely to take any risk. The New York real estate market is crumbling under the weight of new taxes, changing retail landscapes and landlord-tenant regulations; commercial rents are down 40% in the past 5 years and landlords don’t want to invest in their buildings in New York and are instead buying properties in New Jersey. The Democrats who want to throw Trump out want to raise your taxes a ton and even to tax capital gain on paper earnings that you haven’t even sold yet, take away your choices on health care, and half of them look like people that you would not want to spend even 5 minutes with. Do you really want to have a coffee with Elizabeth Warren or play cards with a crank like Bernie Sanders? The list of taxes that Pete Buttigieg wants to put on people are scary. He has no assets and is being completely bankrolled by others who obviously expect something. Warren raises millions of dollars from big donors and then walks around saying she won’t accept those kinds of donations. Trump lost more money than almost anyone ever made. Mike Bloomberg is the only real alternative with real experience and a track record of success who “gets it”, but the press and the Democratic Party seem to be in a conspiracy to ignore him and to declare war on billionaires even though the owners of the press are mostly billionaires (a situation that makes no sense to me). People abroad joke openly that it’s cheap to buy Americans off – for $50,000 you can own a candidate. In Europe, it costs at least $1 million. What’s wrong with having financially strong people represent our country who won’t sell out so easily? So unless you want to move to Singapore, which is probably the best thing you could consider doing these days, you have almost no choice but to re-elect Donald Trump. And assuming things keep going the way they are, that’s what Americans are going to do. It’s pretty obvious this is going to happen unless the Democrats get with the program. Right now their program sounds very socialist and they want to copy Scandinavia and offer everything for free. How much do you think employers will value college degrees when they are free and every idiot can get one? When was the last time you got anything for free that was public that was worth anything to you? These guys want to copy Scandinavia — a place where people are so happy according to all these indexes, that they commit suicide more than anyone else on earth. Remember my travel notes from Norway this past summer where someone said that because doctors are on salary there, they will virtually walk out of an operating room at 4pm even if they’re not finished. Well, not exactly, but you get the idea that they don’t have any incentive to do things right and don’t really care. Try getting a surgery appointment in Canada. Norway is a great place to ride the train, but not a great place to get sick. America’s system favors those who pay, but at least you can get something. In Quebec one day they were giving out free cake and the line stretched out for an hour. Unless you want to spend your life standing in line or have connections to get to the front of the line, socialism doesn’t work. Capitalism allows you to get same-day appointments when you need them with doctors who care.

Every 4 years they do the same stupid thing and I don’t know how much more of this America can take. And the system is a rigged two-party system so neither party has any incentive to change. They know that within a bandwidth of 10% of the swing vote, their incumbents are basically safe. Our family is visiting Singapore in August. My in-law is already living there. I have friends moving there. When I walk downstairs, I see rows of empty stores along Broadway, scaffolding that stays up for years because the city is so incompetent and corrupt in terms of inspections and supporting scaffolding companies. These scaffoldings attract homeless people to set up base camps and force stores to close because nobody can see them and they have homeless people blocking the entrances intimidating customers. The approaches to the subway stations reek of urine and there are people on every single subway car begging and camping out, and people in the stations camping out. There are homeless people, a good number of them with mental issues, camped out right where my son has to wait for a school bus. A kid got mugged for his phone a block away from a private school and was saved by a construction worker who got involved. The city’s mayor refuses to allow police to remove these people but he lives in his own world where he doesn’t have to deal with public transportation or walking around a neighborhood. Every time you step in a taxi, you have to pay an extra $3.50 in taxes because they want to dissuade people from entering Manhattan. Except that I live in Manhattan and I don’t have a car to get around and public transport doesn’t always go where I want to go. So why gouge me with this tax to travel within a mile of my apartment or office? It now costs nearly $7 just to enter a taxi during peak hours and that’s more than twice the price in Paris or London. The subway and the bus charge $4 for a family of 4 to get in (kids get no discount) whether or not you go one stop or all the way across town; it’s a way to soak those in Manhattan who use it to go short distances and it’s cheaper to go in a taxi or an Uber or Uber pool for distances up to 20-40 blocks, which is the distance of most rides anyway. The airports now charge $7.50 per person just to ride the monorail within the airport to get to public transportation to the rest of the city. Kids have to pay too; so it costs $30 for a family with kids just to get out of the airport, after we’ve already paid airport taxes on the ticket plus taxes for the billions of dollars it cost to build the monorail at the airport. Then everyone in my family has to pay for the public transport to go home. Uber is cheaper than all of this. I’m going to London this week and I got a family ticket on the Heathrow Express all the way from the terminal building to central London for about $17 for all 4 of us. So please tell me exactly what my billions in taxes is paying for? My zip code is one of the wealthiest in all of the US with its residents paying 90% of the city’s taxes and it is complete crap right outside my door. The tax rate in my neighborhood is over 50%. If I move to Singapore, it’s a flat tax under 20%, everything works and there is no BS and gotcha games nickel and diming me everywhere I go. Unlike our third world airports and airlines, Singapore’s is #1 in the world and its airline is legendary. It’s one of the most uncorrupt countries in the world and its education system is one of the world’s best. Pretty compelling huh? And I’ll bet they don’t have Trump on their TV’s and front pages daily.

