[Posted 7:00 AM ET]
The War on Terror and Bush Foreign Policy
[Differing opinions]
Former U.S. ambassador to the UN, Richard Holbrooke /
Washington Post, Aug. 10, 2006
“Two full-blown crises, in Lebanon and Iraq, are merging into a
single emergency. A chain reaction could spread quickly almost
anywhere between Cairo and Bombay. Turkey is talking openly
of invading northern Iraq to deal with Kurdish terrorists based
there. Syria could easily get pulled into the war in southern
Lebanon. Egypt and Saudi Arabia are under pressure from
jihadists to support Hizbullah, even though the governments in
Cairo and Riyadh hate that organization. Afghanistan accuses
Pakistan of giving shelter to al-Qaeda and the Taliban; there is
constant fighting on both sides of that border. NATO’s own war
in Afghanistan is not going well. India talks of taking punitive
action against Pakistan for allegedly being behind the Bombay
bombings. Uzbekistan is a repressive dictatorship with a
growing Islamist resistance….
“This combination of combustible elements poses the greatest
threat to global stability since the 1962 Cuban missile crisis,
history’s only nuclear superpower confrontation. The Cuba
crisis, although immensely dangerous, was comparatively
simple: it came down to two leaders and no war. In 13 days of
brilliant diplomacy, John F. Kennedy induced Nikita Khrushchev
to remove Soviet missiles from Cuba.
“Kennedy was deeply influenced by Barbara Tuchman’s classic,
‘The Guns of August,’ which recounted how a seemingly
isolated event 92 summers ago – an assassination in Sarajevo by
a Serb terrorist – set off a chain reaction that led in just a few
weeks to World War I. There are vast differences between that
August and this one. But Tuchman ended her book with a
sentence that resonates in this summer of crisis: ‘The nations
were caught in a trap, a trap made during the first thirty days out
of battles that failed to be decisive, a trap from which there was,
and has been, no exit.’
“Preventing just such a trap must be the highest priority of
American policy. Unfortunately, there is little public sign that
the president and his top advisers recognize how close we are to
a chain reaction, or that they have any larger strategy beyond
tactical actions….
“The same is true of talks with Iran…Why has the world’s
leading nation stood aside for over five years and allowed the
international dialogue with Tehran to be conducted by
Europeans, the Chinese and the United Nations? And why has
that dialogue been restricted to the nuclear issue – vitally
important, to be sure, but not as urgent at this moment as Iran’s
sponsorship and arming of Hizbullah and its support of actions
against U.S. forces in Iraq?
“Containing the violence must be Washington’s first priority.
Finding a stable and secure solution that protects Israel must
follow. Then must come the unwinding of America’s disastrous
entanglement in Iraq in a manner that is not a complete
humiliation and does not lead to even greater turmoil. All of this
will take sustained high-level diplomacy – precisely what the
American administration has avoided in the Middle East.
Washington has, or at least used to have, leverage over the more
moderate Arab states; it should use it again, in the closest
consultation with and on behalf of Israel.
“And we must be ready for unexpected problems that will test us;
they could come in Turkey, Pakistan, Egypt, Syria, Jordan or
even Somalia – but one thing seems sure: They will come.
Without a new, comprehensive strategy based on our most urgent
national security needs – as opposed to a muddled version of
Wilsonianism – this crisis is almost certain to worsen and
spread.”
Former House Speaker Newt Gingrich / Washington Post, Aug.
11, 2006
“Yesterday on this page, in a serious and thoughtful survey of a
world in crisis, Richard Holbrooke listed 13 countries that could
be involved in violence in the near future: Lebanon, Israel, Iraq,
Iran, Syria, Turkey, Egypt, Saudi Arabia, Afghanistan, Pakistan,
India, Uzbekistan, Somalia. And in addition, of course, the
United States.
“With those 14 nations Holbrooke could make the case for what I
describe as ‘an emerging third world war’ – a long-running
conflict whose latest manifestation was brought home to
Americans yesterday with the disclosure in London of yet
another ghastly terrorist plot – this one intended to destroy a
number of airliners en route to America.
“But while Holbrooke lists the geography accurately, he then
asserts an analysis and a goal that do not fit the current threats.
“First, he asserts that the Iranian nuclear threat is far less
dangerous than violence in southern Lebanon….
“In fact an Iran armed with nuclear weapons is a mortal threat to
American, Israeli and European cities. If a nonnuclear Iran is
prepared to finance, arm and train Hizbullah, sustain a war
against Israel from southern Lebanon and, in Holbrooke’s own
words, ‘support actions against U.S. forces in Iraq,’ then what
would a nuclear Iran be likely to do? Remember, Iranian
officials were present at North Korea’s missile launches on our
Fourth of July, and it is noteworthy that Venezuela’s anti-
American dictator, Hugo Chavez, has visited Iran five times.
“It is because the Bush administration has failed to win this
argument over the direct threat of Iranian and North Korean
nuclear and biological weapons that Americans are divided and
uncertain about our national security interests….
“Yet Holbrooke indicates that he would take the wrong path on
American national security. He asserts that ‘containing the
violence must be Washington’s first priority.’
“As a goal this is precisely wrong. Defeating the terrorists and
thwarting efforts by Iran and North Korea to gain nuclear and
biological weapons must be the first goal of American policy.
To paraphrase Abraham Lincoln, if violence is necessary to
defeat the terrorists, the Iranians and the North Koreans, then it is
regrettably necessary….
“Our enemies are quite public and repetitive in saying what they
want. Not since Adolf Hitler has any group been as bloodthirsty
and as open. If Holbrooke really wants a ‘stable and secure’
Israel he will not find it by trying to appease Iran, Syria,
Hizbullah and Hamas….
“The democracies have been talking while the dictators and the
terrorists gain strength and move closer to having the weapons
necessary for a terrifying assault on America and its allies. The
arrests yesterday of British citizens allegedly plotting to blow up
American airliners over the Atlantic Ocean are only the latest
example of the determination of our enemies. This makes the
dialogue on our national security even more important.”
Gerard Baker / The Times (of London), Aug. 11, 2006
“It’s too early to say with any confidence yet, but it looks as
though yesterday’s plot to blow up U.S.-bound aircraft from the
UK was closer to the 9/11 tragedy than the Miami-Chicago farce.
If the police and intelligence authorities have succeeded in
foiling such a murderous plan, the correct response is one of
immense gratitude to them, pride in our security institutions and
continued vigilance against future plots.
“But we should also remember that our continuing existence lies
not just in inconvenient security measures and uncomfortably
intrusive intelligence activities, but in a grand global strategy.
Success requires, in addition to the tiresome banalities of long
check-in queues and tighter limits on hand luggage, a
commitment, whatever the costs, to eradicate the deep global
causes that threaten us.
“And for this it just won’t do to claim it’s all about bad U.S.
foreign policy. It is repetitive but necessary to point out that we
didn’t start this war when we invaded Iraq. The attacks on 9/11
were planned not only before we invaded, but during a time
when the U.S. was expending extraordinary effort to try to forge
a lasting settlement between Israel and the Palestinians.
“And if our actions have radicalized the jihadists we should
remember that they are animated at least as much by our ridding
Afghanistan of their spiritual brethren, the Taliban, as they are by
whatever crimes the U.S. may have committed in Baghdad.
