Congratulations to Martin Wolf of the Financial Times
An article was published in the FT on the 29th June that beautifully describes the ways in which we are all being so beautifully ‘screwed’ by the world of finance. (Note, you may need to register to see this article, but please do. Registration is free and the FT is full of great content.)
It starts like this:
This global game of ‘pass the parcel’ cannot end well
By Martin Wolf
Published: June 29 2010 23:31 | Last updated: June 29 2010 23:31
Paul here. Pass the parcel is a game for kids’ parties that involves passing a multi-wrapped ‘present’ around where the kid holding the parcel when the music stops gets to unwrap one sheet, then passes it on, etc., etc., until the kid holding the parcel with just one wrapper on it when the music stops gets the present.
Martin continues:
Our adult game of pass the parcel is far more sophisticated: there are several games going on at once; and there are many parcels, some containing prizes; others containing penalties.
So here are four such games. The first is played within the financial sector: the aim of each player is to ensure that bad loans end up somewhere else, while collecting a fee for each sheet unwrapped along the way. The second game is played between finance and the rest of the private sector, the aim being to sell the latter as much service as possible, while ensuring that the losses end up with the customers. The third game is played between the financial sector and the state: its aim is to ensure that, if all else fails, the state ends up with these losses. Then, when the state has bailed it out, finance can win by shorting the states it has bankrupted. The fourth game is played among states. The aim is to ensure that other countries end up with any excess supply. Surplus countries win by serially bankrupting the private and then public sectors of trading partners. It might be called: “beggaring your neighbours, while feeling moral about it”. It is the game Germany is playing so well in the eurozone.
It’s an article that really does need to be read in full. Martin concludes thus:
Yet it is quite clear that an isolated discussion of the need to reduce fiscal deficits will not work. These cannot be shrunk without resolving the overindebtedness of damaged private sectors, reducing external imbalances, or both.
The games we have been playing have been economically damaging. We will be on the road to recovery, when we start playing better ones.
Now I really don’t want Learning from Dogs to focus on ‘doom and gloom’. There’s more than enough of that to go round twice and thrice.
But when someone writes in such a great clarifying way – then it deserves the widest promulgation. The more we all know about the games being played, the better we can change the rules to benefit society. Well done, Martin.
Financial crises can be very difficult events to understand. Even for those who have spent a great deal of time studying such areas as finance and economics, comprehension of these disasters can be elusive. However, analyzing shared elements in the recent American and Greek financial crises can help give even the economic layman insight into their common causes.
One word can be used to sum up the basic concept behind both of these crises – overextension. Both the American and Greek governments attempted to take on a much heavier economic load than either could handle. While, in both cases, this has been painted by some as a noble, humanitarian effort to help those in need, methods such as inflationary monetary policy tantamount to theft and the disguising of massive budgetary deficits (in both cases with the help of Goldman Sachs) would not justify the means employed even had these efforts been successful, and certainly should be taken to task considering the disastrous ramifications of these actions.
In both cases, many are citing unrestrained spending as the source of the problem. For example, CNN wrote of the Greek crisis that “years of unrestrained spending, cheap lending and failure to implement financial reforms…whisked away a curtain of partly fiddled statistics to reveal debt levels and deficits that exceeded limits set by the Eurozone.”
Without suggesting that CNN was attempting to be deceptive in this explanation, as the points made certainly are important, it must be noted that things like unrestrained spending, cheap lending, and fiddled statistics are merely symptoms of the deeper disease. Instead of asking the government to spend less, tighten lending laws, and implement financial reform, one should instead ask the deeper question – how does the government even have the power to cause such problems in the first place, and why are the results of such government power so often much more hurtful than helpful?
This deeper problem, whose symptoms we are now dealing with, is central banking. The Federal Reserve System and its Greek counterpart, the Bank of Greece, each had a heavy hand in their respective nations’ financial collapses. This is due to these banks’ attempts at economic manipulation – the Federal Reserve directly sets interest rates, while the Greek system uses more indirect methods to do nearly the same thing. Note that it is due to their attempts at economic manipulation, as attempting to set economic law is about as useful as attempting to set gravity.
