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Tuesday, May 03, 2011

Ding Dong Osama's Dead

Here are some important lessons to take from Osama bin Laden’s demise:

  • Some people will say that killing bin Laden will only bring a new more radical leader to the head of al Qaeda, and that it will spur some sort of reprisals. They are wrong. Killing bin Laden takes out a THINKING terrorist, creates panic among his followers and won’t cause any more attacks than those already being planned. Killing bin Laden has absolutely made the world a safer and better place

  • Many are calling the takedown of Osama a symbolic or psychological victory. This is true, but the intel from Osama’s compound shows he was still very much the center of a terrorist network, and losing both a central leader, as well as a strategic base WILL disrupt al-Qaeda’s procedures for some amount of time.

  • Some people have also criticized the decade-long timeframe it took to locate and kill one troublemaker. However, the strategy of the Global Jihad is a long game startegy – they will respect and fear the USA more for sticking it out in the long run, especially that it was bin Laden who preached that the West could not withstand a drawn-out conflict.

  • Pakistan is a fragile country and bin Laden’s support obviously extended deep within official Pakistani territory and not just in the North-Western tribal areas. There is still a large need for US military presence in Pakistan lest a nuclear-armed country go off the rails. I was overjoyed to hear Hilary Clinton point this out.

  • Osama bin Laden was, to paraphrase Gandalf, a great evil, but there are many others. Osama’s message to the world is “Do-it-yourself Jihad.” You may want to shoot up an El Al counter at LAX or try to take down a plane with your underwear, or blow up Times Square. Al Qaeda couldn’t care less how much of a screw up you are, as long as you get the TSA to make commercial flying a more miserable experience than being a Gitmo detainee. Unfortunately, this sort of terror, and this sort of unnecessary stupidity of making passengers “feel safer” will far out live bin Laden.

  • Hamas, the more popular branch of Fatah and the Egyptian Muslim Brotherhood all condemned or mourned the bin Laden killing. It’s important to remember this. I I was better at video editing I would combine a montage of Gazans dancing in celebration of the 9/11 attacks, with New Yorkers celebrating bin Laden’s death. If anyone does this artfully, please send me a link.

  • Another of “Sheikh Osama’s” legacies to the world is the al-Jazeera network. Remember the new Emir of Qatar founded al-Jazeera in 1995 primarily to give a platform for bin Laden’s video recordings, preaching that the US should remove all ot its troops from Saudi Arabia (I forget if bin Laden ever preached against the US Air Force base in Qatar). Al-Jazeera has since developed a life of its own, having tremendous impact in its ability to spread convenient truths and whacky conspiracy theories throughout the Arab world. Of course, as bin Laden tapes were fewer and farther between over the years, the new front face for al-Jazeera became Sheikh Yusuf al-Qaradawi, the spiritual leader of the Muslim Brotherhood, who will contend for at least 50% of the seats in Egypt’s parliament this summer. I wonder, do you think have the support of a mainstream media network will help them?

Sunday, April 03, 2011

The Lesson to be Learned from Goldstone

While Israel and its supporters have welcomed Richard Goldstone's retraction of his scathing false accusations against Israel and its army, I think that there is an important side to the story being largely overlooked: Palestinian reaction.

Obviously, Hamas roundly condemned any retraction and implored the UN to act based on Goldstone's initial report. That same report also castigates Hamas with war crimes, but Hamas' hypocrisy can be overlooked because it knows it is not subject to any UN pressure (despite the fact that the UN is the biggest employer and provider of services in Gaza).

More important is the reaction coming from the less violent wings of the Palestinian Arab population, namely Mustafa Barghouti, the so called 'third way' candidate, supposedly most amenable to peace with Israel, and Yasser Abed Rabbo, a PLO and Fatah VIP who was Yossi Beilin's partner in drafting the Geneva Initiative. Why wouldn't supposedly peace-loving Palestinians want to exonerate Israel, so that their population will be more supportive of their former declarations of peace?

The obvious answer, clearly, is that no one was really interested in selling the idea of peace, or that the IDF could make a good neighbor, to the Palestinian street. While every Israeli household received a copy of the Geneva Initiative no such distribution was done in Arab communities in Yehuda, Shomron or Azza. Palestinian overtures were only made towards Israel for Israeli consumption, and to dupe Israelis into thinking that giving away their land would guarantee peace. The furor which erupted over the so-called "Palestine Papers" was also based on the fact that the average Palestinian had no idea of even which potential compromises their leaders were being asked to make.