“The same applies to Israel and Lebanon. Not only is the current
war the direct result of Hizbullah’s aggression, its deeper causes
lie in the continued determination by Israel’s enemies,
increasingly emboldened by Tehran, to liquidate the Jewish state.
“Few can look at events in Iraq or Lebanon today with optimism,
but it would be dangerous folly to assume, as some do, that the
West should retreat, beating its breast and promising never to
offend again….
“I will grant you that the Iraq war has been characterized, in
conception and execution, by blunder after blunder. And it is
certainly possible that, in their failures there, the U.S. and Britain
have made the world more unstable, not less. But we should not,
in our frustration, confuse the real enemies here. We should not
mistake the unlooked-for dangers caused by blunders and
arrogance in Washington for the targeted threats posed by
nihilism and hatred in much of the Middle East, and in some of
our own cities.
“Yesterday provided us with yet another glimpse of the awful
reality of our long war and associated miseries. We must be very
careful not to ascribe their creation to our own errors.”
Yes, it would appear we dodged the “Big One” with the foiling
of the terror plot. It should also be viewed as a victory in the
war.
But on Bill O’Reilly’s show Thursday night, Newt Gingrich
echoed my own sentiments exactly. “We’re not spending
enough money domestically and we need a wartime budget.”
Gingrich then added, “Five years after 9/11 and we have no
evidence we’re winning this war.”
I could show you what I wrote in the days after 9/11 and it was
all about doing whatever it takes, sacrificing, anything to protect
the homeland and defeat the terrorists.
I agree with the Bush administration’s policies on surveillance
and the Patriot Act, but in other realms, such as in securing the
ports and borders, the execution has been dangerously lacking.
And anyone believing we’re succeeding in Iraq has to have been
in a coma for the past three years, while in Iran, as I wrote in
2002, we had an opportunity to support an incipient student
movement then that had a chance of becoming something far
greater and the White House did nothing.
When it comes to Lebanon, the United States, alone, as the
world’s superpower, failed to heed the warnings and pleas for
help from the Lebanese government, yet Secretary of State
Condoleezza Rice has the temerity to say the U.S. is “seizing
opportunities” and that we seek a “different kind of Middle
East.” Tell me where I’m wrong in trying to comprehend how a
Lebanon, with its infrastructure virtually wiped out, is a positive
for the region when the United States, and to a lesser extent the
UN and some of our ‘allies,’ didn’t even try to prevent a train
wreck that I wrote of for the past 1 ½ years since the
assassination of Rafik Hariri. Or maybe I don’t get it.
Israel vs. Hizbullah
[The UN Security Council unanimously approved a resolution to
end the fighting, with the withdrawal of Israeli troops to be
accompanied by a combined UN and Lebanese force of up to
30,000 in the south. Hizbullah is to free captured Israeli
soldiers without condition. Israel’s cabinet votes on it Sunday,
though if they approve as expected full implementation could
nonetheless take weeks, if not months. As I go to post I do not
know Hizbullah’s reaction to the UN Security Council move.]
More opinion on the crisis in general.
Editorial / Jerusalem Post, Aug. 8, 2006
“So long as Hasan Nasrallah is alive and has an organization to
lead, his survival will make him a hero in the Arab world, and his
path – that of seeking Israel’s destruction – will be seen to have
been vindicated. This may be a bizarre way to look at things,
through Western eyes, but perceptions and beliefs can create
their own reality.
“The sight of Israel being pounded daily by hundreds of rockets
can be counted to hearten the jihadis, not those seeking a more
moderate path for the Muslim world. By this logic, if a militia
like Hizbullah can bloody Israel and survive, then the jihadis can
claim that Israel is not invincible, and destroying Israel is a
realistic goal.
“This is an intolerable outcome for Israel….
“In addition, as much as the government understandably does not
want the war to expand to Syria, Israel cannot ignore the fact that
Syria is busy resupplying Hizbullah, and that some of these
supplies are getting through. It is not enough for Israel to
attempt to destroy these supplies when they cross into Lebanon,
with only partial effect. The government should state that it
regards the resupplying of Hizbullah to be an act of war, and
warn that it will take action to prevent the resupply if it
continues.
“Victory needs to be defined as it originally was when this
conflict began more than three weeks ago – by Hizbullah’s
destruction as a military force. The Bush administration should
need little persuasion that if Hizbullah becomes more powerful
within Lebanon, it will be a victory for Iran and a defeat for the
U.S….
“Time and again, Israel has wanted to believe that how its
actions are perceived in the Arab world does not matter. Yet the
terrorists and the countries that back them do not necessarily
operate on the basis of Western notions of national interest.
Creating a perception of weakness and defeat can have real
consequences. The common objective of addressing the
underlying causes of the next war begins by ending this war with
Hizbullah’s indisputable defeat.”
Mort Zukerman / U.S. News & World Report, Aug. 14/21, 2006
“Some accuse Israel of a ‘disproportionate’ response. But what
exactly is a ‘proportionate’ response when a whole people and
their society are threatened with extinction when hostilities are
initiated without provocation, when every act of restraint invites
a vicious contempt? Israeli Prime Minister Ehud Olmert’s
government is one of the most pacific since the state was created.
It is without a single general in the cabinet. It has made a
commitment to withdraw from approximately 90% of the West
Bank. How should it defend its citizens? ….
“Hizbullah must not come out of this with even a perceived
victory. Otherwise, the Muslim Brotherhoods in Egypt and
Jordan, as well as other jihadists, will look to Iran for leadership
and to Hizbullah for operational assistance. Over time this will
pose an existential question for Israel and create still more havoc
for the Middle East. If Israel is seen as victorious, Palestinian
extremists will be weakened and Syria, and possibly Iran, might
be forced to reappraise their approach. Rarely have the stakes
been higher.”
Daniel Jonah Goldhagen / Los Angeles Times, Aug. 8, 2006
“For the second time in the long history of the Middle East
conflict, an enemy of Israel has effectively said: We do not care
what you do.
“Hizbullah – in choosing not to return the two soldiers it seized
on July 12, and in its bombardment of Israel – has declared that it
does not care if its war-making leads Israel to attack Lebanon’s
cities, ruin that country’s economy and kill its people. What
matters most is inflicting damage on Israel, weakening its morale
and goading it to a level of destruction that will incite the world’s
wrath. The Palestinians said as much with their second intifada
and their suicide bombings. But this is different because
Hizbullah’s daily rainfall of rockets in Israel portends an
intolerable military assault without end….
“The political Islamists are emboldened by their newfound
power. As Nasrallah has boasted, ‘When were two million
Israelis forced to become displaced, or to stay in bomb shelters
for more than 18 days?’ And the danger will escalate a
thousandfold if Iran, the epicenter of political Islam and
Hizbullah’s master, achieves its own invulnerability with nuclear
weapons, so that it too can launch rocket and other attacks
against its many targets. Iran’s former president and current
power broker, Hashemi Rafsanjani, spoke candidly in 2001: ‘The
use of even one nuclear bomb inside Israel will destroy
everything,’ he said, although it would harm the Islamic world.
‘It is not irrational,’ he went on, ‘to contemplate such an
eventuality.’
“A nuclear Iran, sharing Hizbullah’s and Hamas’ enmity for
Israel’s very existence, is a foe with a million times the wealth
and destructive might to found, fund and supply many more
Hizbullahs against many more enemies, including the hated
West.
