Barbarians are at the gate

I recently read Infidel by Aayan Hirsi Ali. This remarkable book has been widely read and reviewed. I will not try here to provide another critical review. Rather I would like to attempt some general appreciative observations.

The book operates on the reader's consciousness at a number of different levels - probably not all intended by the author and probably varying a lot with the background of each reader.

At its most simple level, it is a compelling autobiographical story. Ali is not a sophisticated writer – but she has a clarity of expression that reflects her clarity of thought. Her descriptions are graphic without being flowery or intrusive. One gets a good sense of the streets and houses of Mogadishu or Nairobi and the claustrophobia of Saudi Arabia. Some of her obviously traumatic experiences seem understated. But this is perhaps not surprising in an autobiography – at the time they occurred she was perhaps not completely aware of the trauma or of its significance. Also, Ali gives the impression that her overriding purpose is to provide a case-study of a general condition, that of girls growing up and of women living under the yoke of traditional Islam. For this a certain studied detachment was probably necessary. Her story is the story of the passage from infancy to adulthood and beyond and it is a common story. Ali was resourceful and fortunate enough to escape, at great cost, the oppressive world into which she was born, but the vast majority of Moslem women are not so fortunate. Ali's story is the story of untold millions, without the happy ending, without redemption.

So, first and foremost, it is her personal story – and the reader is spared few details. It is a courageous tale, told with grace and dignity. One senses a little egocentrism, probably necessary to achieve what she has achieved in such a short time, facing such overwhelming odds. This needs to be emphasized. Aayan Hirsi Ali's achievements are astounding. Coming from a small village in Somalia, through many trials and traumas, she obtained a graduate degree at a university in Holland and became a member of parliament, while still in her twenties. And now, in her thirties, she is an articulate spokesman for oppressed women around the world (as a resident fellow at the American Enterprise Institute in Washington DC). Her books have sold millions of copies and have been translated into many languages. She is an inspiration to many and an example of what can be achieved.

At another level this book is an expansive window into the worlds (plural) of Islam. For those of us hailing from South Africa (many years ago), it may come as a surprise to discover the nature and extent of African Muslim culture in Central Africa (not confined to North Africa). Speaking for myself, I admit that, prior to reading this book, Somalia was a place without content for me, a wilderness - scene of "Black Hawk Down" – location of a humiliating experience for America, a failed state, not worth bothering about. So it was revealing to learn a little about the history of Somalia, a region with an ancient and rich tribal culture, swallowed many centuries ago by the insatiable appetite of the expanding Islamic empire, into the modern colonial period to become a colony of Italy and Britain, and then in the post-colonial period a brutal communist dictatorship (sponsored by the Soviet Union). Colonialism left a power vacuum in its wake that was filled by the hopes and dreams of socialism. While the colonial governments seriously compromised tribal institutions, the communist regime forcefully tried to suppress them completely and the result was a complete breakdown of law and order, a horrible civil-war in which hundreds of thousands were killed, wounded and displaced. This is a tragic story of ethnic cleansing and genocide that occurred before these words acquired the widespread familiarity they now have and it deserves to be more widely known. Ali, brings us into this world of inter-tribal destruction and brutality. We are introduced to people who have names, families, loved ones, personal histories; people who have had their lives destroyed, who have been brought low-down to pitiful animalistic conditions, human skeletons without hope, grasping at survival – a picture familiar to us Jews. It is a picture of the collapse of civilization without recovery.

I was fascinated to learn about the nature of Somali Islam, which has its own idiosyncratic characteristics, quite distinct from the Arabic and other versions, and is intimately intertwined with tribal distinctions and traditions. Lineage is key in determining status and young children are indoctrinated in the details of their family tree up to many generations past – so that at a moment's notice they can recite it. And tribal identity is key as well, its importance can hardly be overstated. Reading this book one learns that "racism" is not necessarily about race – these tribal distinctions, as we have learned from Rwanda, can have life and death consequences. Witness Sudan as you read this. They are all Moslems, these Somalis, yet everything hangs on clan-membership. It is the extended family writ large. And, like all strong families, it can be an immensely caring and efficient social institution. There is a far-reaching Somali diaspora. The clan to which Ali belonged has vast international network connections – providing sustenance and resources to any member who shows up. It is powered by an unswerving commitment to the tenets of hospitality and charity to clansmen found in the teachings and traditions of Islam.

Ali spent time growing up in different worlds, in Kenya, Saudi Arabia and Ethiopia – the first of which was her introduction to a non-Muslim society. This provided her, and the reader, with a new perspective. While Kenya was by no means a prosperous society, it was more prosperous than Somalia and palpably freer, especially for women – tribalism still played a very important role, but Islam was absent from the mix with notably liberating results.

Back in Somalia and in Kenya she encounters the Muslim Brotherhood, the organization that ultimately spawned Al Qaida and other radical Islamist organizations. Radical Islam filled the moral vacuum left by the collapse of society in post colonial, post communist Africa. Radical Islam, like all fundamentalist creeds (meaning that its moral claims are based on revelation of the word of God), has a moral clarity about it. It has a clear structure and permanence about it that provides security in a terrifying world. The reality that is Al Qaida today began many decades ago – out of the ashes of a collapsed power base in Africa and the Middle East. When seen through the eyes of Aayan Hirsi Ali one gets a sense of the power and intransigence of this multi-faceted movement that transcends regional differences. It is a movement with deep fundamentalist roots that brooks no critical examination of its tenets whatsoever. All criticism is met with various degrees of violence. And the kicker is that, according to Islam, it is a sacred duty to convert non-Muslims to the faith, by force if necessary. Like all fundamentalist systems, Islam claims a monopoly of true belief. And their agenda is clear, announced for all to hear, they are out to get us!

This may be familiar, but it seems not be completely understood by those present-day intellectuals who, in the name of multiculturalism, advocate understanding and dialogue. There is no talking to these people and there is no way to accept their vision of society. For anyone who believes in freedom, in the sacred value of individual autonomy, in individual human rights; pure Islam is simply evil. The most glaring manifestation of this is the brutal repression and dehumanization of women, including the obsession with virginity and the widespread practice of clitoral and labial circumcision in order to ensure it. With Ali we wonder, where are the voices of condemnation? Why are the defenders of women's rights so mute when it comes to the teachings and practices of Islam? And why are thousands of Muslim women being killed in "honor" killings and thousands of young girls being violently circumcised on kitchen tables in Europe today?

This is the final and most general level at which this book operates. It speaks to the question of identity in this post-modern world. When she finally escapes to Holland, Ali is awed by the freedom and civility of European culture, but she ultimately comes to understand its awful, terrifying vulnerability in the face of Islam. She finds herself besieged and physically threatened by her former co-religionists while living in a welcoming society that is ill-equipped to deal with the threat. Coming ultimately and painfully to abandon her belief in Islam, she embraces European social democracy only to abandon it as well to finally arrive at a realization of the value of classical liberalism.

The essence of the asymmetry between Islam and the West (especially Western-Europe) lies in their different approaches to identity. This is well captured in Natan Sharansky's new book (Defending Identity), but Ali has it too. Islam provides its believers with secure identities that tell them how to live their lives and for which they are wiling to kill and to die. There is no similar cause animating the identities of Western Europeans. Pan-European identity does not have much traction by comparison. In fact, the prevailing worldview of Europe today is anti-identity, post-identity – an undifferentiated universalism. There is antagonism and self-consciousness about "being different." They think that by denying "essential" differences they will make them go away. They think that the Muslim immigrants to Europe, if treated with non-judgmental, non-demanding forbearance, will become good Europeans. They don't realize that unless they take a stand, the descendants of today's Europeans will be tomorrow's Muslims.