Consider this metaphor of setting gravity. A man claims to be able to set the force of gravity on the earth. He tells a stunt biker that he can set gravity to be half as much as normal. So, the biker attempts to jump a distance that is much longer than he normally would attempt. Upon jumping, the biker finds that, obviously, the first man never was able to set the nature of gravity at all, and he falls to the ground long before reaching his destination.
This is exactly what happened due to the actions of central banks in the cases of both the United States and Greece. Interest rates and other natural economic restrictions were said to be more flexible than they truly were. Thus, individuals who based their actions on this information ended up engaging in activities that were far more risky than usual. However, once they had “jumped,” so to speak, they found that, in fact, economic law was as strict as ever, and they “fell.”
However, if the answer is so obvious, why are we not hearing more about it? Each of these financial crises is extremely complicated, and the above described scene is, it must be admitted, an oversimplification. This is not to say that it is not accurate, but rather that this nature of the crises’ root cause is not immediately apparent to all upon examining the situation.
For example, a person who has been educated their entire life in an economic school that praises central banking, deficit spending, and government action in general would certainly seek to find another cause for the crisis, perhaps by blaming business owners for making risky investments or stating that government controls were not strict enough. However, a person who has studied and understands the damage done by central banking and government economic controls will be quick to realize what has occurred.
People with such knowledge are becoming more and more common in both the United States and around the world. “Even today, with an economic crisis raging, the response by our government and the Federal Reserve has been characteristic,” Ron Paul writes in his recent book, End the Fed. “Interest rates are driven to zero and trillions of dollars are pushed into the economy with no evidence that any problems will be solved. The authorities remain oblivious to the fact that they are only making our problems worse in the long run.”
While he may be one of the most popular adversaries of central banking, it is not just Ron Paul, or even Austrian economists, who are calling out government for its role in these financial crises. In an e-mail to supporters, Democratic congressman Dennis Kucinich cited “the 1913 Federal Reserve Act, the banks’ fractional reserve system and our debt-based economic system” as major factors in the American crisis.
Such complex and important issues as economic crises need all the attention we can give them, and it is impossible here to provide the in-depth analysis that these situations merit. It also must be noted that while both the United States and Greece have to an extent both engaged in central banking to their detriments, each country does have a different system. Still, the general principles hold, always returning us to that first word – overextension. As long as nations attempt to manipulate the laws of economics to engage in far grander pursuits than they can sustain, we can expect to see such economic crises as have been seen in the United States and Greece in the future.
Amazed they don’t just tax Fun and leave it at that!
Lemonade isn't a substitute!
Once again the British Politically Correct nanny-state lobby seems about to pounce by reducing the drink-driving limit to 50 mg. This is yet another fatuous knee-jerk “Let’s give the image that we are responsible and doing something” initiative.
No, I do NOT favour driving while drunk, but at 80 mg per ml you are not “drunk” or even impaired. The introduction of the 80 mg limit was a great step, but more would be a mg too far.
I know for an absolute fact that if I drink one pint of beer I am in no way more dangerous than if I drink nothing. Don’t ask me how I know; I just do. I’ve been driving all over Europe for 40 years; and experience counts for something after all.
Yes, I do want to see road accidents reduced, but let’s see something REALISTIC and EFFECTIVE. Why are most accidents caused? (apart from people way over the limit, unlicenced or driving unroadworthy cars and so on)
arrogance and lack of imagination: “It can’t happen to me.”
impatience: overtaking dangerously to save 45 seconds on a two-mile journey
driving too fast in the wrong place at the wrong time.
driving without consideration for others
not driving as if every other driver was an idiot
failing to give yourself enough of a margin for error
failing to understand statistics
The last two points are perhaps crucial. Drive on the périphérique in Paris and you’ll see examples of both. Of course, the French are, in general, brilliant drivers and 99.9% of the time they can get away with driving up someone’s boot, but statistics tell us that there is 0.01% of the time when this will NOT be OK.
What steps COULD be taken instead of clobbering the one pinter?
