Our little Elizabeth is such a city gal. At the supermarket, she passes up the offer of chocolate chip cookies by the man behind the bakery counter and says “I want biscotti” instead. She wants to go “to the courtyard” to play and likes to sign for packages at the building’s concierge counter. She is also an amateur lock picker; she has figured out how to use a housekey to let herself into the bathroom when I am in it. She noticed one day when I showed Karen how to rescue Jeremy who had locked himself inside. Jeremy is almost walking and is amazing on the jungle gyms at the parks; he climbs up almost any slide.
We are heading on our first major holiday out of the eastern time zone; 2½ weeks in California including LA, San Diego, Yosemite National Park and Napa Valley. We are to return just before the Jewish New Year and next month you’ll get some nice photos and notes, I hope.
Some comments on recent world events:
US Elections — I am going to have a hard time with this election. On one level it is very simple for me. The only real connection I have to the US government is paying taxes and Obama will raise them significantly so therefore I want to vote for McCain. On the other hand, the Republicans have so mismanaged this country that the business climate is so poor on every count that it is a hidden form of taxation and there is no good place to invest money in this country. H1B immigration is still under quota killing small businesses and driving the next generation of innovators and future world leaders away from the country; the deficit is at an all-time high and the US is basically broke so banks are paying no interest on deposits and are not lending money even to good creditors and people are so nervous that they now hesitate to keep more than $100,000 in a bank account, the stock market is down with no end in sight; the US dollar is so devalued on the world stage that even people in flea markets in India and Africa don’t want to accept it anymore; the price of oil is at an all-time high and nothing is really being done to reduce dependence on Arab oil with the Republicans having so many business interests there, and real estate markets are depressed to the greatest degree since World War II, and the country’s leading companies and assets are all being sold to foreigners out of distress, all of which point to an irreversible decline that will take at least a generation to reverse. The Democrats have done a much better job of managing these things over the past 2 decades. Reagan’s economic policy was poor and Clinton was the only one who balanced the budget. The Republicans talk about marriage and taxes but they never did anything about the marriage penalty and they have never done anything for 2 decades except create deficits and allow the government to go into disrepair always spouting forth nonsense about the free markets but allowing oligarchies to abuse real people such as what has been done in the airline industry and putting in ideologues into governmental service agencies that don’t know how or don’t care to provide essential services such as air traffic control. Their tax cuts have been so meager that American Express gives more cash back to its credit card holders. Basically they talk the talk but they don’t walk the walk and I’m sick of it and on this count it is obvious that America is also sick of it and totally ready to vote for Democrats. Who cares about foreign policy when your domestic economy is going down the drain? We don’t have a billion dollars to give the Republic of Georgia when we don’t have a billion dollars to fix our own state of Georgia.
Obama has not convinced me that he has any real plans for “change.” He’s never done anything but run for office and make inspirational speeches, according to Democratic activists I’ve talked to who can’t bring themselves to vote for him. He has run a disciplined campaign and can be expected to run a disciplined administration. Biden is certainly qualified to be VP or President. McCain’s pick for VP is a joke; the lady just got herself a passport this year and is probably the most underqualified person since Quayle to be picked for the job and it speaks volumes for McCain’s potential judgment as a president besides the fact that his campaign has been a hodgepodge of disorganization. (Something about Palin strikes me as odd — she is so big on having kids even when she knows they have Down Syndrome, but when she had her last kid, she went back to work after 5 days.) McCain has few friends and would probably be an ineffective president; he won’t get along with Congress and they will basically legislate around him and he will be out after one term. Obama is likely to have a strong team who will probably work well with a Democratic Congress to cut meaningful deals on legislation driven mainly by staff and this is not necessarily a problem; the presidency is a bully pulpit and his job is mainly to sell a policy and get others to go along with it.
But you cannot escape certain points that McCain makes — McCain has a lifetime of supporting change and reform and Obama has no track record of taking on his party or any real institution. I buy the argument that McCain couldn’t pick Lieberman because he needs to first look within his political party and I also think that Lieberman would be a poor running mate to complement McCain’s weaknesses. McCain is also unquestionably a man of character and Obama has nothing on him there. People believe what McCain says and nobody is sure if Obama believes what he himself says or feels that they know what he really stands for. People have to BELIEVE in their president and McCain is in a strong advantage point for this gut check in the polling booth even if they are not quite sure what kinds of things he might do as president. I think this race will be decided closely and at the very end by people’s gut feelings in the last 2 weeks and that the debates will matter and that ultimately the vice presidential candidates will not matter because they seldom do, except that if more trash comes out about the Palin, it will hurt McCain. She does have popular appeal with an approval rating higher than McCain, Obama or Biden; the Democrats will try to simply ignore her and hope that people talk less about her than McCain.