Ali, and Sharansky, recognize the unique strength of America. All Americans have un-self-conscious hyphenated identities, as in, Jewish-American, Irish-American, Italian-American, etc. To become an American does not entail the giving up of one's ethnic traditions, one's religion, one's customs; as long as they do not deny the freedom of others to maintain theirs. To become American means to become committed to American ideals, to liberty and democracy in the broadest sense - to a respect for the individual regardless of his or her multiple identities. In America we do not regard it as a threat for an American citizen to feel Irish or Jewish and to indentify with Ireland or Israel. In fact, we respect people with loyalty to their heritage and a commitment to preserving it. Freedom means being whoever you want to be as long as you do not deny others the same privilege. And many times Americans have been willing to defend these ideals and to die for them. This respect for individual differences and choices categorically does not imply the need to tolerate or ignore intolerance, as exhibited by Islam's orientation to non-Muslims or to women. Intolerance does not have to be respected or tolerated. The American ethos is well-positioned to respond vigorously to this behavior and to this threat – and indeed it is probably true that, in general, American Muslims are more comfortably assimilated than their counterparts in Europe.

Having said this however, there is nevertheless ample reason for grave concern. America, in many ways, at this juncture in its history seems to be in danger of abandoning these core essentials and of becoming more like a morally-relativistic Europe, unable and unwilling to defend itself against a very real threat to destroy its culture by violence or, perhaps more effectively, by exploiting and abusing the very freedoms that make it great. The lesson of Infidel (and of Sharansky's book and of the work of others like Brigitte Gabriel) is that we ignore these threats and tolerate them at our peril – peril to our bodies and our souls. As someone once said, the price of liberty is eternal vigilance.

This book needs to be read.

What the hell in going on?

As I absorb the fresh assault of news items reporting on the latest incursion of Congress or President into the lives of Americans, I feel somewhat at a loss as to how to characterize what the hell is going on!

A simple list of the threats to life as we know it and want it to be is a great challenge. I am sure to leave something out. Anyway, it's a good place to start. Just the list. The book, the article, the commentary cannot be written just yet because the ground is changing to rapidly under our feet. The earthquake is not over.

1. Government spending obligations continue to rise- no end in sight and no good plan to pay for it.
   
2. Taxes are starting to rise everywhere – as predicted.
   
3. Environmental initiatives imply new taxes, new restrictions – I challenge any honest person to deny that this will have no effect whatsoever on so-called global warming – it may, however, destroy the economic recovery.
   
4. Labor union power is on the rise – my report that this initiative had died was premature. As resources are moving from the private sector to the government sector the power of labor movements is increasing. Unemployment in the governments sector is about 2%. Unemployment in the private sector is about 9%. We are seeing strikes, and expensive political initiatives against any attempt to introduce fiscal responsibility into government. Government workers, unlike workers in the private sectors, are refusing to make sacrifices – like foregoing salary increases and bonuses. These can only be paid by taxpayers. Those who take are increasing at the expense of those who give. The reincarnation of union power in America is an ominous development, one that could destroy its economy.
   
5. Health care reform is downright scary. The details of the President's plan have been left deliberately vague, but the indications are that this is really about bringing more of the health care insurance and delivery system under the control of the Federal government – in short it looks like it is a move to make all of health care more like Medicare. Medicare operates at a huge loss, with great waste and corruption, and succeeds in spite of this to deliver health care to millions of mature Americans, only because of the very high-priced-high-quality private health care system that subsidizes it. The impending deficit for Medicare dwarfs the huge social security deficit. This initiative is a power grab to nationalize medicine and it will make health care less accessible, less innovative, less responsive, and less attractive to doctors, nurses, paramedics, patients and everyone involved. The ultimate human and monetary cost defy estimation and imagination. An aspect of this is the bringing of health-care insurance under the umbrella of the Federal government. This will discourage access to new and effective medicines and strengthen the hand of the FDA in denying such important treatments to millions of Americans each year, in the treatment of cancer and other life threatening diseases. It will also mean a centralization of medical records with the Federal government gaining enormously increased power.
   
6. Protectionism is on the rise – initiatives to protect domestic industries with trade barriers and subsidies – very dangerous.
   
7. Incipient Inflation is a real threat. The level of reserves created by the Fed is very high and the prospect of "mopping" this up very dubious to my mind. Inflation is the most insidious tax of all.
   
8. The power of government continues to expand everywhere you look. The President is talking about controlling the actions of even those companies who have not accepted TARP money, while those who have are already being micromanaged by government bureaucrats. And the Fed now has control over all manner of "banking" not only commercial banks, but investment banks and brokers as well. Big brother has grown very big.
   
9. Antitrust – there are alarming indications that this administration is going to move toward a European approach to anti-trust – competition in which there are any losers is a bad thing (witness the recent butchering of Intel in Europe). In fact the Europeanization of American public policy seems to be a common theme in much of the above.
   

Have I left anything out?

I cannot talk authoritatively about foreign policy, but I worry about it.

Actually, with the Democrats so powerful in Congress, there are some things that the President could do, some real opportunities to do something good amidst this madness. I can think of three – maybe there are others.

1. Immigration – surely Democrats could get behind an initiative to free up the movement of workers across borders to the north and especially to the south. Lets declare amnesty for all those who have lived peacefully and gainfully employed in America for at least two years and make is easier to get a work visa. On what basis could "liberal" Democrats oppose this.
   
2. School Choice- President Obama supports the public school systems in America, but, like the vast majority of Democratic members of Congress, sends his kids to expensive private schools. What hypocrisy! It does not have to be like that. School choice can be extended to all parents in America, starting with the poorest in Washington DC where the mayor (who is black) is leading a movement in favor of school-choice. Charter schools are a start and Obama can begin by refusing to destroy the charter movement in DC that is immanent in a bill before Congress. But parent scholarships or vouchers is a logical step for the whole country. On what basis could "liberal" Democrats oppose the giving of school choice to parents of lower-income children? It could hardly be worse for them than it is now. The real obstacle is the unscrupulous, self-serving power of the teacher-unions. President Obama could really show intelligence and courage on this one. He could get lots of non-partisan support.
   
3. The Drug War - is prohibitively costly. The collateral damage is accumulating and is not worth it. Even if one does not believe that people have a right to decide what substances to consume, there is no way to justify this "war" in any realistic cost-benefit terms. The resources committed, the corruption produced, the private lives violated and destroyed, it is a catastrophe. President Obama can get out ahead on this - change the focus from enforcement to education - reallocate resources. Decriminalizing the drug traffic would put the violent cartels out of business. Surely "liberals" can support this.

Who Shall Decide?

I often tell my students that, when it comes to economic policy, the most important question is not "What shall be done?" but rather "Who shall decide?"

Each of us, informed and trained in matters of economics or not, is opinionated about what should be done to "save" the auto companies, achieve energy-independence and similar important questions. While low-level, relatively simple, decisions in our every-day lives, often paralyze us, we have almost no compunction deciding what steps should be taken to save the nation, its poor and its unemployed, its rich and its old. Of course, most of these statesmen-like decisions are prefaced with such phrases as "we ought to … " without specifying who this "we" is. What it really means is that someone, like the president or the Congress for example, ought to have the power and the resources to do this or that. And there's the rub.

This is an exercise of the fatal conceit of thinking that human-will is all that is necessary to fix the world. Give the power to he-who-has-the-will. And in this case many Americans think that Barak Obama is that guy – the guy who should have the power and the responsibility to put everything right. He thinks so too and he has not been shy about accumulating as much power as possible for this purpose.