Let’s talk about global warming for a second. I’ve written in earlier posts that I have no good ideas. Well, here appears to be one. Batteries are good things because if you want to store and use energy so that you don’t have to keep creating it all the time, you want batteries. The entire planet runs on energy creation. The cost of producing batteries has gone way down (ie: lithium battery costs are down 85%), but there is a lot of room for further improvement. The US spends $28 million a year on R&D for batteries; it spends $150 million a year on tax subsidies to the coal industry. You’d think that the Americans might shift more investment into this area.

Slide attraction in LA

Saudi’s IPO of Aramco really failed. After it was clear that the IPO would not fetch anywhere near what the crown prince MBS hoped for, he wanted to save face and basically reserved the shares for domestic buyers and gave them a 10% bonus on dividends if they bought and held their stock and liberalized rules allowing people to borrow money to fund share purchases. And then they pumped the stock at the IPO to make it look good and fooled nobody who cared. As much as the rest of the world’s business community wants to suck up to Saudi Arabia as a customer, they did not want to invest in Aramco because they are quite afraid of political and oil market instability and the crown prince’s autocratic ruling style and it’s clear that he controls Aramco and can decide how much profit the shareholders will ultimately have and recently he replaced professional technocrats at the company with his friends and relatives who were not qualified. The Saudi citizens have no choice; if they don’t buy the shares, they will be seen as disloyal and be penalized. Free markets work; if people don’t like what they see, they can choose to not invest and virtually every international fund from Australia to Japan stayed away from this IPO. Now, to top this all off, you read that even people who are not making trouble in Saudi Arabia and who signed written pledges not to make opposition are still being jailed and tortured. Why the heck would any Saudi citizen with half a brain want to remain inside that country under these conditions? Business people want Saudi business that they will pay for; people don’t want to invest in Saudi Arabia. There’s a difference and it played out perfectly in this Aramco public share offering.