Start with the apparent ONE MILLION people in Britain driving either unlicensed and/or in uninsured or unroadworthy cars.
Ban rich Daddy’s boys from driving high-powered sports cars: nobody under 25 should be able to drive anything over 80 bhp for a start.
Where is the logic in manufacturing cars that can drive at three times the speed limit? BAN THEM. BE LOGICAL.
Make the viewing of video of the aftermath of accidents a compulsory part of the driving test so that people came reeling out of the room white and vomiting at the sight of accident victims with their faces smashed up and/or their heads severed. This is the REALITY of accidents. Let’s GET REAL.
Prevent people from driving for TOO LONG. Tiredness is a MAJOR factor in accidents, but there is ABSOLUTELY NO CONTROL over the hours that private motorists can drive. Modern technology could do something here.
Make the punishments for careless and/or dangerous driving SEVERE.
Make people AFRAID of causing an accident.
The truth is that a car is as dangerous as a gun and people should treat them as such. Sadly, familiarity breeds contempt and people too often forget the basic principles.
Every time I get in my car I tell myself the following:
Drive with as much care as when you first drove so nervously and gingerly on your first trip with your new licence.
Every journey could be your last. Just because the last n days have been trouble-free it doesn’t mean that today will. (statistics again)
There could be an idiot around the next corner, so drive defensively. (there is always a percentage of idiots, so statistically you are CERTAIN to meet one now and again)
Going too fast in the wrong place and/or conditions isn’t worth the risk. (stats again)
You have no right to maim or kill anyone else by bad driving and causing “an accident”‘.
Be afraid – think of what a serious injury or even your death would mean to your family.
It’s no good being “sorry” afterwards ……
Let’s hope the new British government has a bit of commonsense about this.
PS The Police could do their bit, too. A significant number of people are killed by policemen rushing about.
By Chris Snuggs
IAM Logo
A P.P.S. from the Editor. In fact, one of the best things that could be done is create an
incentive for passing the Institute of Advanced Driving driving test. I passed the test in 1966 and it has been the best investment I have ever made.
Why doesn’t the UK Government give a free year’s road-tax for every person who passed the IAM test. All this proposed change in the drink/drive limit will do is to put yet more British pubs out of business. G’rrr.
‘Among the calamities of war may be jointly numbered the diminution of the love of truth, by the falsehoods which interest dictates and credulity encourages.‘ (Samuel Johnson, from The Idler, 1758)
I have used this quotation simply because we need to remind ourselves that the media, politicians, journalists and many ordinary folk find it easier to be extreme, opinionated, outlandish and provocative (ergo, ignorant) than to be thoughtful and reflective about an incredibly complex situation. Rant and blame, while making for great reading or viewing, is not helpful.
This all came to mind from reading a recent article in The Financial Times (you may need to register to view it) which was titled:
Britain should back down over BP
By Clive Crook
That article starts like this:
A week ago I criticised the US media for childishly demanding that President Barack Obama “just do something” about the oil spill in the Gulf of Mexico, observing there was much to be said for a leader who stayed calm in a crisis. Next day, no doubt as a result, Mr Obama became pointedly less calm. He called for some “ass to kick”, a very Bushian sentiment, and dialled up the invective against BP – which he likes to call by its old name, British Petroleum, to underline the company’s alien perfidy.
The US outcry against the company is still building, and the administration, intent on deflecting its critics, has put itself in the vanguard. Criminal investigations and efforts to remove a statutory cap on the company’s liability are under way. It is ominous that lawyers are working hard, with the administration’s blessing, to enlarge the very concept of civil liability.
And concludes thus:
The question of whether even this company’s mighty resources are adequate to meet these demands cannot be dismissed. In such circumstances, I cannot see why BP has hesitated to suspend its dividend. The idea that it can take this calamity in its stride and proceed on the basis of business as usual is absurd, and politically foolish too, since it is a provocation to critics intent on vengeance.
The Gulf disaster will have far-reaching economic and energy-policy implications. The right liability and mandatory insurance regimes for deepwater drilling are high on the list. No doubt the White House should worry less about kicking ass and more about thinking these questions through. But British complaints that BP is being “scapegoated” will not help reason to prevail. Let us not add insult to injury.