In my opinion, Obama is likely to lead a presidency that will probably pass more legislation that will be good for the country but he will raise taxes in the process, but you have to wonder by how much? Taxes are already high and we are at the point where the more they tax, the more people will avoid them which will effectively lower the rate of tax revenue, particularly if the economy continues to underperform. Whatever his foreign policy preferences, Biden will have influence and anyway we all pretty much have seen that Bush’s foreign policy has been a failure even with the Russians who feel totally free to ignore us because Bush is all bark with no bite, so how much worse can he do? Even the North Korea “success” seems to be a mirage with the country quietly putting their reactors back together. McCain is a better choice if you actually want very little to be done and for the president and congress to basically bicker with each other.
The US is so messed up right now that more of the same is simply unsustainable. Problem is that McCain won’t deliver the change we need and Obama will, even though he has no idea what it is and will probably have little to do with figuring it out.
I think that I will wind up voting for McCain, Obama might well win and then we will sit around in 4 years and find that it wasn’t so bad after all. But the real question to answer is what will the white christian man do in the voting booth on election day, and if you can answer that, you will know who will win.
Russia — My friend in Moscow is riding high. He thinks Putin is running a great country, that it is as democratic as it needs to be, and that if he once was thinking of taking residency in another country, he is no longer thinking about it. He likes the fact that Russia bullies Europe and Central Asia around and that it knocks off foreign joint venture partners and leaves them shirtless. I think this is short-term gain for Moscow which is flush with oil money and that over the long haul the Russians will be big losers. Foreign investors are getting out or reassessing their prospects, the rouble had to be devalued, the stock market is falling and Europe which had its head in the sand is on full notice that it faces a bully. Poland went straight into the embrace of NATO after sitting on the fence and playing hard to get for close to 2 years, Georgia will be sacrificed but nobody cares for it anyway, and Ukraine will probably be sacrificed as well. The Russians have to be granted a sphere of influence just as America has, but let’s face it, Georgia was an easy prize to conquer and it was somewhat stupid for the Russkies to stomp around and take what was so easy to get just so that they could show everyone their muscle. The Europeans are dependent on them for energy and the Turks have to reassess their energy policies with the ‘Stans which hoped to bypass Russia, but over the long haul, this will energize all the nations around Russia to redouble their efforts to learn to live without them (ie: to look for other fuel sources). People see what the Russian policy is and they won’t trust them and won’t want to do business with them. The Russians got their deterrence but in the process they scared everyone away and will be left alone economically which will drain them once oil prices decline in the next 5 years, especially if they intend to fund troops all over their spheres of influence to make such influence felt. It is a game that they ultimately can’t win because Russia can’t really grow its economy without foreign investment since its domestic production is still quite weak amid a controlled economy.
World Economy — a few items of interest. Auto sales in China are declining markedly. Could be because of the lowered subsidies or a slowed economy it could be a blip because people were watching the olympics. But there is certainly a trend and American auto manufacturers are nervous because they were hoping China would help rescue them from subpar sales in the US. The evidence is that the rest of the world is also seeing an economic downturn; Australia suffers from the fall of commodity prices and the UK is really in bad shape with a poor housing and banking market. One interesting counter to all this is that US states are giving away all kinds of incentives to get foreign companies to locate factories here and they are succeeding because US workers are highly productive and the weak US dollar favors foreign investment — a German auto executive said this week on the front page of the Financial Times that the US is right now one of the cheapest places in the world to locate a factory. Problem overall which ties into what I wrote above is that we will one day wake up to find out that our factories are owned by foreign companies and that we are producing some other nation’s profit. Basically, the present US economy poses opportunities for the US in the world amid the fact that others are doing worse than we are; but these are opportunities borne out of weakness, not out of strength, and in order to turn things around, there need to be major structural changes.
Israel and the Arabs — In another week or so we will find out who will be the next prime minister and I don’t think Olmert will hang around in his chair for long. Presumably Tzippi Livni will win the Kadima primary and Ehud Barak will have to explain how someone who he said a month ago was not qualified to be prime minister is going to have him play second fiddle to her. If Livni turns out to be stronger than everyone says she is, she will be prime minister for awhile since nobody wants elections except for the Likud and Bibi Netanyahu. Otherwise, there will be elections within a year and he will become the next prime minister because Ehud Barak is unelectable and unpopular within his own party and nobody sees anyone else right now as ready and able to do the job. Right now nobody is running against Barak mainly because they are hoping he does so poorly so that they can blame him for their defeat.