“Israel’s political Islamic enemies are studying and rejoicing
over the new geostrategic situation. These totalitarians’ ultimate
targets – all ‘infidels,’ especially here and in Europe – should
study it as well, be sobered and realize that Israel, in fighting this
war in its self-defense, to reestablish a geostrategic balance, and
for its long-term survival, is ultimately fighting for them as
well.”
Editorial / Daily Star (Lebanon), Aug. 7, 2006
“We must not forget that Hizbullah’s armed resistance was
spawned by Israel’s invasion and occupation of Lebanon in
1982. During 18 years of Israeli occupation, Hizbullah grew
under the very noses of its occupiers into a formidable force that
now poses a serious challenge to its oppressors. Any UN
resolution that fails to demand the withdrawal of Israel’s 10,000
troops from South Lebanon will invite further armed resistance.
Sanctioning Israel’s occupation of South Lebanon also ensures
that thousands of refugees, whose humanitarian plight ought to
be an utmost concern in any UN resolution, will not be able to
return to their homes in the South.
“Furthermore, instead of calling for a ceasefire, the resolution
calls upon Hizbullah to cease all of its attacks, while implicitly
giving Israel the right to continue its ‘defensive’ operations.
Where does that leave Lebanese civilians? Israel has argued that
all of its military activities in Lebanon since July 12, including
the killing of over 900 civilians, have been justified in the name
of self-defense. Are the Lebanese now expected to freely allow
themselves to be slaughtered in the hundreds by an occupying
army?”
Rami G. Khouri / Daily Star, Aug. 9, 2006
“Israel has repeatedly used its military power in the past 40 years
to stop attacks against it from South Lebanon, always to no avail.
Hizbullah’s impressive performance to keep fighting and
attacking during the past month suggests that a historic turning
point has been reached. In a narrow but ferocious engagement,
an Arab force has fought Israel’s military to a draw, and thus
perhaps neutralized Israel’s historical reliance on its military
deterrence to impose its will on its neighbors. This may be why
Israel is attacking civilian installations throughout Lebanon,
making a wasteland of the country – as a lesson to anyone else
who might consider challenging it militarily. This strategy
probably will not work either, because savagery, like occupation,
only begets resistance and defiance.
“Hizbullah will emerge stronger politically from the ceasefire
diplomacy if Israel is forced to comply with the key Lebanese
demands of exchanging prisoners, leaving the Shebaa Farms, and
stopping cross-border flights and attacks, in return for no more
attacks against Israel from Lebanon. If Israel is no longer a threat
to Lebanon, Hizbullah would not need to remain an armed
resistance movement beyond the control of the government.
“Israel and the U.S. now focus their energy on preventing
Hizbullah from emerging from this war politically strengthened –
because a stronger Hizbullah with widespread support in the
Arab world and Iran would make the Israeli-American position
in the other four wars immeasurably more difficult. Hizbullah in
Lebanon is the embodiment of all five wars, which is why it must
be defeated forever in Israeli and American eyes, as well as in
the eyes of those many Lebanese and other Arabs who mistrust
Hizbullah and who fear its local and regional aims.”
Lebanese Prime Minister Fouad Siniora / Washington Post,
Aug. 9, 2006
“A military solution to Israel’s savage war on Lebanon and the
Lebanese people is both morally unacceptable and totally
unrealistic. We in Lebanon call upon the international
community and citizens everywhere to support my country’s
sovereignty and end this folly now. We also insist that Israel be
made to respect international humanitarian law, including the
provisions of the Geneva Conventions, which it has repeatedly
and willfully violated.
“As the world watches, Israel has besieged and ravaged our
country, created a humanitarian and environmental disaster, and
shattered our infrastructure and economy, putting an intolerable
strain on our social and economic systems. Fuel, food and
medical equipment are in short supply; homes, factories and
warehouses have been destroyed; roads severed, bridges smashed
and airports disabled.
“The damage to infrastructure alone is running into the billions
of dollars, as are the losses to owners of private property, and the
long-term direct and indirect costs due to lost revenue in tourism,
agriculture and industrial sectors are expected to be many more
billions. Lebanon’s well-known achievements in 15 years of
postwar development have been wiped out in a matter of days by
Israel’s deadly military might.
“For all this carnage and death, and on behalf of all Lebanese, we
demand an international inquiry into Israel’s criminal actions in
Lebanon and insist that Israel pay compensation for its wanton
destruction.
“Israel seems to think that its attacks will sow discord among the
Lebanese. This will never happen. Israel should know that the
Lebanese people will remain steadfast and united in the face of
this latest Israeli aggression – its seventh invasion – just as they
were during nearly two decades of brutal occupation. The
people’s will to resist grows ever stronger with each village
demolished and each massacre committed.”
Geoffrey Aronson / Daily Star, Aug. 11, 2006
“If former Prime Minister Ariel Sharon were dead he would be
turning in his grave. In the few short months since his
incapacitation, the new strategic concept that he championed for
the Gaza Strip, like its model on Israel’s northern frontier with
Lebanon, has been all but destroyed by an Israeli military
establishment that was never reconciled to it and by a newly
installed civilian leadership that chose not to confront the
generals.
“Putting Humpty-Dumpty back together again is still possible on
Israel’s front, where the betrayal of Sharon’s plan, for all the
destruction wreaked on Gaza, can be remedied. But Israel’s ill-
conceived adventure in Lebanon represents sweet revenge for
militants in Israel who continue to be seduced by the idea of a
Lebanese protectorate first outlined in the abortive May 17,
1983, peace agreement between Israel and Lebanon, a fantastic
idea that can only be realized, if at all, in the aftermath of a
terrible regional war that threatens to unfold.
“Say what you want about Sharon, it is near certain that he would
never have been bamboozled into the war that the generals,
cheered on by Washington, sold his successor Ehud Olmert in
the few short hours after Hizbullah forces attacked Israel and
captured two soldiers. As the architect of Israel’s 1982 invasion
of Lebanon, Sharon saw his grand vision of domination over its
northern neighbor, the destruction of the Palestine Liberation
Organization, and a massive transfer of Palestinian refugees to
Jordan collapse into an Israeli commission of inquiry that forced
him from the Defense Ministry.
“Sharon went into what was to be a short-lived political exile,
but Israel’s occupation of the southern rump of Lebanon
continued for 18 long and bloody years. Prime Minister Ehud
Barak’s 1999 campaign for the premiership was going nowhere
until he promised to withdraw Israeli forces from the country.
The Israeli public, though not the generals, was sick of sending
sons to a foreign land that reliably hemorrhaged Israeli
casualties. Israel’s retreat across the border in May 2000 was
viewed at the time as the end of a sad chapter in Israel’s history,
never to be repeated.”
Bret Stephens / Wall Street Journal, Aug. 8, 2006
“Consider the choice now before Mr. Nasrallah. As a matter of
propaganda, he might prefer to keep the war going. He has been
riding a wave of Muslim support that shows no signs of cresting.
Even in Egypt, the cleric is compared to Gamal Abdel Nasser,
the difference being that while Nasser was thrashed by Israel in
less than a week, Mr. Nasrallah remains unbeaten and unbowed
after nearly a month. For now, he is the symbolic leader of the
Muslim world, bridging the gap between Sunnis and Shiites,
secular nationalists and Muslim fundamentalists – a latter-day
Yasser Arafat in the garb of an ayatollah.