Frankly, I don’t have either the knowledge or the competence to judge the validity of Mr Crook’s article and, as so often in cases like this, took to reading the comments as they can frequently shed more light on a particular issue.
And that is how I came across the following comment from RiskManager. Whoever you are, well done on taking the time to put what feels like some badly needed balance into this issue. This in no way lessens the terrible harm being metered out on innocents, just as in any ‘war’, but this is not about winning – it is about learning.
From RiskManager
Unlike ANY U.S. company EVER in a similar situation (Exxon, Union Carbide, Accidental Petroleum, etc. etc. – its ALL of them), BP has indeed done the right thing since the blowout by immediately admitting its liability/responsibilities. It has mobilised the largest containment and clean up operation ever and immediately issued compensation to those affected. The effort to stem the well, something never done before at this depth, has seen the assembly of the best experts in the world and the greatest concentration of sub-sea equipment perhaps ever seen. That efforts have failed so far to stem the leak is a fact that testifies to the challenge of the task, a challenge that cannot be understood until the failed Blowout Preventer (BOP) is recovered and we find out why the accident happened and why the top-kill did not work. What is going on inside the BOP?
And there it is. Today we just do not know. The failsafe in place, a modern BOP, failed. We don’t yet know why. BP may well. Transocean and Cameron the same. When we do recover the failed BOP which is under subpoena already all the questions will be answered. Until then it is fatuous and unhelpful to go round looking for bottoms to boot.
Why the gas kick happened down the well seems to me to be secondary. Things happen. That’s why we have a failsafe, that’s why there was BOP installed and paid for by BP, the failsafe device.
An editorial in The Daily Telegraph of yesterday said….
“It should not be difficult to rewrite the rules to make sure that no deep-water drilling is permitted without a fail-safe arrangement in place from the start,…..”
No, these are the current rules. The fail-safe arrangement was the blowout preventer, the one that failed. Note how BP always refer to it as the “failed blowout preventer”. Always.
The BOP has multiple (five I think) valves, of varying types with at least one that is meant to shear the casing, the drill pipe and anything else.
One valve was operated from the surface by the tool pusher who testified as such, indeed he operated it before the Offshore Installation Manager gave permission as mud circulation had been lost. That failsafe BOP valve failed.
The next I believe is a failsafe that shuts when contact is lost with the rig, like a dead mans handle on a train. As the Deepwater Horizon rig sank and contact was physically broken (or before), it also failed.
The others (three ?? ) are I believe all meant to be operable by sub sea vehicles (ROV’s). The first days after the blowout were spent trying to shut these valves as per the design of the failsafe device, the blowout preventer. All these valves failed.
That’s a lot of failure. Why??
Now, if BP should have known about whatever is found to have happened in the failsafe BOP then it is their fault. If sub-contractors installing and operating the BOP or is manufacturers lied or were negligent it is there fault.
If the blowout preventer had worked as intended, as the failsafe final defence device, there would have been no loss of life and no oil spilled.
Given the sums of money involved I suggest the UK immediately prepares to seize US assets of potentially liable companies or associates in the event that BP is found to be the victim of its supplier’s negligence. Unlike BP these companies have already sought protection of US law, are paying dividends and are saying nothing at all as BP gets a kicking
At the end of the day, we (you and I) need the deepwater oil as the worlds easy and cheap to produce oil reserves are controlled by the OPEC cartel and restricted to about a 40% of global production from 80% of reserves. But however many failsafes, however many regulations, human activities entail risk. The deep water drilling was thought to be safe with a modern BOP. It wasn’t. Now we need a BOP and inspection/testing regime that really is failsafe and expertise in responding if that fails. I would have thought the facility to install a new shear ram at the well head below the BOP after a blowout would do the job, or a fitting at the top of the LMRP that a ready built new valve could be installed on top of post blowout would do the job..
Ironically BP will certainly be the world experts in these matters after this accident and response.
P.S. Shortly after completing this Post, I read the following from the BBC. (Extract provided only – see link for full BBC article.)
