Thoughts with a Focus on Egypt — 6 February 2011

You know you have kids when the only movies in your Netflix queue are kids stuff; kids are “what do you do for me NOW, not yesterday or later”. You are thrilled when your kid comes in and says “I did pee pee all by myself” as opposed to you worrying about an accident…We took our kids to a kiddie opera version of the Marriage of Figaro. It ran an hour and had too many notes. But our kids actually sat through it and enjoyed it. I and another dad who was with us wanted out. City kids!…….I was in Houston this week on business and it was about 30 degrees below normal there. Just as cold as New York and in fact it even snowed there just after I left. I couldn’t wait to get back to where it was Supposed to be Cold rather than where it was Not Supposed to be Cold. You know what I mean?

My kids have been enjoying TV kids shows from Australia and New Zealand. High Five is a really good show from New Zealand. High energy, fun skits and really great teenage idol performers. They should bring that one to America. The kids really like Brum from the UK about cars. And Playschool, Don Spencer for Kids and Bananas in Pyjamas have all gone over very well….The German company Haba makes some really good wooden toys for kids. We bought a set of toys from them that you put together the various wooden blocks, set up contraptions and the idea is put it all together and then put marbles on them and set it up in such a way that the marbles keep on rolling. There are any number of combinations and it is a study in gravity and engineering. It is a good “shabbat” toy – nothing electrical about it. Very good for kids as small as 3 and adults of any age.

Why is Apple a great company and Dell sucks? I called Dell to find out how to take out the hard drive from my PC when I gave it away. They passed my call along several times to several guys in India and then I got asked 21 questions, and while all this was going on I figured out that I could just unplug the cable to it and then lift the blue tabs on the side and the hard drive would slip right out. I called Apple for something much more complicated because the root of the iPod problem my wife was having was hardware involving my computer. They charge you $30 for giving you answers, but I got some American guy who just told me the answer for nothing and, even though it involved me having to go out and buy some third party software to solve the problem, he told me in advance what I would need to do to finally solve the problem. This past year I bought an HP computer and stopped buying from Dell.

If anyone asks what did Israel bring to the world? If you’ve ever been to Max Brenner chocolate shop, you can stop right there. They have really done a great job of creating a concept restaurant revolving around chocolate. My kids had a great time there and it was a great bribe to give them after a photo session at K-Mart.

Ehud Barak really pulled what they call a “stinking maneuver” in Israel. Probably one of the all-time dirtiest political moves. The head of a political party resigned from the party and started a new party when he realized that the party didn’t support him anymore and was going to remove him. Ultimately, this move will keep Netanyahu’s government stable for a long time. It is a real slap in the face to the US Government’s continuing slapstick attempt at making policy in that area; they were planting all kinds of stories showing their disgust with him and hoping to bring down the Israeli government and get a government with Tzippi Livni’s Kadima party in it which I don’t see happening. He basically thumbed his nose at them and now he is firmly ensconced in this government. As I’ve said, it is silly to walk around wishing the Americans to deliver the Israelis. You have to deal with them as they are, not as you wish them to be. Barak and Netanyahu are buddies and I think that as long as they both think a military solution to Iran is something they have to deliver, they are both going to make sure they remain in power as long as they think it is necessary and enough others around them will agree.

It will take time to see what the actual effect is. Israel’s Labor Party has a chance to put in new blood, rebuild and could become an effective force in a few years if the constellations are right. It is actually an interesting opportunity; Barak was blocking new blood in that party and now he’s out. Likud doesn’t have much going on its younger ranks.

My friend tells me that Iraq looks better than it appears to the public. He visited there a few weeks ago with the US military. But people who go with the military usually thinks it looks better….On Lebanon for a second: The Lebanese prime minister is a compromise candidate and most of the people in the area are OK with him. He might provide some surprises to Hizbullah. I think the country will move on. Hariri doesn’t have so much sympathy; he blundered and is seen to deserve what he got.

A note about China….They are becoming more assertive and pissing off their neighbors in Asia who are looking to the US for security. I saw this in Australia. So basically the Chinese can keep on pushing their weight and thereby pushing everyone closer to the US. Another thought about China: We keep hearing about how the Chinese value their families. But I read today in the Financial Times that almost 20% of all children in the country and 50% of rural area children live with grandparents or in foster homes as parents leave them in the countryside to seek better opportunities in the cities.