“As a matter of strategy, however, Mr. Nasrallah would do well
to exercise restraint. Politically, his stock can go no higher; if
the war really ends tomorrow, he will emerge not only as the
clear victor against Israel but as the de facto master of Lebanon.
The international community will be required to consult, court
and ultimately legitimize him as the details of this resolution – as
well as a subsequent one spelling out the remit of an international
force for southern Lebanon – are put into place. That could take
weeks or months. In the meantime, Israel would lose the military
and political initiative, demobilize its reserves and begin to
withdraw its forces. The Lebanese government of Fouad Siniora,
formerly an ally of the U.S. and an opponent of Syria – would
also be brought to heel, as it would be entirely dependent on Mr.
Nasrallah’s say-so to implement a resolution to which it is
ostensibly a party.”
Thomas L. Friedman / New York Times, Aug. 11, 2006
“With every war there are two days to keep in mind when the
guns fall silent: the morning after, and the morning after the
morning after. America, Israel and all those who want to see
Lebanon’s democracy revived need to keep their eyes focused on
the morning after the morning after.
“Here’s why:
“The only way that the fighting in south Lebanon will be brought
to a close is if all the parties accept a ceasefire and the imposition
of a robust international peacekeeping force, led by France, along
the Israeli-Lebanon border – supplanting Hizbullah.
“The morning after that ceasefire goes into effect, everyone
knows what will happen: Hizbullah’s leader, Hasan Nasrallah –
no matter how battered his forces and how much damage his
reckless war has visited on Lebanon – will crawl out of his
bunker and declare a ‘great victory.’ Hizbullah, he will say,
fought the Israeli Army to a standstill inside Lebanon and rained
rockets on northern Israel. Meanwhile, military analysts
everywhere will write that Israel has ‘lost its deterrence’ vis-à-vis
Arab forces, and blah, blah, blah….
“On the morning after the morning after, Lebanese war refugees,
who had real jobs and homes, will start streaming back by the
hundreds of thousands, many of them Shiites. Tragically, they
will find their homes or businesses badly damaged or obliterated.
Yes, they will curse Israel. But they and other Arabs will also
start asking Nasrallah publicly what many are already asking
privately:
“ ‘What was this war all about? What did we get from this and at
what price? Israel has some roofs to repair and some dead to
bury. But its economy and state are fully intact, and it will
recover quickly. We Lebanese have been set back by a decade.
…For what? For a one-week boost in ‘Arab honor?’ So that
Iran could distract the world’s attention from its nuclear
program? You did all this to us for another country? ….
“Israel needs to keep its eyes on the prize. It’s already inflicted
enormous damage on Hizbullah and its community, but
Nasrallah will only have to pay the full price for inviting all that
destruction once the guns fall silent on the morning after the
morning after. So let’s get there as soon as possible. That will
deter him. What would deter him even more, though, would be if
the UN would go ahead and impose sanctions on Iran for its
illicit nuclear bomb program. After all, it was Iran, Nasrallah’s
master, that ordered up this war to distract the UN from doing
just that. It would be nice to say to Iran: You ravaged Hizbullah
for nothing.”
Ralph Peters / New York Post, Aug. 11, 2006
“In the air, the Israeli Defense Force has flown over 10,000
sorties, dropping more than 13,000 bombs and launching over
2,000 air-to-ground missiles. Yet the terrorists keep firing ‘junk’
rockets – they’re shadow targets airpower can’t hunt.
“Embodying a brave military’s strategic blindness, a retired
major general remarked dismissively that ‘a missile strike on Tel
Aviv wouldn’t matter, because it wouldn’t do any serious
damage.’
“That’s nuts. If one Hizbullah missile reached Tel Aviv and
knocked over a trash can, it would be perceived as an electrifying
triumph by the Muslim masses in the Middle East.
“The problem isn’t that the Israeli generals are ‘fighting the last
war.’ The problem is that they haven’t been fighting seriously –
as if Israel’s future depends on it. The stakes are huge, and
they’ve been fighting small. Now they’ll have to hit very hard to
make up for lost time.
“A lone general put the situation bluntly: ‘Hizbullah prepared for
exactly the war we’re fighting.’ …
“Facts hardly matter in the Middle East (for Arabs, especially,
facts are too terrible to contemplate). Beliefs trump all else.
And tens of millions of Arabs and Persians already believe that
Hizbullah’s the victor.
“Israel has got to learn to see the world through the eyes of its
enemies.”
Bernard Lewis / Wall Street Journal, Aug. 8, 2006
“In Islam, as in Judaism and Christianity, there are certain beliefs
concerning the cosmic struggle at the end of time – Gog and
magog, anti-Christ, Armageddon, and for Shiite Muslims, the
long awaited return of the Hidden Imam, ending in the final
victory of the forces of good over evil, however these may be
defined. Mr. Ahmadinejad and his followers clearly believe that
this time is now, and that the terminal struggle has already begun
and is indeed well advanced. It may even have a date, indicated
by several references by the Iranian president to giving his final
answer to the U.S. about nuclear development by Aug. 22. This
was at first reported as ‘by the end of August,’ but Mr.
Ahmadinjad’s statement was more precise.
“What is the significance of Aug. 22? This year, Aug. 22
corresponds, in the Islamic calendar, to the 27th day of the month
of Rajab of the year 1427. This, by tradition, is the night when
many Muslims commemorate the night flight of the prophet
Muhammad on the winged horse Buraq, first to ‘the farthest
Mosque,’ usually identified with Jerusalem, and then to heaven
and back (c.f., Koran XVII.1). This might well be deemed an
appropriate date for the apocalyptic ending of Israel and if
necessary of the world. It is far from certain that Mr.
Ahmadinejad plans any such cataclysmic events precisely for
Aug. 22. But it would be wise to bear the possibility in mind.
“A passage from the Ayatollah Khomeini, quoted in an 11th-
grade Iranian schoolbook, is revealing. ‘I am decisively
announcing to the whole world that if the world-devourers [i.e.,
the infidel powers] wish to stand against our religion, we will
stand against their whole world and will not cease until the
annihilation of all them. Either we all become free, or we will go
to the greater freedom which is martyrdom. Either we shake one
another’s hands in joy at the victory of Islam in the world, or all
of us will turn to eternal life and martyrdom. In both cases,
victory and success are ours.’
“In this context, mutual assured destruction, the deterrent that
worked so well during the Cold War, would have no meaning.
At the end of time, there will be general destruction anyway.
What will matter will be the final destination of the dead – hell
for the infidels, and heaven for the believers. For people with
this mindset, MAD is not a constraint; it is an inducement.
“How then can one confront such an enemy, with such a view of
life and death? Some immediate precautions are obviously
possible and necessary. In the long term, it would seem that the
best, perhaps the only hope is to appeal to those Muslims,
Iranians, Arabs and others who do not share these apocalyptic
perceptions and aspirations, and feel as much threatened, indeed
even more threatened, than we are. There must be many such,
probably even a majority in the lands of Islam. Now is the time
for them to save their countries, their societies and their religion
from the madness of MAD.”