It is a bit of a farce right now with Olmert and Rice trying to make deals with the Palestinians and Syrians before the clock runs out on Olmert. The Palestinians and Syrians are sensibly not agreeing to anything because they don’t want to be embarrassed agreeing to terms with a lame duck. Livni, I must recall, was said to have met with the Palestinian negotiator over 70 times by November 2007 when I was told about it, and never once in any of those meetings pulled out maps. So you can imagine how fruitless it must have been to be talking with her and what you could expect if she became prime minister. Considering the stated views of Livni, Mofaz, Barak and Netanyahu, I think it is almost impossible to believe that there will be any kind of viable agreement with the Palestinians in the near term. There is the basis for an understanding with Syria; the Golan is not the issue; Lebanon is and these are not a problem for the Israelis, particularly if the Democrats take over the White House and no longer stand in the way of an agreement because of their gut distaste for Syria. I also read the Financial Times feature this month about Assad and his wife based on a biographer who knows them and went over their life histories. It was an eye opener; I had previously thought him an idiot and been led to think this by others. This article makes them both out to be much more cosmopolitan than I thought and says that both of them want to fundamentally change Syria and bring it into the world but not to do it too quickly. Besides, Assad has no choice as he found out when he tried to cozy up to the Russians this month by offering them military facilities in Syria after their Georgia invasion and was essentially slapped in the face and told to bugger off. The Israelis have understandings with the Russians, perhaps better than the Americans have managed and the Russians have let Syria know that they are not going to take their side against Israel. Jews have a good deal of influence in Russia’s oligarchies today it seems, and it seems that Putin doesn’t want to pick fights with a country filled with Russians who invest in and travel often to Russia. In fact, this past month the Israelis instituted visa-free travel with Russia, something that doesn’t exist between Russia and the USA.
My long term assessment stated several years ago is still my main forecast. Which is that deals will be made first with Syria and Iran that will affect Hamas and Hizbullah. Then and only then will it be possible to deal with Palestinian affairs because otherwise these groups have an effective veto with outsiders bent on stirring up trouble and Fatah in any case is a joke with little street power or moral authority within Palestine. However, once understandings are reached with Syria and Iran, it will be possible to deal with Hamas if the Fatah functionaries are incapable of delivering a solution. Hizbullah will go out of business and will not be part of a deal. Right now Hamas is more able than Fatah to deliver but it is simply not interested in dealing with the Israelis at this time because it is more in the business of carrying out the designs of its patrons than state building. But this will change at some point once the patrons are satisfied.
That said, I must also say that although the terms of an agreement with the Palestinians are essentially known to all, the ultimate shape of what sovereignty will exist is now up for grabs. The concept of a two-state solution is ebbing away into the realm of the theoretical. Nobody really believes in it anymore, certainly not the future prospective leaders of Israel and, despite all the talk, the facts on the ground are becoming universally believed to be irreversible. The Palestinians don’t believe they can unite to deliver a viable state and see the Israelis as hell-bent on a divide and conquer strategy both physically on the ground as well as on a person to person basis (ie: setting tribes and clans against each other); the Israelis don’t see the Palestinians as capable of uniting to deliver a stable entity that could assure them of security and consistency; and the Arabs don’t think much of the Palestinians overall. Oded, the analyst in Israel who has been consistently dour and curmudgeonly of all this for the nearly 20 years that I have known him, has also been the most consistently correct for these 20 years and he has all this time said that the Palestinians will settle for autonomy within an Israeli state. I’ve heard more and more Palestinians say over the past 2 years that this is what they see as the long-term solution because nothing else shows any chance of happening, and I have a feeling that this is where things are going and that Palestinians may not necessarily be hostile toward this eventuality because Israel basically works and the Arab states neighboring them don’t have much to offer economically or politically.
I still expect action against Iran, particularly if it becomes clear that Obama will win the election. Right now, Bush has no reason to be supportive of what could be a failed exercise or something that creates great heat while McCain is trying to look responsible and electable and he may not want to saddle McCain with his decision on the matter. But if Obama is likely to win, Bush will not shirk what he believes is his God-given duty to put Iran in its place and he will not stand in Israel’s way to uproot what it sees as this cancer which it believes is an existential necessity. In such a venture, I expect no true opposition from the Arabs, particularly Saudi Arabia.
I’m looking forward to my visit to the region in December to see what is the effect of the oil surplus to the developing Gulf, to sort the hype from the reality, to see where Iran fits in and what is the prospect for the Arab-Israeli agenda after the US elections.