Also in the failure department are the governments of the Peoples Republic of China and Russia. This Hong Kong thing is bad for them because an entire generation of people in Hong Kong, both young and old, are utterly disgusted with Beijing’s rulers and there is no chance that Taiwan will ever want to join up with Beijing unless they are invaded or put under nuclear blackmail without the US as a reliable ally. Beijing will either have to break its word with its One Country, Two Systems promise or lay off the territory and the current ruler seems to have a bug up his butt when it comes to his pride. He’s not gonna want to back down. The problem really is that China is not succeeding in making anyone around it or in it feel comfortable. Foreigners don’t enjoy doing business there; anyone living there with money wants to get it and themselves and their children out of the country, and the country increasingly looks like such a scary place that I’m not even sure I would want to go there with my family as tourists because they are just picking up tourists and putting them in jail as bargaining chips. The Russians are doing this too and nobody is going to want to deal with them either. I can understand that North Korea and Iran do this, but you know that you don’t go there except on your own risk. I never recall for the past 100 years China or Russia doing this to tourists and I can’t believe they would think these kinds of shenanigans are going to help them in the long run. Chinese feelings about Huawei have been negatively impacted by stories that have been viewed by people inside China showing that the company worked employees insanely and got someone put in jail for 8 months on trumped-up charges (actually he was never even charged with anything) when he sued for his contractual severance bonus when he left the company after 12 years. You want to run a country in which governments and companies which are basically extensions of the government can run all over their own citizen,s and eventually you are going to wind up with a very unmotivated citizenry that is not going to believe all the propaganda and be whipped up into nationalistic frenzies every time you tell them that they are under attack. It’s worked pretty good in China till now, but you can see that it is a matter of time before the flame runs out in China. In Russia it took 70 years for Communism to play itself out; we’ll see what happens in China.

Here’s an important reason to know why China is not going to succeed long term as it is: Investment fund managers who visit China bring “burn phones” with them, meaning the phones are only to be used in China and then left there. They do this because they know they are going to be spied on. If investor confidence in that country is so poor, you can basically assume that there is no trust and no basis on which to make long term relationships that form the nucleus of investment. I wrote earlier that MBS in Saudi Arabia can run his country any way he likes, but the market is not going to vote in his favor as long as he does and so long term he will get professional wrestling tournaments to show up there for a week and leave and movie theaters will indeed be built, but he ain’t going to get major investments.

My business partner is running in the primary election for Congress in Westchester county, New York as a Republican for a seat that is generally viewed as a safe Democratic seat by a vacating long-serving congresswoman. I think it’s pretty cool to run for Congress sometime in your life if that’s what you want to do, whether or not you have a viable chance to win. You can check out his campaign site at www.eisenforcongress.com to get more of an idea about him as he presents himself to the public.

One of the issues he is raising is about drone technology. He talks about it in the civilian arena but I want to discuss it in the military arena. A few years ago the US military canceled a drone research program and that may turn out to be a fateful mistake that the US pays for in its next generation of warfare. Other countries are moving heavily into drone technology and in my last posting I noted that Iranian technology was on par with Israeli technology. Future warfare calls for swarms of drones to overpower an enemy’s forces by sheer numbers. American power projection around the world is led by aircraft carriers, which now cost upward of $13 billion apiece. According to the Economist’s military analysts, they are sitting ducks for these drones and new missile technologies that reach further out with greater accuracy. (Just to give you an idea of what I mean by a sitting duck, in 1985 when Top Gun was filmed, it cost $275,000 just to turn a battle ship around so that they could film it in the right sunlight.) Ships now have to sit at least 600 miles offshore to stay safe and the latest generations of bomb-delivery aircraft have shorter flying ranges so that they can be stealthier and avoid these missiles, and 600 miles is at the top range of their capabilities. The drone program that was cancelled would have extended the range of attack drones; it was shelved in favor of being able to refuel a human plane. That may sound trivial but if a pilot has to be flying a high-performance plane for 12 hours to do a bombing run and avoid increasingly sophisticated anti-aircraft missile technology, just how sharp do you expect that human being to be? The US has a lot of eggs in a very few baskets at this point and it may find that its military reputation takes a real hit if one or two ships get sunk, which is increasingly probable. It’s an important reason for any president to think twice now about using the military, and that’s not a good thing because if the risk of using your military is too high, enemies will step into the void as they already are. Think China and Taiwan for example. The US won’t count for much in the world if its military is seen as outdated and ineffective.