Just this week we have him deciding which cars GM should produce – now that the Federal Government is a shareholder – having previously decided who should be the CEO. This includes deciding that GM should produce less SUV's, tucks and mini-vans and more Chevy Volts. No matter that more consumers want the former and pretty much shun the latter. As economic czar he gets to exercise his preference for environmentally friendly cars, regardless of consumers' preferences. (It gives me no pleasure to note that I predicted this would happen – but why do I feel that I am the old one who is terrified by it?)

This week he is also deciding how the credit card companies should run their businesses, what interest rates they should charge and under what circumstances. Pretty much the whole banking industry, including banks and other financial institutions, are now subject to the veto of the Federal government in one form or another in what they do. Is their any part of the economy that is not at risk?

The whole point of a civilization that runs on laws and markets, and not on the decisions of individuals or committees of individuals, is that such things do not have to be decided by our leaders. The leaders are subject to the rule of law and the laws of economics just like the rest of us. In such a society I get to decide, without interference from the president, what kind of car I want to drive. What gives him the right to decide for me? The usual answer is that my car may pollute the air by causing global warming. (Actually even if we abolished all of the high carbon footprint cars, the affect on global warming would be about zero – so this is a terrible answer.) Even if it were true, this would just mean that ways need to be found to cause me to take this into account when I make my decision. If my private act of consumption causes harm to someone-else then I should be made to compensate them. So, theoretically, the price of the car could reflect the cost of cleaning up that pollution – by, for example, levying a tax or a toll (I hate taxes or government tolls – but this is much preferable solution to micromanaging the auto companies). [See GM Is Becoming a Royal Debacle in the WSJ].

At the twilight of the first 100 days of this president I keep trying to find something to cheer about. Its really tough. You might think he would favor parental choice in education for their kids through vouchers or charter-schools, but he is flip-flopping on this, anxious not to offend the toxic teacher-unions. [see The Union War on Charter Schools in the WSJ] And, though I am not an expert on foreign affairs, I cannot but feel uneasy about the enthusiasm with which he is prepared to be seen with the likes of tin-pot dictators like Hugo Chavez of Venezuela and Daniel Ortega of Nicaragua, thereby undermining the credibility of the domestic opposition in these countries who often need at least our moral support to fight for human rights and freedom; and I wonder why he feels it necessary to apologize to the whole world for everything bad America has ever done or to deny the reality of American exceptionalism. [see The President's Apology Tour in the WSJ ]. Why, at least, is he not talking straight on human-rights abuses around the world, including in, most prominently, Russia?

This messiah-president is getting to make a lot of important decisions. God help us.

A Microeconomist's Protest

Check out this incisive analysis of the "stimulus" by my colleague Mario Rizzo.

Worth reading carefully.

A Microeconomist’s Protest

Deconstructing Obamanomics

In this month’s issue of Commentary Magazine just published, John Steele Gordon has an analysis of the contradictions in Obama’s economic plans. I have extracted the relevant parts below. (The rest of the article is bad history). 

This analysis greatly clarifies the horrendous disregard of basic common sense and elementary economic logic. It also suggests the nature of Obama’s single-minded determination to pursue his activist agenda – effecting a green revolution, strengthening unions, nationalizing health-care, restricting international trade, etc. all under the smokescreen of claiming to cure the economic crisis. Steele analyzes just one of these insane initiatives (energy) but it applies with equal force to all. The Obama economic program is blatant doublespeak – what it claims and what it really means are exactly the opposite.

The truly Orwellian nature of the rapidly unfolding transformation that is occurring has not been fully realized by most people. When they do realize it they will be shocked to find an administration every bit as tenacious, scary and utilitarian in its pursuits as the much-maligned neo-conservatives of Bush-the-younger. Team-Obama seems willing to do just about anything to achieve its goals. As they see it, the worthy nature of the ends they seek justify extreme means. Just because they are dressed up in the garb of leftist propaganda should not make them any less scary.

There are signs, reflected in some Congressional pushback, that realization is beginning to dawn. Let us hope so. 

The Economic Contradictions of Obama-ism

JOHN STEELE GORDON

April 2009

In February 9th, President Obama visited Elkhart, Indiana, the American community with the country’s highest unemployment rate, 15.3 percent. (It had been only 4.7 percent the year before.) He was there to sell his stimulus bill, then moving through Congress and since signed. He noted that the bill would provide help for the workers who had lost their jobs and, more important, help them get their jobs back by reviving the economy.

The jobs that have vanished in Elkhart are predominantly in the recreational-vehicle industry, which is concentrated in the city of 52,000. With the severe recession the country is now experiencing, it is hardly surprising that this industry has been devastated. After all, an RV is expensive both to purchase and to operate and is hardly a necessity. But when the economy recovers, will those jobs come back as demand for RV’s returns? Or, in the meantime, will new environmental regulations championed by Obama work to impede the sales of vehicles that get only a few miles to the gallon and thereby make job growth in Elkhart an impossibility?

The latter seems to be the case. In its proposed budget for fiscal year 2010, the Obama administration has also said it would inaugurate a “cap-and-trade” program to reduce the emission of carbon dioxide into the atmosphere. This program would require all companies to buy at auction the right to emit the gas, which all fossil fuels—oil, gasoline, coal, natural gas, etc.—do, in varying amounts. The total amount of emissions allowed would be strictly limited.

While billed as a program to reduce greenhouse gases, cap-and-trade is, inescapably, a tax on virtually all economic activity, as fossil fuels are an input in nearly all economic outputs. Even a lawyer, after all, has to use electricity to have the lights on in his office and power his computer. And electricity is mostly generated by fossil fuels, especially coal, the biggest emitter of carbon dioxide.

This will be no small tax. The Obama budget estimates that the carbon tax will bring in revenues of $78.7 billion in 2012. The Congressional Budget Office estimates that it might net as much as $300 billion. The administration says that in 2019 this carbon tax will be the sixth-largest source of federal revenue, after personal and corporate income taxes, payroll taxes for Social Security and Medicare, and excise taxes.

Cap-and-trade will have a profound impact on the recreational-vehicle industry in Elkhart, whose pain Obama professed to feel. The cost of manufacturing the vehicle will rise because of the new tax, which will in turn increase the retail price of RV’s and thus inevitably decrease sales. The cost of operating them will also rise substantially as the tax raises the price of gasoline, further limiting demand. Nor will the tax’s effect on Elkhart and its environs be limited to RV’s. The entire mid-section of the country, where Elkhart is located, will be especially hard hit, because the region is far more dependent on manufacturing and coal-fired electric generating plants than the continent’s two coasts.

Limiting carbon-dioxide emissions may (or may not) be a worthy goal, but a cap-and-trade system to further that goal will take a disproportionate toll on the sort of people who are now out of work in Elkhart, Indiana and not the bicoastal elite, whose members can more easily afford the tax.

The Obama budget envisions an explosion of economic growth as the country recovers from the current recession—more than four percent a year from 2011 through 2013. This will supposedly be sufficient to halve the $1.75 trillion deficit it projects for 2009. But there is something off here. Many of the policies Obama and his team are pursuing, cap-and-trade being the most obvious, are likely to interfere with growth in exactly the sectors in which the United States will need it. If the goal is growth, as it should be, the role of government should be to determine ways in which its conduct can fuel that growth. And that is precisely what Obama is not doing.

The cap-and-trade tax will inescapably and adversely impact the economic recovery and future growth rates. If passed, it will act on the economy as a whole exactly the way a governor acts on a steam engine, increasingly resisting any increase in revolutions per minute. With the supply of licenses to emit carbon dioxide fixed, the price of the permits will inevitably rise as economic activity picks up. That means that any increase in overall demand will increase the price of energy, and thus, in a feedback loop, nearly everything else. That will damp down demand. The more the economy tries to speed up, the more the carbon tax will work to prevent it from doing so.