Barack Obama calls for clean energy push
President Obama
US President Barack Obama has called on his Democratic Party and other supporters to back a government campaign for clean energy.
In a statement aimed both at paid-up Democratic Party members and at millions of individuals who backed his 2008 presidential bid online, the president asked his network to lend their name to a campaign to change the way America produces and consumes its energy.
“We are working to hold BP accountable for the damage to the lands and the livelihoods of the Gulf Coast, and we are taking strong precautions to make certain a spill like this never happens again,” Mr Obama said.
“Beyond the risks inherent in drilling four miles beneath the surface of the Earth, our dependence on oil means that we will continue to send billions of dollars of our hard-earned wealth to other countries every month – including many in dangerous and unstable regions,” he said.
“In other words, our continued dependence on fossil fuels will jeopardise our national security. It will smother our planet. And it will continue to put our economy and our environment at risk.
“We cannot delay any longer, and that is why I am asking for your help.”
Let me close as I started, by using an old saying:
“It’s an ill wind that blows no good.” (John Heywood (c.1497-1580))
“The trouble with Socialism is that you eventually run out of someone else’s money.”
The Human Species is unique in many aspects, but outstandingly so in the art of irony. Take Socialists, for example.
Now these are extremely caring people; they love their fellows so much that they want to do everything possible to make them comfortable and happy. It’s so wonderful; one is so admiring, inspired even at this outpouring of fellow-feeling.
In pursuit of their noble aim, socialists therefore spend vast amounts of money on all kinds of services to make people’s lives happy.
It’s true that they don’t always ASK people what they WANT in order to be happy, but that’s because they are very clever people who know what is best for other people.
And so mushrooms a whole myriad of agencies and quangoes for this or that disability; this or that special needs group.
There is free this, free that, handouts, subsidies, initiatives, pledges (Gordon Brown’s speciality). It is all so uplifting, and of course FREE!! What could be more wonderful?
Of course, it all has to be paid for. Now this phrase “of course” is very interesting. It means that being paid for is bleedin’ obvious to the writer and to anyone else with the slightest understanding of economics, including my old Gran.
Funnily enough, however, it is not quite so obvious to socialists, who – rather sadly – seem to believe that money grows on trees. This phrase is a bit hackneyed, but I can’t think of a more fitting one.
So where DOES the money come from, since it does not actually – to the surprise of many socialists – grow on trees? Well, it comes from those who MAKE money! What a surprise. And of course, that is an inexhaustible fount which can be milked till the cows come home (or perhaps after they come home!) Hence the expression “milch cow”. Yes, those nasty capitalists can be milked for all they are worth.
Tim Geithner? You can’t get much higher in responsibility for the US economy, yet he comes out with what to the layman seems an absolutely insane statement.
Germany is ALSO heavily in debt. The German coalition government has just announced a “Sparprogram” of €80 BILLION euros. Families, the unemployed and the civil service are all going to be hammered.
Germany like everyone else has overspent and of course been hit by the bankers’ insane greed and the ensuing financial crisis. (By the way, the latter was a total breakdown by regulators and if Obama really wants to rant at someone he should rant at the people responsible for organising the regulation of finance in the USA … oopps …. that was the politicians! No wonder BP makes an easier target.)
Tim Geithner
But returning to Geithner, does he REALLY think that we can get out of this mess by Germany getting more heavily into debt? It’s potty, isn’t it? Someone said recently “You don’t give a drunk more alcohol.”
Someone, somewhere, someone has got to say “ENOUGH – NO MORE DEBT” And anyway, why SHOULD Germans be expected to shoulder the responsibility for everyone else?
No Mr Geithner! Your government can continue to spend money it hasn’t got if you like (the US up to a $ trillion of debt now?) , but please leave us over here in Europe to sort this mess out in our own way. You are beginning to sound like ex- (God, how I love that prefix) British PM Gordon Brown, who spent 13 years playing Fantasy Finance, with the results all too clear.
Maybe I’ve got this all wrong – salvation really does come by incurring ever more debt? If so, perhaps the economists can explain it to me. Can we find two economists who agree?