January 2011 v 2010 in all 3 divisions of my company was good. I think recovery is happening and that the jobs market will in 6 months show improvement. Right now I understand that the 9% unemployment rate is really double that when you consider all the people who are on part time work who would normally be employed full-time. My main concern right now economically is that oil is going up past $100 a barrel and this could choke the economy as people cut back on discretionary spending and companies see increased costs. It is a large tax by any other name.

State of the Union Address – I thought Obama’s address was really good, and then I saw the Republican response and the “focus group” they presented as truly representative Americans on Fox News Network. Then I was told the country is heading toward bankruptcy and the Republicans need to save it and that reaction to Obama’s speech was “phony.”. If Ronald Reagan had given the same speech, they would have praised it to the high heavens. It’s as if we are living in two different countries. The question is – which country is the real country we are living in? Frankly, except for his health insurance thing which to me is a very slight marginal cost, the last 2 years have been much better for me than the 8 Republican years that preceded it. The stock market is up, corporate performance is up, taxes have not gone up, and America is managing fairly well in the world. Compare that with the market being down, corporate performance down, taxes never went down and everyone hating us all over the world and a bunch of foreign military adventures that got out of hand and drained the country. I love to hear the Republicans talk the talk but they don’t walk the walk. Obama’s speech was the first presidential address that I can remember where he actually put down some real goals for the country and gave you some sense of how he might get there. Governments are necessary to invest in things that the private sector just can’t do by itself. A powerful argument, which he didn’t make in his speech, was in the NY Times last week. The government set up an agency to fund all sorts of drug research because the drug industry hasn’t been pursuing cures for several popular diseases because it wasn’t profitable to do so. It may be that there is still 9.5% unemployment, but without the stimulus there would have been even more. Governments do serve a purpose and investment aka spending is not by itself evil. It is suicidal for the country to have Republicans and tea party activists equate every act of spending as an act of waste which is basically what they are doing. The real money to be saved is in raising the retirement age, dealing with social security and medicare – and let’s see who has the guts to take it on. That said, the Economist said his speech lacked specifics and they weren’t too impressed – Obama didn’t have a credible plan to reduce the deficit they said and he didn’t look serious about reigning in spending. But the Republicans don’t want to repeal Obama’s health care law because it is full of cuts to Medicare. So again, both parties aren’t prepared to do the necessaries. If Obama would announce he was willing to cut sacred cows such as social security and medicare, the Republicans would follow suit once they knew they weren’t going to be hammered in front of the electorate for going along with it. But if Obama won’t lead, nothing will happen.

I had an interesting conversation with an old friend who is now an executive at a major multinational energy company. He feels that within another 6-8 years they will have mastered the production from algae into alternative fuels and that this will make a big difference, for instance, in aviation. Right now, the economic cycle is particularly hard on aviation because when there is economic recovery and demand and oil prices go through the roof, aviation is the first industry to get killed and that helps bring about the end of a positive economic cycle. As I see it, in another 6-8 years, hopefully alternative fuels will allow more industries to avoid the crazy gyrating prices of fossil fuels and thereby insulate themselves and prolong economic cycles. Right now, he says, that all these alternative forms of energy total not more than 5% of world demand and that, for the near to medium future, the world will have to deal with the gyrating prices of fossil fuels as the demand curve from the developing world rises. Even if the various producers ramped up production, it wouldn’t affect the prices all that much. His company, one of the world’s largest, has upped its production quite a bit over the past 5 years and it hasn’t made a difference in the price. Two reasons he says that the Gulf countries have invested in alternative energies is that they feel guilty about creating so much pollution that they want to leave the world better to their children, and also that they know that oil in the ground is finite and that it will at some point run out, which is one reason they don’t ramp up production – they could but then they would use it up.

OK, now let’s get to the main event for the month.