Skating at Bryant Park, NY City

Here’s an interesting thought from an op-ed piece by Agnes Collard in the NY Times. She says that having babies by themselves is not expensive; you can breastfeed them for nothing. It is getting separation from them that costs money – formula and bottles if you don’t breastfeed; contraptions to keep them entertained if you don’t look at them; a stroller if you don’t carry them; a crib so you don’t sleep with them; a bedroom so you don’t have to have them around; child care so you can get farther away; camp and school so that you don’t have to spend the day or summer with them. You are not paying for the babies; you are paying for the separation from the kids. This article was also interesting because it wondered why in Denmark, where government provides so many incentives for people to have kids, the birth rate keeps going down. Birth rates in Japan are in bad shape; there are only 46% of people working versus the number of old people which is the highest such figure in the world, and foreign-born immigrants make up only 2% of the country (in Canada, by comparison, the figure is 22%). The figures are expected to become 20% worse over the next 20 years. The working age population has dropped 14% (by about 10 million workers) over the past 15 years and will drop even more in the next 20 years. In the other Asian Tiger countries, the problem is actually even worse. The reason I mention this is that articles about the Asian birthrates look toward European style incentives to encourage baby-making but these incentives don’t work. Immigration is probably the #1 best thing you can do because hard-working natives just don’t see the value these days in having children, and giving them a tax subsidy or an extended period of work leave (which they fear will jeopardize their careers) won’t do it. In China and Japan, for example, women are terrified of taking work leave to have kids even when laws are enacted to supposedly protect them. I care about this subject because it is a great example of where articles written in one publication totally contradict other articles in the same or other publications. There are just so many statistics out there and this is problem that defies easy solutions.

Another problem in the “lies, damn lies and statistics” category is education. For years people thought that Finland was the gold standard on the basis of PISA test results. Educators were so gaga over Finland that their schools were charging $1,300 just for educators to visit them. Now it turns out that Finland is not doing so well, and that Estonia is actually doing better than they are. Turns out that it is not only how you educate kids, but what kind of kids are in the schools and who their parents are. Finland’s scores dropped as immigration rose versus Estonia, which also has immigration, had richer parents immigrating. The Estonian kids spoke more Estonian in school; in Finland having a bunch of kids in the schools who couldn’t speak the local language brought down the scores overall.

Here’s another reason to be wary of statistics: This year’s political rage is all about Pickett and Wilkinson’s study on inequality, basically saying that the rich are getting richer and the poorer are getting poorer. The US Democratic party’s left wing is gaga over this study and in the rest of the world people are taking note of it. The problem is that according to the Economist, the study is flawed and societies are not as unequal as they suggest. In fact, there has been a lot of improvement in the lot of the middle class around the world. Wealth taxes, the current suggestion of the progressive left, is a terrible idea because they don’t work. Europe tried it and it was a huge flop and they had to withdraw them. They are also short-sighted because after a few years of taxing all the wealth and creating new government programs to spend the money, what happens when there is no more wealth left to tax but you have the other 95% of the country expecting handouts from all these programs? France has tried for 50 years to create equality but in 50 years they have had zero economic growth and some of the highest long-term unemployment rates in the world – something like 40% at present. They tried a wealth tax and had to withdraw it after a few years when the wealthy people fled the country. Scandinavia offers a great deal to its citizens but contrary to reason, they’ve lowered taxes on their wealthiest citizens during the past decade. The Democratic approach sounds cute to uneducated people across America but it is no solution to our problems. Just like tariffs are also stupid and a proven failure throughout history. The truth is, that if America could do just one thing and get it right, it would be to encourage smart immigration.