The funny thing is, my Mum and my Gran both agree. In their day if you overspent you were in trouble and could neither blame anyone else nor hope that some benevolent soul would bail you out …. perhaps they should be running western economies?
François Fillon, the French prime minister, said on Friday (June 4th) that the weakening currency was “good news” because it could boost European exports. His comments accelerated the currency’s slide and prompted selling of French government bonds.
This of course is the cunning ploy formerly used by weak, failing, uncompetitive countries such as Greece, Italy, Portugal and so on before they hitched their waggons on to the euro gravy-train led by the massive German engine. (Anyone remember the story of the over-burdened camel, by the way?)
For France’s Prime Minister, the falling euro is “good”. Well done, François. Thanks for the increased price of oil and everything else we import. How the Swiss must be quietly smirking as they watch this shambles of overspending and reckless financial profligacy.
And the news of Hungary’s tottering economy is helping to push the euro further down towards parity with the dollar. Wonderful. Perhaps we should hope that it falls to half the dollar! Think of how much that would boost exports! This policy is of course about as fatuous as France’s idea that cutting the working week to 35 hours would increase employment.
Of course, the Yanks could copy our example and help to push the dollar down, so that the USA and Europe end up in a deadly game of spiral descendency (“Ha, Ha – our currency is weaker than yours!”) while the Russians, Chinese and Arabs quietly prepare to buy up all our increasingly-worthless assets.
We deserve better leaders.
P.S. Ireland? The Forgotten Basket Case? Don’t worry – it won’t be forgotten for much longer:
Fears for Ireland’s financial stability also re-emerged after the minister of finance said that the country’s banks had to refinance more than €74 billion of debt by October 1. The sum is equivalent to more than half Ireland’s annual economic output.
P.P.S. The USA will save the world as usual? Maybe not!
This may not be very Politically Correct but I am getting a bit fed up for the following reasons with Obama’s constant bad-mouthing of BP :
If the regulatory procedures were not strong enough then that is the USA’s fault, not BP’s.
The USA is glad enough to extract oil from ecologically-dangerous places because it is hooked on oil. That isn’t BP’s fault either.
It is bleedin’ obvious that SOONER OR LATER (see previous comments on statistics) there was going to be an accident of this type, yet NO PROPER CONTINGENCY PLAN was in place. That is partly BP’s fault (over-confidence) but also the USA’s fault for not insisting on one.
BP is clearly doing all it can to put things right; constantly rubbishing it seems fairly pointless.
Nobody knows how much BP was to blame; there were other companies involved, including US ones.
The burning BP Oil Rig
In general, the USA has long been too soft on oil companies because it needs the oil.
Now of course we are going to have a pendulum swing the other way, but rather than knee-jerk reactions why not consult and put in place an effective “doomsday scenario” plan? For example, a 20,000 ton concrete dome that could be lowered right over a fractured well to seal it off?
Of course, Obama’s ranting is political. He does NOT want this to be his “Katrina”. However, nobody in their right mind would blame him personally for this accident and now that it has happened it is pretty pathetic to rant about how evil BP is.
What’s done is done. Statistically, there was BOUND to be an accident of this kind one day. By allowing deep-sea drilling the USA MUST HAVE ACCEPTED the risk. If proper and regulatory contingency plans had been in place then the environmental damage might have been minimised.
In general one must say of the Human Race that we aren’t brilliant at anticipating risks and preparing for the worst. Witness carbon emissions and climate change. As a man-in-the-street, the ONLY change in long-held habits that I have seen to combat global warming is that you can no longer in Europe buy old-fashioned light bulbs. Otherwise life seems to go on pretty much as ever, with all governments desperately wishing for growth because of their idiotic over-spending.
STOP PRESS: Above all a President needs to stay calm and rational. There was no reason to stop all off-shore drilling pending the result of an enquiry. This has put thousands of Americans out of work. No, I am NOT minimising the damage; it is tragic and disastrous, but 80% of Louisiana’s economy depends on the oil business.