The same is true of many of the other policies embedded in Obama’s budget. He will raise taxes on high earners rather than lowering them to give those earners an incentive to put their money into the private markets. He intends to increase the number of federal regulations on private business and industry, rather than reduce the number of those regulations for the purpose of eliminating barriers to growth. Taken together, these counterproductive actions will make job creation in the private sector difficult, because they will make it more expensive to hire new workers. The Obama plan will, in general, make it more expensive to do business at a time when one would think he and the nation as a whole have every reason to make it as inexpensive as possible to do business.

There is, it appears, a contradiction between the economic growth Obama says he wants and has promised to produce, and the goals his policies actually indicate he wants to achieve. Those policies suggest there are financial goals he values more highly than economic growth. But can he succeed without growth? And what, at this moment, could be more important?

------------------

Mark Twain once said that “history doesn’t repeat itself, but it rhymes.” That goes double for economic history, especially in the industrial era when the economy has evolved so quickly from generation to generation. But certain patterns are clear. In modern times, the more that government has controlled the economy, the more bureaucrats, politicians, and intellectuals get to choose winners and losers instead of the marketplace, the less economic growth and innovation there is, the more persistent unemployment is, the slower the improvement in the standard of living.

If you want a vivid example, just compare post-war Britain, which both moved in a socialist direction and became the sick man of the Great Powers, with Margaret Thatcher’s Britain, in which the welfare state was pared back, socialism was reversed, and the forces that had made Britain great were unleashed once again.

It is worrisome in the extreme to realize that Obama’s policies have much more in common with those of Clement Attlee, the prime minister who took over from Winston Churchill when the Second World War ended and put it on the socialist track, than with those of Thatcher, who took charge in England at a time of desperate economic straits. At a time when the United States needs dynamism more than ever, the nation’s voters have chosen to be led by a president whose animating philosophy has led him to adopt policies that will make that dynamism impossible to achieve. If the contradiction proves costly to the American economy, as history suggests, it will exact a profound tribute of its own from Obama’s political future as well.

About the Author

John Steele Gordon is the author of An Empire of Wealth: The Epic History of American Economic Power, among other books. His articles for COMMENTARY include “Look Who’s Afraid of Free Trade” (February 2008) and “Speculators, Politicians, and Financial Disasters” (November 2008).

© 2009 Commentary Inc.

The Pain of Being Right

I can say with the utmost sincerity that I take no comfort in being right in my warnings about President Obama and some other things - like the dangers of FANNIE and FREDDIE (which can be found on this blog over the few months preceding the election and in my many emails over the last few years).

In fact, I write now with a heavy heart. I wish I had been wrong, I really do. I wish I could have been pleasantly surprised by the moderation and incipient conservatism of President Obama. Maybe I still will; I hope so. But, as I am coming to learn more about "what makes him tick" I have less and less expectation of this. My wife has taught me that one's strengths are often also one's weaknesses. So it is with Obama. He is a man of vision (maybe a vision borrowed from an earlier time, but a vision nevertheless). He has opinions, he has insight. He is eloquent, despite the increased use of the teleprompter. But it is this very vision that is his problem. He is dedicated to it and he is going to pursue it even in the face of severe obstacles. He displays these qualities of dedication and perseverance, admirable in themselves, but fatal in pursuit of flawed goals.

Here is what I was right about.

1. For years I have warned about the dangers of taxpayer exposure resulting from the government underwriting of the exploding mortgage debt in quasi-government agencies. Not my insight of course. I used the authority of those I respected from the WSJ, Barrons, and other publications to alert my students and my email list participants. But, in truth, I never anticipated that it would be this bad. Denial is a strong mechanism. And by the way, the real villains are not the AIG executives who received bonuses, or the bankers. The real villains are, among others, Barney Frank, Chris Dodd, and Nancy Pelosi. We ought to throw garbage on their lawns or, better still, indict them. 
2. For years I have warned about the dangers of propping up the American automobile companies. There is no doubt in my mind that the auto unions played a large role in this fiasco. And this ought to teach us something. 
3. I warned that Senator and candidate Obama had endorsed the bill now going through Congress that will do more to strengthen the declining power of labor unions than any piece of legislation in the last fifty years. This bill will scrap the right that workers now have to vote by secret ballot on the issue of unionization. The President is behind it. While he is talking tough on GM and Chrysler he is supporting the establishment of union power elsewhere. This is VERY bad news. Unions are a curse on prosperity. They are violence-prone legal monopolies. We are going precisely in the wrong direction at the worst possible time. 
4. I warned repeatedly about this president's environmentalist inclinations. I warned that he would try to use the crisis to foist expensive, "clean" cars on the American public. And with his increased power over the auto manufacturers this is exactly what is talking about doing – at the taxpayers' expense of course. Carbon taxes and jobs "created" by subsidizing clean energy are also in the mix. And for what? For economically destructive outcomes that do little if anything at all to reduce the pace of this alleged global warming. Everyone agrees that, if it is true, there is very little we can do about it short of crippling the world economy into starvation. 
5. I warned repeatedly about the potential for crisis to bring protectionism. The world has made giant strides in expanding world trade and benefiting hundreds of millions of people at home and abroad in the period since WWII. Now with the crisis, predictably, but stupidly, countries, the U.S. included, are putting up trade-barriers in the name of protecting jobs. This is a recipe for Depression (with a capital D). Trade creates jobs. Even expanding imports create domestic jobs. Restraints and barriers to trade destroy jobs. 
6. And, with appropriate irony, heavy-handed environmentalism, in the name of climate-policy, has now been linked to protectionism. There is talk now of using trade policy to punish those countries who do not match our levels of carbon taxes on their industries! A double whammy – high taxes and higher tariffs. One could be forgiven for thinking that the aim is to destroy the economy to achieve a kind of pathetic equality – we will all be equally poor and miserable – but at least we won't be envious any more, right?
   

It all adds up to rapidly expanding power. The president's inclination to use the first person, as in "this is what I am going to do" should give us pause. This is a power-grab, have no doubt. His supporters know this. They have forgotten the lesson that power, in itself, is a dangerous thing. No matter that when the cronies of the much-maligned Bush the younger stealthily pushed the power of government through mechanisms like the Patriot Act, executive initiative, etc., the current Obamites cried bloody murder in the name of freedom. But, now that their government is expanding its reach into our lives and our pockets at a rate which dwarfs even the worst of the Bush excesses, they are strangely overjoyed. This is easily explained of course. Its not arbitrary power that they are against. It is power for those with whom they disagree that is the problem. As long as the "right people" are in charge (an echo from J.M. Keynes) we will be alright. Then it is power for good. This is hubris at its most dangerous, this is, as F.A. Hayek has taught us, the Fatal Conceit, this is the Road to Serfdom.

The right people do not necessarily know what to do and how to do it. The right people have to rely on others in a giant and unpredictable and slow, corrupt bureaucracy. And the right people invariably get replaced or controlled by the wrong people.

Here are some things I hope I will be wrong about.