Here are a couple of good reasons why immigration is good: 45% of the Fortune 500 companies today were founded by immigrants or their children; 40% of American Nobel science prize winners since 2000 are immigrants; and globally immigrants are 3x more likely to file patents than natives in a given country. When immigrants make more money, it opens up more opportunities for the people around them. If everyone in the world who wanted to migrate could do so, global GDP would double; that is $90 trillion a year. There is nothing else the world could do besides liberalizing immigration policies that could create as much global wealth. The actual amount of immigrants in today’s world is only 3.5% of the global population, the same as 50 years ago. However, 15% of the world’s population would like to live somewhere else, roughly 750 million people. That figure includes a third of sub-Saharan Africa and a quarter of Latin America and the Caribbean. America is a tough place to get in; last year 200,000 got in, and there were 294 applicants for each one of its 50,000 green card slots. A century ago, 98% of all who arrived at Ellis Island were accepted. At this point, the proportion of foreign born people in New York is 38%. So that gives you an idea of the size of the problem against the small amount of what is actually happening. You’d think that countries would be excited to take in immigrants based on the incentives but they don’t. It is a huge missed opportunity. To explain the various myths, facts and advantages is beyond the range of this posting but you can read the survey on Migration in the Economist dated November 16, 2019. Consider this: Australia has a very tough but welcoming immigration policy and has enjoyed 28 years of continuous economic growth. So far Trump’s program has not created actual new jobs in America and the #1 reason is that he restricted immigration. America has also become a country in which it has become very hard to move around from one place to another because of high housing costs and the concentration of fewer companies monopolizing industries and trending toward certain cities and employing anti-competitive practices that make startups elsewhere harder, and when it becomes hard to move around, it dampens economic growth. Think of how hard it is to move around China and those effects on that country’s ability to grow.

Jeremy at Venice Beach, California

I think that the US is hopelessly destined for a future that is not as nearly as bright as it should be, mainly because we have a two party system that is broken and that people are putting party before country. It is destroying the fabric of America as I said above when people can’t even agree on what is good and what is bad. Here is what I would propose to do: Rather than get 10 billionaires to get together and start a third party in a system that is rigged for only 2 parties, I think they should get together and go to some country such as Belize or some place in Africa and say we are offering you 50 billion dollars to buy up half of your country and we are going to create our own sovereign country. Give the selling country a commission on the GDP of the new country. This country would be run as a private corporation would, with a board of directors, and the goal of the country would be to make as much economy as possible. It’s not a democracy but who cares – the idea is to get shit done but to be clean about it, sort of how Singapore runs except in the Western Hemisphere. Easy immigration for those that are qualified and can show enough assets and income to be “qualified investors”, low taxes, no baggage such as uneducated or homeless people – they don’t get to move or stay there except under a work visa as needed. The Democratic Party just wants to tax people and destroy the incentive to create anything. The Republicans talk a good game but always raise taxes and call them fees and do other things that have the effect of raising taxes such as limiting deductions. America hasn’t done a single important thing as a country in 40 years except argue with itself. The only thing in America’s favor is that its enemies are self-defeating even though they are clever and organized. China, Russia, the Emirates and the Saudis – whether they have money or people or power, they are not incentivizing their citizens to succeed and therefore they drive people away. I told you above that America is overrated as a great place to be successful. It is the best available but it still sucks. Why should Norway and Switzerland be so much nicer? I say hit the reset button — I’d move in a second if there was an English-speaking place in a pleasant climate within a 4-5 hour flight of the rest of my family in the US.

Religious people bemoan the fact that religious observance in the western world is going down significantly among both Christians and Jews, although they don’t like seeing religious fanaticism elsewhere. Here’s a hopeful piece of news. Arabs in the Middle East are also less into religious parties and religion, especially among the young. Participation in religious parties is down by a third in the past 5 years in the region; more specifically, down 50% in Tunisia, 25% in Algeria and 20% in Egypt. Egypt is particularly striking because it is a place where religion is really part and parcel of ordinary people’s lives. Participation in Friday prayers in Iraq is down by a third. I wrote in earlier posts (and discuss in a companion article being posted now) that Jewish American participation in religion is down significantly among millennials and their attachment to Israel is also down significantly. The pull of religion around the world is an important cause of conflict; the less important religion is to people the more likely they are to prioritize economic issues and not get hung up over religion. Imagine what would happen if abortion ceased to be a controversial issue among a lot of Americans; right now you have swaths of Americans who will never vote for the other party because they are hung up on one side of the abortion issue. Take that away and you have another reason for political realignment in the next generation. It is probably one of many reasons that the face of America is set to change over the next decade or so.