And we badly need perspective. This is – as I already said – a terrible disaster, but the record of off-shore drilling is in fact extremely good in ecological terms. One bad experience should not lead to the knee-jerk shut-down of the entire industry. Fascinating article in the UK Guardian newspaper. That article concludes thus:
In an open letter to Obama published in Louisiana’s Thibodaux Daily Comet newspaper, local resident Stephen Morris vented fury at the drilling freeze: “If it was a knee-jerk response to everyone’s anger about the continued leak and possible annihilation of southern Louisiana’s way of life, you didn’t think it through or your advisers are smoking way too much crack.”
And this article in the UK Independent brilliantly sums up the way Obama is getting this all wrong for superficial, popularist reasons. Here’s how that article starts:
The evidence is overwhelming. Any fair-minded person who examines the Gulf of Mexico oil spillage is compelled to two conclusions. First, that there is no evidence of wrongdoing by BP. Second, that the President of the United States has behaved disgracefully.
The vessels of the Los Angeles class, the pride of the US nuclear submarine fleet, will not operate below 950ft. If they were to dive to 1450ft, their hulls would implode. The Americans do have three subs which could function at 2,000ft. They cost $3bn each. It follows that drilling for oil below a 5,000ft seabed is a difficult business which involves risks. But it is essential.
ISRAEL – Can anyone tell me which of these statements is not true?
Fatah, long-time sworn enemy of Israel, no longer sponsors attacks on Israel.
Fatah poses no military danger to Israel.
Fatah has accepted the right of Israel to exist; threats to obliterate it from the map have come from Iran, but that is not Fatah’s fault.
Palestinians in general are among the best-educated and most democratic of Arabs.
A democratic Palestinian State trading freely with Israel would greatly increase prosperity in both states, but especially in Palestine.
Free, democratic and prosperous states do not in general cause conflict.
A free, democratic and prosperous Palestine would cause ordinary people in Gaza and elsewhere in the Arab world to wonder why the hell they were bothering to support extremists and “terrorists”. Hamas, Hezbollah, Al Qaeda and Iran would have the ground cut totally from under them. The latter are terrified of anything free and democratic, so it is no wonder that their main aims are to foment disorder and chaos. Israel sometimes seems to play their game for them.
I believe all the above to be true, though am willing to stand corrected. And so the next question is, Why does Israel still occupy the West Bank and impose roadblocks on ordinary Palestinians trying to create some sort of normal and prosperous life for themselves?
West Bank and Gaza
It seems to me that Israel’s policy here is potty. In all walks of life, you encourage good behaviour (assuming you want progress, peace and prosperity). I am unclear how the good behaviour of Fatah in the last few years has been rewarded. On the contrary, there is endless talk as ever but little action on the ground.
One understands Israel’s existential fears, but the dangers no longer come from Fatah and Palestinians in the West Bank. They should and could become the allies of Israel.
Has Israel become so accustomed to battering its enemies with force that it cannot learn the humility of victory and take a longer vision?
The major sticking points?
Jerusalem? This has to become a shared city in some form. Israel has no right to claim it as its own. We all share the planet; I can see no fundamental problem with sharing a city.
The exiles? There has to be some sort of justice. We – I believe – empathize with Jews. We understand their fears for their existence. We support their right to exist. But they do not seem to empathize with those Arabs whose land was taken from them first in 1948 and then later by conquest. EMPATHY – this is sorely lacking in the current Israeli leadership.
Israel Blockade Challenged
The Aid Ship Fiasco? Once again, Israel is its own worst enemy. The critical thing is to establish the truth, so if Israel has nothing to hide then why does it not permit an independent enquiry?
It seems pretty clear to me that the majority of activists on the first ship were peaceful but you only have to have a few prepared to use violence and this will cause big trouble, which seems to have been the case here. And everyone knows that if Israel or Israelis are attacked then they respond with overwhelming force.
But “winning hearts and minds” CANNOT be done without the truth being known, and nobody who matters (ordinary Arabs, Iranians and Turks in particular) is going to trust an enquiry carried out solely by the Israelis. This is so obvious that one wonders if – as often seems the case – Israel has taken leave of its senses.
Learning from Dogs 