—
Wall Street
The markets held up well under the renewed terror threat but on
the week both equities and bonds still declined for one reason;
the feeling that the Federal Reserve, despite ‘pausing’ for the
first time since June 30, 2004, may have to resume raising
interest rates in the near future.
In announcing its move on Tuesday to hold the line, but with a
rare dissenter on the board, the Fed’s statement reiterated
Chairman Ben Bernanke’s consistent message of the past two
months, namely that the economy was cooling, thanks to the
housing slowdown and high energy prices, as well as because of
the lag effect of the past 17 rate hikes.
But inflation, it avers, despite running hotter than what the Fed is
normally comfortable with, will decline as the pace of economic
activity slows. However, the Fed will keep focusing on the data
and it is this fact that led to the week’s poor performance.
Friday’s retail sales report for July was stronger than expected,
up 1.4%, which in and of itself would give the Fed pause that
perhaps it put on the brakes too soon, but more importantly the
import price index component was definitively above any Fed
target, up 0.9%.
Ergo, by week’s end traders were screeching to a halt in their
best Roadrunner interpretation. ‘Perhaps we should just wait a
while before committing any new capital,’ they mused.
Let’s face it, for the Federal Reserve to have to raise interest
rates all over again come September would be a major bummer.
But since it’s not likely the Fed wants to admit a mistake, it will
probably wait until October to do so, if need be, and imagine if
the inflation data in between kept flashing warning signs. So
that’s the new conundrum.
Meanwhile, housing is tanking. Don’t take it from me – though
you could have the past year or so and appeared ‘in the know’ at
your cocktail parties, even if not particularly popular – but rather
listen to those whose business depends on correctly forecasting
trends.
Like Angelo Mozilo, CEO of the largest home mortgage lender
Countrywide Financial. “I’ve never seen a soft landing in 53
years.” Or ISI economist Nancy Lazar, who on CNBC said
“housing is weakening very significantly.” Or Robert Toll,
chairman and CEO of luxury home builder Toll Brothers, who
said the current slowdown “is the first downturn in the 40 years
since we entered the business that was not precipitated by high
interest rates, a weak economy, job losses or other
macroeconomic factors. Instead, it seems to be the result of an
oversupply of inventory and a decline of confidence.” Signed
contracts for Toll are down a whopping 45% from a year ago.
Economist Mark Zandi pretty well summed it up. “We could be
underestimating the dark side. Euphoria could turn into abject
pessimism very quickly.”
So the question becomes, just how much will a slowdown in the
housing sector, which has been the engine of growth for years,
impact consumer spending? A lot. And that’s not taking into
consideration the millions in the construction, home
improvement and home-lending industries, for starters, that could
lose their jobs.
It was all so predictable, even if some of us were early in
sounding the alarm. The easiest warning sign, looking back, was
housing affordability. Bloomberg News ran a typical story this
week in examining Naples, Florida. Admittedly, Naples is
bubble central as home prices rose a stupendous 140% since
2001.
But now Naples is losing “teachers, nurses, paralegals and other
middle-income workers” who are pursuing jobs elsewhere
because they’d have to take out sixteen home equity loans on top
of their mortgage to be able to afford to live in this lovely
community.
And, again, this is a global phenomenon. It could be crash city,
sports fans, though by definition this is 2007’s headline, not this
year’s.
One last item on the topic, and far closer to home, concerns a
story in the New York Times on the New York / New Jersey
region.
From 1995-2000, incomes rose 33% while property taxes were
up just 11%.
From 2000-2004, however, property taxes have gone up two to
three times the level of income.
Street Bytes
–The major averages all lost at least 1% on the week, with the
Dow Jones falling back to 11088, off 1.4%, and Nasdaq
declining 1.3% to 2057. Nasdaq has now declined 8 of the last
ten weeks. Even a bullish earnings report, and forecast, from
Cisco Systems couldn’t help the tech barometer.
–U.S. Treasury Yields
6-mo. 5.19% 2-yr. 4.97% 10-yr. 4.97% 30-yr. 5.10%
Rates rose across the board on signs the economy may not be
cooling off as fast as the Fed expects it to, though there was more
good news on the budget deficit front as it narrowed $20 billion
for the month of July over the level of a year earlier. For the first
ten months of the fiscal year, corporate income taxes are up $56
billion over the corresponding period, but as we’ve all learned by
now a vast majority of this improvement is a result of the much-
maligned oil sector’s success.
Next week, Fed watchers (and the Fed board itself) will be
eagerly eyeing the release of the producer and consumer price
indexes for July.
–One of the two or three biggest stories on the week was
overshadowed by the terror plot; that being the shutdown of
British Petroleum’s Prudhoe Bay pipeline due to “severe
corrosion.” With about 400,000 barrels a day shut-in this is only
2% of daily U.S. oil consumption, but it’s part of a wider
problem these days as Cambridge Energy Research Associates’
Daniel Yergin pointed out in an op-ed for the Wall Street
Journal.
“The abrupt shutdown of the Prudhoe Bay oil field on Alaska’s
North Slope adds to the slow-motion supply shock that’s been
pushing oil prices up the ‘wall of worry.’ It comes on top of the
interruption of production by insurgents in Iraq and Nigeria,
continuing production declines in Venezuela since President
Hugo Chavez consolidated his rule, and some supply that has yet
to come back after last year’s Gulf of Mexico hurricanes.
“Add it all up, and about 2.3 million barrels per day of capacity
is currently out of commission. Though only about 2.6% of total
world capacity, this loss is very significant in a market where the
balance between supply and demand is so tight. It exceeds the
extra ‘spare capacity’ that is the shock absorber for the oil
market.”
Longer-term, incidentally, Yergin is optimistic enough new
sources of supply will be found to meet demand (I disagree),
citing technology advances that will allow companies to produce
more in deep offshore waters, Canadian oil sands, and liquids
made from natural gas. But he adds:
“There are important qualifications, however. First, there is
physical capacity to produce, not actual flows, which as we have
seen over the last year can be disrupted by everything from
natural disasters to government decision, to conflict and
geopolitical discord. Second, while prices are going up rapidly,
so are costs; and shortages of equipment and people can slow
things down. Third, greater scale and technical complexity can
generate delays. Still, a 25% increase in physical capacity by
2015 is a reasonable expectation, based upon today’s evidence,
and that would go a long way to meeting the growing demand
from China, India and other motorizing countries.”
Editorial / Wall Street Journal
“Opponents of opening the Arctic National Wildlife Refuge
(ANWR) to oil drilling have long argued that the supply
wouldn’t make a difference to prices. Well, that claim took a
spill yesterday with BP’s announcement that it is shutting down
its operations at Prudhoe Bay due to a damaged pipeline that
could take months to patch.
“U.S. crude soared $2.25 on the news….This market reaction
came as some surprise to various newspaper scribes and
politicians, given that Prudhoe Bay ‘only’ supplies about
400,000 barrels a day, or less than 2% of daily U.S. oil
consumption.
“These are the same folks who’ve delighted in informing
Americans in recent years that opening up nearby ANWR to
drilling would ‘only’ result in an extra one million barrels a day.
This argument – that ANWR isn’t worth the effort – might have
some currency if oil were plentiful and gas prices were still
‘only’ $1.50 a gallon. But with the margin between global oil
supply and demand so thin, any supply counts. ANWR is
exactly the sort of home-grown oil cushion that would help
smooth out supply disruptions from the likes of Katrina or the BP
lead, if ‘only’ Congress could get a clue.”