Since the PLO stopped negotiations with Israel, using Operation Cast Lead as an excuse to cover up the unbridgeable gaps between Olmert and Livni's concessionary offers and Abbas' intransient demands, it has been obvious to close observers that the PLO intended to act unilaterally against Israel through the UN. On March 20th, Saeb Erekat, the chief non-negotiator, announced this officially.

Israel's goal now has to be not only to show that its army acted justifiably against Hamas, but that Fatah and more moderate-sounding factions are just as willing as Hamas to incite against Israel, and are as unwilling as Hamas to negotiate a peaceful settlement.

The original platform for negotiations was the concept of "Land for Peace." The international community must understand that with the thorough PLO rejection of peace, there is no reason to entertain that Israel should depart from any of its land.

Monday, January 31, 2011

The New Ten Plagues

Here are ten interesting points worth knowing about what is happening in Egypt, that I have not seen widely reported:

  1. The wannabe leader of the protests is Mohammad El Baradei. Many media have called him a reformer or democracy advocate, seemingly showing up from out of nowhere. However, El Baradei is not a new face. He was already campaigning for the Egyptian presidency in the elections scheduled for September 2011. What's more, his main endorsement, and reportedly, his financial backing were from the Muslim Brotherhood. The "unity" government El Baradei is calling for is unity between himself and his main constituency. Even if that constituency wasn't fundamentalist Muslims, it would portend badly for "democratic reform."

  1. Only El Baradei and Westerners are talking about freedom and rights. Actual protesters are almost exclusively talking about (a) hating Mubarak (b) a need for economic improvement. Egypt's economy is poor and the citizens seem to be looking for a short term solution. The liberation of Egypt may turn out a lot like the "liberation" of Cuba, in which the wealth of too few elites was "liberated" and dispersed to the masses. In other words: communism. Of course, this might be couched in terms of "Zakat" - Islamic charity by the Muslim Brotherhood.

  1. Egypt is a considered the largest Arab country but it has hardly ever been ruled by Arabs. It was the seat of the second largest Shia Empire and mostly ruled by Shia Berbers and Albanians/Turks for most of its modern history. The serf culture runs deep and Egyptian Arabs were used to second class status. Nasser's Pan-Arabism invigorated Arab pride, but it basically fizzled when Nasser essentially let the USSR take over Egypt.

  1. Mubarak appointed Omar Suleiman as his Vice President, seemingly, to dispel the idea that he intended to name his son, Gamal as successor. Suleiman is well respected in the army, is known to be close to Israel and is well entrenched in the old regime. He has considered himself the true heir to Mubarak, as Egypt, since 1952, has been ruled by a military dynasty. Suleiman is also hated by the Muslim Brotherhood. No one was fooled that Suleiman represented any change - so why appoint him? Perhaps Suleiman forced his way in with a simple threat: Make me your successor and I'll make sure the army protects you. Don't, and I'll join the protesters and launch a military coup. An alternative explanation is that Mubarak wants Suleiman to be held responsible for any crackdown. He could be throwing Suleiman to the wolves so that his son could still be considered as a future leader. Maybe both?

  1. The Muslim Brotherhood has taken a shadowy role in these protests but, besides El Baradei, there are other small signs of Islamic influence in the protests. Many news agencies reported on protesters throwing stones at pictures of Mubarak. The symbolism of this, lost on many non-Muslims, is the equation of Mubarak with the Jamarat – the symbolic demon at which Muslims throw stones during the Hajj. While Western media think of this as just an expression of anger at Mubarak, it means much more to the Muslim protesters and turns the battle for a new regime into a Jihad. Furthermore, the Ulemma (Islamic Scholars – controlled by the Muslim Brotherhood) declared that the rioters killed in the protests have the status of Shahidin – holy martyrs. This means that the all-important "Rule of 40" will apply.

  1. "The Rule of 40" was a key component in both the radicalization and success of the Islamic revolution in Iran in 1979. Every time protests were quashed or fizzled, the 40-day mourning period of some dead protester ended. The memorial service on the 40th day drew together large crowds and gave the religious leaders the opportunity to fire up the crowds for more protests. More protests led to more deaths, more deaths led to more memorials and more memorials led to more fiery fundamentalist sermons. So far, relatively few protesters have been killed in Egypt, but by declaring the dead as martyrs, more people will feel the need to attend their memorial services and the Rule of 40 will perpetuate the Islamic takeover. Ironically, the Muslim Brotherhood stands less of a chance if the protesters take down Mubarak quickly, without much assistance from Islamic rhetoric.