1. The current bailout will not work. Because of it the recession will deepen and last longer than we expect and hope. Attempts to "save" homeowners amount to trying to re-inflate the bubble at precisely the time when resources ought to be moving elsewhere. So recovery will be postponed and savings further depleted. And bailout money will continue to be spent in ways that produce scandal and outrage.
2. The liquidity behind this bailout, an explosion of the money supply, accomplished by Federal reserve purchases of Treasury bonds, will produce inflation, rising interest rates, rising government debts, rising taxes, falling real incomes and wages. Chairman Bernake tells us inflation is no problem and the money will be "mopped-up" when the time is right. When will that be? And how will it be done? In order to reverse the explosion in liquidity the Fed will have to sell the bonds it has been purchasing. Who is going to buy them? At what prices? In order to sell them, when the economy is healthy again, the Fed will have to lower their prices (aka raise interest rates). This is politically very unpopular, especially during recoveries. (Even if it could be done, it would mean a massive increase in the national debt held by the private sector, implying large future tax liabilities to pay the interest.) So forgive my skepticism. Kiss those bonds good-bye. The money is here to stay, and once it begins to circulate more rapidly, prices will rise, and the rest will be history. Remember that American word Stagflation. 

I REALLY hope I am wrong.

I Protest

NPR - The Diane Rehm Show. 

Dear Diane,  

I am a long-time listener. Although I frequently find myself in disagreement with your guests, and also with your implicit and sometimes explicit, presumptions, I respect the quality of your program and your own particular dedication as a radio-journalist-editorialist.  

I am writing to register my strong protest against the un-rebutted slurs and misstatements made recently on your program - in the two morning shows, one after the other. The subject concerned the withdrawal of the nomination of Charles Freedman as President Obama's chairman of the National Intelligence Council. The statement was made, a few times, that his withdrawal was simply another instance of the power of the Israel Lobby that has produced a reluctance on the part of the media in general to have an open discussion of the Israel-Palestinian situation. Reference was even made to the scurrilous and largely discredit article by Melshheimer and Walt. 

Space considerations prohibit my providing a complete response to these remarks. However, I urge you please to consider doing some in-depth research on these issues. You might start with two of Alan Dershowitz's recent books - The Case for Israel and The Case Against Israel's Enemies (I wonder if you have ever had Professor Dershowitz on your show). The truth is the exact opposite of what was asserted. The media (excepting the shrill right-wing radio talk shows, and Fox in general) is actually constitutionally biased against Israel. It has been well documented that the media coverage during the latest Gaza action was scandalously distorted - to the point of reporting as news what later turned out to be outright lies (as in the case of the UN school that was never bombed). There has never been an honest, open accounting of the activities and finances of Hamas who steals American taxpayer money donated to the UN. Israel's enemies are all dictatorships. They lie with impunity and refuse open investigation by the media. Israel is a democracy with a critical internal press. Israel's actions are routinely and openly examined and criticized in spite of the power of AIPAC or any other pro-Israel lobby.  

On the other hand, there are numerous, effective pro-Arab-anti-Israel lobby groups. Billions of dollars of Saudi money is being used to fund "Islamic Studies" departments in this nation's universities in which hatred of Israel (and America) is being taught. Numerous "panels" are being organized in which pro-Israel proponents are denied a voice. I have personally witnessed one of them at Binghamton University - (see for yourself here). There is absolutely no shortage of analysis of Israel's actions.

Charles Freedman's views need to be examined. When they are you will find him unfit to fill the position for which he was nominated. Both in regards to the far-east and the middle-east his position is quite extreme and very idiosyncratic. To attribute his withdrawal to the actions of the "Israel Lobby" was quite unjustified. The rush-to-judgment of your guests, without so much as a mild protest from you, was most unfortunate.  

I will continue listening to your show and hope never to encounter this type of event again.  

Best wishes, 

--- 

Peter Lewin 

Clinical Professor, Economics 

University of Texas at Dallas 

School of Management

The budget is a lethal mixture of poisons.

In the next few months we will find out "what makes him tick" – President Obama that is.

In my past blogs on him (here and here) I tried to reserve judgment, while warning of the danger that he really believed his own rhetoric.

If the current budget is any indication, my worst fears may have been understated. 

Mr. Obama actually seems to have deep-seated, often well disguised, principles. And the only thing more dangerous than a politician without principles, is a politician with the wrong principles.

Mr. Obama is a believer in the power of big government to achieve miracles. In fact, judging by his use of the first person, he is under the impression that the government is his own personal tool. The miracles will be his achievements.

There should be no illusions on this. America, and by implication the world, stands at the crossroads of a radical change of course that will have dire consequences for generations to come. It could be the peaking of the American civilization.

History suggests that civilizations do not die precipitously. They commit slow suicide. Affluence and success brings power, and power both corrupts, and in our case, creates guilt and the illusory belief that all pain, suffering and sacrifice can be avoided, thus providing deliverance from the guilt. The State is seen as the golden key to the world of equality in all things and prosperity for all without interruption. But, in reality, the State is merely that rhetorical device whereby everyone tries to live at the expense of everyone else. The result is collapse and impoverishment. 

Witness Mr. Obama's budget. It is an horrific combination of economic blows.

First, there is fiscal madness. The sheer size of this budget, on top of the various bailout and sub-bailout expenditures, is literally unimaginable, in the sense that if you told me two years ago that the Congress, as corrupt and spineless as it is, would vote to more than triple the deficit in one year, I would have said, never! I could not have imagined it. This spending, whatever it goes for, will have to be paid for, one way or another. Most likely it will mean higher taxes, much higher than provided for in this budget, and high inflation (which means high interest rates, falling real wages, rising unemployment, … hitting the poor worst of all). 

Second, this budget contains huge amounts to sustain long-term failed endeavors. The most obvious is the nation's failed public school system. Bush the younger spoke of vouchers and competition, but, in the end, compromised with a teacher-union intimidated Congress to implement a wasteful and useless "no child left behind" program. No one has yet explained to me why it is necessary for government to produce education as well as subsidize it (the latter may at least  be  debatable). The government is not good at producing anything, why should education be different? The system is the problem, throwing money at it just exacerbates the problem, it is no solution. Might as well flush this money down the toilet while kids in the inner-city languish in institutions that cannot educate them and simply expose them to crime and drugs. 

We are also going to throw money at an increasingly expensive and challenged health-care system – one that faces long-term catastrophe as the baby-boomers enter the ages of infirmity. Like the abortive "Hillary-care" a generation ago, this initiative does nothing to increase the supply of heath-care, which is the only thing that will arrest the inexorable rise in costs. We need more doctors, more hospitals, more hands to do many routine, now protected, health-care activities, and more competition to provoke more efficient delivery. More government money will just make things worse.

The same is true of college-education subsidies. They will increase the demand for a limited number of spaces and prompt the colleges to raise their prices, as they always do.

Third, and perhaps even more harmful than the previous two, is the environmental package. This contains a double whammy. First, and obvious, is the overt taxation of businesses for the purpose of limiting CO2 emissions. It needs to be understood, and cannot be overemphasized, that businesses never pay taxes. The taxes levied on businesses are ultimately "paid" by those who buy its products (at higher prices), those who work in the industry (at lower wages), those who supply the industry (at lower prices); in short, the taxes are paid in a multitude of invisible, and insidious, ways by the distortions of the production process that they produce. But, second, and perhaps even worse, this budget contains provisions for the promotion of "renewable" energy alternatives. Economically unviable investments, that would never be voluntarily made, are going to be foisted upon the American public in the interests of "clean" energy. The American auto producers are going to be hijacked for the purpose of producing ridiculously expensive cars that very few have been willing to buy. And all this is justified on the basis of the patently non-existent benefits of reducing CO2 emissions – understand this clearly!, there is absolutely no proven benefit to the climate or anything else from these dramatic economic distortions (see here).

All of this implies the unprecedented extension of the naked power of government against which the only protection offered us are the good intentions of this new messiah president. 

I retain a faint hope that Congress will succeed in clipping his wings. But how much this will help in softening the blow of this huge catastrophe only time will tell.