Meanwhile, on a more micro level, the state of Alaska is losing
$6.4 million a day in tax and royalty losses related to the Prudhoe
Bay shutdown. 86% of state revenue comes from oil revenues so
it’s not a good time to be a state worker. Governor Frank
Murkowski will seek some sort of redress from BP, though there
is also late word BP may be able to keep open half the oil field
while the problem is being fixed.
Of course BP’s latest problem is but one in a worrisome series of
major issues, including the catastrophic fire at its refinery in
Texas City that killed 15, while a whistleblower has talked of
incredibly lax maintenance on its Alaskan pipelines.
In case you are wondering as I was in the immediate aftermath of
the shutdown just who supplies the pipe, and could benefit from
new orders, it turns out Nippon Steel and U.S. Steel received the
contracts for the work. However, for these two the resulting
revenue is relatively insignificant to their bottom lines.
–On the ongoing topic of ‘energy security,’ Russia’s Gazprom
and Algeria’s state-owned gas group have cut a deal to work
together on liquefied natural gas projects. But Europeans,
particularly the Italians, are concerned this will further increase
their dependency on a limited number of gas suppliers. When
you combine Gazprom, Algeria and a few other entities, over the
coming decades the EU will rely on imports for 70% of their
energy requirements against 50% today.
Of course if Russia was Canada, let’s say, there would be no real
concerns. But last I checked the Kremlin wasn’t exactly peopled
with the kinds of folks you’d trust to watch your house while
you’re away on vacation.
–According to a report by Global Investment House, OPEC oil
revenues will reach $522 billion and $495 billion for 2006 and
2007, respectively, a 43% increase from 2004.
–A strike at the world’s largest copper mine in Chile, the
Escondida mine responsible for 9% of global supply, has not had
an adverse impact on prices as of yet.
–The Bank of Japan held the line on interest rates as the pace of
growth in the second quarter slowed, though there is strength in
important areas such as machine orders, up 8.5% in June.
–The backdating of options scandal continues to widen. Three
former senior executives at Comverse Technology were indicted
for their roles in a wide-ranging scam to defraud investors.
In one instance, the three set up a slush fund and told assistants
“to create dozens of phony employee names to be mixed in with
real people on the list of options presented to directors for
approval. The assistant merged first and last names of
acquaintances to make the bogus names, the affidavit said.
Hundreds of thousands of options were thus approved [by the
compensation committee] with no real recipient, the government
said.” [Charles Forelle and James Bandler / Wall Street Journal]
In 2001 alone, the executives told the assistant to grant 10,000
options apiece to 25 more fake employees.
Broadly speaking, as the criminal filing in the Comverse case
alleged, “The undisclosed paper gain in the options rewards an
employee for prior service rather than providing an incentive for
future service, without disclosure or shareholder approval of this
kind of compensation.” [Forgetting some of them didn’t even
exist.]
As Bloomberg News reported:
“The practice misleads investors about a company’s profits and
dilutes the value of outstanding shares, as well as obligating the
company to sell shares to insiders at a discount, the complaint
(further stated).
“A Federal Bureau of Investigation official, James ‘Chip’
Burrus, said the FBI is investigating 45 option-backdating cases.
[The SEC is looking into even more.]… ‘It’s the corporate
equivalent of placing a bet after the race has been run,’ Burrus
said.”
I had to mention Chip, a classmate from Wake Forest. Not only
a good guy, but his career path was predictable. We need more
like him!
Continuing, Columbia University law professor John Coffee
weighed in. “Federal securities laws make it a crime to
knowingly circumvent any system of internal accounting controls
or knowingly falsify any book or record or account. That’s
almost always happening in backdating cases.”
Meanwhile, in the Comverse case, former CEO Kobi Alexander,
who has dual citizenship in Israel, is believed to have fled there.
–Wal-Mart, clearly feeling the heat, agreed to raise wages at
nearly a third of its 4,000 U.S. stores in an effort to remain
competitive with other retailers and meet a need for workers and
managers as it continues to expand. Some workers will see their
paychecks grow by an average 6 percent, which means they may
be able to cover the increase on a gallon of gas…..maybe. The
average full-time hourly wage at Wal-Mart is $10.11.
–Google announced a joint venture with News Corp.’s MySpace
“social networking” site, wherein Rupert Murdoch’s Internet
operations will receive guaranteed revenue of $900 million by
2010. Peter Chernin, News Corp.’s president, said “In one fell
swoop we have paid off two-thirds of our Internet investments,
we have gotten a 70% premium on our MySpace investment and
are now playing with house money.” [Financial Times] Sounds
pretty good to me.
Separately, Google released a report saying click fraud is just not
that big a deal. But in disputing an industry study by Outsell Inc.
that estimated 14.6% of all clicks are fraudulent, Google didn’t
offer its own estimates. I’d say it’s higher. [Washington Post]
–Venture capital group Elevation Partners, which counts among
its partners Bono as well as the only $billionaire I’ve ever
personally had a glass of wine with, Roger McNamee, acquired a
40% stake in Forbes Media for an estimated $250-$300 million.
–This is a bit worrisome, especially if you’re a big American
brand. Seven of India’s 28 states have announced partial or total
bans on Coca-Cola and Pepsi in the wake of concerns over
pesticide levels in the soft drinks. Two of the seven have issued
total bans, including Kerala, a communist state. [I bet a lot of
Americans don’t know this last bit….I didn’t myself until I was
working there for a few weeks in 1985 (Cochin) and I had to deal
with a loudspeaker blaring outside my hotel room all night.]
Both Coke and Pepsi say they are victims of a campaign by
leftists to embarrass the government. So far, however, the
campaign hasn’t reached the major cities where a majority of the
product is consumed.
–Finally, I told you I was worried about my carbon fiber play’s
earnings report and it turns out for good reason. You have to
understand the CEO founded the carbon fiber business and he’s
an old-timer with long time horizons, so when the business goes
down for maintenance before further expansion he really doesn’t
see it as a big deal. But for shareholders it is, and was, and so
revenue in the June quarter was below estimates and the stock
got whacked.
Now, however, I’m more confident than ever about future
operations so I’m holding on. Yes, I wish I had jettisoned my
shares at the top but I’m not a trader. The story’s in tact, just
a quarter or two behind where we should be.
What is interesting, though, is some of you remember my pain
has been lessened by the fact I leant my shares out for a fee.
Well, my broker / dealer just lowered the rate I was receiving
because of lessening demand. “Send ‘em back,” I said, “I’ll take
it from here.”
Foreign Affairs
Iraq: I’m going to hold off on my own history of commentary
here for another time (I mentioned last week I was going to
unleash it on new readers), but for now there were two highly
significant events amidst the non-stop carnage. First, Prime
Minister Maliki strongly criticized both the United States and
Iraqi militaries for the handling of a raid in Sadr City where a
woman and child were killed, saying the botched operation
threatened his reconciliation efforts. Then two days later we had
the suicide bombing at a checkpoint near one of the Shiites’
holiest shrines in Najaf which claimed 35 lives. What virtually
every report failed to mention was that the bomber detonated
himself (as he was being patted down) just blocks from Grand
Ayatollah Sistani’s home. It is the moderate Sistani who has
evidently passed along word to the Bush administration (he
doesn’t speak to them directly) that Iraq’s future is beyond bleak
and this attack brings him one step closer to throwing in the
towel. Sistani, after all, has held back Sadr and his Mahdi
Brigades to a great extent and if you thought the civil war looked
rough today, just imagine what it would be like if Sistani told
Sadr to do what he had to do to protect the people.