Here is a topic I haven’t really discussed but it turns out that it is being severely overlooked by just about everyone who is not professionally involved in the military. Iran is perfecting its Precision Guided Missile (“PGM”) Program. Thomas Friedman hinted at it in a recent column when he described the accuracy of the strikes against the Saudi targets in September. To be more specific, it used to be that a missile was “dumb” and it could cause damage within a 5 yard radius and hit a target within 200-300 yards of accuracy. The Iranians are making those missiles “smart” and now they can make 5 yards radius worth of damage but hit a target within 3 yards of accuracy. This means that it takes only a small percentage of the arsenal you needed to have to hit a target, so instead of sending 100 missiles you might only need to send 5. Considering how much missiles cost, they can cost $10 million each, this is like going to Amazing Savings to buy your dinner napkins and paper plates for a Passover Seder for 100 million people. The Israelis are hugely concerned about this because war is all about money – you can have the capability to fight, but it’s ultimately how much you can afford to spend that matters. The Israelis are making it clear, having struck roughly 1,000 targets outside of Israel these past few years, that they are willing to go to war and absorb mass casualty events now in order to prevent Iran from perfecting and using PGM systems. This is conventional warfare for now but you could put nuclear devices on those missiles and make it a nuclear threat. You might ask if the Americans would send forces out to fight for Israel if it had to absorb a mass casualty event? The answer is no, but that’s why Israel is a nuclear power with America’s blessing. Nukes instead of Troops. That’s why there is no defense treaty between the countries.

Finally, the topic of the unbelievable cost of prisoners. In New York City, there are approximately 8,000 prisoners in local prisons at any one time. According to the New York Times, it costs $925 per person per day to house a prisoner. That is about $335,000 a year. This adds up to billions of dollars. So this means that an old person in the most expensive nursing home in the City costs less to house than a prisoner. I have an idea – let the City book a group rate at a Ritz Carlton resort say for about $300 a night and give each prisoner a food and beverage credit of $100 a day. Let’s make a deal with the prisoners – as long as you behave yourself, you can stay in a 5-star hotel and hang out at the pool and bar and play tennis or go to the gym, but if you try to escape the resort or misbehave, you gotta go to prison. I’d bet that 95% of these guys would stay at the Ritz rather than go back to Rikers Island and the city’s costs would go down more than 50%. That should be a joke, but at these rates, it’s sound advice.

Here are some other interesting things to note in the travel news department:

We were recently in Los Angeles and Puerto Rico. In Los Angeles, Uber is really cheap and much easier to hail than a cab. The Mr C Hotel in Beverly Hills is not a bad place with pretty rooms and good breakfasts with a real Italian feel, but the facilities of the hotel are OK but not so great and I would only recommend it if you were staying in the Pico-Robertson area over the Sabbath (meaning you needed to be within walking distance of synagogues) and wanted something better than a Marriott. Marriott owns or manages both hotels on that block and they doubled their rates to the point that you could get much better value going a block or two away to the Mr C than staying in either the Residence Inn or the Marriott on Beverly Drive. In downtown LA there is this tower with this slide that goes along the side of the building and it looks really cool. It was actually pretty lame and you could totally miss it. The view from the top is OK but LA is not really a pretty city to look at from the top of a building. We took a 5 hour tour with Tours by Locals and saw things like Venice Beach, Beverly Hills, the Chinese Theater with the footprints on the sidewalk, and odd things such as an unusual vantage point to see the Hollywood Sign and a little cemetery in Westwood with graves of celebrities such as Merv Griffin whose tombstone reads “I will not be back after these messages.”