  1. Despite the radical nature of the Muslim Brotherhood, there is no need to prepare for immediate warfare. Egypt is still a cracked reed – a horrible economy and not prepared for any immediate conflict.

  1. Meanwhile, in the Gaza Strip there has been eerie silence from Hamas. That's good news for Sderot, but weird in that one would expect mass rallies of solidarity with their Muslim Brotherhood sponsors or at least some celebratory rockets on Sderot. It might be that they are lying low just as the Muslim Brotherhood is acting behind the scenes for now.  

  1. Al-Jazeera seems to be the guiding hand behind the delegitimization of Arab governments, and for spurring protesters to arise and organize. People are beginning to notice this, especially Mahmoud Abbas, who claimed that Al-Jazeera had declared war on Fatah and the PLO, and by the Mubarak regime, which closed Al-Jazeera's Cairo bureau. But who is behind Al-Jazeera? Their news director is Whadh Khanfir (hat tip, Dashiell Shapiro), a Palestinian from Jenin, with an obvious bone to pick with the PLO. But the true power behind the network is the Emir of Qatar, Hamad ibn Khalifa al-Thani. As the leader of Qatar since overthrowing his father in 1995, al-Thani has built Al-Jazeera to give voice to the most dangerous extremists in the Arab world, usually suppressed by regimes desperate to maintain ties with the United States. Al-Thani created the soapbox for Usama Bin-Laden and seems to admire the al-Qaeda goals of subverting western-facing Arab governments and restoring a Caliphate. However, fomenting popular uprisings seems to be an odd occupation for the decadent dictator of a small republic chosen to host the 2022 World Cup. Perhaps Al-Thani thinks that Iran can protect him, perhaps he's afraid Saudi Arabia will shut him down, perhaps he just wants better TV ratings. Whatever his reasons, Al-Jazeera is intent on spreading Tunisian style chaos throughout the Arab World, country by country.

  1. Sudan is next!

Wednesday, January 26, 2011

The Dependency Curse

A version of this article was published at

Last week, Netanyahu adopted the recommendations of the Sheshinski Commission, charged with determining the appropriate rate of taxation on oil and gas extraction profits. The commission was empaneled based on the recent discovery of large offshore gas fields, Tamar and Leviathan. At the beginning of this week, the recommendations were brought to the cabinet for a vote, and passed. The only ministers to oppose were from Yisrael Beytenu.

The commission decided to raise the extraction taxes to rates comparable to those found in Western resource-rich countries, to a rate ranging from 52% to 60%, nearly doubling the current levels. They applied the tax to all future and current extraction sites, so that the large profits expected from the Tamar and Leviathan fields would essentially be divided between the invested companies and the State.

As soon as these major finds were revealed to the public there was strong pressure on the government to raise tax rates so that "the country's resources" could be shared by the entire country. The socialist elite were the first to jump on the "spread-the-wealth wagon" but a lot of people who should know better were also pulled up along the way. First and foremost of these is our Prime Minister, Binyamin Netanyahu, who was forced by public pressure to form the Sheshinski commission and is now standing firmly behind its conclusions.

Obviously, the oil and gas companies were livid about the idea that tax law would be changed specifically to garnish their profits after they had spent considerable time gaining exclusive rights to mine the ocean floor and even commissioning a geographical study to ensure that the Leviathan Gas Field was squarely in Israeli territorial waters, so as not to encroach on the rights of Cyprus.

However, the media and generally socialist-leaning public had no sympathy for Delek Group Chairman, Yitzchak Tshuva, or the other "tycoons."

Only National Infrastructures Minister Uzi Landau (Yisrael Beytenu) stood up for the right of companies to adhere to the tax rate they expected when they invested millions of shekels in their exploratory venture.

Another Yisrael Beytenu MK, Anastassia Michaeli, pointed out that it was not just "greedy tycoons" who held a stake in the large gas finds. The companies who had secured the extraction rights and prepared the fields for extraction were publicly held companies. Shares in these companies were held by private investors, as well as popular mutual and pension funds. The stock price dropped accordingly hurting the bottom line of many average citizens, as well.