Iran: Chief weapons negotiator Ali Larijani once again reiterated
Iran will expand its uranium enrichment program and ignore the
UN’s 8/31 deadline, but he did still say President Ahmadinejad
would have a response to the original UN package by 8/22. [And
now that you’ve read Bernard Lewis’s take above, you and I
await 8/22 with some trepidation.]
Larijani also warned that if the UN levied sanctions against Iran
for non-compliance, Iran would use the oil weapon. And there
was new evidence Iran has been trying to import uranium from
Africa, a fact just brought to light by Tanzania which discovered
a shipment headed for Tehran last fall.
President Ahmadinejad, by the way, is being interviewed by
Mike Wallace for “60 Minutes” this Sunday.
Afghanistan: The Taliban is very much alive and I read a
depressing tale that offered further proof in The Times (of
London), written by Tim Albone.
“Shot and hanged from the branch of a fruit tree, (a) mother and
her teenage son were summarily tried, sentenced and executed
for no bigger a crime than delivering clean laundry to a relative.”
The relative was working as a policeman and the Taliban
accused the two victims of being spies. The chief of police in
Helmand province said “How could this boy be a spy. He was
only 13?”
Australia is increasing its force in Afghanistan to 700 from its
current 550, while it was a bloody week for NATO forces.
Among the dead, three Americans and four Canadians, bringing
the latter’s death toll here to 26.
India / Pakistan: The two have expelled diplomats over spy
charges and there is a clear undercurrent of tension in this critical
region of the world that has been exacerbated by Pakistan’s
alleged ties to the recent Mumbai train bombings.
Yet, of course, it was Pakistan that helped uncover the airliner
bomb plot this week. It plays a duplicitous game and one has to
wonder just when it will give up bin Laden and Zawahiri?
North Korea: New analysis is coming in on Pyongyang’s July 5
(July 4 in the U.S.) missile tests and it turns out that the only one
of the seven to fail was the long-range Taepodong-2, despite
previous reports to the contrary. The other six, experts now say,
were actually within their target ranges and traveled 185-250
miles each.
But Kim Jong-il has not been seen since a day before the tests,
highly unusual behavior for him, which is spawning rumors of
some kind of internal conflict in the commie regime. Or perhaps
he is seriously ill. Prior to this disappearance he had been quite
visible, stepping up morale-boosting visits to military bases, for
example.
Meanwhile, South Korea has relaxed its suspension of food
assistance after the missile launches and is now sending $10
million in food aid to its flood-ravaged neighbor. Aside from
what is deemed to be a staggering loss of life (far greater than the
“official” death toll of 549), evidently North Korea’s farmland is
largely a total loss.
Taiwan: Taipei was down to 25 largely impoverished nations
that continued to recognize it over the mainland, but now it’s 24
with the defection of Chad.
Taiwan’s Mainland Affairs Council blamed Beijing and said the
move had humiliated the government. A top minister added
“The Chinese government did all it could to threaten and
blackmail Chad, leading it to break ties with us on the eve of
Premier Su Tseng-chang’s departure [for the nation.] What it
does is mainly insult the Taiwanese government and its people.”
Vice President Annette Lu Hsien-lien said the latest setback
showed the mainland was the island’s “real enemy.” [South
China Morning Post]
Japan: Prime Minister Koizumi appears set to make one last visit
to the Yasukuni war shrine next week as he prepares to leave
office in September. If he does so, it would further inflame
tensions with South Korea and China. Yasukuni glorifies Japan’s
militaristic past.
Mexico: The Electoral Court ordered a partial recount of the July
presidential vote, 9% of the polling places, and not the full one
that leftist Andres Manuel Lopez Obrador had called for. So his
supporters have spent the week blocking toll booths, bank
entrances and the Treasury Department as he refuses to give in.
Random Musings
–Democratic Senator Joe Lieberman of Connecticut lost his
primary race to antiwar candidate Ned Lamont, 52-48, after
which Lieberman declared he will run as an independent in the
general election.
Daniel Henninger / Wall Street Journal
“With the knifing of Joe Lieberman, the Democrats have locked
in as the antiwar party. No turning back now. You’re in or
you’re out. And this will be enforced. Susan Estrich, formerly
of Dukakis for President, told the Fox News Channel this week
that Hillary Clinton ‘has got to get herself in a position where
she’s for withdrawal of troops in Iraq before the next Democratic
primary.’
“Running as the antiwar party amid a world obviously vulnerable
to pitiless terror will require political suppleness. But the
younger generation of Democratic activists – widely praised for
their irreverence and antic energy – may not fit the sober public
mood now.”
Editorial / Washington Post
“Connecticut Sen. Joseph Lieberman’s decision to move forward
with an independent candidacy after his loss in the Democratic
primary is a controversial choice but in this circumstance the
correct one. The leaders of Mr. Lieberman’s party lined up
yesterday to endorse Ned Lamont….That’s not surprising: After
all, Democratic voters selected Mr. Lamont to represent them.
And as weak a competitor as the Republican candidate, Alan
Schlesinger, may be, those leaders have to worry that Mr.
Lamont and Mr. Lieberman would split the vote and make way
for Mr. Schlesinger or a replacement. [The state’s popular
Republican governor, Jodi Rell, has called on Mr. Schlesinger to
step aside.]
“But the critical question facing voters in November, as opposed
to party leaders now, is who would make the better senator –
which is why we welcome Mr. Lieberman’s decision to remain
in the race. He would be, by far, the better choice for the people
of Connecticut….
“(Mr. Lieberman) became an object of voter anger not only about
the war but at the Bush administration in general. Because Mr.
Bush has governed too often in a partisan way, many Democratic
voters concluded that anyone who reached across the aisle in an
effort to cooperate must be a sap. In such an environment, party
orthodoxy comes to matter more than accomplishment; any
assumption of good faith on the other side becomes a sign of
weakness.”
William Kristol / The Weekly Standard
“There is a political opportunity for the Bush administration if
the Democrats reject Lieberman. If he’s then unable to win as an
independent in November, he would make a fine secretary of
defense for the remainder of the Bush years. If his independent
candidacy succeeds, it will be a message to Bush that he should
forge ahead toward victory in Iraq and elsewhere. Either way,
the possibility exists for creating a broader and deeper governing
party, with Lieberman Democrats welcomed into the Republican
fold, just as Scoop Jackson Democrats became Reaganites in the
1980s. Is it too fanciful to speculate about a 2008 GOP ticket of
McCain-Lieberman, or Giuliani-Lieberman, or Romney-
Lieberman, or Allen-Lieberman, or Gingrich-Lieberman?
Perhaps. But a reinvigorated governing and war-fighting
Republican Party is surely an achievable goal. And a necessary
one.”
David Brooks / New York Times
“There are two major parties on the ballot, but there are three
major parties in America. There is the Democratic Party, the
Republican Party and the McCain-Lieberman Party.