In Puerto Rico, the Dorado Beach Reserve resort is back after the hurricane and it is still one of the best properties on the island. You can get a room with 2 king beds that makes it sensible for a family of 4 but you cannot get rollaways in a room due to changes in the fire code. Something that I want to discuss is concessionaires who provide services to hotel guests, such as surfing lessons and photography shoots. The people actually doing the work are really exploited by their bosses and get about 10-15% of what you pay in. They are desperate for tips because they get nothing for their work. I estimate the photographer who shot our pictures, prepared the proofs and the video montage and presented it to and would have to finish it off if we bought the package spent about 10 hours to get about $65. A surfing instructor got about $25 to do an hour’s lesson. We of course were paying top dollar for all this stuff and you don’t think to give tips for lessons and photography shoots. I felt so bad when I found out about it that I went around in a hijacked golf cart getting cash to distribute to these people. It was doubly hard when the one ATM on the development’s property was broken and I had to get a hotel manager to overrule his employee who told me that the hotel wouldn’t advance me any cash. I was in a resort and charging things to my room which is why I had no cash on me. The last 2 hours of my trip should be spent at the pool with your family, especially when it was all rain the day before, but I felt this could not be ignored. I think that travel writers and managers of hotel chains should be more attentive to this issue. If people care that their chocolate from Africa is picked by and sneakers in Bangladesh are manufactured by people getting fair wages, they should care about the people immediately around them providing them services during their holidays. I know that I can’t enjoy my holiday if I feel that I am enjoying myself at someone else’s expense. At least if you are going to be gouged by the vendor who is already paying a kickback to your resort for the right to be there exclusively, they can pay people decently and not make it your job to make these people happy. I have employees; it’s my job – not my clients’ – to make them happy. How happy are you when you go to the counter for pizza and a soda and the person turns around the machine and asks you to put in a tip? You hate it because that person doesn’t deserve a tip as we know it, and it’s not your job to make up for the fact that the food court place raised its price and is also underpaying its employee. If someone wants to make me really happy when I’m on vacation or doing anything, what I’d like to see is an employee say to me “I love working here and I’m not looking for your tip.” When I was a kid, bag boys at Publix supermarket would walk my mom or my grandmother to the car and load the bags. They never accepted tips and made it clear they valued their jobs. Nobody ever forgot that for an entire generation and it was one reason you knew you liked shopping at Publix.

Travel insurance is good for some things but not others. As I mentioned in a travel posting last month about a summer trip to the Bahamas during hurricane season, travel insurance is not going to protect you against a hurricane warning if the policy says that the area has to be rendered uninhabitable in order for you to collect. According to Travelex’s Select policy, you basically have to show up to the area, get hit by the hurricane and be utterly homeless at the resort you paid for in order to collect. Allianz now offers a policy that allows you to cancel if there is a hurricane warning. Here’s another two areas where travel insurance sucks: (1) If you buy a ticket with frequent flyer points and you have to bug out of your trip in the middle, it will cost you a lot of cash to get home, assuming the airline won’t put you out on a flight for free at the last minute. Travel insurance doesn’t view frequent flyer points as a monetary loss and all they’ll give you is $200 to redeposit the points. That only helps you if you know that you’ll use those points toward another ticket before they expire, which in the case of our once in a lifetime trip to Australia next year for my son’s bar mitzvah, might never happen. (2) Let’s say a close relative dies in the middle of a trip and it’s a death that is covered under the policy. You and perhaps your family have to fly to the funeral and it might not be where you live. Maybe your parents live 1,000 miles away from where you live and when such things happen times is of the essence, such as if you are in Australia and everyone is waiting for you to come home to a funeral. Well, travel insurance will only cover the cost of a ticket to go back to your place of return, and it won’t pay anything for you to go somewhere else. That basically means it’s useless if someone dies because it would be insane to go to one place for free and then have to pay last minute to then fly to some other place. By the time you paid for that extra ticket and filed the claim to get to your first place, you’d have spent the money you saved buying the insurance in the first place and spent a lot of time doing it.

Well, that’s it for now. If you look at this posting, you can see a companion article that is the presentation I will be making at the Limmud Festival in Birmingham, England on 25 December about the future of the American-Israeli relationship on all levels – how, no matter who wins the next election, it will never be the same. Here is the link to that article.

Best wishes to you at the Festive Season and see you in 2020!

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