As soon as the public campaign to raise taxes on these companies gained steam, so did ideas of what to do with the huge tax windfall. The opposition to the tax created even greater animosity towards the tycoons. MK Yachimovich (Labor) decried the greed of the tycoons for preferring lining their own pockets instead of improving the nation's health, education and welfare systems. Popular radio personalities asked: "How much wealth do they need?"
The irony of course, was that the ones ascribing greed to businessmen who work hard to generate profits, were themselves the very personifications of the green-eyed monster, lusting over money they did nothing to earn. No pot has ever so brazenly called the kettle black.

It seems that only Yisrael Beytenu has seen how damaging this tax-and-grab policy can be, or, at the very least, the only party willing to explain the issues without being swept into populist positions.

The companies involved in discovering and developing the gas fields entered into an expensive and somewhat risky project. The project was financed based on a reward-to-risk ratio by investors who assumed that the current tax rate would remain. A tax hike offsets this balance. While it is true that a democratic government has the right to change tax policy at whim, it is simply a bad business practice to change the terms of even an assumed deal. Legality aside, opportunistic tax hikes look very bad, especially to foreign investors, hurting the entire Israeli economy.

Furthermore, the Israeli extraction industry is relatively new. Adding new taxes makes the industry less lucrative and will discourage competition in the industry, which leads to a monopoly or a small cadre of companies acting in monopolistic fashion.

As mentioned above, these new taxes will not only take money from "tycoons" (who should be protected by rule of law as much as a beggar), but from average working Israelis who invested in oil and gas through the stock market or through pension funds.

The economic reasons for opposing this tax hike are compelling, but there is an even more important reason that the Knesset must work hard to prevent the tax from being raised.

The psychological effects of tax dependency may be the most damaging to Israel in the long run. The effects are being felt prematurely, as different government bodies have already started to snipe over who should benefit from the gas revenues. Each Ministry is now trying to explain how it is financially incapable of development without these gas revenues. The mere thought of extra disposable cash has discouraged ministers from reforming their sectors or increasing efficiency. Why bother belt tightening when we can "suckle from the bounty of the seas?"

The other aspect is that government is by nature inflationary. Wants are infinite but resources are finite. When the gas runs out, how will the country deal with a sharp drop-off in its tax-revenue? Will a society based on tax dependency be prepared for austerity measures, or will the urge to tax only grow? Here, we need only look to modern Europe as an example. For years, the European hunger for taxes was insatiable, and now every European country is forced to make severe public sector cuts – depressing the mood of an already depressed economic situation.

But what about those countries that are riding the resource-profit high? First, Israel's finds are significant, but are no match for those of Abu Dhabi or Qatar. However, these countries are also not models to be emulated. While these are small states with dictatorial rulers, one can see that excess wealth can lead to weird and not-necessarily-sustainable growth. Flashy items like World Cup Stadiums and Towers of Babylon may not be on the Israeli agenda, but there is always an urge to make a splash when you have what to spend.

PM Netanyahu suggests the tax revenues be dedicated solely to education – very practical – until there is a push to turn every classroom in the country into a "smart classroom." Besides the questions of whether "smart classrooms" actually produce smart students, it is only natural for someone spending someone else's money to go beyond necessity into luxury.

The worst effect will be felt by the population as a whole, which, after years of painstaking free-market gains in Israel, will be brought back to the attitude that one can make a living on somebody else's work. The psychological effects of this are immense. Rather than contributing to social cohesion, the attitude will enforce an obsession with jealousy, "wealth gaps" and allocations. The rabbinic dictum of "Who is rich? One who is happy with his portion" will lose all meaning. The psychological attitude of tax dependency, along with the resultant drop in foreign investment, discourages the resourcefulness and entrepreneurial spirit that has been the pride and lifeline of Israel for the last two decades. Israel cannot afford to let its entrepreneurial engine relax!

Proponents of the tax hike must look past the short term benefits and be very wary of the long term damage to the nation and people of Israel. Let our country develop naturally, with resourceful companies generating new sources of employment for workers and profit for investors. Stand up to the populist greed and jealousy. The economic effects of a tax-hike can be reversed. If the tax is repealed, investor trust in Israel will return and competition will enter the market, since markets adjust to new realities very quickly. However, the psychological effects of a tax dependent society may last decades. The Knesset must stem the government's attempt to "reel in the Leviathan on a fishing-rod" and convince the public to resist the urge to live off its ample ingenuity and skill.