Egypt – I think the army is part of the violence, trying to push Mubarak out or to at least put in a VP of their choosing. They want to control the future now and not wait for him to die without any successor in place. The military also wants to preserve their economic interests in the country which are huge. They also have the monopoly on expertise running institutions in the country which cannot be undone overnight without chaos. Gamal Mubarak is not one of them (i.e. military); Omar Suleiman is, but he is old and not a long-term choice. But for now, he seems to be effectively heading up a transition government. But you can play with fire here. There are strains between the country’s internal security forces and the military and we saw them playing out on the streets, and the military itself has its dysfunctions. I don’t think it was a coincidence that this revolt started while the heads of the Egyptian military were in Washington and that for days the US said nothing. I continue to think that the military is behind this; as soon as Mubarak finished his speech of February 1, the troops started cracking down presumably because the military wasn’t satisfied that he is leaving quickly enough and they know that upping the violence will result in him having to leave faster…. The NY Times Headline “Mubarak (Pharaoh) Orders Crackdown, With Revolt Sweeping Egypt” could have been printed 5,000 years ago. ..You see camels going through the square in the mobs and then you see this sign “YES, WE CAN, TOO!”…Bridges the gap of the millennia huh?

In Egypt’s case, I’ve been saying for several years that it is a problem that Mubarak has been acting like he’ll never die; he refused to put in a Vice President; acted like it was his family’s fiefdom and insisted that his son take it over. The last election cycle was a total sham. Why should a nation of 80 million people that is a leading nation in that region of the world put up with this? Why should a whole region of the world be ruled by Pharaohs? And why should the US be seen as preaching democracy and propping these people up? Of course people hate our country. There is Internet, Al Jazeera, Twitter, Facebook – even the North Koreans now know what they are missing. Today people all over the world probably got up and watched the Saturday Night Live parody of Mubarak in which he says his approval rating is 115% and that his new cabinet will be filled with people he fired from the old cabinet. How long can these countries resist change and how is the rest of the world supposed to get with the program?

What is exciting about what is going on in Tunisia and Egypt is that it is not a bunch of Islamic radicals out there trying to overthrow the government. In both countries, it is a bunch of ordinary people on the streets that are voicing the frustrations of a generation of people that have been kept down and are totally frustrated. It is the Arab world saying that they know they have fallen behind the rest of the world by a bunch of dictators who lead them and they want to get out from under this. Yes, there are Islamic groups that stand to gain from this (i.e. they raided Egyptian prisons to free their captives) but they are also treading with care on the streets – people are not as ideologically convinced of the rightness of their cause because Islamists have not shown that they can run governments well and people want nonideological solutions that deal with their real issues, such as making a decent living. They also don’t want to be too visible and scare the rest of the world into backing government crackdowns against them. But they are there patiently waiting for their moment. Yes, we don’t know what kinds of governments will result from these situations and it’s true that a democratic Egypt would probably be more friendly to Islam and less friendly to the US. But the US and others have to face the future – do we want more Turkeys or do we want to keep pushing for this concept of “stability” and risk being on the wrong side of history and risk creating more Irans? I think that Obama and Hillary Clinton actually get it (and the Republicans support the way he is handling this), even though he looks weak in the region. They haven’t been calling for democracy to piss off the governments in power, and they have been lukewarm about backing those governments. Both the governments and oppositionists look at the US and see a weak and ineffective superpower in decline. But in a way this is necessary. The US is not propping up governments that are unpopular but they are not making enemies of those governments either because they have to deal with them. Nobody is happy but it is probably the most proper course for the US to take. It is not being the enemy of the people and it is better positioned for whatever the outcome will be in these countries as they awaken from a generation of repression and insist on taking their places in the developing world as full-fledged nations of people and not just mafia governments. The US couldn’t go out on a limb for the Green movement in Iran because they had no prayer; in Egypt, the US can’t afford not to back this movement which, as I’ve said, is not totally coming from the grassroots but is in fact backed by the military. Over the long haul and if you look at history in the past half century, I think the amount of public support for Islamic groups will be in direct proportion to the extent the US is seen as backing the governments against the people. Over the long haul, I think change in the Middle East is good for the US and its allies in the region and I agree with Tom Friedman’s latest missive to Israel to get ahead of the curve because a great storm is coming its way. It is time to move past the idea that the alternative to the existing order is a bunch of fundamentalists and it is a real problem for Democratic Israel to appear to want dictatorships in the Arab World for fear that democracy would only lead to fundamentalists bent on Israel’s destruction. The Hamas in Gaza and Hizbullah in Lebanon situations are not analagous; they are external implants stirring up the pot in places with no real state. Hamas exists because Israel created it against Fatah; it won its election because Fatah was so corrupt and because Israel was seen to support it. Egypt has a real state but it lacks an opposition. This can be fixed over time. You can’t hold back a billion people in a region who want to live their lives in a country not ruled by a dictator and you can’t put the internet and satellite TV back in the box. Turning off the internet in Egypt and shutting down the trains didn’t do squat to keep people from converging onto Tahrir Square. Another thought: Peace treaties with dictators that don’t have public support and unilateral moves without bilateral agreement don’t create lasting situations. Israel got out of Gaza and Lebanon unilaterally and got nothing out of it from the other side. Peace treaties with Egypt and Jordan don’t have public support because there was no Sulha “reconciliation between people” to the deal. Rather than say it was a mistake to make those treaties and moves, the lesson learned should be that the Israelis will need to sit down and make real peace with real people. The Leaks from the Palestinian side this month, looked at in their worst light from the Arab perspective, actually show that it is possible and that it was indeed the Israelis who didn’t want to deal with the Palestinians. Not a pleasant truth to face after being told otherwise for so long but it appears to be the case.