Personal Reflections from the Holy Land

For the first time in 33 years I am visiting Israel. A short 8-day visit.

I was born in February 1948 a few months before the birth of the state of Israel (and the election victory of the Nationalist party in South Africa), so I have grown up alongside Israel. This is my fourth visit, and, as expected, this time I see the biggest change.

Israel is truly a miraculous achievement. It is now a complex, developed and affluent economy. In the face of continual threats its inhabitants live very busy and creative lives. The achievements of its citizens are amazing. But this is well known.

Reacting on a more personal level, I see a society like me grown somewhat cynical from experience, the experience of maturity that afflicts us all if we live long enough. The cynicism is doing battle with lingering idealism, and, in the end, because we have children who must inherit our handiwork, idealism wins out.

I am with my daughter staying at a student hotel-hostel in Jerusalem. There are Jewish children here from all over the world. They are seeing the phenomenon of Israel and I am privileged to do so again alongside them for a while, through their young eyes. Israel symbolizes the triumph of hope over despair – hatikvah. Seen inevitably in the context of the emergence of the "new Jew" out of the squalor and brutality of the shtetl and the ashes of Auschwitz, this vibrant, creative yet persistently compassionate people continues to inspire us as Jews.

I puzzle over the essence of our identification with this entity we call the Jewish people, and I have come to believe it to be a matter of "tribal" continuity. The "tribe" is the extension of the extended family. And we know by looking around that tribal-ethnic ties are incredibly powerful both for good and often for ill. Tribal connections persist over centuries and carry collective experiences and myths along the generations. Children drink them with their mothers' milk so that by the time they reach adulthood it is part of their social DNA – they have no choice.

This is manifestly true for me as well. Yet, while I sometimes feel apprehensive at my susceptibility to this romantic identification, I am immensely comforted by the conviction that the "Jewish people" is a "good" people when seen against the backdrop of the world at large. We fight amongst ourselves bitterly, but fundamentally we share a belief in peaceful coexistence. There are glaring exceptions, because all people are fallible, but, as a rule we are peaceful, compassionate, tolerant. That the world is unable to see the stark contrast (it could not be starker) between Israel and its neighbors is a source of eternal frustration, but perhaps not mystery, since there are none so blind as those who will not see.

So we Jews, in Israel especially, live continually recalling our struggles in the recent and the distant past. In my short time here I have visited Yad Vashem, completely new since my last visit, Har Herzl, where I relived the struggle for independence and security through 6 major wars and many minor ones, up to the present. I saw the graves of boys killed within the last month in Gaza lying close to those who fought for independence in 1948. It never seems to end. How does one go on celebrating life in the face of such immanent death?

That is the other side of the coin. Since being here I have visited beautiful restaurants with every variety of food, attended an international book fair, with books from many countries in many languages, listened to a lecture by the great modern Jewish thinker, Rabbi David Hartman, seen a little American musical, 1776, celebrating the Declaration of Independence, walked miles among ancient ruins, under the guidance of a passionate expert, many uncovered within the last few months, and felt the thrill of recalling a language I once knew intimately and thought I had forgotten – a living, dynamic, beautiful language.

To believe in the continuity of the Jewish people for its own sake is narcissism, but to be able to identify with a collective stream of consciousness that sanctifies life and gives hope from the midst of depravity and despair, is a noble elevation.

What if they are wrong?

The current number for the stimulus package is $900 billion. That is pretty close to a trillion, which it might be very soon. So lets call it a trillion. What's a billion between friends?
This trillion is supposed to save us from a disastrous recession by stimulating economic activity. The proponents have estimated that it will save many jobs (though the percentages are small they are persistent enough to add up). But what if they are wrong?
What if, as I and many others believe will happen, the stimulus package fails. Then this means that the trillion dollars will be a total waste. The recession will cause a lot of pain and impose losses. In the absence of the stimulus package, however, one wonders if these losses would add up to a trillion dollars. (This number dwarfs spending on the Iraq war). So if it does not work we must add the trillion dollars to the losses.
If it does work, will it save a trillion dollars worth of jobs?
Just wondering?
Wondering also why its proponents don't consider the probability that it will fail and the cost of that. And why aren't journalists asking these questions?

Refusing to see evil

What do the rise of Islamofascism and the return of Keynesian-big-government-welfare-statism have in common?

This has been bothering me. I think I have finally figured it out. Both stem for the stubborn refusal to see evil in the world.

Sounds ridiculous, right? Indulge me.

Evil? Well evil is a human quality. Animals are not evil – they act according to instinct. We do not hold them morally accountable. And nature is Nature. Natural laws are neither good nor evil, though they can sometimes be harsh. They are what they are.

No, evil is exclusively reserved for human behavior. It is a moral category that we reserve for humans.

If you are part of this conversation then I am going to assume we share some basic moral values, those values broadly consistent with what we understand by "liberal democracy." Included in this are:Respect for the person and property of every human being regardless of race, gender, national origin, etc. – non discrimination and equality before the law

• Respect for promise keeping, valuing the fulfillment of one's word in business and in life in general. The value of trust.
• Respect for freedom of action and especially freedom of speech. Freedom of action includes anything that is not coercive. Coercive behavior is behavior that is violent, threatens to be violent, or creates dangerous conditions. The burden of proof is on those seeking to restrict human behavior to show that it is coercive.
• Etc.

OK, so I hope we can broadly agree. I understand that we may differ in the details – we may differ a lot in the details. But at this level of abstraction general assent among the people I usually talk to, and who would bother to read this blog, should be fairly easy.

Moving on. I see two broad set of problems in the world right now and they are causing me much anguish and frustration. And they appear completely unrelated. Appearances can be misleading.

The first is the return of Statism. Advocates of big government social engineering are back– lets call this X.

The second is the rapid rise and spread of Islamofascism – actually to be more accurate, what bothers me is not only this rise in radical Islam (which is bad enough) but also the fact that it is being tolerated, indeed facilitated, by the policies of the governments of the economically developed world. Let's call this Y.

Both are very serious problems that threaten to destroy civilizations based on the principles of liberal democracy. And both are supported and facilitated by the same group of people. They call themselves "liberals" – but what they actually are is naïve. They are naïve and mistaken in their understanding of the diversity of human motivations and predispositions in the world. I see no other way to analyze this thing than to resort to some social psychologizing. Forgive me.

Lets take X. The motivation for statism is the conviction that "good things" can be done by giving the state more power, lots of power. This means giving the state lots of money. This money has to come from somewhere and lots of it is coerced from some, deemed less deserving of it, and given to others, deemed more deserving of it. At least that is the theory. In practice of course the people charged with carrying out these beneficent policies are fallible human beings who seldom have the expertise, knowledge or moral fortitude to accomplish the tasks. The incentives that rule in the public bureaucracies are notoriously perverse tending to ever-larger budgets and inefficient implementations. The liberals base their hopes for grand state social policies on an implicit belief that the people charged with implementing these policies share their goals and share their commitment to the values of liberal democracy – that they can be trusted to keep their word, that they respect and honor the sanctity of the property of others, that they will not discriminate in order to benefit themselves and further their own, as opposed to the public's, welfare. This belief is discredited every day in every way. Bureaucracies attract a particular kind of person, one usually with a comparative advantage in survival, that is, one with political survival skills. Playing the game and looking out for number one, that's the ticket. Master the rhetoric, pretend to have the knowledge and tell them what they want to hear. Then they will keep the money coming. Above all never tell them you have reached your goal – that is the kiss of death. And, of course, never leave a single dollar unspent. Its not what you know, its who you know. Wise up.