“All were on display Tuesday night. The Democratic Party was
represented by its rising force – Ned Lamont on a victory
platform with the net roots exulting before him and Al Sharpton
smiling just behind. The Republican Party was represented by its
collapsing old guard – scandal-tainted Tom DeLay trying to get
his name removed from the November ballot. And the McCain-
Lieberman Party was represented by Joe Lieberman himself,
giving a concession speech that explained why polarized primary
voters shouldn’t be allowed to define the choices in American
politics.
“The McCain-Lieberman Party begins with a rejection of the
Sunni-Shiite style of politics itself. It rejects those whose
emotional attachment to their party is so all-consuming it
becomes a form of tribalism, and who believe the only way to get
American voters to respond is through aggression and stridency.
“The flamers in the established parties tell themselves that their
enemies are so vicious they have to be vicious too….
“The McCain-Lieberman Party counters with constant reminders
that country comes before party, that in politics a little passion
energizes but unmarshaled passion corrupts, and that more
people want to vote for civility than for venom.
“On policy grounds, too, the McCain-Lieberman Party is distinct.
On foreign policy, it agrees with Tony Blair (who could not win
a Democratic primary in the U.S. today): The civilized world
faces an arc of Islamic extremism that was not caused by
American overreaction, and that will only get stronger if
America withdraws….
“The history of third parties is that they get absorbed into one of
the existing two, and that will probably happen here. John
McCain and Hillary Clinton will try to reconcile their centrist
approaches with the hostile forces in their own parties. And
maybe they will succeed (McCain has a better chance, since the
ideologues on the right feel vulnerable while the ideologues on
the left, perpetually two years behind the national mood, think
the public wants more rage).
“But amid the hurly-burly of the next few years – the continuing
jihad, Speaker Pelosi, a possible economic slowdown – the old
parties could become even more inflamed. Both could reject
McCain-Liebermanism.
“At that point things really get interesting.”
As you can imagine, Joe Lieberman took advantage of the terror
arrests in Britain, as did Republicans, though at the same time it
was obvious he would have won had the terrorists been rounded
up two days earlier.
“If we just pick up [in Iraq] like Ned Lamont wants us to do, get
out by a date certain, it will be taken as a tremendous victory by
the same people who wanted to blow up these planes in this plot
hatched in England,” he said. “It will strengthen them and they
will strike again.”
I like Joe Lieberman, having seen him up close and personal at a
campaign stop in New Hampshire during his run for the
presidency in 2004. He’s a good man, and as readers such as
Scott P. have long offered, “If John McCain and Joe Lieberman
joined forces as independents, they’d have my vote.” I imagine
were that to occur in mid-2007 (following a Lieberman victory
this fall) they’d instantly poll 30%. I’d vote for this ticket in a
heartbeat. But McCain is not likely to jump ship, especially
since he didn’t in 2004.
And note to Ned Lamont. Just what the heck were you thinking
in allowing Al Sharpton, Jesse Jackson and Maxine Waters to
share the podium with you on primary night?
–On a related topic, according to a Washington Post / ABC
News poll only 55% of voters now approve of their
congressman, a big drop from three months ago and the lowest
such finding since 1994, the last time control of the House
switched parties.
But I’d be shocked if such an event occurred in 2006, with
incumbents being more entrenched than ever, though we still
have a long three months to go before the vote.
–Republican Congressman Bob Ney opted not to run for
reelection this fall, the biggest victim in the Jack Abramoff
scandal thus far.
“Ultimately this decision came down to my family,” said Ney.
‘Dad, why are you such a dirtball?’
–James Van Allen died. He was the physicist that discovered
the radiation belts encircling the earth by conducting an
experiment on America’s first successful space mission, Explorer
I, four months after Sputnik. As one expert put it the other day,
“His discovery of the Van Allen belts was the first major
scientific discovery of the Space Age.”
But Van Allen was critical of manned space flights, saying
robots could do everything humans could without exposing
“fragile living beings to the harsh environment of space.”
Yeah, but it needs to be noted this was pre-snowboarders, you
understand.
–By the way, if you’re looking for a space adventure without
leaving terra firma, the Russian Federal Space Agency is seeking
volunteers to go on a 520-day flight to Mars and back.
“The simulated flight will take place in a spaceship consisting of
five modules with a total inner space of 550 cubic meters…Only
three will make it to Mars, including one that will act as the
landing craft.
“The flight will take 250 days, and the crew will have 30 days to
explore the Red Planet. The return flight will take 240 days.”
[Moscow Times]
But the space agency will subject the crew to stress with various
emergencies planned; you know, like a giant oil spill in Siberia
and the ability to vote for but one candidate come election day.
Well, that last bit may not come to pass, but this is a serious deal.
Anyone, regardless of nationality, can apply but you need to be
between the ages of 25 and 50. Since I’m within the window
maybe I’ll go for it!
Then again…just saw you can’t drink beer the whole time.
Never mind.
–Yikes….Greenland’s ice-sheet is melting three times faster
over just the last two years than the previous five-year period,
according to a paper in the journal Science.
–The Washington Post had an editorial supporting further
congressional funding for a project to eliminate the snakehead,
the vicious fish that is capable of great feats in track and field.
Well, that might be a slight exaggeration but it can wriggle on
land for short distances and next time you answer your doorbell
and don’t see anyone around, you may want to look down.
But what I didn’t know is the snakehead is a “really good eating
fish,” according to a game official. One biologist caught 62 in
two hours at Virginia’s Dogue Creek so the Post is encouraging
anglers of all kinds to help reduce the surplus population, to
paraphrase Ebenizer Scrooge.
–Charles K. passed along a disturbing piece from The Guardian
concerning hunting and China’s tourism industry. The
government is “inviting bids…for the right to hunt endangered
species under a kill-to-conserve campaign.” For example, “the
starting price for a permit to shoot a wild yak, of which there are
fewer than 15,000 remaining in the world, is $40,000.” How can
they kill yaks? As we learned last week this noble, albeit mangy,
animal is also a train enthusiast.
–Finally, USA Today had a story on how museum attendance in
this country is dropping precipitously. For example, the annual
figure at Williamsburg is down from 1.2 million in the 1980s to
just 700,000 last year. Where the impact is really being felt is in
smaller museums, such as the one honoring James Dean near
Fairmount, Ind., that was forced to close in March after 16 years.
At least newer destinations such as Abraham Lincoln’s
presidential library in Springfield, Ill., and Bill Clinton’s in Little
Rock are drawing well.
So parents, drag your kids away from their video games and take
them to a museum, for crying out loud.
—
Pray for the men and women of our armed forces.
God bless America.
—
Gold closed at $642
Oil, $74.35
Returns for the week 8/7-8/11
Dow Jones -1.4% [11088]
S&P 500 -1.0%[1266]
S&P MidCap -2.4%
Russell 2000 -3.2%
Nasdaq -1.3%[2057]
Returns for the period 1/1/06-8/11/06
Dow Jones +3.5%
S&P 500 +1.5%
S&P MidCap -1.8%
Russell 2000 +0.9%
Nasdaq -6.7%
Bulls 40.2
Bears 37.1 [Source: Chartcraft / Investors Intelligence… bear
reading slightly bullish…35 being normal. Reminder, this is a
contrarian indicator.]
Have a great week. I appreciate your support.
Brian Trumbore