Egypt is not Iran and neither is it like Jordan, Lebanon or Syria. In Iran, the army sided with the mullahs after Carter refused to give its backing to the military when they asked the US to guarantee defense against a Russian invasion. In Iran’s case, there was a religious figure who was seen as the opposition who was primed to step onto the stage when the shah left. Egypt’s Moslem Brotherhood is not that popular and its leaders are elderly and seen as behind the curve. They have to work with other parties as part of a coalition and it is a real state with institutions, a middle class and educated people who want to make a living. It is not a major oil exporter and tourism employs many people. Shutting the Suez Canal will do more to drive up local food prices than it will affect the price of oil for everyone else. The peace treaty with Israel brings many benefits to the country. The army is strong and has a good relationship with the US even now. Jordan is not Egypt or Iran. The Moslem Brotherhood is a legal party there and people are not profoundly unhappy with him as they were with Mubarak – However Abdullah is not like his father and he is certainly not beloved. I think he would be wise to move toward a constitutional monarchy lest he wake up one day and find himself and his family exiled to London. Lebanon is itself a place of chaos, its military is weak and Hizbullah fills a void. Syria is a police state and nobody expects any nonsense in that country anytime soon.

I think the Israelis are coordinating with the Egyptian military. Given the recent troop movements and moves on both sides, I wouldn’t be surprised if Mubarak is at some point shuttled to the Sharm el Sheikh area and is then shipped off to Saudi Arabia.

I should say one thing about George Bush Jr. He and Coni Rice were right about one thing – they were hated by the local dictators but they said the truth when they made speeches in the Middle East saying that the tide of history favored democracy and that if the local dictators didn’t get in front of the wave, they would pay dearly. Bush and Rice had egg on their faces when elections produced results that were not favorable to US interests and they backed off, and Obama’s team was certainly more skeptical. But Bush Jr. was onto something and a bit of him must feel vindicated just now.

ust in case you were wondering if there is any consistency to my words on this site, you should know that I just went after writing all this and re-read an article I posted in October 2003 called The US as Global Citizen in which I made a 5 year review of my Foreign Policy enunciated in 1998 governing US intervention around the world. In that 2003 review, I posited that the US should intervene on behalf of bettering the life of the Average Joe in a given country rather than intervening to eradicate some stated evil. I felt that doing the latter wasn’t working very well. As it turns out, my position viz a viz Egypt appears to be consistent with my 2003 policy. You can read that article below:

Global Thoughts 5 October 2003 The U.S. as Global Citizen

Global Thoughts Question to You, the Esteemed Reader:

If someone gave you $5 million today, what would you do Tomorrow (and afterward)? I’m interested in hearing your thoughts about this.

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