Statism, apart from being based on coercion, and encouraging the implementation of an "ends justifies the means" mentality, causes liberal democracy to fail because it is parasitical of prosperity. It destroys private initiative and innovation. It punishes the pursuit of profit, necessary for economic growth. It diverts resources from their most valuable uses.

Statism has been slowly gaining ground in America for more than 50 years, with a temporary interruption for the Reagan years. This current financial crisis however has provided it with fiscal steroids. The politicians, mostly, though not exclusively, Democrats, are in hog-heaven. This "crisis" is a party for them. By their own admission, endorsed by President Obama, this is an opportunity to fund all manner of social programs that have heretofore never made it off the collective liberal wish list. Yes we can! We are all Americans, we all believe in the same thing. Lets throw enough money at it and the good in all of us will rise to the occasion. Hallelujah!

What about Y – the tolerating and facilitation of the rise of a brand of Islam that is predicated on religious racism and sexism? (Only Moslems possess religious truth, only Moslems are entitled to full social rights,… an explicit denial of the basic tenets of liberal democracy – it unequivocally rejects both liberalism and democracy). I leave aside some important questions like, is radical Islam broadly representative of the essence of Islam? Is Islam capable of being reconciled with liberal democracy? Where are the moderate Moslems? And so on. Leave those aside.

Now clearly everyone in this conversation with me will have to admit that according to our adopted moral standard, this world-view is evil. It is fascism based on religious teaching, fascism claiming divinely revealed truth. It is a denial of any and all of those truths that we hold so dear and self evident, enumerated above. Who can doubt that it is evil pure and simple? Any doubt must surely be banished by the unspeakable acts of cruelty perpetrated by its adherents in the name of its creed. Yes we all agree.

The liberals, however, while condemning the creed and the acts, mostly in muted terms, urge tolerance for the protagonists, seeing them as unfortunate victims of Western domination and exploitation. Liberal guilt over the achievements of the west, and the relative deprivation it suggests for the rest, translates into forbearance for the outrageous. They are desperate, they don't know any better, how could they? Our liberals, to be sure, are consummate elitists, patronizing benefactors who see it as their duty to reform the excesses of the world with kindness and understanding. The terrorists are not evil, they just commit evil acts. They can be brought to embrace liberal democracy. We need to talk to them firmly but with understanding and compassion.

At root here is the same basic presumption that everyone shares the same goals, the same values – liberal democratic values. Any appearance to the contrary is just an illusion. People are basically good.

Well what if they are wrong? What if some people are irredeemably evil? I don't care why. Maybe Hitler had a bad childhood. What difference does it make? No amount of conciliation, education, negotiation, or whathaveyou could have brought Hitler to embrace the right values. Why do we think that Ahmadinejad, Nasralah, Meshal, … are any different?

News flash! They do not share our values, they do not share our goals, they never will. They want us dead or subjugated. They do not want to live among us, they regard our lifestyles as immoral. This is a clash of values a clash of civilizations.

So why are we bending over backwards to accommodate them and their noxious values? Why are British religious authorities bowing to Islamic religious law? Why are tens of thousands of militants allowed to collect welfare in Britain and in Europe? Why did Denmark compromise free speech by dignifying Moslem intolerance of cartoons they find offensive? Tolerance does not require us to tolerate intolerance. The liberals seem to be more afraid of precipitating self-guilt than of sacrificing principle. Europe is in serious danger of imploding in a surrender of liberal values. We are not far behind.

This is all shrouded in illusion - lack of clarity. Groupthink has run amuck. We have lost an understanding of and a commitment to western civic virtues. This loss will be debilitating in our attempt to limit the size of the state and preserve prosperity and in our ability to defend against the insidious destruction of our culture not only from outside but also from within. Just because you are paranoid does not mean they aren't out to get you.

The momentum is formidable. I have no illusions that I or even those more eloquent and visible than I can make any real difference. But you are entitled to ask what I propose. With regard to X, the solution is simple – a return to a commitment to a much smaller government. Reduce the role of government. It can't happen overnight. But if the current infatuation runs its course and culminates in a collective disillusionment with government solutions maybe we will get another round of Reaganomics. Who knows?

What about Y? Well we ought to be able to recognize evil when we see it and not tolerate it. Freedom of speech means we ought to be able to call it. Lets stop pretending that Islam has nothing to explain. I am not suggesting government actions. I am suggesting a public awakening, which will have to be reflected in a wising up of the media. The mainstream media is either shrill right-wing shriek or nauseating left-wing soft peddling. Clarity of vision is what we want. If something threatens to compromise liberty, lets say so loud and clear. There are people who wish us harm not because of what we have done, are doing or will do. Reforming our ways will not redeem us in their eyes. Nor will it change them. They wish us harm simply because of who we are. We better understand that.

Fighting against cynicism

All this fuss! What's it all about?

If it is the prerogative of the mature in years to be cynical, it is probably also their duty, for the sake of the young, to fight against that cynicism. For surely we cynics also love our children.

So here we are with the first black president of the U.S.A. ever – well actually he is most decidedly mixed-race, having a very white mother. But, since he is widely perceived as black and was elected anyway, there is ample cause for celebration. I do believe that is true. Such a thing would not have been possible forty years ago. Great strides have been made. Race, though maybe a barrier in some situations, and actually an advantage in others, is less of a factor in most of American life. I am indeed very happy about that. One million Americans, of all colors, shapes and sizes, could congregate in Washington and celebrate for America – and be proud of being American, proud of the freedom it stands for. Cause for celebration indeed.

I am also gratified by the fact that President Obama is surely a very talented and (seemingly) intelligent man. It will be refreshing to have an intelligent president, one that can make a good speech and understand what he is saying. I am told he even writes much of his speeches himself. He has the insight and understanding to make important decisions. Dare we hope he will make the right ones?

The unknown factor is the character of Mr. Obama – what makes him tick? What does he really believe? His campaign rhetoric contained something for everyone: but is he a populist, a radical, or a moderate? Really? (see my earlier blog "the hope and the terror") My friend Stan Liebowitz thinks he is a conciliator, a believer in compromise and "making nice" for everyone concerned. All sides give a little and we agree to differ but live happily ever after. As a master of rhetoric he can make miracles happen. Everyone thinks they have gained something.

Maybe he is right. But there definitely seems to be another side to him. He seems to have a definite agenda. So in his remarks to the press today he spoke of some environmental regulations that he will impose. He will allow each state to establish its own auto emissions standards, thus ensuring that auto-manufacturers will have to adhere to the most stringent – the costs of producing different cars for different states being uneconomical. He also announced that by "encouraging" the production of energy efficient cars and other measures, he would move America away from dependence on foreign energy and, in the process, "create millions of jobs." And he boldly proclaimed that his administration will be one that "pays attention to facts," referring to the "facts" of global warming; in reaction to which he plans to introduce significant industrial emissions standards.

"Create millions of jobs"? Is he really that stupid? How is producing unprofitable cars going to create jobs? To exist these jobs will require fat subsidies. Whence the money for these subsidies? From taxes paid by income or profit earners who would otherwise spend this money to do what? To create jobs, silly. So we take money from profitable ventures and spend it on unprofitable ventures and claim to be "creating jobs." What a neat trick? Does he really believe this? Then he is stupid. Does he not? Then he is deceitful. Not a great choice. Am I being cynical?

And what about the "facts" of global warming. Again, is he stupid or deceitful, or maybe uninformed? The facts? What are the facts? Well, depending on which period you choose to look at, it can be shown that the average temperature of planet earth has gone up a bit. In the broad sweep of the multi-billion year history of the earth, this is a very small swing. Huge climate changes have been occurring throughout its existence and will continue to do so. So there may be a global warming trend. Let us stipulate this as a fact. What else? Is it a fact that this warming is being caused by emission of Co2 to produce a greenhouse effect? The answer is – Maybe. Maybe is not a fact. It is a theory. We are told there is a "scientific consensus" on this. Is that a fact? Actually it is an exaggeration. There are a large number of reputable scientists who disagree.

What else? Let us assume that this warming is the result of Co2 emissions, is it a fact that we are causing it? Simple answer: No. There is ample assertion to this effect, and many computer simulations, but no "facts." Lets say we are responsible for some of it, are we responsible for a lot of it? The answer: We don't know. Lets say we bear some responsibility, does it follow that if we impose massive restrictions on emissions, necessary for normal production in the developed countries and absolutely crucial for economic development elsewhere, that we will arrest the global warming trend. The answer: Absolutely not! It cannot be shown that we could make a real difference even at great cost, even at prohibitive cost. That is a fact. From which it follows that the assertion by a "scientist" quoted today by the BBC that President Obama's measures will certainly have a significant beneficial effect on climate change is, quite simply, a lie.

For many years now (more than ten) I have been telling my students that the environmentalists are very dangerous. Next to radical Islam, theirs is the most dangerous religion we face. The big difference is that most of us at least vaguely realize that radical Islam can be dangerous to our lives, our economy and our freedom. News flash! The environmentalists are poised to destroy our lives, our economy and our freedom as well. They use the mantel of science, with a capital S. But they are not really concerned about the facts. They have a strong, implicit faith in what they see as the imperative of "preservation." They, and the vast numbers who listen to them, fail to understand that there is nothing mystical about the use of resources. As long as we want to live productive, creative lives, we shall have to use resources (transform matter from one form into another). The real and important question is not "how shall we use our resources?" No, that is not the important question. The important question is: "Who shall decide this – who shall decide how resources are used?" The environmentalists are sure that they, and they alone, should be the ones to decide – not through the market, but by government fiat, by coercion. That is why they are incredibly dangerous. They lust after power, the power to be the ones to decide what may be produced and how. They need little excuse to impose their heavy will upon us – a mere suspicion that we may be "causing" a warming trend is sufficient for them to cripple industries and destroy jobs. And now they have a champion in the White House!

When the President says "create jobs" and "pay attention to the facts" and this really means "destroy jobs" and "ignore the facts we don't like", how can one not be cynical?

Hullo! Hamas

Hamas	Hullo!
Israel	Hullo! Is this Hammas?
Hamas	Who is calling?
Israel	This is Israel.
Hamas	We recognize no-one by that name.
Israel	You know the people you are fighting against
Hamas	Oh! You mean the Zionist entity - we don't talk to you.
Israel	Why not?
Hamas	Because you are occupiers of our land and perscutors of the Muslim people.
Israel	So why don't you hang up the phone?
Hamas	We would if this were a real conversation. But since it is a figment of the Jew Lewin's imagination we know it will be understood as his construction of what we might say if we did not hang up the phone.
Israel	Fair enough. Listen the UN wants us to establish a cease fire. We are happy to do this if you stop firing rockets and agree not to do so again. Then we can talk about normalizing relations between us.
Hamas	We can't do that. We cannot stop firing rockets until you withdraw your troops and stop killing our innocent people.
Israel	Innocent people are dying only because you persist in firing your rockets and then put innocent people in military target places.
Hamas	Our people understand it is an honor to die defending our cause.
Israel	Well then how can we avoid killing innocent people?
Hamas	Easy, just stop attacking us.
Israel	But how are we supposed to defend ourselves?
Hamas	You cannot defend this illegitimate project of occupation. Sooner or later you will realize you must capitulate.
Israel	You mean we must just surrender to you to kill us all.
Hamas	Not necessarily. You may live under the legitimate rule of Allah. You can even choose to embrace the one true creed of Islam.
Israel	You do not talk for all of the Palestinians.
Hamas	Some of our brothers are misguided. They have set up unholy collaborative organizations.
Israel	What if these organizations agree to a cease fire, or to negotiations and the establishment of a two-state solution?
Hamas	We may agree to go along for the time being. There is precendent for this in the words and actions of the Prophet. But in the end there is no place for a non-Muslim authority in this land.
Israel	If we withdraw now will you stop the rockets?
Hamas	Certainly not. We will show the world how we have survived your agression. We will double the number of rockets.
Israel	What if we destroy all your rockets?
Hamas	We will get more from Iran.
Israel	OK, thanks, nice talking to you.
Hamas	Call again any time.

Some amateur ruminations on the Israel-Palestinian conflict

In most of what is being written in regard to the current conflict in Gaza, it is insufficiently pointed out that what is now the "Palestinian refugee problem" is a creation of Arab politics. It is a reflection of the undeniable fact that the Arab world has overwhelmingly failed to come to terms with the existence of Israel as a permanent Jewish nation state.

Certainly, in the wake of the creation of the state in 1948, mistakes were made on both sides, the Arab and the Jewish. Certainly, in regard to the treatment of its own arab minority, there are things Israel could do, and could have done, better. But, surely, if the resolve had been there, the roughly 750,000 Arab refugees created by the upheavals of the 1945-1949 period, could have been fairly and compassionately accommodated - as were millions of post-war refugees, in what was a most tragic and unusual time for these "displaced" people. In particular, the Arab world, Saudi Arabia, Jordan, Syria, the Gulf states ... , could have "absorbed" these people, as the roughly same number of Jewish refugees from Arab countries were absorbed into Israel - perhaps a lot more easily at that.

That this did not happen is as understandable as it is tragic. The creation of a Jewish state in the midst of the Middle East was regarded as unacceptable and reversible - surely without any significant exception in the Arab world. The UAL set its face firmly against it and not much has changed in this regard, despite the few peace treaties that exist. This is not to minimize the importance of those treaties. Rather their importance is to be gauged by their existence despite the seemingly implacable and widespread hostility to Israel that endures. 

If by some miracle a number of Arab states came to a warm and embracing acceptance of Israel's right to exist, the Palestinian issue could, and I believe would, be resolved rather easily. The Saudis with all their wealth and influence could bring pressure and largesse to bear to work out broadly acceptable compensation and accommodation. Money now given for arms could be given for peace and economic development. Trade with Israel in peaceful conditions could be encouraged. 

Pie in the sky? Of course. But not because it is impossible. It is because it is politically unthinkable. The Palestinians were and still are political pawns. To resolve the issue would be to give up the major respectable grievance against Israel as an entity. 

If this is true there are important implications.

1. There is nothing Israel can do to "solve" the Palestinian problem, short of disappearing as a nation state.
2. As a matter of broad political focus, the powers that be should concentrate on mobilizing broad and significant Arab support for legitimizing Israel and directing aid to the Palestinians that is constructive and not for purposes of terror and disruption.
3. In the absence of this, Israel was, is and will be in a "holding pattern" - struggling against the diverse and varied forces that are thrown against her in the hope of weakening and ultimately destroying her.

In a nutshell, any "real" settlement of the Israel-Palestinian conflict must come to terms with the existence of a Jewish Israel in the heart of the Muslim Middle East. Any progress toward such a settlement would have to begin by first acknowledging this and would have to confront the powerful forces of radical Islam in its different manifestations. The prominent existence of repressive dictatorial regimes, which may themselves have been fashioned to deal with such religious zealotry, probably reduces the probability, any time soon, of a move towards modern secular and liberal states that would be necessary for Israel's existence to become generally acceptable in Arab eyes. But short of this cultural transformation the prospects seem rather bleak.

Still, I am not without hope. I have seen massive unexpected changes in my lifetime, like the economic liberation of much of Eastern Europe. One never knows what miracle is waiting around the corner.